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Rise of the Robots

Technology and the Threat of a Jobless Future

by Martin Ford

Hardcover, 334 pages, Perseus Books Group, List Price: $28.99 |

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Rise of the Robots
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Technology and the Threat of a Jobless Future
Author
Martin Ford

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Book Summary

A artificial-intelligence entrepreneur offers a stark warning about what we must do to keep an automated economy from being a massively unjust one.

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The German service robot Toomas was designed to welcome customers and help them find items in a store. Joerg Sarbach/AP hide caption

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Attention White-Collar Workers: The Robots Are Coming For Your Jobs

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Note: Book excerpts are provided by the publisher and may contain language some find offensive.

Excerpt: Rise Of The Robots: Technology And The Threat Of A Jobless Future

Introduction

Sometime during the 1960s, the Nobel laureate economist Milton Friedman was consulting with the government of a developing Asian nation. Friedman was taken to a large-scale public works project, where he was surprised to see large numbers of workers wielding shovels, but very few bulldozers, tractors, or other heavy earth-moving equipment. When asked about this, the government official in charge explained that the project was intended as a "jobs program." Fried- man's caustic reply has become famous: "So then, why not give the workers spoons instead of shovels?"

Friedman's remark captures the skepticism — and often outright derision — expressed by economists confronting fears about the prospect of machines destroying jobs and creating long-term unemployment. Historically, that skepticism appears to be well-founded. In the United States, especially during the twentieth century, advancing technology has consistently driven us toward a more prosperous society.

There have certainly been hiccups — and indeed major disruptions — along the way. The mechanization of agriculture vaporized mil- lions of jobs and drove crowds of unemployed farmhands into cit- ies in search of factory work. Later, automation and globalization pushed workers out of the manufacturing sector and into new service

jobs. Short-term unemployment was often a problem during these transitions, but it never became systemic or permanent. New jobs were created and dispossessed workers found new opportunities.

What's more, those new jobs were often better than earlier counterparts, requiring upgraded skills and offering better wages. At no time was this more true than in the two and a half decades following World War II. This "golden age" of the American economy was characterized by a seemingly perfect symbiosis between rapid technological progress and the welfare of the American workforce. As the machines used in production improved, the productivity of the workers operating those machines likewise increased, making them more valuable and allowing them to demand higher wages. Throughout the postwar period, advancing technology deposited money directly into the pockets of average workers as their wages rose in tandem with soaring productivity. Those workers, in turn, went out and spent their ever-increasing incomes, further driving demand for the products and services they were producing.

As that virtuous feedback loop powered the American economy forward, the profession of economics was enjoying its own golden age. It was during the same period that towering figures like Paul Samuelson worked to transform economics into a science with a strong mathematical foundation. Economics gradually came to be almost completely dominated by sophisticated quantitative and statistical techniques, and economists began to build the complex mathematical models that still constitute the field's intellectual basis. As the postwar economists did their work, it would have been natural for them to look at the thriving economy around them and assume that it was normal: that it was the way an economy was supposed to work — and would always work.

In his 20 05 book Collapse: How Societies Choose to Succeed or Fail, Jared Diamond tells the story of agriculture in Australia. In the nineteenth century, when Europeans first colonized Australia, they found a relatively lush, green landscape. Like American economists in the 1950s, the Australian settlers assumed that what they were seeing was normal, and that the conditions they observed would continue indefinitely. They invested heavily in developing farms and ranches on this seemingly fertile land.

Within a decade or two, however, reality struck. The farmers found that the overall climate was actually far more arid than they were initially led to believe. They had simply had the good fortune (or perhaps misfortune) to arrive during a climactic "Goldilocks period" — a sweet spot when everything happened to be just right for agriculture. Today in Australia, you can find the remnants of those ill-fated early investments: abandoned farm houses in the middle of what is essentially a desert.

There are good reasons to believe that America's economic Goldi- locks period has likewise come to an end. That symbiotic relationship between increasing productivity and rising wages began to dissolve in the 1970s. As of 2013, a typical production or nonsupervisory worker earned about 13 percent less than in 1973 (after adjusting for inflation), even as productivity rose by 107 percent and the costs of big-ticket items like housing, education, and health care have soared.

On January 2, 2010, the Washington Post reported that the first decade of the twenty-first century resulted in the creation of no new jobs. Zero. This hasn't been true of any decade since the Great De- pression; indeed, there has never been a postwar decade that pro- duced less than a 20 percent increase in the number of available jobs. Even the 1970s, a decade associated with stagflation and an energy crisis, generated a 27 percent increase in jobs. The lost decade of the 2000s is especially astonishing when you consider that the US economy needs to create roughly a million jobs per year just to keep up with growth in the size of the workforce. In other words, during those first ten years there were about 10 million missing jobs that should have been created — but never showed up.

Income inequality has since soared to levels not seen since 1929, and it has become clear that the productivity increases that went into workers' pockets back in the 1950s are now being retained almost entirely by business owners and investors. The share of overall national income going to labor, as opposed to capital, has fallen precipitously and appears to be in continuing free fall. Our Goldilocks period has reached its end, and the American economy is moving into a new era.

It is an era that will be defined by a fundamental shift in the re- lationship between workers and machines. That shift will ultimately challenge one of our most basic assumptions about technology: that machines are tools that increase the productivity of workers. Instead, machines themselves are turning into workers, and the line between the capability of labor and capital is blurring as never before.

From Rise Of The Robots: Technology And The Threat Of A Jobless Future by Martin Ford. Copyright 2015 by Martin Ford. Excerpted by permission of Basic Books.