Mainstream Economics and Post-Scarcity: Larry Summers on the Automation of Labor

See the full article here on Larry Summers' personal website


     The idea that labor automation technology will be an increasingly disruptive economic force in the 21st century has become the subject of serious economic debate in the last few years. Case in point--comments recently made by Larry Summers, a prominent Harvard economist, former Secretary of the Treasury and former Director of the National Economic Council. Summers is one of the most respected economists within the discipline, and certainly one of the most influential, evidenced by the fact that his advice played a large role in the Obama administration's response to the Great Recession.

     Appeals to authority aside, that technological displacement is now the subject of hot debate among economists who actually give advice to policy makers is obviously itself a critical step in the creation of an efficacious response to this displacement.
   
     In this interview, Summers lays out his view of several key themes in the debate: effects on inequality, the limitations of increased education, and how the nation should help workers who are displaced by automation. Here's the full question and response on that last point--

How should the country help workers displaced by technology?

More progressive taxation means they will have to pay a smaller share of tax burdens. And in the case of poorer workers, more support for their work through the earned income tax credit may be possible. Reduced economic rents mean lower prices, which mean higher real wages, and a larger share of a firm’s revenues going to compensation.

Part of reducing rents is adequately empowering workers, whether it is through increases in the minimum wage, through giving collective bargaining a serious chance, or whether it is through promoting arrangements that give workers a share in profits.

    A brief explanation for non-economists of several terms and their relevance--
    Progressive taxation is a taxation system wherein higher income individuals pay a larger share of their income than lower income individuals. The degree to which a taxation system is progressive is the magnitude of that relative gap in taxation, so for instance a system where top 20th percentile earners pay 50% of their income in taxes compared to 10% for the bottom 20th percentile is more progressive than a system wherein top earners only pay 40% and bottom earners 20%.

    The increase of income inequality over the last few decades is an inarguable economic fact, so what's left up for debate is what role technological change has played in that development. Like Summers, I'm convinced by arguments that technological progress has played a large role in inequality growth and will play in even larger one in the years to come, such as put forward by Erik Brynjolfsson of MIT, but Summers is also correct to point out that there is some fuzz here in the data. The logic makes sense--automation replaces some jobs, some technologies make skilled workers disproportionately more productive than unskilled workers, and especially now, technology means that a few people can become extremely successful (I'm looking at you, Instagram).

    The idea then is that taking forward the assumption that technological progress today is biased towards creating concentrated wealth, then increasing the progressiveness of our taxation will make the benefits of technological progress more directly and evenly distributed throughout society.

    An earned income tax credit, or EITC, would be the output of that increased tax revenue raised through increased rates on top earners. An EITC is a taxation system typically meant for low to medium earners that is supposed to both increase their standard of living while not distorting their incentives away from work. Basically, for every dollar an individual earns, the government will match with some amount, and the individual should always have something to gain from working more.
   
    Compared with basic income, an EITC is almost certainly the better option in the short term, if for no other reason than it has been tested and found effective on a large scale (Meyer and Rosenbaum, 2009) and thus economists and policy makers have a good understanding of how it actually works, with little guesswork or chance of catastrophe. Ultimately it may be a poorer solution as automation becomes ubiquitous enough to make even a little bit of labor from some people unnecessary, as EITC helps the working poor but not the absolutely unemployable and poor.  In the meantime, there's little danger in expanding EITC, other than it potentially becoming a problematic hurdle to adopting basic income in the further future.

    Economic rent is a more academic term. I'll quote the first sentence from Wikipedia

"In economics, economic rent is any payment to a factor of production in excess of the cost needed to bring that factor into production"

   That's a technical definition, and can be fairly confusing, so here are the examples of economic rents Summers gives in the same piece

"...property values protected by exclusionary zoning, franchises contributing to the politically fortunate, overly generous protections of intellectual property, or implicit subsidies to the financial system..."

   The crux of the idea of an economic rent is that some revenue is essentially unearned, and should be treated differently from economic profit--it is undesirable. Summers believes, and he is surely firmly supported by most economists on this point, "Reduced economic rents mean lower prices, which mean higher real wages, and a larger share of a firm’s revenues going to compensation."

    Summers is far from the first or last economist to take on the topic of technology and labor, but it's certainly heartening to see the issue come into the prominence that it deserves. Automation will be a process, and it's likely that the best policies for transitioning society through this technological revolution will change depending on just how far labor substitution has progressed.   

The Share Economy

Former Secretary of Labor Robert Reich on the Share Economy

"The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy."

Robert Reich

     This morning I had a conversation with a friend, a student pursuing a master's in environmental engineering, about how he was about to start working as a freelance driver for a tech company in order to make some money around his schedule. With no minimum number of weekly hours necessary to maintain his partnership with the firm, he can prioritize his education over work when he needs to, and ramp up his workload when he has more time or needs more money.
      For someone like my friend, the benefits of this type of work are pretty obvious--even opposed to traditional part-time employment, he has more control over his labor hours. Perhaps a few years ago he would've had essentially the options to seek full-time employment, (extremely difficult to balance with graduate school), part-time employment (lower pay, more compatible with pursuing higher education), or going unemployed, supporting himself either through loans or the beneficence of family. Freelance type work, especially of the sort that can be neatly divided into discrete, hour-long tasks, fills in the gaps between unemployment/part-time/full-time, and since hours do not need to be agreed upon in advance, shifting preferences can actually turn into shifting hours of work.
      So what's the problem? If technology has provided a way to do away with restrictive labor traditions which prevent people from maximizing utility while simultaneously improving consumer experience, isn't that a win-win?
       Although the rise of the share economy, or other types of free lance work can be advantageous for some kinds of workers, especially young workers who don't even have expectations of acquiring full-time employment, it does a lot to erode the ability of these workers to bargain for a fair share of the productivity gains of these technologies. Freelance work pays ok, often worse than a comparable full-time position in the past, but those who own companies like Uber or Amazon are raking in profits hand over fist.
        The evidence that productivity gains turn into benefits for the laborer who's productivity has increased are slim--only a fraction of increased worker productivity over the last several decades in the United States has turned into increased wages for those very workers who have become more productive. Factory workers, aided by advanced technology, are several times more productive per hour than in the past, yet the returns have gone more to the owners of that technology (returns to capital) or the employer of the worker. The growth of a freelance economy only makes it easier for business owners to capture a larger share of those productivity gains.
      Freelance workers have proven pretty easy for large tech companies to shut out of unionization. The results of that reduced bargaining power project pretty easily into the future--corporations, excluding rare outliers, do not give out concessions to labor without hard-earned reason.
      Moving to a policy perspective, what should we do about the rise of this type of work? Legislating away companies like Uber would destroy a business that serves consumers better than what came before, and it's hard for me to justify taking away the right of people to sell their labor however they please. Creating processes to facilitate unionization or other bargaining collectives seems better--certainly in the United States we've seen a weakening of laws around unions that has been demonstrated to cause an increase in inequality between management and labor, so it stands to reason that reversing the legal trend would have some effect on the economic trend.
     But the entire idea of using a "guild" or an industry union to address these issues is difficult, as the barriers to entry are puny, and the definitions of industries increasingly fluid (I doubt there will be any Uber drivers at all in 10 years once automated cars price out human drivers). Basic income and other national redistribution schemes would circumvent these issues--tax corporate profit (which has gone through the roof since 2008) and use that money to buy things like single-payer healthcare or wage supplements, and suddenly life as a freelancer becomes distinctly more like its ideal, worker-empowered form. It's not necessarily the students of the worlds who freelance around their schedules who are losing out from the rise of the employee-less economy, it's those people who need to freelance full-time to make ends meet because traditional full-time employment has been systematically dismantled. Implement a basic income, and at least in this aspect, we get the best of both worlds.

Not Everything is Exponential

To begin this post, I present a list of predictions for the year 2019 made by the famed futurist and Google director of engineering Ray Kurzweil, from his 1999 book The Age of Spiritual Machines

1. The computational capacity of a $4,000 computing device (in 1999 dollars) is approximately equal to the computational capability of the human brain (20 quadrillion calculations per second).
2. The summed computational powers of all computers is comparable to the total brainpower of the human race.
3. Computers are embedded everywhere in the environment (inside of furniture, jewelry, walls, clothing, etc.).
4. People experience 3-D virtual reality through glasses and contact lenses that beam images directly to their retinas (retinal display). Coupled with an auditory source (headphones), users can remotely communicate with other people and access the Internet.
5. These special glasses and contact lenses can deliver "augmented reality" and "virtual reality" in three different ways. First, they can project "heads-up-displays" (HUDs) across the user's field of vision, superimposing images that stay in place in the environment regardless of the user's perspective or orientation. Second, virtual objects or people could be rendered in fixed locations by the glasses, so when the user's eyes look elsewhere, the objects appear to stay in their places. Third, the devices could block out the "real" world entirely and fully immerse the user in a virtual reality environment.
6. People communicate with their computers via two-way speech and gestures instead of with keyboards. Furthermore, most of this interaction occurs through computerized assistants with different personalities that the user can select or customize. Dealing with computers thus becomes more and more like dealing with a human being.
7. Most business transactions or information inquiries involve dealing with a simulated person.
8. Most people own more than one PC, though the concept of what a "computer" is has changed considerably: Computers are no longer limited in design to laptops or CPUs contained in a large box connected to a monitor. Instead, devices with computer capabilities come in all sorts of unexpected shapes and sizes.
9. Cables connecting computers and peripherals have almost completely disappeared.
10. Rotating computer hard drives are no longer used.
11. Three-dimensional nanotube lattices are the dominant computing substrate.
12. Massively parallel neural nets and genetic algorithms are in wide use.
13. Destructive scans of the brain and noninvasive brain scans have allowed scientists to understand the brain much better. The algorithms that allow the relatively small genetic code of the brain to construct a much more complex organ are being transferred into computer neural nets.
14. Pinhead-sized cameras are everywhere.
15. Nanotechnology is more capable and is in use for specialized applications, yet it has not yet made it into the mainstream. "Nanoengineered machines" begin to be used in manufacturing.
16. Thin, lightweight, handheld displays with very high resolutions are the preferred means for viewing documents. The aforementioned computer eyeglasses and contact lenses are also used for this same purpose, and all download the information wirelessly.
17. Computers have made paper books and documents almost completely obsolete.
18. Most learning is accomplished through intelligent, adaptive courseware presented by computer-simulated teachers. In the learning process, human adults fill the counselor and mentor roles instead of being academic instructors. These assistants are often not physically present, and help students remotely.
19. Students still learn together and socialize, though this is often done remotely via computers.
20. All students have access to computers.
21. Most human workers spend the majority of their time acquiring new skills and knowledge.
22. Blind people wear special glasses that interpret the real world for them through speech. Sighted people also use these glasses to amplify their own abilities.
23. Retinal and neural implants also exist, but are in limited use because they are less useful.
24. Deaf people use special glasses that convert speech into text or signs, and music into images or tactile sensations. Cochlear and other implants are also widely used.
25. People with spinal cord injuries can walk and climb steps using computer-controlled nerve stimulation and exoskeletal robotic walkers.
26. Computers are also found inside of some humans in the form of cybernetic implants. These are most commonly used by disabled people to regain normal physical faculties (i.e. - Retinal implants allow the blind to see and spinal implants coupled with mechanical legs allow the paralyzed to walk).
27. Language translating machines are of much higher quality, and are routinely used in conversations.
28. Effective language technologies (natural language processing, speech recognition, speech synthesis) exist.
29. Access to the Internet is completely wireless and provided by wearable or implanted computers.
30. People are able to wirelessly access the Internet at all times from almost anywhere
31. Devices that deliver sensations to the skin surface of their users (i.e.--tight body suits and gloves) are also sometimes used in virtual reality to complete the experience. "Virtual sex"—in which two people are able to have sex with each other through virtual reality, or in which a human can have sex with a "simulated" partner that only exists on a computer—becomes a reality.
32. Just as visual- and auditory virtual reality have come of age, haptic technology has fully matured and is completely convincing, yet requires the user to enter a V.R. booth. It is commonly used for computer sex and remote medical examinations. It is the preferred sexual medium since it is safe and enhances the experience.
33. Worldwide economic growth has continued. There has not been a global economic collapse.
34. The vast majority of business interactions occur between humans and simulated retailers, or between a human's virtual personal assistant and a simulated retailer.
35. Household robots are ubiquitous and reliable.
36. Computers do most of the vehicle driving—-humans are in fact prohibited from driving on highways unassisted. Furthermore, when humans do take over the wheel, the onboard computer system constantly monitors their actions and takes control whenever the human drives recklessly. As a result, there are very few transportation accidents.
37. Most roads now have automated driving systems—networks of monitoring and communication devices that allow computer-controlled automobiles to safely navigate.
38. Prototype personal flying vehicles using microflaps exist. They are also primarily computer-controlled.
39. Humans are beginning to have deep relationships with automated personalities, which hold some advantages over human partners. The depth of some computer personalities convinces some people that they should be accorded more rights.
40. While a growing number of humans believe that their computers and the simulated personalities they interact with are intelligent to the point of human-level consciousness, experts dismiss the possibility that any could pass the Turing Test.
41. Human-robot relationships begin as simulated personalities become more convincing.
42. Interaction with virtual personalities becomes a primary interface.
43. Public places and workplaces are ubiquitously monitored to prevent violence and all actions are recorded permanently. Personal privacy is a major political issue, and some people protect themselves with unbreakable computer codes.
44. The basic needs of the underclass are met. (Not specified if this pertains only to the developed world or to all countries)
45. Virtual artists—creative computers capable of making their own art and music—emerge in all fields of the arts.
    
            For a bunch of predictions made in 1999, Kurzweil has done remarkably well, with almost all of the technological advancements he foresaw either already here or on pace for development by 2019. As the years have gone by, the evidence for continued exponential technological progress has mounted up--Moore's law has continued more or less unabated. As an economist, and not a computer scientist, I can't speak to exactly how Moore's law will continue--transistor density on silicone chips is approaching a theoretical maximum--but there are enough potential advancements in computing technology such as adopting a new medium, like graphene or silicene, developing 3-D transistor architecture, quantum computing, etc. that to say it won't continue is basically to guess that not one of these things will work they way they seem to have the potential to. I apologize if that was a bit rambly--the point is that I accept the premise that Moore's law will continue into the foreseeable future.
            Conversely, the ever accelerating pace of technological progress has proved extremely challenging for humanity to handle on a social level. A big example--here we are as a species in 2015, fully aware of the existential threat posed by climate change, and yet more or less we're doing an awful, awful job changing our behavior to accommodate this fact. It's one thing to predict a technology being invented--predicting the human response to this technology, especially the broader social response, is much more difficult.
          That isn't to say there isn't some happy interplay here, like the invention of the internet allowing the rapid dissemination of a massive amount of information, greater access to education, news, etc. which support social progress and doubtlessly increase the speed at which society embraces beneficial technologies and behaviors. But despite all this, in a similar vein to our failing response to climate change, irrational behavior (defined broadly in this case as behavior that doesn't even look like utility maximization when you squint) is still dominant in our societies.
    
    There is no real reason to believe point 46, "Worldwide economic growth has continued. There has not been a global economic collapse."
    
          Social sciences at this point are, to phrase it kindly, not sciences. For a plethora of reasons, the same kind of idea sorting that occurs in sciences like chemistry and physics, where good ideas get proved and bad ideas disproved, does not occur in the social sciences. Even now, immensely powerful bankers and politicians around the world make bad economic policies and support bad economic research, either out of a profound conflict of interest, ignorance, or some combination thereof. Even if economic knowledge was developed enough to provide policy ideas that would prevent collapse (and I don't think it's that far off), that's pretty far from that knowledge being easily identified (there are many contradictory schools of thoughts within economics as a discipline) and implemented by world governments.
          Progress in technological capability rests on a set of much more stable conditions, and we should not extend this same certainty to social progress. It's certainly possible to take technological advancements and use them to help create a better global economy, but it is much less inevitable than Mr. Kurzweil predicts. 

Humans Need Not Apply

Humans Need Not Apply, a new video from CGP Grey, is an excellent introduction to the advancements in automation technology and their purportedly inevitable domination of the economy. It covers everything from robotics to software automation, and does a good job showing how these new technologies will be penetrating essentially every occupation.

In terms of relevance to economic policy, this video also makes an excellent point about how high unemployment needs to be for a catastrophe. At the height of the great depression, the unemployment rate hovered around 25%---the proportion of the workforce currently in occupations with obvious potential for automation is 45%. Clearly, if even a fraction of that workforce begins to be displaced by automation, the consequences will go far beyond increasing income inequality.

Even if you're familiar with the ideas on this blog and automation, Humans Need Not Apply is worth a view, especially if you're still sure that technological displacement will never be anything to be worried about.

A Redundant Labor Force

       As the mechanization of labor increases, a smaller amount of human labor is required to produce an amount of goods or services. While in some instances this means that work will be reduced evenly, as in everyone in a certain industry might work less hours, often the reduced hours will be distributed unequally, with some individuals being pushed out of the labor market, and even some highly specialized workers seeing an increase in hours.
       This surplus labor force is put in a quandary by an economy wherein their income is determined by their production—as they are not productive relative to machines within the legitimate economy they earn no wages, and therefore must either turn to a black market economy (one unlikely to be mechanized with the same vigor as legal industry) or starve. The implications of this redundancy are already having an enormous political, social, and economic impact on western societies.
        Human labor will be replaced by mechanized labor first where the work is most physical and easily turned into an algorithm, so low wage unskilled labor, such as factory work will be, and have already been, the first to go. Compounding the difficulties of the political system effectively handling surplus labor, the displaced work force will be comprised of those least likely to be able to influence the political system, instead, debate conducted by elites disconnected from the realities of a mechanizing economy will continue to focus on side-issues or moralizing on the failures of an unemployed populace. Unemployed and unskilled persons have historically been marginalized by the political process everywhere, and are unlikely to find redress as jobs become permanently scarcer.
         David Simon, creator of The Wire, speaks of the problems already facing a permanently under/unemployed class caused by this technological displacement. The drug war and the attendant massive number of incarcerated persons in America, he asserts, are the result of a system which has failed to adequately provide for those who have been replaced by mechanical labor. Some proportion of any excess labor force will turn towards criminality in order to survive.

         Obviously, imprisoning this excess labor force as it inevitably becomes increasingly desperate is a very poor solution to the problem. By failing to ensure a wealth distribution system which allows these displaced laborers to benefit from technological advancements, society can expect little else.

Shifting the Long Run Debate on Healthcare

Healthcare and Robotics

                American economic debate over the last few years has been defined in large part by considerations of the government’s role in healthcare, with much justification. Healthcare makes up 17.9% of the United States’ GDP as of 2011, and with a population that is both aging in terms of the percentage of people above 65 and the increasing life expectancy at reaching that age, demand for healthcare services will continue to rise.  If politicians in the United States are elected (or not) because of their policies and views on health care spending thirty years or more away, why not consider the entire system as malleable? Mechanization of labor stands to play an extremely important role in reducing the cost/unit of medical care, with important consequences for domestic politics, macroeconomic planning and society that should be looked at.

                In economic analysis there are several different time horizons that can be used to explain the movements and flows of the economy. Roughly, the first horizon is the known as the short run, defined as a time period where capital, such as machines and buildings, and labor, cannot be changed. Most projections of future health care costs are based off of extrapolating the current healthcare system into the future, from the education of physicians to the prescription of medicine, into the future, rather than a long run analysis which permits for a flexible reimagining of the system that might be more sensible in light of technological advancement.

                Much talk recently has been made of the relevance of the costs of medical care. Paul Krugman identifies the costs of procedures as the most important part of the health care equation, and controlling these costs as the key to fixing healthcare¹. There are many reasonable explanations for the high cost of medical care—advanced technology such as MRI machines are expensive to create, companies need money to fuel future research, and so on. Many of these concerns are intractable in the short term, but it is a mistake to think that they cannot be overcome in the future with far sighted policies.

                As an example, there is a strong case to be made for the obsoletion of the highly-skilled physician.  Doctors, the engines of the health care system, account for around 80% of healthcare spending².  There are many reasons why doctors command such high incomes in the United States, enumerated elsewhere³, but it is unclear exactly why the duties of a doctor cannot be performed with equal or higher ability by sufficiently sophisticated robotics (See previous post as to see why other positions within healthcare might still be filled by humans). A doctor probably spends over twenty years in education before he prescribes her first dose of aspirin—a robotic envoy could conceivably download terabytes of information in a few seconds and be ready to perform flawless procedures. Not only would the operating cost of a robot be significantly less for a robot, they would have no opportunity cost and require no return to education. Every task in a hospital that could be mechanized as opposed to performed by an MD could be an immense savings.

                Even if, grimly, this somehow only translated into a mechanical doctor only being a few percent cheaper than a human one, the implications for the national budget, and more importantly, accessible healthcare for all would be tremendous. Developing policies and hospital structures that will be able to manage the transition from human medicinal practice to mechanized practice stands to have an impact on national or even international healthcare greater than any of the current topics of discussion which focus distributing costs.

1) http://krugman.blogs.nytimes.com/2012/12/03/its-health-care-costs-stupid/

2) http://www.forbes.com/sites/realspin/2013/04/03/whos-to-blame-for-our-rising-healthcare-costs/

3) http://www.bloomberg.com/news/2012-12-12/to-cut-health-care-costs-pay-doctors-less.html

Keeping a Human Element in the Economy

The Added Value of a Human Element

                Labor will be mechanized wherever mechanized labor does a “better” job than human labor. “Better” is typically defined or conceptualized as price per unit of output—efficiency loving economists really go for efficient cost functions. However, clearly firms do not simply produce based on the cost of inputs, and the price they can charge for the output is just as important. Firms can charge a premium on a good or service for a variety of reasons unrelated to the obvious characteristics of that good or service. For example, consumers are willing to pay more for a product which is produced at an environmentally conscious factory than an otherwise identical product manufactured at a fountain of pollution. The same logic applies to pricing on sweatshop/no sweatshop, domestic/foreign production, and basically whatever aspect of a product that can be put into the consumer’s attention. Clearly, there are situations where the value of the output, as determined by human consumers, depends in large part on secondary qualities of that output.

                Certain industries likely then are not likely to be mechanized as the decrease in production cost might correspond to a potentially even larger drop in market price, because mechanizing the industry reduces the value of these secondary characteristics so much. These industries are those where a human producer adds some value to the final product that cannot be replicated by machine labor. Determining what those industries will be though is an interesting question—what exactly can a human do that other humans would prefer to be done by other humans? And why, exactly, would we prefer that a human does this work?

Audio technology has advanced in a really amazing way over the last century or two, giving any individual the ability to hear world-class musicians at incredibly high fidelity wherever they are. Still though there is a demand for live music venues where surely less skilled musicians will perform. An audiophile might make an argument that there is some quality to the music at any live venue that makes it preferable to a recording of superior musicians, but this argument that the expressed preference for live music is due to more beautiful acoustics or a louder sound system seems inadequate.

Similarly, although it is easy to buy extremely accurate prints of paintings produced originally by masterful painters, people like to buy original, hand painted works by local artists. Again, the difference in quality between a mechanical reproduction and a hand painted version is negligible, and probably undetectable to most people. Even as reproductions of masterpieces get more and more accurate, it seems likely that markets for original artwork of ostensibly inferior quality will survive. However, like with music, it is difficult to answer why exactly we might prefer the more “human” product.

Approached from the other side of the market—there are certain industries that humans might prefer to engage in even if robots can do it. Artistic pursuits like painting and music almost certainly fulfill this requirement—hobbies seem poised to take up a significantly larger part of the average individual’s day as the amount of time they need to work in order to live a comfortable life decreases. But what of things such as child rearing, low intensity farming, and construction that under some conditions people are eager to outsource and in other conditions eager to participate in?

Child rearing is about as intimate and involved of an experience as a human can expect to have. So again, even as the ability of robots to perfectly mimic the duties of a parent increases, down to warm touches which condition the brain of the child to release oxytocin and artificial breast milk which contains just as many (or more) antibodies and nutrition as that from a human mother, humans seem unlikely in the foreseeable future to mechanize childrearing too much. While people are perfectly content to let a robot tend to the dishes, holding one’s baby and developing that connection cannot be outsourced. The general prediction then would be that the tedious and uninspiring will be mechanized, whereas the exciting and profound will still attract human effort, even if it can be characterized as labor. Such a prediction is less exciting after examination—how much of what we define as tedious or uninspiring is the result of our unique cultural moment, and what are the long term consequences of relegating dreadful labor to uncaring robotic? Many philosophical and religious traditions hold that there is value to the human experience or soul in thankless labor. The choice of doing away with thankless labor seems a good experiment for testing that hypothesis.

Introduction to Post-Scarcity Economics

     The economies of the world are going to change a lot within our lifetimes. Technology is rapidly advancing on numerous frontiers, forcing workers in all economic sectors to constantly retrain themselves in order to stay relevant to their field. New waves of destructive technologies (a term here used in Schumpeter's sense of creative destruction) are being developed--advanced robotics and 3-D printing, for example, will both lead to the creation of entirely new industries while obsoleting old ones. Labor intensive industries, such as farming and factory work are not too long off from being completely automated. It's not hard to imagine that within a decade or two machines will be created that can harvest crops and plant seeds more cost-efficiently than manual laborers, in fact, working prototypes are already in the fields (see the end of this post for links to examples, and this topic will be addressed further in depth in later posts). Car manufacturing has already seen a large proportion of its manual labor force become automated.
        It's not just manual labor industries though that will be revolutionized by technological advancements in the next century. Doctors too, consummate skilled professionals who even excluding specialized training and continuing education are in school for upwards of twenty years, will see their roles in the medical industry minimized as it becomes clear that super computers which use tremendous numbers of data points and clever algorithms are much better at making diagnoses, and that a robotic surgeons hand will never, or at least on astronomically fewer occasions, slip.
        In 2012 you'd be hard pressed to find a cobbler or a blacksmith, and in 2052 you might find it equally difficult to find a human surgeon or a human factory worker. Robotics will do the job better for cheaper, eventually.
       There will, obviously, be many new professions that arise along with these new technologies. There will need to be companies which design, produce and sell robots and 3-D printers. However, there is a limit, barring unprecedented advancements in the speed at which a person can trained a new skill, how fast people can learn how to perform new jobs. Once the development of destructive industries hits a certain point, the rate at which people are separated from their jobs will exceed the rate at which they can be retrained for new positions, if those new positions even have time to be created. Unemployment, it would seem, would boom in this scenario.
     Economic doomsayers have argued for centuries that each new advancement in technology, from the beginning of the industrial revolution until the advent of the personal computer is bad because although it may be beneficial for an individual to adopt, by destroying a traditional industry (cottage workshops, many secretarial positions) the increase in unemployment would be a net loss for society. It is clear that these doomsayers have been wrong--society has in fact not collapsed because of labor saving advancements, and contrarily, it has experienced since the industrial revolution a meteoric rise in the standard of living, without the sort of employment crisis some foresaw.
     There is a difference, though, I would argue between what has characterized the last several hundred years of industrialization and the upcoming robotic economic revolutions. The invention of factories meant that the productivity of any worker in that factory increased astronomically, and where previously one worker could produce eight widgets a day, ten workers with specialized tasks could produce a thousand. The demand for widgets couldn't possibly keep up if every widget-maker became such a more productive widget maker, so inevitably some of them had to switch careers. Luckily, there were new factories making other products being built all over, so these temporarily deposed widget-makers could find new work before too long. But with a robotic-labor revolution, there isn't really anywhere for the redundant heart surgeon or migrant worker to turn to. Per capita productivity will go up from the robotic revolution, but it won't be because worker productivity goes up. If a robot designs a robot for another robot to make, then that robot goes out is maintained by another fleet of robots that were also designed by robots, and this trend occurs simulatenously in a huge number of industries, where exactly does a massive unemployed labor force fit into the situation? Since all non-creative jobs or jobs that people might prefer to be done by a human such as a masseuse can be roboticized within our lifetimes (I was born in 1992, apologies to an older reader), where do the masses of those in soon-to-be eliminated positions find new work? Wall-E, the 2008 Pixar film, presents a rather convincing possibility--they won't.
    This presents a challenge to our current economic system. When no one (or at least very few) people have to work in order to feed our civilization, how do we manage a food economy? When eventually there are more people than useful jobs for them to do, how do we react? Do we stifle technological progress in order to preserve unnecessary jobs? There is a chance that I am wrong and people will continue to create new industries that still require human labor at a rate exceeding that which robots take human jobs, but I think that is unlikely, and that these questions need to be considered. Much of the world is headed before too long to a place where post-scarcity is possible. This blog will be a place where I attempt to consider the implications of a post-scarcity economy, and the ways that people should start thinking about the world a few decades from now so that the post-scarcity economy can be handled in the best way.

Links:
Roboticization of food harvesting
http://fruitgrowersnews.com/index.php/magazine/article/robotic-strawberry-harvesters-demoed-in-california1
http://www.fresnostate.edu/jcast/cati/update/2012-summer/aiming-for-automation.html

Doctors becoming a different profession, responsibilities diminished by new technologies
http://tech.fortune.cnn.com/2012/12/04/technology-doctors-khosla/

A graphic showing a predicted timeline of various technological advancements
http://michellzappa.com/map/envisioning-technology-2011-03-07.png