The idea that computers will soon steal our jobs is an article of faith among many of the world's most powerful people. The argument goes like this: breakthroughs in robotics and artificial intelligence will make it possible to automate various kinds of labour. Self-driving cars will replace taxi and truck drivers; software will replace lawyers and accountants. We'll end up with a world where machines do almost all of the work. Over the last few years, a growing chorus of pundits, academics and executives have made this scenario seem inevitable – and imminent.
As someone who watches technology trends closely as part of my business, I have been thinking about the future impact of all the technology innovations and automation we are currently experiencing and on the cusp of achieving. Many of the headlines I read about these trends -- and even some I write -- predict some pretty negative consequences right along with the monumental achievements and improvements. While improvements in machine learning, artificial intelligence, big data, and robot automation could mean huge advances in medicine, science, commerce and human understanding, it's also undeniable that there will be consequences as well. These technological advances represent a significant challenge to capitalism. Together, they are poised to potentially create jobless growth and the paradox of an exponentially growing number of products, manufactured more and more efficiently, but with rising unemployment and underemployment, falling real wages and stagnant living standards.
With the unemployment rate falling to 5.3 percent, the lowest in seven years, policy makers are heaving a sigh of relief. Indeed, with the technology boom in progress, there is a lot to be optimistic about. Manufacturing will be returning to U.S. shores with robots doing the job of Chinese workers; American carmakers will be mass-producing self-driving electric vehicles; technology companies will develop medical devices that greatly improve health and longevity; we will have unlimited clean energy and 3D print our daily needs. The cost of all of these things will plummet and make it possible to provide for the basic needs of every human being. I am talking about technology advances that are happening now, which will bear fruit in the 2020s. But policy makers will have a big new problem to deal with: the disappearance of human jobs. Not only will there be fewer jobs for people doing manual work, the jobs of knowledge workers will also be replaced by computers.
A feature of the fight for control of the Labour Party over the past year has been a fair amount of finger-pointing, with leader Jeremy Corbyn's supporters decried as "Trots" and "anarcho-syndicalists" and his critics branded "Blairites" and "neoliberals". What do all these terms mean? While Labour members on different sides of the party might not agree on much, most are happy to call themselves socialists. It was in Tony Blair's controversial speech to party conference and 1994, and it was in Jeremy Corbyn's speech to conference on Wednesday, when he heralded "21st Century socialism". Since the idea first came into being in the 19th Century, socialism has taken on many forms, but most versions of it have in common a belief in public rather than private ownership or control of property and natural resources.
In the future, machines will replace humans in jobs. This is not controversial: it's what machines have done since well before the start of the industrial revolution. Petrol pump attendants were replaced by automated pumps, secretaries were replaced by Microsoft Office. This is what economists call the substitutive effect of automation: humans are substituted in jobs by machines. From time to time, fears have been expressed that humans would run out of jobs entirely. I first wrote about this concern back in 1980, and like many other people at the time, I under-estimated the resilience of what economists call the complementary effect of automation.