Technology Killing Jobs, A Brief History
Why this time it's different — and maybe much worse.
PARIS — Imagine it's the early 1900s, the dawn of the 20th century, with all its promise and hope. Scientists and engineers are looking to the future and imagining a world in which machines handle more and more of the work previously done by people, including that most primary and vital of activities: agriculture.
At this point, agriculture still employs half the world's workforce. But a century from now, these experts predict, only a few hundred thousand people will be enough to keep the agriculture going in a country like France. There will be machines to plow, to milk the cows, to harvest the grapes. Even more incredible: one single man, with one single machine, will be able in one single day to harvest almost 1 million kilograms of wheat — a feat accomplished with a New Holland combine harvester on Aug. 15, 2014, with 798 tons harvested in eight hours.
What a nightmare! What will become of those millions of farmers who don't know any other job? How will society cope?
Fast forward to 1930. In the factories, assembly lines are demonstrating their formidable efficiency. The first best-selling economist, John Maynard Keynes, writes one of his best essays, Economic Possibilities For Our Grandchildren. He announces the emergence of "technological unemployment" due to the "discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labour."
The year is now 1961. Computers are starting to move from laboratories to companies. Time magazine, in a comprehensive investigative piece called "The Automation Jobless," suggests that the number of jobs lost to more efficient machines is only part of the problem. "What worries many job experts more is that automation may prevent the economy from creating enough new jobs," the article reads.
More than a half-century later, thousands of experts — whose jobs, it's worth pointing out, didn't exist in 1961 — are still grappling with questions about the future of work. They see promise, but also serious cause for concern.
Two years ago, a pair of Oxford economists, Carl Benedikt Frey and Michael Osborne, published a sensational article in which they estimated that 47% of jobs in the United States were threatened by automation. Their method, applied to France, puts that figure at 42%. For Britain it's 38%. In its World Development Report 2016, the World Bank extends the assessment to other countries: 63% of jobs are endangered in Croatia, 65% in Argentina, 69% in India, 72% in Thailand, 77% in China and a mind-blowing 85% in Ethiopia!
The only way to cope, it seems, will be to create hundreds of millions of new jobs — if that's even possible. Either that or face massive unemployment. Hence the global fear regarding the future of work.
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Real-life human *computers, circa 1949 — Photo: NASA
Worst-case scenarios are mushrooming. In its report, the World Bank quotes science-fiction writer Isaac Asimov, who in 1964 described his vision of the world in 2014. "The lucky few who can be involved in creative work of any sort will be the true elite of mankind, for they alone will do more than serve a machine," Asimov wrote.
The mini-series Trepalium paints a similar picture. It describes the dire prospect of a world in which only 20% of the active population has a job. To keep the hordes of poverty-stricken people at bay, they live behind high walls. Winter is definitely coming.
We've heard these warnings before. And in the past, the economy found a way to create new jobs. And yet some experts worry that things are different this time around — for three reasons, according to a recent report published by the U.S. bank Citi and Oxford University.
First off, the change is taking place faster. It took 75 years for the telephone, launched in 1878, to reach 100 million users. It only took seven years for the Internet and two years for Instagram to achieve the same result. Another sign is that robotization is gaining pace, with sales of industrial robots growing 17% per year since 2010, compared to 3% before the 2008 financial crisis. What's more, information technology is shaking up the economy as a whole, not just a few industrial sectors. Finally, and contrary to what happened in the past, only the few are reaping the fruits of technological change, not the many.
This issue of distribution and sharing is crucial. It's striking to see Citi's experts bring up the need for tax credit for low-incomes and reducing working hours (something Keynes already advocated, foreseeing a three-hour workday).
Still, with regards to job creation, we might put some faith in what French economist Frédéric Bastiat wrote in his 1850 essay That Which Is Seen, And That Which Is Not Seen. What is seen are the jobs that are disappearing. What is not seen are the jobs that will emerge. Because we don't know about them yet. Because they will appear in shapes and sizes that aren't familiar to us, that don't resemble 20th-century work. Because the ways money circulates will also change, as will money itself.
Rather than fear the worst, let's keep our eyes wide open. Let's try and turn the tide. And let's preserve flexibility in the system, so the future truly can arrive, in whatever form or shape it will take.