Nội dung

The Green Light / 207 prosperity. This is why capitalism has succeeded, and other economic systems have failed. In time, I think it is likely that our perceptions will shift so that we begin to truly recognize the economic contribution that our individual marketplace decisions make. Someday, the majority of people will be valued in economic terms not for what they directly produce, but for their participation in consumption markets. If we can succeed in gradually extending that participation to the billions of people who are now trapped in poverty—and do so in a way that creates incentives to conserve resources and minimize environmental impact—we may find that the resulting consumer demand is capable of fueling an engine that can drive us to unprecedented economic heights. The Green Light The natural cycle in the tunnel is stable and reinforcing. The vast majority of the consumers in the tunnel now glow with a predominantly green light. As time passes, the collective intensity of the lights continues to gradually increase. Suddenly, we see that vast numbers of dim green lights have begun to stream into the tunnel. These new lights have barely enough intensity to make it past the threshold, but once inside, they join the river of lights as it courses over the panels on the tunnel walls. At first, we sense that the businesses in the tunnel are straining somewhat to meet this new demand, but as time passes, the cycle again strengthens. The collective intensity of the light Copyrighted Material – Paperback/Kindle available @ Amazon THE LIGHTS IN THE TUNNEL / 208 in the tunnel begins to quickly increase. We also notice that, over time, each of the newdim lights is very gradually becoming brighter. As the new lights stream into the tunnel and are incorporated into its natural cycle, we see that some bright white lights begin to pulse with new energy. New panels are now appearing in many places on the tunnel walls that were once dark. The entrepreneurs and business owners in the tunnel are responding to the rapidly increasing demand. As the number of lights continues to increase, the speed with which panels are updated and the number of new panels appearing on the tunnel walls seems to accelerate. Although we had perceived the tunnel as being almost infinitely vast, it now appears that the walls are completely covered with panels. Even as we sense this, however, the tunnel itself begins to expand. As newpanels rapidly fill the spaces on the expanding tunnel walls, we notice that some of the brightest white lights are now radiating with an unprecedented intensity. Still, as the ever-increasing cycle of light continues to parade through the expanding tunnel, we sense strongly that it is the seemingly infinite number of green lights that truly encapsulates the collective energy, enterprise and hope of all human beings. Copyrighted Material – Paperback/Kindle available @ Amazon APPENDIX / FINAL THOUGHTS Are the ideas presented in this book WRONG? (Opposing arguments and my responses) …. Page 210 Two Questions Worth Thinking About ……... Page 223 Where are we now? Four Possible Cases …….. Page 224 The Next 10-20 years: Some Indicators to Watch For .…………………………………… Page 227 Outsmarting Marx …………………………… Page 237 The Technology Paradox …………………….. Page 239 Machine Intelligence and the Turing Test ……. Page 241 Copyrighted Material – Paperback/Kindle available @ Amazon THE LIGHTS IN THE TUNNEL / 210 Are the ideas presented in this book WRONG? (Opposing arguments with responses) In this section I have listed some of the arguments that may be made against the ideas in this book, together with my responses. These are either conventional arguments or things I have thought of or seen elsewhere. The economy will always create new jobs; we will never have structural unemployment as a result of advancing technology This is the idea behind the “Luddite fallacy” which I discussed at some length in Chapters 2 and 3 (see pages 95 and 131). At present, I suspect that most economists would probably be likely to agree with this statement and, therefore, disagree with what I have suggested in this book. Here, in a nutshell, is my argument for why I think we will end up with a serious unemployment problem: As technology advances and industries automate, this improves the efficiency of production and tends to make the products and services produced by those industries more affordable. That leaves more purchasing power in the pockets of consumers. Those consumers then go out and spend that extra money on all kinds of products and services produced by a variety of industries. Some of those industries are relatively labor intensive, so they have to hire more workers to meet this demand—and so overall employment remains stable or increases. This is the reason Copyrighted Material – Paperback/Kindle available @ Amazon Appendix / Final Thoughts / 211 that, historically, technology has not led to sustained, widespread unemployment. My argument is that accelerating automation technology will ultimately invade many of the industries that have traditionally been labor intensive. Additionally, the process of creative destruction will destroy old industries and create new ones, and very few of these new industries are likely to be labor intensive. As a result, the overall economy will become less labor intensive and ultimately reach a “tipping point.” Beyond this point, the economy will no longer be able to absorb the workers who lose jobs due to automation: businesses will instead invest primarily in more machines. I have also argued that this process will be relentless, and if it is not addressed by some type of government policy, we may ultimately see a precipitous drop in consumer spending as a substantial fraction of the population loses confidence in its future income continuity. That, of course, would result in even more unemployment and a downward spiral would ensue. Copyrighted Material – Paperback/Kindle available @ Amazon THE LIGHTS IN THE TUNNEL / 212 If technology resulted in unemployment, everyone would already be out of a job because technological progress has been going on for hundreds of years This really just amounts to saying “it hasn’t happened yet, so it will never happen.” History has proven time and again that, where technology is concerned, something can be impossible since the dawn of civilization and then suddenly, in the blink of an eye, become possible. Revolutionary technologies, such as the airplane and nuclear power, where all dismissed as being impossible even by preeminent scientists who were involved in the research that led to their development. Today, most of us accept that technology will continue to advance and produce things that we might currently view as impossible. However, we still think too narrowly. We accept that there will be new technologies, new products and new industries, but most of us are not prepared to accept that all this will change the basic economic rules that we take for granted. But why wouldn’t that be the case? Is there a fundamental reason why accelerating technology should impact nearly every aspect of our lives—but not impact the way the economy works? As I pointed out in Chapter 2, advancing information technology—because it enabled the creation and distribution of financial derivatives—has certainly played an important role in the severity of the current economic crisis. I suspect that this is just a preview of the economic impacts that technology will have in the future. Copyrighted Material – Paperback/Kindle available @ Amazon Appendix / Final Thoughts / 213 The population is aging. Once the baby boomers retire, we will have a worker shortage not unemployment In nearly all the developed nations (and also in China), the populations are rapidly aging and retirement plans are projected to come under intense pressure, as too few young workers have to support too many older retired people. Does this imply that there is likely to be an overall shortage of workers as large numbers of older people leave the workforce? I think it is certainly possible this may be a counteractive force that might tend to delay the impact from automation to a certain extent. Here are some things to consider: § The impact of automation on a specific job category is really not related to the number of workers available to perform that type of job. Once technology advances to the point where a type of job can be automated, the machines to do this can easily be replicated. Machines do not need to be educated or trained, and so they are not subject to the bottlenecks that create shortages of workers in fields such as nursing. Therefore, in considering the overall impact of machine automation, the important criterion is not the number of workers available but the types of jobs that can be automated. To the extent that there are worker shortages within a specific job category, that would actually tend to increase the incentive for automation technologies to be developed in that area. We already see this effect in Japan where significant work is being to done to develop Copyrighted Material – Paperback/Kindle available @ Amazon THE LIGHTS IN THE TUNNEL / 214 § § robots capable of assisting with care of the elderly population. The current consensus view seems to be that, as a result of the 2008-9 financial crisis (and its impact on 401k plans), many workers will remain in the workforce longer than originally planned. This will give automation technology longer to come into play before any worker shortages materialize. Even if the aging population does tend to retard unemployment, this would, of course, simply be a delaying factor—not a long-term solution to the problem. I think we can certainly expect to see worker shortages in some areas, but this may very possibly be combined with an overall unemployment problem. The danger is that increasing structural unemployment will unfold in parallel with the demographic problem. I suspect that most of the projections regarding the impact of aging populations assume reasonably full employment among younger workers. If this does not turn out to be the case, the situation will obviously be much worse. As I pointed out in Chapter 3, a payroll tax-based system for supporting retirement programs might become completely unsustainable. Copyrighted Material – Paperback/Kindle available @ Amazon Appendix / Final Thoughts / 215 Businesses will never fully automate because of the high initial capital investment and the lack of flexibility this implies There are some valid points here, and I think that these factors may, in many cases, serve to retard the process of automation—but in the long run they will not prevent it. Some businesses will certainly delay automation because of the high capital outlays required. However, over time, machines will become more affordable, more reliable, and more flexible. At some point, as technology advances, machines will begin to outperform workers to the extent that a non-automated business will not be competitive. Consider the case of online banking: it generally offers a range of services, such as automatic bill paying, that could not be offered by a human bank teller. Keep in mind that automation offers cost benefits beyond simply eliminating wages. There are also payroll taxes, benefits, vacation time, management issues (and if you eliminate workers, you can in many cases also get rid of the first line managers), etc. There are also safety and liability issues; consider the safety advantages of a fully automated warehouse. The need for technical and economic flexibility may also tend to hold back automation for a time. If a business invests heavily in specific machines to produce a particular product and then that product does not sell well, it may be stuck with equipment it does not want. The obvious answer to that is that, in the future, automation technology will be more flexible and easy to adapt to different products. I think the manufacturers of automation equipment Copyrighted Material – Paperback/Kindle available @ Amazon THE LIGHTS IN THE TUNNEL / 216 are fully aware of this issue and will build increasingly flexible products. There is also the issue of economic flexibility: a business that employs workers can lay them off in slow times, while a more automated business will be stuck with its machines. Again, I think that, in the long run, as technology advances, businesses that don’t automate will simply not be able to compete: and that reality will overwhelm other considerations. Another point is that both of these factors (high capital costs and the need for flexibility) may tend to push the next wave of automation toward software applications geared toward eliminating knowledge worker jobs. Software is typically more flexible and has a lower up front cost than expensive mechanical automation. As I noted in Chapter 2, automation of these jobs, together with offshoring, may mean diminishing prospects for knowledge works and college graduates in general. Machines may take over most unskilled labor, but they will never be able to do skilled or professional jobs that require lots of training and education I think this is a dangerous misconception that stems, in part, from a certain amount of hubris on the part of people who are well educated. The conventional wisdom is that a fence has been erected within our society. On the lush, garden side of the fence, are workers who have strong educations and training. These people are beneficiaries of the information age. On the toxic wasteland side of the fence, are relatively unskilled workers. These people Copyrighted Material – Paperback/Kindle available @ Amazon