Technology and jobs

I have mentioned the rational optimist Matt Ridley a few times already (start here), and I do so again with great pleasure. He has written a piece for The Times that has much the same title as the one above, and you can read it also on his website. I like it partly because I enjoy his breezy style, and partly because I remember having  discussions about this issue with the late Fred Gruen, who taught me a great deal about the interconnection between economics and politics.

I still take the view that technological change does provide new jobs at the cost of the old, and that those who are displaced are rarely the ones who get the new jobs. The talk (from Labor) on the day I wrote this post  was about how the Government had banished the car industry and what would happen to the skilled and semi-skilled workers who would no longer be making cars. I guess some of them may in the future be assembling cars from components brought in. I don’t know, and at the moment I doubt that anyone does.

Ridley’s little essay looks more at the macro side of things, and from a longer view. The paragraph that grabbed me, as a historian, goes like this:

In the 1700s four in every five workers were employed on a farm. Thanks to tractors and combine harvesters, only one in fifty still works in farming, yet more people are at work than ever before. By 1850 the majority of jobs were in manufacturing. Today fewer than one in seven is. Yet Britain manufactures twice as much stuff by value as it did 60 years ago. In 1900 vast numbers of women worked in domestic service and were about to see their mangles and dusters mechanised. Yet more women have jobs than ever before. Again and again technology has disrupted old work patterns and produced more, not less, work — usually at higher wages in more pleasant surroundings.

I mentioned the shift in agriculture in a recent post of my own. What Ridley says about Britain applies equally to Australia. Over my working lifetime I have seen Australia move into manufacturing from agriculture, then into service, then into what was called  ‘the quaternary sector’ (mobilising information in the interests of efficiency),  and now into the quinary sector (culture, health and research). Australia has become wealthier — three to four times since the 1950s — and our workforce is much bigger and better paid. What is there to fear — over the longer run?

Ridley offers what he sees as a current anxiety, which is that the fearful are the clever people themselves, who see technology as replacing them. As computers get smarter and smarter, who will need them?

… there’s a sort of frisson running through the chatterati now that people they actually know might lose their jobs to machines, rather than the working class. Indeed, the jobs that look safest from robots are probably at the bottom of the educational heap: cooks, gardeners, maids. After many years’ work, Berkeley researchers have built a robot that can fold a towel — it takes 24 minutes.

He’s great fun, isn’t he! And he’s not worried, though people like him (and me) have to be included in the chatterati — and I’m no more worried than him, because there’ll still be a place for a solitary blogsmith tapping out his ideas and thoughts. And there’s more to our confidence than sheer self-interest.

If we are reaching the point where robots could do almost anything, what is there left for people to do? To this I suggest two answers. The first is that we will think of something. Half the new professions that are thriving today are so bizarre that nobody could have predicted their emergence — reflexologist, pet groomer, ethical hacker, golfball diver. In a world where androids run supermarkets, you can bet that there’s a niche for a pricey little shop with friendly salespeople. The more bulk services are automated, the more we will be willing to pay for the human touch as well.

I didn’t find the pointer to his second answer, though it is probably that we have more time now to do what we would like to do, if we are not given over to  the need to work, work, work. He puts it this way:

Technology liberated us from that precarious and awful world. If it does so again, so that our grandchildren never have to think in terms of “jobs” at all, but merely in terms of how they can fill their days fulfilling their wishes and helping others, mixing bits of work with bits of leisure, while drawing on the output of Stakhanovite machines for income, will they envy us our daily commutes and our office politics? 

He doesn’t think so, and nor do I. But, back to the beginning, governments cannot ignore the displacement of workers, because workers are voters, and because the communities in which they live will all suffer if they become unemployed, and there are even more voters in the communities. So I think we can expect government of all kinds to be loud in their talk about ‘packages’ and ‘plans’, while the rest of us thank our lucky stars that we are somewhere else.

Join the discussion 10 Comments

  • Alister McFarquhar says:

    Happy to be reminded of Fred Gruen -we met in Melbourne Cambridge and at Conferences

    but we lost touch when he went to Canberra

    The relation between technology and growth was well explored in Colin Clarks Conditions of Economic Progress [1940]

    Keynes considered Clark a genius

    For me the best applied economist I know

    I wanted to do my PhD under him at Oxford

    but he thought my project frivolous

    Fortunately this criticism assured the award of a fellowship to be held anywhere in the World

    Such was Clarks unpopularity with the establishment

    I doubt Gruen understood the conflict between economics and politics

    Economics is about maximising personal utility

    Macroeconomics relevant for policy is like climate science- a bit of a mess

    Politics is about manipulating factoids to get votes

    Gruen would be for maximising efficiency

    Many current economists seem to be for redistribution which has no cost

    Most are evangelists reflecting their politics

    They would be better to say who gains and who loses from alternative policies

    and leave it to the politicians

    What did you learn from Fred on this?

    I hope my brevity does not rob my comment of meaning

    • Don Aitkin says:

      Alister,

      Fred was a Visiting fellow in my Department after he retired. He wanted to see politics from the perspective of political scientists, and in return I got to see politics from the perspective of economists. Yes, Fred was about maximising efficiency but, since he’d been an adviser to governments, he tried to find ways of doing so that would be acceptable to governments of either persuasion. Very shortly afterwards I became an adviser to government too, and I learned a lot more there!

  • Mike O'Ceirin says:

    Don the effect of technology on jobs is certainly valid in that jobs are displaced because particularly computer controlled machines do the job more quickly, cheaper and do not need a rest. I must though address some of the misconceptions in that are in the piece. The first computer I used in 1974 was much slower and had much less capacity than anything being used today but to computers are getting smarter is a nonsense. In principal the computer of 1974 and all current computers are the same it is just modern ones run vastly more quickly an have a much greater capacity. Computers can be instructed what to do by humans using a programming language nothing more and nothing less. If you go and buy a towel it will be folded by a machine and most likely the control mechanism of the machine will have computer. Your towel folding example has to some futile effort to show we can make something in own image that will decide how to fold towels. What motivation is there for the computer to fold towels? Only that someone instructed it to. If the computer decides it should try origami with the towel or that a touch of lemon juice is needed then maybe it making some independent decision that is getting smarter. It is hard to predict where technology will lead us but certainly cooks, gardeners and maids are far less needed now because of technology.

    • dlb says:

      What I often wonder about is what did IT professionals and those who find computers an all consuming passion (geeks) do before computers were invented? These people are often very bright, surely people with such brains must have felt somewhat under challenged in the days of the parrafin lamp and horse drawn cart?

      • Don Aitkin says:

        One of the great advantages of the present over the past is that there are indeed very many more ways of earning a living than there used to be, and at least in principle, more ways of leading a satisfying life. The literature of the last hundred years contains many perspectives about men (and women, too) who felt under-challenged by what was available to them.

  • Gus says:

    A striking feature of Verne’s “Paris of the 20th Century” fantasy is his firm belief that 20th century people would rely on servants in the same way that they did at his time, the late 19th century. He did not envision washing machines, dishwashers, vacuum cleaners, kitchen appliances and the surprising reality that today most people look after themselves and do not employ servants. Neither did he envision that we would no longer travel by sea other than for fun. In his book, great canals are dug out to connect Paris with the sea, so that gigantic ocean liners can dock in Paris itself, alongside railway stations. Students in his book exercise Latin and vie for honors in Latin poetry–this being amongst their primary occupations. In short, just about everything in the book is wrong. It’s a great book because today it reminds us of the futility of predicting future. It never comes out as we think it should. It makes jumps sideways instead. It progresses by changing the subject.
    So, the car industry in Australia is going to fold. This is not because the current government is banishing it. It is because it no longer wants to feed tax payers dollars to it. Did this industry ever really belong in Australia? None of the companies were Australian for starters. Today, Australia is a country of about 23 million expensive people. But right next door is a country of 237 million (10 times larger) inexpensive people, who all want to drive cars! Indonesia is going to become one of the largest car markets in the world. This is why GM, Ford and Toyota move their operations there. This is a rational decision.
    What of the workers and engineers employed by GM, Ford and Toyota in Australia? Well, why shouldn’t they start their own car company and produce specialized vehicles of their own Australian design for special customers, vehicles like those built by McLaren, a company established by a New Zealander in 1963, or vehicles like those built by Tesla, a company established by Elon Musk in 2003.
    It isn’t true that you can’t start a new car company today. Of course, you can. There are many such companies sprouting like mushrooms in Britain, Sweden, the Netherlands, Russia, in Germany even. All it takes is know-how and capital.
    But they can seek new opportunities in something more sideways, something more original too. For example, they can build dirigibles or fast trains or pleasure boats or gigantic trucks for mining operations in Pilbara or drones. 3D printing techniques will open new opportunities to small companies.

  • nofixedaddress says:

    24 minutes to fold a towel. 60 per day.

    But will it reach for the next towel?

  • […] I have no proposed solution, and think that what has happened has been almost unavoidable. I wrote in a recent piece that economic change rarely provides the new jobs to the displaced workers, and you can see an […]

  • […] have commented favourably on Matt Ridley’s work a few times (for example, here, and here). He is an entertaining writer, well-read and wide-ranging. He wrote a typically engaging […]

  • Non seulement il a réussi sa meilleure perf de la saison (20 pts, 9 rbds, 3 ctres), mais il a en plus mis le 1er trois points de sa carrière NBA.

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