It's not just about off-shoring, structural unemployment is here to stay

In a blog post Robert Reich points out that we have permanently lost good paying skilled positions due to productivity as a result of the adoption of technology.

As technology came on line, workers were able to do more. It appears that the average worker can now accomplish over 2 times as much today as in the 1970's

Keep in mind that this is just the average. In some sectors (such as manufacturing or office work) the increase well may be by a factor of 10 or more. It is even worse then that, in some areas job's have been virtually eliminated. In the seventies, it was hard to visit a business and not see large rooms, filled with workers (mostly women) busily typing (typists) and doing accounting (bookkeepers). Word processing software has virtually eliminated the position of typist from the 21st Century office.  Similarly accounting software has achieved the same for bookkeepers.  Things are even worse.  Now computers are writing sports articles.

Stop and think of the implications of this. Writing a sports article is a creative act. The creative arena has traditionally be viewed as a safe haven from structural unemployment. No More. Granted, the articles written by software are not great Shakespearean works. One thing experience has taught us it that once a technological breakthrough takes place, the new technology will increase incrementally over time. At some point in the future, software may well be creating great works of literature on par with William Shakespeare (or at least Tom Clancy).

Writing is not the only creative area that is being impacted by this type of technology. Music is similarly being impacted. Again this is not a great work comparable to Mozart but it certainly my raise to the level of a competent amateur. With the recent advances in neural network programming (i.e. Watson), it is only a matter of time before the neural nets take feedback on computer generated compositions and start to generate better (or at least popular) compositions.

The Alamo of creativity, software, will not long withstand this assault. We already have standard methods in place to describe and document data that can be accessed and manipulated by software. What is lacking is a standard calculus that describes data manipulation. Once that comes about, it is only a matter of time before software will be generating software and then it will be Katie bar the door for software designers and implementors.

Bad enough as this is economically, there is a social aspect to this also. Structural unemployment is a major driver behind income inequality. Income also drives consumption. Consumption drives production.  It seems quite likely that as income falls, consumption will fall, triggering a reduction in production almost inevitably to increased layoffs. This type of systemic unemployment coupled with the structural unemployment identified here will result in an ever increasing amount of not only economic but social inequality (the elephant in the room is that sustained economic inequality may be inevitable).

History tells us that when the gap between the have's and the have not's becomes large enough social unrest follows.  Just consider:

  • The labor / social unrest demonstrated in the 1920's and 30's (which by the way, gave us Fascism, WW2 and 60 million dead)
  • The Russian Revolution of 1917 (resulting in Stalinism who killed between 20 and 60 million of his own people)
  • The French revolution (end result; Napoleon and the Napoleonic Wars - this butchers bill is estimated to be between 3.2 and 6.5 million).

Just consider with modern capabilities what the butcher bill could be if social unrest triggers another world holocaust. 300 million, a billion, more?

So, what to do?

We could:

  • Do Nothing. Just Jim is nuts. This will never happen. This is to be hoped and prayed for. If we take no action though, this outcome is unlikely.
  • Take the sky is falling approach (run around and scream and shout). Historically this has proven not to be an effective response and not very useful.
  • Take the Luddite / SkyNet is coming approach. Seek to retard or restrict the adoption of technology.  Unfortunately, standing in the way of progress has been shown to be as successful as King Knute's attempt to hold back the sea.  At best, it will just retard things.
  • Or, like the Marines say we can 'improvise, adapt and overcome'.  Adaption is the only way to address the changes we currently face and will face in the future. Biology tells us that a species that fails to adapt will fail to flourish. As will we, if we fail to act effectively.

Before we consider what actions we should take, it would behoove us to consider some fundamental principals.

To some in this country, the term 'entitlement' is a dirty word. When they use this term it is usually coupled with the idea that recipients of benefits of 'welfare' / 'social' programs are undeserving.

Got news for them.

They are not only deserving but they are ENTITLED!

It says so in the CONSTITUTION!

The preamble to the states "We the People of the United States, in Order to form a more perfect Union, establish Justice, ensure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

Yes, there it is folks, in black and white.  We not only deserve and are entitled to, it is a fundamental duty of the government, to promote the general welfare. This is a fundamental part of our social contract and one that we have failed at miserably.

Important as this principle is (and it needs reiteration: "promote the general Welfare"), there is one that is more important.

"We the People" is the first phrase in the preamble and there is a reason for this. The constitution is a social contract between individuals. Let me reiterate between individuals.

Whatever action we undertake, if it does not promote the general welfare, we should not be doing it.  Stated as a principle:

"Every action we undertake will promote the general welfare of Individuals"

Every journey begins with a destination.  We need to know where we are going before we start planning or traveling. We should begin talking about:
  • What do we mean by general welfare?
  • What do we mean when we say Individuals (the plural of a single person versus groups of people)?

Once we have a consensus, we can then address how we are going to achieve our ends when it comes to:
  • Politics
  • Economics
  • Society
  • Technology
  • ...

This is a clarion call.  The ongoing evolution of technology and its adoption will pose challenges far beyond the structural unemployment identified here.  The outcomes have the potential to radically change us and our society.  These outcomes run the gamut from extremely positive to the extremely negative. 

We can have a world in which nobody worries about: 
  • Having enough food to eat, 
  • Getting sick,
  • Being decently clothed
  • Not being able to put one's time to productive us
  • ...

At the other end of the spectrum lies a Malthusian catastrophe of truly horrendous proportions.

We can hear the trumpets sounding. The time to act is now. If we do not, we will be overcome by events with probable poor outcomes.

Make the impact of technology change part of your every day dialogue. Over the course of history the human race has reached and acted on momentous consensuses; slavery, status of women, democracy just to mention a few. All of these started with reasoned dialog. Now is the time for us to step up and do our part.