Of course, acknowledging the real struggle might seriously impact the whole "things will get better by themselves, just keep sleeping" argument of the piece...
Keep in mind that The Washington Post was recently acquired by Jeff Bezos.
This article makes much more sense when viewed in the light of Amazon's current PR problems due to their treatment of poorly paid warehouse workers. They are desperately trying to automate as fast as possible, and this piece tries its best to spin it as a win-win for everyone.
Consider Fred, who is paid $1 and produces $10 in value. Every employer would love to have Fred come and work for them. In fact, another employer would likely offer Fred $2 to come and generate $10. Fred, not being an idiot, takes the offer.
Another employer offers Fred $3, and so on, until Fred is making ($10 - opportunitycost).
In other words, Fred being way underpaid according to the value he produces is an unstable situation.
On the other hand, the mechanization of agriculture had devastating social consequences when introduced to the UK in the 1700s, leading to mass unemployment, crimewaves and the introduction of the death penalty for stealing food. The industrial revolution eventualy created replacements but things got very ugly for a few generations.
There's no reason to assume that replacement forms of employment will automatically appear when needed.
> as the market for cotton cloth matured in the mid-20th century, further automation no longer generated such increases in demand and new technology slowly eliminated jobs in the textile industry.
This seems to be a counterpoint to his thesis: Technology does indeed create unemployment if all demand has already been satisfied.
His point should thus be stated with a caveat: Technology does not destroy jobs as long as demand increases along with the increased supply. In order to know whether robots will steal our jobs, we have to first determine whether human demands are already being met or not, and it seems plausible to me that they nearly are today (though the inverse also seems plausible).
"Demand" can be a bit of a fuzzy thing. For instance, all those people who were now had "enough" clothes and were saving money from the lower prices were instead buying other things, creating increased demand for some other sector of the economy. Which, presumably, would eventually lead to more jobs elsewhere.
I think a better moral for the story is to expect technology to have significant local effects on employment in particular industries (either up or down), but the evidence for the economy as a whole seems to be much more neutral.
The loom was an example of a technology that actually had a more egalitarian effect on wealth distribution: expensive skilled labor was replaced with greater numbers of cheap unskilled labor.
Given the right prices, this sort of technology can make sense even if it doesn't actually "save" labor at all -- replacing one efficient skilled person with two inefficient unskilled ones for the same output makes business sense if the skilled labor is more than double the price.
Today's market has a lot of disparity in labor prices like this, especially when you look at it globablly. So it's entirely possible for new tech that doesn't actually save labor in terms of output per worker to find a niche.
At the same time, it's also possible for tech to do the inverse, and replace three expensive unskilled workers with one skilled one who commands double the wage.
So in terms of income inequality, at least, it's not entirely clear where technology will take us.
To write an entire article using historical textile production as an example and not mention the impacts of contemporary globalization on the same industry is confusing at best and hopelessly optimistic at worst.
The point of the article isn't what is happening presently in terms of textiles and globalization, but how technological innovation affected the industry in 18th and 19th century Massachusetts.
That said, there are some omissions. The American Colonies / Early United States were labor-constrained. The economy was growing rapidly, and there simply weren't enough warm bodies to meet demand (discussed in Smith, Wealth of Nations, Book 1, Chapter VII). Wages were high, supplies of finished goods were limited, and the benefits of industrialization were high. This contrasted with England in which factories drew masses of labor from the countryside, city populations exploded (Liverpool, Manchester, and Birmingham grew from small towns of 4,000 - 6,000 in 1685 to major cities of 393,000 - 552,000 by 1881, see Arnold Toynbee's Lectures on the Industrial Revolution), and working conditions in general were abysmal.
Which suggests other reasons why picking the Lowell factories as the analysis point is somewhat misguided. Toynbee's Lectures paint a markedly different picture of how industrialization proceeded in the UK.
The challenge now is that virtually all basic needs of survival ... and then some ... are satisfied. Does this mean that there's no additional demand or demand growth possible? No. But ... the situation's markedly different from the late 18th century.
Too: the dawn of the Industrial Revolution was a period in which there were vast untapped natural resources -- virgin land (or, if you prefer, newly cleared land by way of the aboriginal genocide and pandemics) in the Americas, forests, untilled prairies, and of course, untold gigatons of coal, oil, and gas in the ground. William Stanley Jevons noted that increased efficiencies tended to increase consumption of resources by increasing their marginal utility (the so-called Jevons Paradox)
We're looking at a constrained resource environment going out, which may well invert the logic of Jevons Paradox and see fewer resources consumed with increasing efficiency. Which would mean that automation would idle, not employ, hands.
Internet technology has stabilized already: we're still using HTML, HTTP, javascript, etc. The Space Jam website from 1996 still loads in a browser. Most servers and clients still use IPv4. Etc.
Well, it must, some day. But I'm not betting on any specific millennium.
I just love those articles that state that "we have no problem" because "everything just settles out at the end", while forgetting that one of the mechanisms for everything to settle up is a huge share of the population dying. It's survival bias acting at slaughter time.
> It is difficult to imagine productive activities that cannot be automated—mining, construction, many medical services, house cleaning: the list goes on and on.
> A decline in the demand for labor, caused by automation, will result in lower wages, without necessarily producing an increase in employment (work effort will not grow if there is no work), let alone an increase in national income.
However, as he also states, "with no truck drivers to pay, the cost of truck transportation will fall, and price will follow". In my view, this will further reduce the main necessities of living (food, hygiene products, energy) which will in turn allow people to live with much less money. Therefore, the poverty levels should fall, as well. It is not hard to imagine the government paying enough social welfare so that everyone can afford basic stuff. Actually, government could also just buy enough robots and produce all the necessities itself.
This is conveniently forgetting that demand (which eventually ends in consumer demand) isn't necessarily infinite. We have this thing called a planet we live on, that needs to remain intact (or Elon Musk needs to get a move on getting us to other planets :)
Could the inventors of the loom, at the dawn of the Industrial Revolution, have imagined the types of jobs most of have today, in the morning of the Information Revolution? I doubt it.
There will be industries and jobs enabled by today's technologies, that we can't picture today. My bet is on biotechnology. We know only a very small amount about the systems of life.
Yeah there may be new jobs, but why would you have a human doing them, when a robot could?
We can't pretend that a new tool for humans to use is equivalent to a fully autonomous robot which can think for itself beyond any human capacity. Those two things are fundamentally un-alike.
[+] [-] al2o3cr|12 years ago|reply
Wow. Way to completely write out of the story the PEOPLE who fought tooth-and-nail to get those raises, WaPo....
http://en.wikipedia.org/wiki/Lowell_Mill_Girls
Of course, acknowledging the real struggle might seriously impact the whole "things will get better by themselves, just keep sleeping" argument of the piece...
[+] [-] FD3SA|12 years ago|reply
This article makes much more sense when viewed in the light of Amazon's current PR problems due to their treatment of poorly paid warehouse workers. They are desperately trying to automate as fast as possible, and this piece tries its best to spin it as a win-win for everyone.
[+] [-] WalterBright|12 years ago|reply
Another employer offers Fred $3, and so on, until Fred is making ($10 - opportunitycost).
In other words, Fred being way underpaid according to the value he produces is an unstable situation.
[+] [-] chrisdevereux|12 years ago|reply
There's no reason to assume that replacement forms of employment will automatically appear when needed.
[+] [-] ealloc|12 years ago|reply
This seems to be a counterpoint to his thesis: Technology does indeed create unemployment if all demand has already been satisfied.
His point should thus be stated with a caveat: Technology does not destroy jobs as long as demand increases along with the increased supply. In order to know whether robots will steal our jobs, we have to first determine whether human demands are already being met or not, and it seems plausible to me that they nearly are today (though the inverse also seems plausible).
[+] [-] YokoZar|12 years ago|reply
I think a better moral for the story is to expect technology to have significant local effects on employment in particular industries (either up or down), but the evidence for the economy as a whole seems to be much more neutral.
[+] [-] YokoZar|12 years ago|reply
Given the right prices, this sort of technology can make sense even if it doesn't actually "save" labor at all -- replacing one efficient skilled person with two inefficient unskilled ones for the same output makes business sense if the skilled labor is more than double the price.
Today's market has a lot of disparity in labor prices like this, especially when you look at it globablly. So it's entirely possible for new tech that doesn't actually save labor in terms of output per worker to find a niche.
At the same time, it's also possible for tech to do the inverse, and replace three expensive unskilled workers with one skilled one who commands double the wage.
So in terms of income inequality, at least, it's not entirely clear where technology will take us.
[+] [-] georgeoliver|12 years ago|reply
[+] [-] dredmorbius|12 years ago|reply
That said, there are some omissions. The American Colonies / Early United States were labor-constrained. The economy was growing rapidly, and there simply weren't enough warm bodies to meet demand (discussed in Smith, Wealth of Nations, Book 1, Chapter VII). Wages were high, supplies of finished goods were limited, and the benefits of industrialization were high. This contrasted with England in which factories drew masses of labor from the countryside, city populations exploded (Liverpool, Manchester, and Birmingham grew from small towns of 4,000 - 6,000 in 1685 to major cities of 393,000 - 552,000 by 1881, see Arnold Toynbee's Lectures on the Industrial Revolution), and working conditions in general were abysmal.
Which suggests other reasons why picking the Lowell factories as the analysis point is somewhat misguided. Toynbee's Lectures paint a markedly different picture of how industrialization proceeded in the UK.
The challenge now is that virtually all basic needs of survival ... and then some ... are satisfied. Does this mean that there's no additional demand or demand growth possible? No. But ... the situation's markedly different from the late 18th century.
Too: the dawn of the Industrial Revolution was a period in which there were vast untapped natural resources -- virgin land (or, if you prefer, newly cleared land by way of the aboriginal genocide and pandemics) in the Americas, forests, untilled prairies, and of course, untold gigatons of coal, oil, and gas in the ground. William Stanley Jevons noted that increased efficiencies tended to increase consumption of resources by increasing their marginal utility (the so-called Jevons Paradox)
We're looking at a constrained resource environment going out, which may well invert the logic of Jevons Paradox and see fewer resources consumed with increasing efficiency. Which would mean that automation would idle, not employ, hands.
[+] [-] hobs|12 years ago|reply
Technology will likely not stabilize.
[+] [-] snowwrestler|12 years ago|reply
[+] [-] marcosdumay|12 years ago|reply
I just love those articles that state that "we have no problem" because "everything just settles out at the end", while forgetting that one of the mechanisms for everything to settle up is a huge share of the population dying. It's survival bias acting at slaughter time.
[+] [-] slurry|12 years ago|reply
It has, however, stabilized locally for periods of time in one area of industry or another.
And it is likely to do similar things again.
[+] [-] mhb|12 years ago|reply
http://www.becker-posner-blog.com/2014/01/secular-stagnation...
[+] [-] tomp|12 years ago|reply
> It is difficult to imagine productive activities that cannot be automated—mining, construction, many medical services, house cleaning: the list goes on and on.
> A decline in the demand for labor, caused by automation, will result in lower wages, without necessarily producing an increase in employment (work effort will not grow if there is no work), let alone an increase in national income.
However, as he also states, "with no truck drivers to pay, the cost of truck transportation will fall, and price will follow". In my view, this will further reduce the main necessities of living (food, hygiene products, energy) which will in turn allow people to live with much less money. Therefore, the poverty levels should fall, as well. It is not hard to imagine the government paying enough social welfare so that everyone can afford basic stuff. Actually, government could also just buy enough robots and produce all the necessities itself.
[+] [-] hrishirc|12 years ago|reply
[+] [-] vshade|12 years ago|reply
[+] [-] aridiculous|12 years ago|reply
[+] [-] snowwrestler|12 years ago|reply
There will be industries and jobs enabled by today's technologies, that we can't picture today. My bet is on biotechnology. We know only a very small amount about the systems of life.
[+] [-] sixbrx|12 years ago|reply
We can't pretend that a new tool for humans to use is equivalent to a fully autonomous robot which can think for itself beyond any human capacity. Those two things are fundamentally un-alike.
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] scotty79|12 years ago|reply
[+] [-] lhgaghl|12 years ago|reply
It's not stealing if I don't want it.