Writing for the Wilson Quarterly, Daniel Akst gives voice to a growing concern:
Of course, this isn’t all down to technology – globalisation has played its part too. However, while the costs of shipping have gone up (and those of outsourcing have become more apparent), the costs of computing and robotics continue to go down. The fear, therefore, is that technological progress will push more people out of a greater range of jobs than ever before.
How will we cope? Instead of trying to predict the future, Daniel Akst looks back to the past, to a previous wave of automation in post-war America:
When the greatest economic minds of the era tried to predict the long-term consequences they usually got it completely wrong. For instance, this is what the economic historian Robert Heilbroner said about Herbert Simon – ‘a manifold genius who would go on to win the Nobel Prize in Economics’ – when the latter predicted that the average family income would reach $28,000 by the early 21st century:
The idea that consumer demand might have a limit now seems absurd, and Simon rightly dismissed it by declaring his “great respect for the ability of human beings” to spend money “without vomiting”. However, his own predictions were also way off-beam:
Instead of a future in which people earned more money than they could spend, things turned out the other way round – or at least they did among those on lower-to-middle incomes. The productivity gains brought about through automation did indeed make us richer overall, but they did so unevenly:
In the post-war period, redistribution, especially through welfare payments, was the answer to the impact of automation on jobs. Akst believes that this must continue to be the case:
The trouble is that the post-war expansion of welfare was a disaster, creating a dependent and dispirited underclass. It cannot be the answer to the new wave of automation now threatening the livelihoods of middle income earners.
In any case, our public finances cannot take the strain – far from extending welfare up the income scale, governments are withdrawing it. Daniel Akst is right when he says that “the robots will surely keep coming”, but the same does not apply to handouts for the middle class.