Most of the stuff you read these days is all politics, even when it comes to real data. Here is an example. Recently, Trump’s Treasury Secretary Steve Mnuchin said it would be 50-100 years for robots. I’d love to see the data he’s looking at. Certainly, they’d like that to be true. Of course, they do have a lot of more pressing things on their plate right now like tax reform. Here is the quote from the Axios story:
On AI supplanting human jobs: “it’s not even on our radar screen…. 50-100 more years” away. “I’m not worried at all” about robots displacing humans in the near future, he said, adding: “In fact I’m optimistic.”
Former Treasury Secretary Larry Summers wrote an article with a differing opinion. Jeb Bush thinks it is imminent. PWC says that 38% of all US jobs are subject to being disintermediated by a robot. When I have spoken to college classes, I talk about this. It’s not the low-level minimum wage jobs that are at risk, but highly educated people are at risk too. I have already seen technology that replaces doctors, lawyers, and accountants. Moral: Learn principles and how to think when you go to college. Form the beginnings of a network. Don’t think college is a be all end all.
The reality is somewhere in between Summers, Bush, and Mnuchin. There are jobs that are almost certainly threatened today. Here is a macroeconomic fact that has played out generation after generation. It takes about 30 years for a radical new innovation to be adopted by the masses and it’s true economic potential unleashed.
There are always hurdles. In the case of the printing press, people had to learn to read and bookmakers had to get to scale. With rail, track had to be laid and engines built. It’s always something. Even computers have taken about 30 years. If the internet went mainstream in 1993 with the introduction of Netscape, we still aren’t where we will be in 2023. If you think it won’t be a lot different, look at the last five years of innovation.
One of the sad things about groundbreaking innovation is sometimes older generations have to die off for them to be embraced. Baby boomers are age 52-54 and up. They are starting to die off and the generation ahead of them is fading away faster and faster.
Summers is correct we are just starting to see artificial intelligence in all kinds of applications. We have seen large-scale robotics in factories for years. We are starting to see smaller scale robotics. Someday, we will have microscale robotics. Those little spidery robots from the movie Minority Report will become our reality.
In some cases, Mnuchin is also correct. Yes, we have self-driving cars but large scale adoption won’t happen for at least 30 years or more likely fifty. I saw an interview at the Chicago Economic Club with GM’s CEO Mary Barra and she said in certain places it will happen sooner. We have to rebuild roads with sensors. We have to redesign cars. There are other things that have to take place before there is adoption world-wide. If you want to ponder the effects driverless cars will have on society, Benedict Evans wrote a very thoughtful blog post.
Here is one paragraph:
Next, gas itself is bought in gas stations, of which there are about 150k in the USA. Those will also go away (unless there are radical changes in how long it takes to charge an EV). Since gas is sold at very low margins, these retailers make their actual money as convenience stores, so what happens to the products that are sold there? Some of this demand will be displaced to other retailers, and some may be going online anyway (especially if an Amazon drone can get you a bag of Cheesy Puffs in 15 minutes). But snacks, sodas and tobacco sell meaningful proportions of their total volume as impulse purchases attached to gasoline. Some of that volume might just go away.
Innovation in one industry has knock-on effects in places you might not think about. That’s why it’s really hard to figure out which jobs will be created or killed beyond a basic few. Driverless cars will kill any jobs that use drivers. After that, it’s all speculation.
I don’t think basic income is the answer to the problem of robots taking jobs away from humans. The incentives are all wrong. Humans need the dignity of work and belonging. Basic income will turn out like welfare which doesn’t work. A tax that has been proposed turns my stomach as well. Why are we taxing progress? Lotus 1-2-3 and Microsoft’s suite of Excel/Powerpoint/Word took away and changed a lot of jobs but we didn’t tax that. Heck, just having a computer and internet gets rid of a lot of jobs.
I also don’t think any of us today will have all the answers. If you go by the 30-year heuristic, 2045-65 is when robots, autonomous vehicles etc will really reach their full capability. One thing we are sure of is that no one can predict the future with any accuracy. I do think that the more we empower individuals to design their own lives, the better off we will be. That means less interference by government, and a lot of competition in private industry. No sacred cows.