This weekend I will be going to Torino, Italy. Torino is the site of the information part of the G7 conferences that take place throughout the year. You can see a link to the entirety of the G7 here. I was invited by the US government to attend and advise the G7. I will be advising the I-7, which is the G-7’s strategic advisory board on innovation.
For my part, I am going to be discussing the future of work. That made the Economic Club of Chicago’s discussion on Karl Marx even more interesting. It’s also why I have been listening to a lot of podcasts from different points of view on how autonomous vehicles will affect us or if we should have a basic income guarantee. What happens when technology crosses borders and makes them irrelevant when it comes to “work”? Can you have a country without a common culture?
Fortunately for me, I have a lot of friends that are very attuned to research in labor economics. It’s a general interest of mine, and it’s one I have invested in. Deskpass hits right at the future of work. In our fund, we think a lot about what finance is going to look like post Fin Tech revolution. What happens when blockchain powers a lot of things that used to be done by humans? What about artificial intelligence and machine learning?
It’s easy to be terrified.
Fear comes because we are unfamiliar. People get scared about what they don’t know. The good news is technology ought to be able to help us know more about what we don’t know in the future than we do today! There should be less known unknowns.
However, if we look at history innovation has raised standards of living. It’s made people significantly more productive. I love the Milton Friedman story about visiting a communist country and asking why they were digging with shovels and not heavy equipment. The politburo representative said it was an “employment program”. Friedman remarked that they should use spoons instead of shovels if that was the case.
We cannot predict with any accuracy what some future jobs will be. It’s pretty easy to see which ones will be displaced by tech initially. However, there are second, third, fourth, and fifth order effects of innovation that aren’t immediately apparent. As Benedict Evans said, “What happens to Frito-Lay sales if there are no gas stations?”
Clearly, figuring out new ways to educate the masses for the coming changes is important. It’s easy to say we should create a bunch of programmers, but what happens when the machines can program themselves?
One thing everyone should bear in mind that hasn’t been talked about a lot, what happens if because of all this technological upheaval the cost to live goes down significantly? If we look at the cost of food over the course of the last 100 years, it’s dropped precipitously. With autonomous farming, it could become extremely cheap and only use up 1-2% of our budget. Autonomous vehicles could drop the cost of transporting goods. Having software inside appliances could drop the cost of servicing them. An autonomous power grid could drop the cost of energy. Governments that adopt blockchain could significantly drop the cost of operating government.
That’s going to leave a lot of excess capacity when it comes to human capital. There is dignity in work. Public policy needs to recognize this. For example, in most of Europe it is very expensive to hire and fire workers. Changing policy around that might free up labor markets, change cost structures and decrease unemployment rates which are very high.
If you have any thoughts about the future of work, big data, and artificial intelligence with regard to public policy I’d love to hear your thoughts in the comments.
I am optimistic. Humans are creative. They will find things to do.