Friday, September 30, 2011

The Delightful People

The Wall Street Journal Blog wins my Title of the Week award for It's Man vs. Machine and Man Is Losing. The chart from the post shows that US businesses are investing in machinery and software rather than people right now. Which is worrying since capital is scarce (in the form of bank lending anyway) and labour is abundant (given rising unemployment). What's going on?

Every recession in the past forty years has been accompanied by a flurry of articles and op eds hailing 'the end of work' and 'the jobless recovery'. They've all been wrong - so far. But maybe this time really is different?

Megan McArdle blames software - or rather the culmination of decades of automation and falling real (and nominal) prices for hardware, software and the telecommunications services that connect them. Referring to analysis by Arnold Kling she observes that:
The jobs that are being automated are the stable, well-paying jobs where you could settle in and know exactly what you'd be doing for years.  As Arnold says, if you can define it, you can probably outline it specifically enough to outsource, either to a lower-wage worker somewhere else, or to a computer.
Sounds like an advanced case of what Kevin Kelly calls The 7 Stages of Robot Replacement. Now coming to a business sector near you...

Megan wonders why we are not happy to see dull, dreary jobs replaced by automation? Of course, just as the jobs are going, a lot of people are beginning to realise that 'dull and dreary' wasn't all that bad after all, given the (lack of) alternative.

The implication is that we are all going to have to 'upskill', becoming knowledge workers: fewer burger flippers and more chart flipping instead. But even that isn't especially secure, nor rewarding. In a typically insightful post, Seth Godin captures the angst of the pre-recovery labour market perfectly (and it is as true of Ireland as elsewhere):
The industrial age, the one that started with the industrial revolution, is fading away. It is no longer the growth engine of the economy and it seems absurd to imagine that great pay for replaceable work is on the horizon.

This represents a significant discontinuity, a life-changing disappointment for hard-working people who are hoping for stability but are unlikely to get it. It's a recession, the recession of a hundred years of the growth of the industrial complex.
 But the technology that caused the discontinuity will also open up a new era of opportunity:
When everyone has a laptop and connection to the world, then everyone owns a factory. Instead of coming together physically, we have the ability to come together virtually, to earn attention, to connect labor and resources, to deliver value.

Stressful? Of course it is. No one is trained in how to do this, in how to initiate, to visualize, to solve interesting problems and then deliver. 
Personally I'm not so sure. The very people observing and reporting on the changes we are witnessing - people like Megan and Seth - are the likely winners from the changes they describe. But far fewer people are cut out for flipping charts than flipping burgers - and no amount of third level participation nor retraining for ex-bricklayers is going to change that soon. If ever.

Still, I believe we will find our way through the challenges ahead - muddling or otherwise. I take inspiration from Keynes, who in a famous passage anticipated a future in which:
We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.
In other words, it is people - not machines nor software - that will provide the things we value most in the future. Though I have no idea who those 'teachers' will be, nor what they will teach. Luckily for me there are now 7 billion of us engaged in finding the answer.


  1. It seems we have to find new networks, new people to deal with, work for and sell to, if we want to survive, let alone thrive. That's the stressful part. Here in Ireland we have the advantage of being a food-producer in this world of seven billion. The real question is how do we involve everyone in that advantage, and not just the usual ranchers and their agents? It's a matter of some urgency, I would say.

  2. Here's the great Gordon Pask on this question (writing a long time ago):

    "Define 'man' functionally (the alternative, as a 'bag of chemicals', I find unacceptable), and he is at least an adaptive decision maker. To use him where neither choice nor adaptation are called for is not a human use. Conversely, automation never put a man (in this functional sense) out of work. If it does stop him playing the robot so much the better, for too much imitation makes us robot like. In particular, it is both distasteful and dangerous to regard man as a cheap substitute for an automaton - dangerous because there is a vicious circle and ultimately man will lose.

    There still remains the question; who will pay the men who used to play at robots? Overall, two possibilities occur. First, the added efficiency of the process (demand for its product assumed) makes it possible to sustain these people in more human pursuits (there is some quantitative evidence in favour of this possibility). Otherwise rethink the concept of efficiency, and organize the process so that it is most efficient, given the maximum utilization of human beings. This, I agree, does not necessarily entail maximum short-term productivity, but I assume a certain social responsibility on the part of management..."

    ... Rethink the concept of efficiency in more human terms. Hmmm. Now, there's a thought.


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