Monday, November 28, 2016

Matt Ridley: Artificial Intelligence is not going to cause mass unemployment

The tech industry, headquartered in Silicon Valley, is populated largely by enthusiastic optimists, who want to change the world and think they can. But there is one strand of pessimism that you hear a lot there: that the robots are going to take all our jobs. With artificial intelligence looming, human beings are facing redundancy and obsolescence. I think this neo-Luddite worry is as wrong now as in Ned Ludd’s day.

“Any job that is on some level routine is likely to be automated and if we are to see a future of prosperity rather than catastrophe we must act now,” warns Martin Ford, a Silicon Valley entrepreneur, in his book The Rise of the Robots. “With the technology advances that are presently on the horizon, not only low-skilled jobs are at risk; so are the jobs of knowledge workers. Too much is happening too fast,” says another Silicon Valley guru, Vivek Wadhwa.

“Think of it as a kind of digital social Darwinism, with clear winners and losers: Those with the talent and skills to work seamlessly with technology and compete in the global marketplace are increasingly rewarded, while those whose jobs can just as easily be done by foreigners, robots or a few thousand lines of code suffer accordingly,” says the George Mason University economist Tyler Cowen in his book Average is Over.

Yet we have been automating work for two centuries and so far the effect is to create more jobs, not fewer. Farming once employed more than 90% of people, and without them we would have starved. Today, it’s just a few percent. The followers of the mysterious “Captain Swing” who destroyed threshing machines in 1830 were convinced that machines stole work. Instead of which, farm labourers became factory workers; factory workers later became call-centre workers. In both transitions, pay rose and work became safer, less physically demanding and less exposed to the elements.

In 1949, the cybernetics pioneer Norbert Wiener warned that computers in factories could usher in “an industrial revolution of unmitigated cruelty”. In 1964, a panel of the great and the good, including the Nobel prize winners Linus Pauling and Gunnar Myrdal, warned that automation would mean “potentially unlimited output by systems of machines which will require little cooperation from human beings”. This hoary old myth just keeps coming round again and again.

This time it’s different, I hear you cry. Those were just peasants or factory hands: now it’s software developers, accountants and perhaps even lawyers who face obsolescence through automation. Or academics and journalists! People – oh horror! – like us. But if we could lose most of the jobs in farming and manufacturing to automation and still have a record proportion of the population in employment, even while bringing women into the workforce in vastly higher numbers, why should we be unduly alarmed if some white-collar folk now suffer the same fate?

The argument that artificial intelligence will cause mass unemployment is as unpersuasive as the argument that threshing machines, machine tools, dishwashers or computers would cause mass unemployment. These technologies simply free people to do other things and fulfill other needs. And they make people more productive, which increases their ability to buy other forms of labour. “The bogeyman of automation consumes worrying capacity that should be saved for real problems,” scoffed the economist Herbert Simon in the 1960s. 

Yes, but what if there are no more needs to fulfill? Might there come a point where all the work we can ever need is done by machines, leaving nothing for us to do? When even pet-grooming salons and yoga teachers have ben replaced by robots. If so, and if the machines belong mainly to the wealthy, then the economic problem will be one of distribution, not of scarcity, so we may need to consider such radical ideas as the “basic income” in which everybody gets a salary from the government.

But it is not going to come to that. There are infinite new ways we can think of fulfilling each other’s needs and desires in exchange for reward. Look at the way modernity’s spectacular productivity has allowed the revival of crafts or the resurgence in live performance.

And in the unlikely even that this end point were ever reached, so what? A world in which machines do literally everything we can ever think of needing done (“Take me to Mars, Hal, and on the way rewrite Shakespeare as rap”) is a world in which we can spend our entire time consuming the products of those machines’ work. After all, the purpose of all work is consumption, as Adam Smith nearly said. The Tim Worstall puts it this way: “There will continue to be jobs for humans as long as there are unsatisfied human wants and desires. Once all of those are satisfied then jobs don’t matter, do they?”

We are sharing out less work already. In 1856 an average British man worked 149,700 hours over the course of his lifetime. By 1981 that number had almost halved to 88,000 hours – despite the fact that he lived much longer. He now spent more time in education, on holiday, in retirement or leaving work early. In 1960 a British worker spent nearly 12% percent of his or her life at work; by 2010 that number dropped to less than 9% (and I bet she spends some of the “work” time on his home life, reading emails, paying bills).

The final argument of the pessimists is that automation is “hollowing out” the workforce by replacing the jobs of the middle-skill professions, so we will be left with a world of hedge-fund managers and their maids. There has been some disproportionate losses of middle-income jobs in America and Europe since 1980, but as the MIT economist David Autor argues, it’s as much to do with competition from China as automation per se. You cannot outsource maids. And he thinks it is running out of steam anyway. Journalists, he says “tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor.” [Besides, the stagnation of incomes is not really true: see here.] 

Cheer up. Far from a mass of unemployed Morlocks living miserably poor lives while the digital Eloi monopolise the few well-paid jobs, automation is granting us ever more time, as well as more goods and services. [A reader pointed out that in H.G.Wells's book, the Morlocks were actually in charge...]

Matt Ridley, a member of the British House of Lords, is an acclaimed author who blogs at

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