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Is your job safe from a computer?

Pros and cons of the 4th industrial revolution

23rd of October 2016

There is no unemployment crisis. If you are currently unemployed or are working less hours then you would like, then this would be a bitter pill to swallow. However, could it be true? To investigate, I encourage you to watch this Youtube video called "there is no unemployment crisis".



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Automation Destroying Jobs

The first argument discussed in this video is that technology is displacing jobs. I would argue that most people would prefer doing leisurely activities of their choice rather than working. So if we can maintain our standard of living by using technology instead of working, how could this be a bad thing?

Unnecessary Jobs

Next, the reason jobs that use to exist no longer exist is because of a reduced demand for them. Furthermore, some jobs are outright unnecessary, such as telemarketers, are in precipitous decline anyway.

Solution

If people are no longer earning an income through jobs, where will the money come from to allow them to maintain their standard of living? As Stephen Hawking wrote, "if machines produce everything we need, the outcome will depend on how things are distributed." [1] Would social welfare work? No, the video author suggests, as this would promote laziness. Instead, he argues, pay people more or allow people to work less hours.

Counter Arguments

Here is some counter-arguments which emphasis that technology cannot displace all jobs:

  • Insatiable demand - In economics, you learn that people have insatiable demand. In which case, technology would need to meet our desire for not only our current standard of living, but also our desire for an improved standard of living in the future.
  • Natural resources are limited - Technology can help reduce the labor requirements, but not some of the other factors of production, land, capital, and enterprise.
  • Some jobs cannot be automated - Skills that humans have such as intuition, compassion, innovation, creativity, and imagination cannot be done by computers.
  • Changing tastes and preferences - Demand will vary over time as people's tastes and preferences change.
  • Innovation - Similar to the last point, innovation will drive demand for new goods and services.

Concluding thoughts

Technology displacing human labor has been happening since the beginning of human evolution. Humans have evolved to use tools to survive and thrive in changing environments. In one of the simplest forms, the humble wheel, in the form of a cart, can reduce the demand for humans or animals to carry load.

Today people use technology in their everyday life that reduces demand for labor. Most people would use a washing machine to wash their clothes, instead of washing clothes by hand. Similarly, some people have dishwashers which wash their dishes.

We have the had the agricultural revolution, the industrial revolution, and the digital revolution. Now we are about to begin the next revolution, the fourth industrial revolution, which will be heavily centred around the following technologies:

  • Artificial intelligence - Machine learning mimicking human behaviours such as learning and problem solving.
  • Robotics - Automating human manual labor. Robotics is getting better at mimicking the range of human movements which were once thought to be "too hard" for a robot to do.
  • Data Science - Turning large data repositories into useful and actionable information.
  • 3-D Printing - Also known as additive layer manufacturing (ALM) has the ability to create on-demand manufacturing, as opposed to mass manufacturing.
  • Internet of Things (IOT) - Increasing interconnectedness of everyday devices.

The benefits of these technologies is obvious; machines will be able to do more of the work once only thought humans could do. Hence, reducing demand for human labor and thus allowing humans to have more time to do leisurely activities.

The reason why we should be worried about this next revolution is that over human history, when a new technology comes along, it tends to increase income inequality rather than reduce it.

Invested capital – in the stock market, in real estate – will grow faster than income.
Thomas Piketty, Capital in the Twenty-First Century [2]

This sentiment about the need for redistribution of wealth is reverberated by Professor Stephen Hawking below.

If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.
Professor Stephen Hawking [1]
  • Capital in the Twenty-First Century Book Cover
    Capital in the Twenty-First Century

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  • Further Reading

    Bloomberg has created a six-part series called "Forward Thinking: Making sense of Tomorrow's Problems".

    • Forward Thinking: March of the Machines
    • Forward Thinking: How Megacities Are Changing the World
    • Forward Thinking: A $28 Trillion Challenge to Smash the Glass Ceiling
    • Forward Thinking: Defusing the Demographic Timebomb
    • Forward Thinking: For Richer, For Poorer
    • Forward Thinking: What Would a Sustainable World Look Like?

    Reference

    [1] Reddit. Stephen Hawking Ask Me Anything (AMA) [Online]. Available https://www.reddit.com/r/science/comments/3nyn5i/science_ama_series_stephen_hawking_ama_answers/

    [2] T.Piketty. Capital in the Twenty-First Century. Massachusetts, Harvard University Press, 2014.