In the past few weeks doom and gloom stories about the future were printed, discussed and opined in the press. The down and out of the message of futurists is that the middle class is going to be swept away in the coming years because of software and robotic solutions (from here on: automated processes), making humans redundant. 47% of jobs is threatened. From judges that can be replaced by software giving verdicts, to surgeons replaced by robot(arms) and a person “playing” with a joystick. Taxi drivers? Who needs them with Google car? Just some examples that were published recently. Undoubtedly it is all true and perhaps in time humans will no longer be necessary to run society. Fearing the worst, we may end up in a “Terminator” world. Didn’t the movie play in 2025? That’s 11 years from now. I want to look at the topic from a few angles. In the past and present and ask several question, some open ended¥.
What is the result of endless automated processes?
There is no answering that, but let us look at a worst case scenario. Automated processes are taken so far that most people in the middle class do lose their jobs. The result would be that there are only manual labour or low service jobs left on the one hand. Jobs that in the US hardly sustain a family, as president Obama stated recently, because the wages are too low. On the other side there are high end jobs, owners of companies, higher managers and very specialised software engineers and coders/programmers. With a minimum of middle class jobs left, perhaps some sales, some marketing, some in high end services.
If we contemplate such a world, it would mean that large quantities of people do not have a job or very low ones. With no means of income and bereft of a chance to grow in society. This will be a society that is unable to bear the cost of unemployment, of insurance, of education, of infrastructures, etc. Total impoverishment of a large part of a population would be an foreseeable outcome, in which undernourishment and diseases are standard. Where life expectancy goes down dramatically. In other words not unlike many developing countries at this moment. Is this what is in store for most of middle class?
The outcome for industry
Automated processes takes place because machines and software are cheaper than humans. First machines replaced men in factories, unless labour is so cheap that humans fulfil the role of a machine, like e.g. in the clothing industry in Bangladesh. In that case the factory is closed and reopened in a developing country. Where the process starts over again. Software replaces human brainpower and standardised work like e.g. bookkeeping or scripts in call centres. But what happens when automation is carried out to its ultimate step? It means that everybody except for a few specialised people, the owner, sales/marketing, administration and service people, although even they may be external, is jobless. What does that mean for production and sales?
A result is that the entrepreneurs and large corporations all searching for profit maximization have no outlet left. Less and less people, all unemployed, are able to buy their products. There is less sold, leading to less profits and less shareholder value, dwindling investments, a stop to R&D. It just does not sound like a sensible thing to do. Henry Ford’s lesson seems to have been forgotten. It was his workers and workers like his that were to buy his products through higher wages. Ford introduced both an automated process as higher wages. If entrepreneurs and large corporations would stop and answer the question whether this is the outcome they foresee, I can’t imagine them answering: yes! Perhaps in the short run, but ten years from now? No, I can’t.
What went before
Still, recent history shows that the development of automated processes is unstoppable. Let’s go back a few centuries.
Since the beginning of history, for sake of argument here the period of which there are written accounts, most people tilled land. With that came leaders, worldly and religious, landlords who extracted products from the landowners or bound people to the land in a form of serfdom or worse, slavery. Economic development was (s)low in most countries. This form of subsistence changed with the industrial revolution. The invention of the loom, factories, steam engines, the digging of canals, etc., changed the way people produced, the way people were bound to their work, where they lived, the way they were able to transport themselves, the way they could organise. This brought changes and fears. It upset a whole society.
Different categories of people felt threatened in their existence. The Luddite movement in the U.K. was comprised of people working in the textile industry around 1815, mainly working with their hands. They were threatened by machines doing the work they used to do. In a reaction they destroyed the machines. Examples of peasants smashing machines are also well known examples from long ago. The common thing here is that they fell threatened in their respective existence.
Another threat was felt by a completely different category of people: the land owners and other people in the hierarchy, like kings and emperors, their entourage, religious leaders, etc.. People who ruled unhindered and extracted wealth from societies and lived with full power over others. In the U.K. their power had been bound by parliament, in other countries, right up to today, they remained in power much longer or are still in power. The end of World War I upset more than just who won or lost in western European countries. You can see the differences in the development of countries. Examples over time of decisions to stop or forbid development are plenty*. I’ll come back to that in relation to the internet and the debate on governance.
2014.1 Acceptation of technique at home
So back to 2014. Yes, a whole class of people are threatened by automated processes. This is going on since, well, circa 1770? A main difference is that every one, well almost everyone, has embraced the modern technique or does so at the first opportunity possible. From desktop to laptop, from smartphone to tablet, from PlayStation to Wii and chips in the refrigerator to chips in human bodies. We have all become dependent on software in our daily lives. Chances are that there will be no smashing of devices in the short run. They have become a part of our daily lives and are worn close to our bodies. So acceptation is not the problem here. Is this the same in the workspace?
2014.2 Acceptation of technique at work
There is no need to discuss a lot here. The factory was automated first. The office followed suit. Through typewriters, to mechanic calculators, computers and software. People are bringing their own devices to work for over 10 years. So there’s no discussion here. Nothing is prone to be destroyed any time soon.
2014.3 Transition in labour?
There is one topic that has to be addressed though. As history has shown, when a certain development changed the workspace, other work replaced it. The general trend has always been upwards, with crises of some sort and wars in between. People tilling the land moved to cities to work in factories or went to work in collieries. In the post-industrial era people started to work in services. When societies became more complex, more people were able to attend higher education, leading to more people working in higher end jobs. Creating the middle class. Those most talented had a chance to move upwards fast. And now these people are (to be) replaced by software and robots. The main question is, what will be the sort of work replacing what we are leaving behind? Are there some signs of what this will be? I haven’t heard them yet. Only unrealistic talk from a few politicians. I’ll get back to that also.
To put things in some perspective
Here I want to go back to basics, because is ICT all that there is? Of course not. Recently I was in a strategic meeting in which someone raved about the way the world moved forward. How much money could be made in ICT in the near future. That is all true, but. If no one would produce food anymore or work at other sustainable products, the latest app on our smartphones will not sustain us and if no one is willing to build a home or is able to fix a leaking roof, that same app is not going to keep us warm nor dry. In other words, not everything will change. Apps are not worth much if over 50% of a population is out of a job. One thing that is certain also, is that the comment of a politician stating: “We should promote making products again”, as in SME products, sounds like a smart thing to say, but isn’t that the sort of work many countries have said goodbye to? Basically because outsourcing to developing countries was cheaper or because competition made it impossible to continue a factory. That suggestion will probably not work. Although high end man made products may be a part of the solution. Then we need to face the lack of interest in technical education, but that is, at least here, off topic.
Another perspective is the automated process algorithms at banks and traders deciding on the buying or selling of stock. This would totally run out of hand, with severe consequences. There were a few examples, but all were amended in time to prevent a stockocalypse. (Where things went wrong was when the combination of human greed, unbound optimism, almost full liberalisation and consequently totally failing internal and external oversight got the better of financial institutions. It did have nothing to do with automated processes.) In other words as long as software does not have the intelligence of humans to interpret data, humans cannot be replaced to monitor, to interpret, to change course where decisions and maintenance are concerned. Not to speak of operating more accurate robot arms during operations. This brings us to a few interesting questions.
It is my personal theory that a society that does not produce any primary products, products that take a form of, semi-automated, manual labour of some kind cannot sustain itself in the midterm and beyond. It is here that the primary profits are made that are the basis for all else. Food, water, cloths, shelter, warmth are primary products that stand of the basis of (modern )life. If everyone decided to go into app development tomorrow, we’d be dead within a few weeks. Chaos would reign within a week. This work is the basis for luxury where a second layer of products are provided. Cars, gasoline, utensils, interior, etc. The profits made here are the basis for all the luxury bought and services rendered. This is not about percentages in contributions. Just imagine a whole world producing nothing but services and luxury. The money has to be made somewhere first before the rest, the more luxury side of an economy, becomes attainable. A situation that allows taxes to be collected, that give the government an opportunity to lay down the infrastructure needed for a growth and inclusive society, that allows people to develop themselves and contribute to future growth, future developments and inventions. Without it we are all lost.
Are these ethical or practical questions?
A question a society may want to ask itself is whether there is an end to the level it wants to automate itself. Another one is whether there is a level beyond which it wants to develop artificial intelligence further. Even if it is intellectually challenging to do so. Who should lead such a discussion and who are absent from the discussion as we speak?
There is no telling where present development will take us. Most likely to a society that is more automatically processed and where consumerism reigns. It is for certain that things go forward and fast. Research and development move at a faster pace than ever before in history. Sticking to the discussion I foresee three options:
– The economy develops in a way that we cannot foresee at this stage, just like happened in the late 18th, 19th and in the second half of the 20th century. Different jobs are created that we cannot foresee and are not yet familiar with;
– People lose their jobs permanently leading to a sharp decline of economies and wealth;
– The decision is made to keep certain jobs at a sub optimal level from an automated process point of view, but at a more optimal point from an economic and wealth for the masses point of view.
It is one of these three.
Developments like these make people uncertain and afraid. Populism and reactionary forces are in place for over 10 years and growing. Politicians use the unrest and throw fuel into the fire. Instead of leading, pointing the way forward, they cater unrest, attaining power and attention in return or sit idly by hoping to remain in power.
It is important to look at who are driving forces behind these people. What are the mechanisms in place? Who, especially those in power, are being threatened by developments? What do populists and others point at and what development(s) do they try to stop? This is especially telling when a specific development is frustrated. Is this happening? Let me point to developments around internet governance and I would answer yes. The internet is a threat to the vested interests of many. Threats that drive people to stop developments. This is a point that should not be overlooked when a free and always accessible internet is discussed. In large parts of the world leaders do not want an open internet as it directly threatens their personal interests. (After posting news came in on the new internet law in Turkey. (See e.g. here at the BBC.) Why did this law get accepted at this point in time? This is an important question. Especially as the Internet Governance Forum goes to Istanbul in September 2014.) But let me return to the middle class.
If it is true and the middle class is threatened most at this point in time, then it does not yet show in the reactions. History, in the mostly untold variety, also shows that people tend to live their lives, taking it as it comes. Up to a certain point. But taking a closer look, middle parties are losing ground steadily to extremes on left and right. Who are the people shifting positions? Who are the ones that stop being members of political parties? Who are the people losing faith in politics as a whole? Is this just because people are disappearing behind their iPads, game consoles or touch screens surfing the internet? Riding the high waves of consumerism? Or is there something else going on, a certain discontent or fear? It is questions like these that need studying and answering. It is the answers to questions like these that may co-decide where societies are going to and what they will develop towards or help convincing people that another direction is inevitable. Problems, fears, challenges that need to be faced. Fear is a bad counsellor, a Dutch proverb says, but fear that is not addressed is allowed to grow and fester. This has to stop.
I do not have any clear cut answers here, sorry, but I am pondering these questions regularly and certainly would like to discuss further. To sharpen this discussion and my mind. These are interesting times. Development is going at a fast pace and society is changing fast as a consequence. People embrace the fun side of the changes happily, while apprehensions and discontent grow as well. It is hard to keep up as there is so much information available. I’m looking forward to hear your opinion. Where do you think we are moving towards? Doom and gloom? Just the same old thing? Or are we on route to a glorious future? We may well be, but those responsible, politicians, leaders of industry and inventors alike, have to make sure that this future is inclusive, with chances for all, including a fair distribution of wealth. Only this guarantees a future that is worth being a part of.
I´ve seen the future and I like/hate it. Please cross out your preference. The questions raised in this article could use an answer. Who picks up the challenge?
Wout de Natris, De Natris Consult
6 February 2014, Leiderdorp
*A good read here is ‘Why nations fail. The origins of power, prosperity and poverty. Daron Acemoglu and James Robinson. This books gives some excellent examples. Examples that can shed a light on discussions on internet governance taking place right now.
¥ I started this blog from several angles. The first was a mention in a paper of a quote of Dutch trendwatcher Adjiedj Bakas. It is here that the politician’s quote comes from, I found. e.g. http://www.unie.nl/dunk/artikelen/articletype/articleview/articleid/11329/we-moeten-als-de-sodemieter-van-de-euro-af. His ideas are to be published soon as part of his new book ‘Trends 2014’.
The 47% comes from an article from Oxford University researchers Carl Benedict Frey and Michael Osborn. You can find ‘The future of employment’ here.
A fourth source was Syracuse University Researcher in Internet Governance Brendan Kuerbis’ article on IGP blog ‘The ‘iron cage’ of multistakeholder governance’.