WASHINGTON – Modern democracies rest on the explicit belief that freedom is a natural right of all individuals. But they also rest on the implicit assumption that institutions that guarantee all freedoms are necessary to foster economic expansion.
Economic expansion
And this, in turn, is based on the additional implicit assumption stating that the physiological propensity of all modern societies is to have expanding economies. Expansion is driven by relentless innovation pursued by smart people who constantly come up with new technologies that break new ground, creating new sectors and therefore growing the economy, this way generating demand for new jobs, and so forth.
From this perspective, the political debate in democracies is mostly about who has the best recipes to promote the optimal level of economic growth, with increased benefits for most, if not all citizens.
What is this no longer applies?
Well, this is how things, more or less, worked out so far. But what if the basic assumption: unstoppable technological progress that opens up new sector does not apply anymore? This would mean stagnation, and no expanding opportunities.
Even worse, think about technological developments that, while creating net new economic benefits, end up destroying existing jobs. These are labor-saving technologies that, through the deployment of IT and machines, rationalize the existing productive processes making them more reliant on intelligent machines that in turn make workers redundant.
Technology replaces workers
This is what has been happening in the last couple of decades. Information technology and automation in most instances replace humans, this way destroying traditional jobs. Routine back office operations can now be performed by machines, or can be outsourced to cheaper workers in developing countries, (India, Philippines, etc.), who can easily do the same job at a fraction of the cost in a Western country.
We grew up in a world in which the rise of industrialization meant labor force increases. New factories always meant more assembly line jobs. Well, it is no longer so. Factories are becoming progressively more automated. Computer controlled machinery and industrial robots slowly but surely are replacing workers.
Factories will disappear
And if we try to look further down the line, we can also assume that certain factories will not exist any more. The promise of 3D printing technology, now still in its infancy, is that ever more sophisticated “printers” will allow people to actually “make” complex products at home. That’s right. The printer, following a blueprint included in a software file, will make your coffee maker in your own home. Mind you, we are not there yet. Right now, 3D printers can only make parts and components of complex objects. But you can expect that this promising technology will improve.
No drivers, no pilots
By the same token, while today’s drones are still souped-up super-toys, give it a couple of decades and you will see real airplanes piloted remotely. And today’s still experimental driverless cars make me think of driverless taxis coming up in your city. On a more modest level, some modern subway trains are run today without any people at the controls. Same for light rail services connecting terminals in modern airports. And you can already check in at airports or train stations by using automated kiosks.
On-line education
At a different level, on-line education will soon replace old-fashioned universities. And this revolution will translate in the loss of millions of jobs. Think of all the administrators, secretaries, cooks, janitors, security staff, and more who will no longer be necessary, once students will get their education mostly through on-line programs.
Services provided by machines, not by humans
This is the trend. The old service is still there. In fact in many instances it has been improved. But there are fewer or no workers, because the machines do the job just as well as humans. And machines do not get sick, (although they may break down), they do not go on holidays, they do not require maternity leave and they do not get pensions.
Of course, we have no idea as to when this trend featuring technologies that focus on labor-saving technologies will come to an end. Who knows, may be we are on the eve of other spectacular revolutions that will open up new sectors that will actually require more workers.
Jobs are lost
But in the meantime, this labor-saving technological trend is having and we can expect that it will have negative economic and social consequences. People are losing and will lose jobs today, without any opportunities to be able to do the same thing elsewhere. Their only hope is to find something in already over crowded sectors that require mostly manual skills. This means contracting standards of living, and all that goes with decreased opportunities.
Political consequences
And there will also be political consequences. Politicians will no longer be selling the best policies to manage expanding economies. Unable to sell real plans, many will try to sell dreams. I fear that, in a new age of penury, there will be many populists who will try to attract support with impossible promises of new jobs that do not exist. Others will promise to solve the problems of the workers cut off from the economy by pledging to implement income redistribution.
Be that as it may, the fact is that our current economic trends do not match our collective expectations. As of today, the old assumption whereby “Technological Progress=New Employment” is still believed to be true by many, even though it does not apply anymore.
Of course, it applies to the elites who are busy working on the new technologies of the future, and to the relatively few who are implementing them. But it does not apply to the broader society.
Education is the only tool to stay ahead
One way of trying to stay ahead of “jobs destroying technologies” is in gaining an excellent education, in mastering complex processes and in acquiring much more than basic information technology knowledge.
But this would require a massive retooling of our public education systems. Most certainly they were not designed to produce sophisticated knowledge workers. this is something that policy-makers should start focusing on now. But I do not see any sense of urgency.