The industrial revolution of our time

Something exciting is going to happen to the transport industry within our lifetime. Driverless cars and drones are coming. There will be multiple lanes of drone traffic above our heads – Futurama style. Anyone who knows how to invest in air – leave a comment. Looking back at previous industrial revolutions is always a good idea to extract a few lessons. I doubt that we are looking at Highland Clearances ahead. The tragedies of previous industrial revolutions are down to a lack of options. The world is globalised and it is easier than ever to re-skill given the low cost of acquiring information. So you have a choice to either do something else or move.

While there’s all this panic in the US saying that technology is killing jobs, in reality it is creating jobs at a level that parallels it. The numbers back up this assertion. There’s this Promethean fear that technology will lead to our demise – countered by the utopian notion that someday no one will have to work and everything will be done by robots. It has been talked about a lot, notably Adam Smith mentioned it in his essays. The latter isn’t going to happen – or it would have happened already. We live in a world where the average person in the rich world has a more comfortable lifestyle than many an emperor of times gone by.  The hunger for more is deeply entrenched in the DNA of a critical mass of people – who will always seek to compete with others. This way nobody can sit idly without their bite at the resource allocation cherry we call our economy. While it is scary to consider what AI may do to us if it gets super concentrated, I don’t think this will happen within the next 50 years – making it too hard to make assertions about it. I guess our domestic animals still haven’t taken over, so maybe we will find a way to tame the AI as well.

While technology has made things more efficient, it has consistently needed people. When machines comes in, activity increases – rather than staying the same. The internet has led us to use our phones more, not less – just differently. Higher tech equipment in factories led to more production, not less – and it is different to what it was before. Computers have led to more professional services, not fewer – again, they changed their nature to a certain degree. This kind of transition always means jobs. Different jobs, in different places. It is plausible that the entire truck/taxi driving population will go into moderately skilled jobs to do with drone production and control. It may not all be in your home town like it was before, but it ain’t disappearing. The politicos talking about it is probably down to appealing to the people who fear for their jobs.

An interesting essay arguing the opposite point of view is up on Aeon by Prof James Livingston. He makes an interesting argument that a huge number of Americans just about make it over the poverty line through working full time – and many don’t even achieve that. He says that a job in Walmart comes with food stamps as a benefit. Great line. Unfortunately, he doesn’t balance his argument by mentioning income tax. I am not sure of the intricacies of the US income tax system. In Europe, above a certain income level – basically enough to live on for one person who has to rent a place – tax quickly rises to over 50%. Apparently, it is even higher in the US. So if there wasn’t such crazy tax, a job in Walmart probably wouldn’t come with food stamps. Now, I am not sure which is the lesser of the two evils, but the fact that work doesn’t pay is a consequence of the tax system too.