“A World Without Work”, sans any semblance of doubt has to be one of the most influential and powerful books penned in the 20th Century. Addressing a topical issue, the author, a Fellow in Economics at Balliol College, Oxford, sets out in a measured, methodical and meticulous style, the attendant challenges and the probable solutions. The issue dwelt by Daniel Susskind in his book is that of “technological unemployment.” The displacement of humans by machines is neither a novel concept nor an ingenious postulation. Right from the time, mankind has evolved as an intelligent species, convulsions of technology has played a seminal role in both development and displacement. However, to paraphrase Carmen Reinhart and Kenneth Rogoff, this time it may be different. An unimaginable surge in the esoteric realm of artificial intelligence has spawned a veritable ecosystem that is ripe for automation. Automation, that ensures that not only can machines perform more adroitly than human beings, but also exploit an exponential degree of bottom-up intelligence attribute to exacerbate productivity as well. A frightening case in point – the extraordinary exploits of Alpha Go that beat the prevailing board game “Go” champion Lee Seedol.
John Maynard Keynes is credited with popularizing the “technological unemployment”. The “Manure crisis” that plagued the United States during the 19th century and early parts of the 20th century amplified the tumultuous changes that technology could birth. 21 million horses trampling the streets of America plunged an entire nation under a stinking pile of manure. Just when it seemed that the nation would suffocate from the perils of ‘horseshit’, the motor car made an appearance. At the time of writing this review the number of horses in the US hardly exceeds the 2 million mark. Similarly, the Industrial Revolution changed the very lexicon of work. The innovations in England during this period procreated a whole new form of technology that was hitherto unimagined. The inventions and innovations also led to disgruntlement and despair, when workers worried about their jobs being ‘taken away’ by technology began disrupting businesses and destroying machines. The terminology “Luddites” is a direct result of an apocryphal worker named Ned Ludd, who as an apprentice allegedly smashed two stocking frames in 1779 and thus became emblematic of machine destroyers.
But as Susskind illustrates with searing quality while technology is responsible for a substitution effect, it also produces a complementary force. This complementary force has three preternaturally beneficent effects, namely, the productivity effect, the bigger pie effect, and the changing pie effect. For example, bank tellers were in the dread of the havoc that automated teller machines or ATMs could wreak on their jobs. But as Susskind illustrates, the ATMs actually spurred customers to use banks more, thereby increasing the number of bank branches and also the number of bank tellers, who were freed up to do tasks other than dispensing cash.
This complementarity of technology was elucidated in great detail by the economists David Autor, Frank Levy, Richard Murnane. Their postulation now commonly known as the ALM Hypothesis, after the names of the proponents, highlights the fact that jobs are not colossal, but an agglomeration of tasks. Where the nature of the jobs are routing, they are ripe for being automated. Non-routine tasks are usually not amenable for automation. However, as Susskind informs his readers in a world characterized by rampant technology, the lines between routine and non-routine stand blurred. Lots of office jobs for example are assumed to be routine. This prompted the former Bank of England Governor and currently, Vice Chairman and Head of Impact Investing at Brookfield Asset Management, Mark Carney to exclaim that it was time for a “massacre of the Dilberts.” Machines of the modern era are not just capable of performing routine activities, but as AlphaGo illustrated in searing detail, are also extremely capable of executing tasks that require cognitive skills and affectations, traits that are ‘non-routine’ by all stretches of imagination. As the founder of Netscape founder and world renowned venture capitalist Marc Andreessen immortally said, “software is eating the world” and that in the end, there will be only two types of people left: those who program the machines, and everyone else. Susskind writes, “economists had thought that to accomplish a task, a computer had to follow explicit rules articulated by a human being — that machine capabilities had to begin with two-down application of human intelligence.” But machines are “now deriving entirely new rules, unrelated to those that human beings follow. This is not a semantic quibble, but a serious shift. Machines are no longer riding on the coattails of human intelligence.” However, pioneers in the field of technology and communication seem to be oblivious to this fact whether intentionally or in ignorance. When IBM’s Watson beat the reigning champions at ‘Jeopardy’, American scholar of cognitive science, physics, and comparative literature, and the Pulitzer Prize winner of the bestseller, “Gödel, Escher, Bach”, Douglas Hofstadter pooh poohed the achievement alleging that Watson was ‘vacuous.’ The philosopher John Searle, the mind behind the famous Chinese room experiment lamented that that by developing Deep Blue, IBM was giving up on the science of Artificial Intelligence.
Or take the example of the black-taxi drivers of London. The advent of GPS tools such as Waze have made the prodigious bank of “Knowledge” that is a pre-requisite for such drivers to procure a license, almost redundant. Having said that, Susskind argues that the pace of automation would neither be uniform nor harmonious. The progress of automation will take place at different paces in different places, not least because the cost of the alternative to automation will vary. Countries aging faster will automate faster, while legislation and cultural proclivities will exert a huge influence in setting the automation pace. But in the end analysis, there is no eliding automation. “Nothing is certain in life except death, taxes, and the relentless process of task encroachment.”
Such a “task encroachment”, Susskind opines, leads to two kinds of unemployment: frictional, and then structural. Frictional technological unemployment refers to a paradoxical situation where while there are still jobs, not everybody is adequately equipped to handle them. Structural technological unemployment on the other hand arises when a human is replaced in one job, and even though the productivity effect, the bigger pie effect or the changing pie effect means that another job is created, that new job is performed by a machine, and not by the displaced human. David Schloss, a British economist, presciently predicted way back in 1892 that there is no guarantee that the additional work will always be done by humans instead of machines.
Susskind labels himself as a technological realist, and not an apologist for technological determinism. Hence his exhortation that technology would lead to positive progress in so far as alleviation of poverty and income inequality go. But what should be the strategy to be adopted by economies when almost 25% of the workforce is expected to be permanently displaced and dislocated even? One potential solution could be the role that a ‘Big State’ could possibly play to alleviate the tumultuousness caused by unemployment. Such a Big State will take on the responsibilities of redistributing income and wealth. The State can also raise taxes steeply, and clamp down on siphoning of wealth to tax havens.
Another solution could be Conditional Basic Income (“CBI”) instead of the commonly advocated Universal Basic Income (“UBI”). He expresses an understandable degree of skepticism when he writes that he cannot envisage the futility involved in making available a sum in the form of UBI to say, a Mark Zuckerberg. Susskind also calls for restricting the economic might and political power of the disruptive “Big Tech”. Most importantly, Susskind proposes that we would need to alter in a paradigm manner, the concepts of how, when and what we teach. Embellishing the taken for granted “STEM” skills or a targeted focus on the liberal arts would prove to be helpful to address the issue of frictional unemployment. The need of the hour is an education system that makes even leisure productive.
Susskind has all his tracks covered – and much more!