Tim Worstall was recently quotulated, and from that quotulation I extracted this much smaller quote:
The entire point of any form of automation is to destroy jobs so as to free up that labour to do something else. The new technology doesn’t create jobs, it allows other jobs to be done.
Well it’s a snappy quote, but I disagree. The entire point? Surely, part of the point of automation is, often, to make certain sorts of product possible that otherwise wouldn’t be possible, many of which products make other sorts of work both necessary and possible. The point of automation, to use a well-worn metaphor, is not merely to break eggs, in the form of existing jobs that it destroys; it is also to create new kinds of omelette in the form of new products previously unmakeable and new jobs previously undoable, by creating inputs and materials for these new jobs that used not to exist. Oftentimes, new technology does create new jobs, and often this happens on purpose. An often, that’s at the very least part of the point of the exercise. The new technology does not merely allow other jobs, jobs in general, to be done by those it throws out of their existing jobs. It creates particular new jobs that people must then be hired to do.
I think I get where Worstall is coming from. The grand aim of economic life is to create a world that requires us all to do less work rather than merely to remain on progressively more elaborate treadmills and still slaving away at the same old pace for the same old number of hours, for the same old money. But, he overstates that case. The “purpose” of any particular enterprise can be whatever may reasonably be expected to result from it. That can indeed be more freed up labour, but it can also be particular new kinds of labour, which are more fun, more significant, and better remunerated.
Also, the first impact of new technology is often to destroy existing jobs. But that is often only the beginning of the story, as those unleashing the new technology are typically well aware.
What Worstall says reminds me of that claim that you regularly hear that “the entire purpose of any business is to make profits”. Again, snappy, but again, in most cases, wrong. Any enterprise must stay solvent. One way or another, it must pay its bills. But the idea that all that matters to the people who run some particular enterprise is its profitability is, more often than not, just plain wrong. Often, what unites them is not the love of profit but the love of making whatever they make, doing whatever they do. They know that they must be profitable, and can’t be too wasteful, but that’s because that way they get to keep on serving up this stuff, stuff that they love to create for its own sake.
You’ve lived a rarified life, Mr. Micklethwait. Certainly there’s that thin creative slice of humanity that makes for the love of making, but for every one I’d guess there are a hundred thousand Pakistani bricklayers trying to keep that fourth kid from starving, or HVAC contractors scraping to make their mortgage payments. Very little of it is Galt’s Gultch.
Why would anyone intentionally create a cost? Do you mean that they intentionally create new skilled tasks that best fit their needs, thus minimizing what they need to pay out in labor? It might be intentional that they try to minimize labor cost by increasing efficiency, but I can’t see purposefully adding a requirement for paid human labor.
There is only one sensible objective associated with the introduction of automation. And that is economic advantage.
In a commercial, profit-seeking, enterprise, automation can for instance reduce cost – very often of course by removing labour, but sometimes by increasing rate of output, and on vanishingly rare occasions by achieving a quality of output which cannot be achieved without it. For instance, do not try to build a modern mobile phone with a soldering iron, a magnifying glass and some bits. (Phone factories used to have rework guys just like that – amazingly skilled. I doubt they do now.)
In non-commercial endeavours, profit does not apply and we turn ourselves to a simple reduction of cost. Councils and governments and quangoes, for instance, buy computers, for instance, to do clerical work more quickly and more accurately, and perhaps automatically, and then they perhaps burn our tax money less swiftly.
Whether they actually harvest the economic benefits they talk about is another matter. I was once dejobbed by being insourced by a public body. They promptly spent more than the annual cost of my technical contract on kit and caboodle with funds sourced from a different pot. The overall cost of the work about tripled over the course of the contract term. Nobody spake a word.
It is a simple equation if one tells the truth. This machine and its support costs X over its life. During that time it can still do the work of value Y that currently requires me to otherwise spend Z. Z-X is worth the trouble. Very often the circle is squared by finessing Y.
The freeing up of blah-blah-blah is hokum of the John Kerry variety. Where coal-miners once stood, now stand the oil, gas, car, energy workers. When the riots start and old used-to-be oil-workers and carmakers start to die of fuel poverty, their eco-loon children would do well not to just stand there looking at their shoes.
There is a difference between new technology – which allows things previously unmakeable to be made – and automation, which . . . Automates and existing task, freeing up the person doing it to do something else
Automation arises essentially from the application of capital (i.e. assets) to production. Without capital, we all be gatherers, not even hunter-gatherers, (crocodile-wresters etc. excepted) and then we’d be eating each other.
Just to say, note the words Worstall uses, the “entire” point, “any” automation. These are strong claims, and too strong. I do not deny economic motivations, of course not. I merely point out that there are other motivations also. Which there are.
I have indeed lived a “rarified” life, in the sense that I have had personal and sustained experience of organisations whose purpose was not profit. This is a rude way of saying that I know what I am talking about. Just because my life has been rarified does not mean that it never happened. Or, for that matter, that it should never have happened. Several of the above comments are not arguments that I am wrong, but a rather strange irritation that I am right. Arguments often go like that.
Samizdata itself is a good example of what I am getting at. (Perry de Havilland’s life has been, the latter part of it anyway, even more “rarified” than mine has.) Was the entire purpose of Samizdata – which, like all blogs, automates the publication process – to put old-school pamphleteers (such as I once was) out of “business”, to free up our labour? Come on.
Would anyone intentionally create a cost? Yes, if that cost was still a cost, but a lower one. Would anyone create work? Yes, if that work was more agreeable, but still work.
I repeat “never”, “any”. You all agree really.
Also watch out for the word “essentially”. Often this can be translated as “not only”, as above in Mr Ed’s comment. This is often (not always but often) a weasel word to avoid acknowledging the complexities of life, and in this case it was used to avoid acknowledging the complexities of human purposes.
‘Often, what unites them is not the love of profit but the love of making whatever they make, doing whatever they do. They know that they must be profitable, and can’t be too wasteful, but that’s because that way they get to keep on serving up this stuff, stuff that they love to create for its own sake’
At the core of my doctoral dissertation was a business that died in 1962; but, on narrow ground of profitability, it should perhaps have gone in the late 1920s. Large reserves used to speculate for then un-taxed capital gains and phased return of capital kept shareholders happy (regular dividends in the 1930s), a reduced workforce in employ etc., etc. Then happy times again until 1959/60, then more return of capital…
I am in favour of capitalism and against ludism. Nevertheless, people without qualification are going to be in a difficult situation, without any work at all.
Do such things exist? Certainly. Are they the rule? Not at all. Are they even common? No. I think your point contra Worstall was not that such things merely exist.
“Surely, part of the point of automation is, often, to make certain sorts of product possible that otherwise wouldn’t be possible,”
To be usefully pedantic about this. There’s a certain weight that needs to be applied to the “auto” part there.
I would agree entirely if we were to say that the use of a machine enables these wider goals. A chisel rather than a fingernail produces a better groove, allowing us to perform tasks not possible with merely the digit.
But that’s machination. Mation, perhaps. Auto- means it does it itself, therefore my limitation for “automation” does stand.
Although, clearly, I’m also guilty of more than a little vehemence in the rhetoric.
It depends….
I am strongly in support of people getting money by voluntary means – such as investment.
But that is not what the international establishment mean when they talk about less work with automation.
The international establishment (both governmental and corporate) have made it very clear that they mean mass unemployment and a GOVERNMENT “basic income” for everyone.
Such policy choices (and they are CHOICES – they are most certainly not “inevitable”) will lead to utter disaster – economic disaster, and cultural (societal) disaster.
The World Economic Forum (which is joined at the hip with governmental and corporate bureaucracies these days) is WRONG – their economic analysis (that automation must lead to mass unemployment and the response to this should be government benefits and public services) is based on basic economic fallacies.
But then what can one expect of people (such as the World Economic Forum – governmental and corporate) who still take seriously such things as Ricardo’s theory of land and rent (refuted by Frank Fetter over a century ago), and Ricardo’s Labour Theory of Value – the first full length refutation of that (in the English language) was by Samuel Bailey in 1825.
Yes – both Marxism, and World Economic Forum ism (or “Technocracy”) is based on theories that were refuted centuries ago.
You can always tell a government boondoggle when the politicians try to justify it by the number of “jobs” it “creates”.
We have reached this point with HS2 now. The benefits of slicing 20 minutes of the journey from London to Birmingham at a cost of £100 billion + can no longer be argued. Business travel will not be what it was. So the only justification left for this enormous piece of malinvestment is that it “creates” so many thousand jobs, as if that is the end and not the means.
In reality, if HS2 could be built by 100 workers using advanced machinery, why would you employ 10,000 workers? The work would be done quicker and cheaper by 100 workers, it might even make HS2 economically worthwhile.
Any time a politicians seeks to justify a grand projet by reference to the number of jobs it allegedly creates, you know they are bullshitting you. The scientific name for this is Boris Johnson syndrome.
No, the entire point of automation is to perform a task more efficiently (than what previously existed): ‘freeing-up’ of labour is only a by-product.
The quoted article closes with this:
“The only point at which this fails is if human needs and desires aren’t unlimited. Which means that we might be able to provide everything that everyone wants without us all working. Which doesn’t really sound like much of a problem really.”
I find purpose in my work. But I’m in one of Bobby b’s rarified careers (research scientist in a government lab!). I’m not sure how much purpose the HVAC guy finds in his job, beyond paying the mortgage and maybe being able to afford a boat. And the Pakistani bricklayer likely does not find much purpose at all in laying bricks. I could be wrong there and I hope I am.
I am pretty sure that getting humanity to the point that only a fraction of the population need to work to feed, house, clothe, etc. everyone is desirable, but I hope it is not the end of work. At the very least we will have projects like mounting a rescue mission to Mars to retrieve Mr. Musk’s body. 🙂
Aside: whenever I see “fraction” used as I have above, as a scientist I think “but 5/4 is a fraction?”, so clearly I mean a fraction between 0 and 1 and in this case significantly smaller than 1.
The workers of the jobs destroyed are almost never interchangeable with what workers might be needed for the jobs created (if any). It isn’t enough to look at it holistically. In fact it is nowhere near enough. Because people lose jobs and can’t find a new one. It matters little than new ones were created in India or Singapore. Or even Silicon Valley. The planet is not a system that we should try to optimize around cost efficiency.
Ignore the numerical mismatch. People are not cogs or building blocks that can be moved around interchangeably, geographically or technically. They don’t retrain that easily or cheaply. They don’t relocate when they have family and a sense of belonging to where they are.
And nobody has figured out what to do about the displaced workers, the newly unemployed, and their families. Nobody wants to just give them the money that the automation of there jobs supposedly saved some rich capitalist/hedgefunder. And even if they did (e.g., guaranteed income) I’m not so sure that’s a good idea. Work, earning one’s own way in the world, provides a dignity that men need. Without it, and you are cooking up a recipe for social disaster and political instability. We’ve run that experiment often enough to know better.
Far too many of the global elite would rather they just die off and disappear. Stop taking up resources that the global elite would prefer to have for themselves at a nice cheap price. They only need so many chattel slaves to tend their plantations and estates, after all.
Oh please. Speaking as a paid up member of the global elite, you can’t sell stuff to people who die off and disappear, and people with more dosh (i.e. not chattel slaves) are a way better market for goods and services. You really don’t understand capitalists at all. All those people working in utterly unprofitable industries in the 1970s were not sent to the knackers yard & turned into glue, the hint being unemployment figures over the subsequent 20 years. Yes, things are rough until economic growth brings new unexpected opportunities, but changing jobs is what happens as technology changes.
Economies adapt, and it is faster & less painful if they are allowed to adapt rather than subsidising industries that are doomed in the long run anyway.
PdH: Maybe it’s just tone or outlook, but what I think you consider an unfortunate frictive inefficiency that occurs during transitions concretely causes drastic changes in many lives for the poorer – while, yes, advancing our lot in the end, overall.
Point is, with some thought, we can serve both masters without just picking one. We can still argue about which way on the continuum we want to slide without insisting on one end or the other. Let progress continue, but don’t write off human costs as just more eggs in the omelette.
“They can learn to code” isn’t very noble.
Re: the human costs of technology change and “heartless capitalist elites”
Our modern educational system was largely pioneered by capitalists and private patrons, and initially had a free-market/non-governmental basis. It was often unapologetically vocational with very little social indoctrination beside the commonsense of The Copybook Headings.
The takeover of education by gubmint do-gooders – first Fabian/Dewey progressives, now open Marxists – has resulted in appalling ignorance and complete disregard for vocational (re)training – though a combination of elitist academic snobbery and Marxist doctrine.
The only exception i know of is the German vocational/apprentice system.
Here in Israel (a country transitioning from socialiam to capitalism) the teachers unions are strangling education, and hi-tech/bio-tech “robber barons” are the ones sponsoring the Israeli version of charter and magnet schools.
Similarly, socialist management has artificially limited the number of israeli university slots, and unsubsidized technical colleges easily provide the same or better education at a fraction if the cost of “public” institutions…
I’ll take “heartless capitalist elites” over “social justice handwring” any day.
A century ago, there was no such thing as ‘Hairdressing’. In a centuries’ time, I bet their will be jobs such as robot-painting. We can’t know. Let’s wait and see.
Perry – the vast corporations do not need customers, at lest not in the short term.
Money comes from government subsidies and from the Credit Bubble banks. This money is created from nothing.
This even includes the churches (the original corporations) – they got BILLIONS from the American government last year. No wonder there was little real resistance to closing the churches – at least not from the “mainline” churches.
Hollywood has long been showing open HATRED for customers, for years. And this is general position of Big Business now – especially the banks.
There are many rich people in the United Stated Congress – but only one “capitalist” (in the old sense), Senator Ron Johnson of Wisconsin (a manufacturer – he makes stuff).
Watching Mr Johnson it is clear that he is baffled – for example he can not understand why the establishment ignore the evidence that the vast majority of people who die of Covid 19 could be saved.
He looks around him (like a man surrounded by savage vampires) and tries to reason with these “people” – but he can not accept the obvious.
It is just too much for him to accept that the people around him (which are “the system” – for, contra Hegel, a system has no independent existence, it is just people) are EVIL – he keeps trying to reason with them, and to appeal to their moral conscience (he can not grasp that they rejected that – long ago).
I find myself hoping that Senator Ron Johnson dies – his life is filled with suffering, and if he ever works out that the world around him (the system) is totally evil, that the people around him DO understand what he is saying but DO NOT CARE, then his suffering will vastly increase.
Men like that are defending an America that is dead.
They will not her go – they will admit that she is dead, even as she starts to decompose in their arms.
John K.
The one good thing I thought would come out of the insane level of government spending that was the CHOSEN reaction to Covid 19 (and it was a CHOICE – after all South Dakota has a balanced budget, they made a CHOICE not to bankrupt themselves), was that insane projects such as HS2 would be cancelled.
I assumed it – and I was WRONG.
I had not grasped the basic fact that most Western governments believe there is no net cost to government spending (no matter how high it is) or to government regulations – even incredibly restrictive regulations such as the “Net Zero” “Green” stuff.
They really do believe this – that insane levels of government spending and regulations have no net cost.
It is actually a very old mistake.
Certain passages of Adam Smith and other British economists (not French “Liberal School” economists) imply that the costs of government spending are counter balanced by “benefits” of such spending. This is what government thinks in relation to a scheme such as HS2.
So you or me can talk about the costs of a scheme (or a regulation) as much as we like – but the government (or Big Business) person will think “Ah – but the BENEFITS counter balance that cost”.
So we really might as well go and find a cat to talk to.
The cat may like the sound of our voice (even though the cat does not understand the words) – the government or Big Business person will never be influenced by what we have to say.
The claim that automation destroys jobs is exactly identical to the claim of the Luddites of 250 years ago: that machines destroy jobs. It’s a terribly idiotic claim, disproven over and over for centuries… not only theoretically but factually. – How many “jobs” existed before the invention of machines and how may exist now? (That is – how many people lived then vs now?).
Only an utter idiot like Noah Yuval Harari or the World Economic Forum can utter such idiocies. (Noah Yuval Harari sold over 10 million copies of his books). “Automation” is actually just machines.
And… we never create “jobs”. Demagogues and liars and politicians create jobs.
People create things – things that make life easier and more enjoyable. Jobs are a deplorable by product….
One way to create jobs is to live longer. Old people are terrific “job creators” – they need a whole lot of care-givers (and other help).
The most popular person on Fox Business was Lou Dobbs – his show got overwhelmingly the highest ratings.
If the Milton Friedman theory of the Corporation as an entity that tries to please customers was correct, then Low Dobbs would be getting a massive raise from Fox – in this world he has just been FIRED.
What matters to the Corporate Elite is not customers, they could not give a damn about customers (and YES they most likely do want the “common herd” to die of – we are too “vulgar” to be allowed to live), what matters to the Corporate Elite is praise at leftist social gatherings.
They are not stupid people – they come in on their private jets and laugh at the latest measure that will make it too expensive for ordinary people to heat their homes.
It is not that they do not see the contradiction between their words and their behaviour – they see it very well, and DO NOT CARE.
There is the purpose of Samizdata the blog – and then there is the purpose of hosting Samizdata on a blog hosting service..
Yes, the purpose of the latter was to put pampleteers out of business in favor of blog-hosting services. Maybe not your intent, certainly not the whole purpose of hosting, but a purpose all the same.
“What matters to the Corporate Elite is not customers”
Not so sure about that.
You get more customers by following the fashionable craziness du jour than by standing fast for libertarian principles.
“A century ago, there was no such thing as ‘Hairdressing’.”
Sounds a little odd. We’re supposing that vanity is a new invention are we?
Quite apart from the fact that every description of both slaves and servants over the centuries talks about those who aid with styling hair.
Even the Yanomamo have hairdressing – those bowl cuts are created.
Hairdressing as something done outside the household, as a market transaction, sure, that’s perhaps a more recent creation. But the thing itself not so much.
Tim, these were not readily accessible to the public! Now most suburbs seem to have them, or is that just an Australian experience? And here might be a future vocation- cosmetic ear surgery! You would be able to make yourself look like a Vulcan, or an Elf (depending on fantasy tastes), by having your ears changed to be more pointy.
The ultimate question is whether people are a problem or an asset.