Economy & Business

‘The World Is Never Finished’

Google self-driving car prototype at a media preview in 2015. (Reuters photo: Elijah Nouvelage)
Taking a long view of technological disruption

‘The world is millions of years old,” he says sagely. “And the world is never finished.”

Professorial and at times even a little prophetic, Bob Lutz, late of General Motors, isn’t what you’d expect from an old-fashioned American car guy: Zurich-born and Lausanne-educated, he knows a half-dozen languages and did stints at GM Europe, BMW, Ford, Chrysler, and the Marine Corps before returning to General Motors, where he was, among other things, an early advocate of electric cars. In a wide-ranging radio interview with Glenn Beck (who made his reputation as a conservative polemicist but whose straightforward interviews often are terrific and barely touch on politics), Lutz spoke at length about the future he imagines for the automobile industry: autonomous pods that consumers hail on demand rather than owning, networked together in ways that render such familiar 21st-century headaches as traffic jams and car accidents largely (perhaps entirely) a thing of the past. Rich people in the future will own sports cars for the same reason today’s rich people own horses.

Tesla and Fisker have built some beautiful cars, and BMW has put some very nifty electrics on the road, but some of today’s high-tech car companies are overlooking the great lesson of the information economy: Developments in the appliance will be radical and delightful, but developments in the network are where the revolution is. If they’re not careful, they’ll position themselves to be Hewlett-Packard rather than Google. Having an autonomous car that knows exactly where it is (Lutz says GM’s current standard is down to four inches) is a big step forward, but having an autonomous car that knows where it is, where every other car is in a thousand-mile radius, and where all of them are going — that’s a giant leap. Autonomous cars won’t have to route around traffic jams because traffic jams will never form in the first place — that’s the value of the network. Countless man-hours now wasted sitting in traffic will be liberated. Fewer people will die in ambulances or waiting for fire trucks. Everything that moves between producers and consumers — which is to say, every consumer good and manufacturing input — will be transported more efficiently. Many of those problems are going to be solved by Millennials for whom owning a car and having strong feelings about it is a barbaric Boomer relic.

Lutz takes a moderately pessimistic view of the future of labor, one informed by mid-century anxieties about surplus labor. In the 1960s, thinkers at IBM believed that the world’s economy would be effectively “cybernated” — which is to say, automated and computer-managed — by the end of the 20th century, and that this would mean the end of jobs. Time magazine published an anxiety-ridden cover story in 1965 in which some of the big thinkers of the day argued that a 20-hour work week would be the norm — or that only 2 percent of the work force would be gainfully employed. It’s the familiar problem of Inverted Malthusianism: The world grows so prosperous that the demand for labor evaporates, thus leading to mass unemployment and general immiseration. The problem with that logic should be self-evident, and such problems — imagine that widespread global prosperity is a problem! — tend to be self-correcting. Lutz foresees a world in which a relatively small number of workers at a relatively small number of firms create most of the world’s wealth, and everybody else lives off of a guaranteed minimum income, filling their time and preserving their self-respect by operating artisan bakeries and old-fashioned cordwainers’ shops. This is Brave New World with welfare checks repurposed as sedatives, and Lutz is not alone in his soft techno-pessimism: The economist Tyler Cowen and Silicon Valley billionaire investor Peter Thiel both offer similar views. The low-hanging fruit of technological progress is long gone, ruthlessly efficient labor markets will establish ever-steeper socio-economic divides that will erode community life and common culture, and the economic institutions that have sustained middle-class comfort in the advanced world will be undermined by inevitable global development. As Cowen put it in his book title, “Average Is Over.”

It is tempting to look back. Yuval Levin described the palsy of nostalgia in his book The Fractured Republic, in which he found both Left and Right looking back wistfully to a half-understood post-war economic and political settlement that is of very little relevance to the year 2017. That nostalgia infests our current politics: Consider the Trump administration’s fixation on such 20th-century businesses as steel and automobile manufacturing while the current and emerging titans of the 21st-century economy are held in skepticism, if not contempt. While the new mercantilists in Washington, Republicans prominent among them, are trying to protect Lutz’s moribund former colleagues at GM — a firm that had to be bailed out by taxpayers not long ago in a remarkably crooked deal — they are pushing to raise taxes on the employees of high-tech companies and working to make it harder for them to hire the top talent from around the world. The most lucrative and fastest-growing of our industries, especially finance, are written off as mere “service” jobs of no interest to the Real America, which, we are told, is populated mainly by men wearing hardhats. It’s nonsense on stilts, but it bestrides our politics, and not only on the populist Right: Bernie Sanders makes his dacha money selling the same pipe dream.

But if we are going to look backward, let’s look back even farther. The belief that the remorseless efficiency of capitalist production will lead to mass unemployment and consign ordinary workers to lives of misery is older than the word “capitalism” itself. It is an ancient theme in science fiction and loomed large in the mind of Karl Marx. As Star Trek fans and etymology nerds know, the word “sabotage” comes from the French word “sabot,” a kind of simple wooden shoe that workers used to destroy machinery used to automate their work. The end of work has been upon us for a very long time, but it never quite gets here.

What’s happened instead is that our work has become easier, our lives more prosperous and comfortable, and the material downsides of economic setbacks less and less catastrophic. (There are hungry and homeless Americans, but not for economic reasons.) There’s more to life than having a roof over one’s head and food on the table, true, but that is a sentiment best enjoyed indoors with a full belly. We don’t officially have that 20-hour work week they were dreaming of in the 1960s, but the average American probably spends more of his “work” time amusing himself than he did in 1965. Those steelworkers in Pittsburgh didn’t spend a lot of time on Facebook.

In the real world, the balance of power between the world of politics (which is to say, the world of compulsion) and the world of the market (which is to say, the world of cooperation) has shifted dramatically. Bill de Blasio, rotten old Sandinista though he is, would put on a little red fez and dance down Madison Avenue like an organ-grinder’s monkey if he thought that would win New York City the new Amazon headquarters.

Lutz, and those who share his views, are right to be clear-eyed but wrong to be pessimistic.

Ten years ago, as our friends in Cupertino are keen to remind us, there was no such thing as a smartphone. The iPhone is neat, but the services that have grown up around it — the good and the bad, from Uber and mobile payments to sex and dating apps — have changed our lives and our culture in ways that even a visionary such as Steve Jobs could not quite foresee. Uber has been hard on some taxi drivers, but is the world worse off or better off now? You can argue either side of that question, but if we let people choose for themselves, the answer they give is undeniable.

Lutz, and those who share his views, are right to be clear-eyed but wrong to be pessimistic. There is work to be done, and there is value to be created by human effort and human ingenuity. Smartphones and autonomous cars do not change that any more than the telegraph or the Jacquard loom did. We should resist the temptation to see human beings as liabilities — as problems to be solved with a factory job or a welfare check — and see them as what they are: assets. The greatest assets there are, in fact. That isn’t an ideological question — that’s an observable fact. The value of Google isn’t in its real estate or its servers, and the value of Apple isn’t in its inventory or in this quarter’s cash flow.

What will work, the economy, or the culture look like in 40 years? No one knows or can know. But would any of us really go back to the 1970s and live that life, having known what we know now? It is difficult to imagine doing so, or a reason for doing so. Things are radically better today than they were then, and there’s no reason to believe that we — and we are the ones in charge here — are suddenly going to decide to start making things worse.

The world is never finished.


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