The Corner

Economy & Business

Automation: This Byte’s For You

Writing for City Journal, Mark Mills warns that the robots (to use the shorthand) will be gnawing their way far higher up the food chain than we have seen before.

Here’s the dirty little secret about automation: it’s easier to build a robot to replace a junior attorney than to replace a journeyman electrician. And that fact helps explain why economists and politicians are feeling misgivings about “creative destruction,” which, up to now, they have usually embraced as a net good for society….

In the age of the algorithm, though, they’re not so sure any more, and no wonder: instead of creative destruction coming to factories and farms, it’s sweeping through city centers and taking white-collar jobs. The chattering classes have talked and written for years about the “end of work.” Doubtless many fear that the end of their work is in the offing, this time around.

Creative destruction doesn’t sound so benign when it’s coming your way.

Mills:

Consider a bellwether of more white-collar disruption yet to come: of the nearly 200 so-called Unicorns—private, venture-backed companies such as Uber that are valued over $1 billion—90 percent are in nonmanufacturing businesses. There’s a good reason for such a skewed focus. Supercomputer-class software in the cloud can perform, at minimal cost, once-daunting information-centric tasks, from reading X-rays to managing a “passive” investment fund. But the engineering challenges are far greater and many times more complex in cyber-physical systems, where software meets steel in real time…

[W]e’re in the midst of an upheaval in what we might call the “means of management.” The overall effect, I believe, will be the same as in the past—a boost to the economy and more jobs—but the makeover this time will affect the professional and managerial classes. We should expect them to be at least as vocal about it as many factory workers were a generation ago.

While I doubt that this revolution will create more jobs (at least any time soon — and then there’s its depressing effect on the wages of those who still have work to consider) I’d agree with Mr. Mills that those being displaced will be ‘at least’ as vocal about it. In fact, my guess is that they will be very much more vocal about it.

I touched on this topic last year on a piece on automation for NRODT.

Here’s an excerpt:

When Americans do finally grasp what automation is doing to their prospects, rage against the machines (or, more specifically, their consequences) will blend with existing discontent to form a highly inflammable mix. This broader economic unease is already spreading beyond left-behinds and Millennials, but when we reach the point where even those who are still doing well see robots sending proletarianization their way, there’s a decent chance that something akin to “middle-class panic” (a phenomenon identified by sociologist Theodor Geiger in, ominously, 1930s Germany) will ensue. Many of the best and brightest will face a stark loss of economic and social status, a blow that will sting far more than the humdrum hopelessness that many at the bottom of the pile have, sadly, long learned to accept. They will resist while they still have the clout to do so, and the media, filled with intelligent people who have already found themselves on the wrong side of technology, will have their back…

Every revolution, whether at the polling station or on the street, needs foot soldiers drawn from the poor and the “left behind.” Still, it’s the leadership that counts. Add the impact of automation to the effects of existing elite overproduction and the result will be that the upheaval to come will be steered by a very large “officer class” — angry, effective, efficient, a “counter-elite”…looking to transform the social order of which, under happier circumstances, it would have been a mainstay.

The consequences are unlikely to be pretty.