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The Second Machine Age Calls for Vision and Leadership

This post I’ve been pondering on for a long time, but never found the right angle and perhaps I still haven’t. Basically I have these observations, thoughts, ideas and a truckload of questions. Where to start? With the future prospects of us all. Thomas Picketty showed us the rise of inequality. He was recently joined by Robert J. Gordon who not only joins Picketty, but adds that we live in a period of stagnation, for decades already. “All great inventions lie over 40 years and more behind us”, he points out. In stark contradiction to the jubilant voices of Silicon Valley. The end of Moore’s law was announced for the world to read in The Economist of mid March (“After Moore’s Law”, The Economist 19-03-2016). So where does that leave the continuous growth of The Internet of Things? Is this ending good for employment? Will that stifle the rise of populism and angry white men feeling left out?

What a job does

That last thing is why the rise of robots, artificial intelligence and algorithms puzzles me so much. In order to spend money (on whatever), people have to make money and most do so through a job. Decently paid jobs lie at the heart of economic growth. What I notice is jobs disappearing at a high rate. Mostly jobs in (lower) middle class that require a form of education and training. Next to that a job provides a feeling of belonging, a purpose in life, regularity and a sense of fulfilment when something gets done. Jobs are satisfying. On top of that money comes in.

The rise of the masses

In the 19th century the slow rise from poverty of the masses started in the western world. Probably urged by the rise of socialism and communism employers gave away some rights, started paying better wages and the western world changed in many ways because of that. People all got wealthier and healthier. Governments could levy more taxes, making it possible to work on great projects that made life better again. And employers got richer as well, being able to sell more produce to the workers they paid ever better. Think Henry Ford, who not only started the mass production of cars, but also enabled his employees to buy them from him.

Enter the robots

This all stops when people are replaced by things, whether a robot or a machine on algorithms. No pay means poverty, eviction from houses, less health, no education. From an economic point of view it means that less and less products are sold. So where is the economic rationale behind this race to the automated bottom? No demand in the end leads to no supply, no profit for the AI and robot owners and manufacturers. Enter economic decline. Professor Gordon seems to be right there. Fact is I read very little about this link in the media.

‘Free money’

So will Patti Smith be right in the end? Will we all get free money (yes, I know it’s a cover, but my favourite version of the song) or helicopter money as they call it in 2016? Aside from the fact that this money has to come from somewhere, it does not take into account the other less tangible features of having a job. History learns that the missing of those features leads to grave discontent when they are not met. The sort of discontent I do read about on a daily basis. What is at the heart of it? Part is robotisation of jobs.

The end of Moore’s law

So is the end of Moore’s law a blessing in disguise? If the rise of processing power is stopped in its tracks, is that a good thing for employment? Especially for the middle class?

There’s no way of telling of course. When Thomas Malthus predicted his disasters for human kind in the late 18th century, the Industrial Revolution came along changing the game as Gordon writes on. Malthus’ prediction became obsolete fast, although it is used often in other ways.

Make no mistake. If development arrests, mankind will miss out on very positive effects as well. In health, in services, transport, etc.

Major breakthroughs?

The world as we know it may be on the brink of major breakthroughs in IT as the above mentioned ‘The Economist’ article gives a few insights on. A lot is uncertain though as researchers run into great challenges, for years on end already. There’s no predicting a breakthrough as a lot are stumbled upon by accident.

IT breakthroughs do tend to come with a loss of jobs. A reason a lot of people live in fear that their children will not live in a better world. Come in Trump, Pegida, Wilders, Brexit, Le Pen, Beppe Grillo, etc., etc. People and movements that feed on and spread fear, but offer not one single solution to one of the major challenges this world faces. Unless you take the shooting of refugees at the border as a serious option of course.

As a question in this category. Recently several chains of department and retail stores keeled over in The Netherlands. There are several reasons attributed to the bankruptcies, but one of them is the rise of webstores. Online shopping is not replacing physical shopping in general (yet?), but the loss of how many percentages in sales are enough to facilitate the bankruptcy of the physical store? This is an interesting question to answer. I never read one so far. Thousands of people lost their jobs. Are there new ones for them and in what sector(s)? It’d be interesting to learn this too. What are the new jobs some people talk about and are we training people for those jobs? I don’t see them advertised.

The future seems bleak to many

At the Internet Governance Forum workshop organised by NLIGF (Workshop #48, “Internet of Things. Ethics for the Digital Age”), just like the workshop in The Netherlands on this topic, it was hard to find a person who spoke out in favour of current developments, except from a technical point of view. Conclusions were the following. Education runs horribly behind demand, algorithms are a black box in the hands of the private sector, privacy is in danger, as is employment, politicians do not understand the implications of current developments. Most participants, over one hundred at each session, saw a bleak future if the current developments do not change course for the better.

Political leadership?

We live in interesting times, that much is for certain. Where we are heading I just don’t know. What I would appreciate is to have politicians that lead, explain, decide. In short: indicate what they are about. And I don’t mean a strong muscle like in a few countries not too far away from my country is the standard. No. I’m looking for leadership in the current politicians in power in the western world. Who stand for what they do, explain in a clear way why their solution is the right one and start making decisions on an ICT world, the second machine age or fourth industrial revolution, whatever you like to call it. What is acceptable and what not, so we all live in a society where we can fulfil our lives in meaningful ways. A form of leadership that is frighteningly missing, as even the politicians in the mentioned (NL)IGF panel, those who are aware, agreed to.

Having said this, I am totally convinced that another form of leadership is necessary as well: from private industry. A kind of leadership that not only takes care of business, but of society as well. That aims for a balance.

To conclude

Change is scary and certainly for those who fear change the most. These people need to be included and remain included. If not we are heading towards very uncertain times. This is something that leaders in the private and public sector have to start acknowledging and act upon. For me it isn’t hard to picture self-driving cars, machines carrying out surgery or fully automated ships. I have a hard time picturing what all the people who have lost these jobs will do instead, while I can easily imagine the discontent.

There’s no denying, things change. They always have, but the past always offered alternatives when the paradigm shifted. From what I hear and read these sort of alternatives are not in sight in 2016. Hence the main question of this post: what is acceptable in the current change and what is not? Leaders, public and private, have to make some important choices that decide on the kind of world we are all to live in.

By Wout de Natris, Consultant internet governance

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Don't blame the poor robots if we can't make good use of them Alessandro Vesely  –  Mar 31, 2016 11:46 AM

Nice one, Wout.  Thank you so much for a fascinating, cosmological account of the status quo, the best one I’ve read in quite some time.

Unions fallaciously tended to stigmatize computers since the ‘70s, because of job losses.  Some jobs are so alienating as to evoke the concept of exploitation of man by man.  Let’s loose them.  Yet, computers are a source of alienation in their own way.  Perhaps, it is inviting humans to be overly formal might have induced that kind of behavior selfishly focused on money, à la Martin Shkreli, which causes so much decrease?

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