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The Zero Economic Value Citizen
I have an article today in the Harvard Business Review, co-authored with legendary Silicon Valley marketer and venture capitalist Bill Davidow. It’s the first piece Bill and I have co-bylined since we wrote The Virtual Corporation twenty years ago. I don’t know if it will have the same impact as that book did, but it should.
In the article, Bill and I note that the current pace of technological change (though few people noticed, Moore’s Law basically went vertical in 2005), combined with the rise of artificial intelligence, robotics, and the Internet of Things, means that our machines are rapidly assuming an ever-greater role in our economic life. Henry Adams despaired in the 19th century that the rate of progress — about 2 percent — was almost too much for mankind to keep up with. We’re now running at 40 percent.
You’ve read the warnings from Elon Musk, Stephen Hawking and other forward-thinkers that AI poses a potential long-term existential threat to humanity. In fact, we don’t have to look that far. As a growing number of jobs — mostly manual labor, but increasingly blue-collar and soon white-collar— disappear to automation we are already creating what Bill and I call the Zero Economic Value Citizen: people for whom artificial intelligence has rendered their skills or jobs without value. We suspect that many of those millions who have already dropped out of the workforce are just such ‘ZEV’ citizens.
What is the solution? We’re not sure there is one. Government is too slow and stupid. Education, even if the unions weren’t resisting change, probably can’t keep up either. And as our machines get smarter they will continue capturing jobs ever further up the IQ scale.
Are we all destined to become ZEVs? A good question. And what do we do then? I’d like to hear your thoughts.
Published in General
I do think there are limits to what we can foresee. However, I can envision a possible future where machines have replaced so much of the labor in our lives that humans struggle for meaningful things to do.
Down and Out in the Magic Kingdom is a novel that has some element of this issue in it.
Except that humans have always struggled for “meaningful” things to do.
Before the industrial revolution, people were too busy in subsistence survival activities to worry about doing anything “meaningful”.
Then, after the industrial revolution, most of the complaints were that industrialization reduced “meaning” even further, by turning people into robots.
The argument therefore seems to be that every advance that reduces the need for labour reduces “meaning”, even though the vast majority of labour being done in the first place was devoid of “meaning”. So, we started with no meaning and went downhill from there? It makes no sense.
What’s more likely, IMHO, is that as mechanical robots replace the human “robots”, those humans should be freed up to engage in more “meaningful” (but less financially lucrative) activities.
That is, as long as the cost savings of more efficient production are allowed to be enjoyed by consumers rather than being inflated away …
Yeah, except that Cory Doctorow (the author) has the career he has thanks to advances in automation and digital distribution. He distributes his novels digitally for free. There is no way he could do that without dramatic decrease in costs brought about by automation and computing. The number of words published daily has increased exponentially, BECAUSE costs have fallen, wealth has increased, and people have more leisure time.
I’m sorry, but you’re wrong.
The cost of consumptions has dropped, and continues to drop, tremendously.
That is not the same thing as inflation/deflation. Inflation/deflation refer to the value of…money.
The cost of consumption refers to the…price of goods.
Really really really important for “conservatives” to understand this concept. Especially given all the nonsense out there from the Ron Paul types and the Zero Hedge types and the Newsmax types.
Some professions may see increased demand–especially ones that require human interaction and contact, such as:
Many of the new “professions” are things that people can easily do themselves, if only they had a little gumption and willpower. Yoga instructors, personal trainers, teachers, therapists, etc. Heck, even entertainers.
In other words, if the problem of the future is a lack of “meaning”, then one could argue that the professions of the future are those where people get paid to supply other people with “meaning”.
Now, as far as the “ZEVs”:
1) Not having read your HBR yet, I assume you’re familiar with the identical concept in economics of ZMP…zero marginal productivity. There’s already a literature on this topic, so might want to look at it.
2) There are always, and have always been, “ZEV/ZMP” workers. I don’t see any evidence that there are more today, than in the past. Quite the contrary.
3) The vast majority of workers who leave “blue collar jobs”…move into higher skilled jobs. (I can’t seem to find the article the actual numbers now).
I.e. over the past 5 year period the turnover rate in the “blue collar jobs” was around 20%, of which about 17% moved up into higher skills jobs, and only about 3% moved down to low-skilled jobs. This trend, BTW, has been increasing (i.e. more moving into higher skilled jobs).
4) All the evidence points out that those with the skills are becoming increasingly more…economically valuable…than in the past. I.e., technology isn’t substitution, it’s complementary for them.
But more and more people are getting higher levels of skills.
5) The problem has all the hallmarks of being one worker mobility, not of substitution by machines/computers etc. All that stuff happens all the time, and has happened all the time for the past…2 centuries.
So in short: no. There’s no problem.
Tech is complementary, majority of people seem to be handling the transition well, and for those that can’t, it’s more likely an issue of mobility.
What do you think is the demand for a highly skilled Software engineer or computer scientists today?
More than in the past, or less?
I’m not sure people who talk about “technology” replacing us, actually realize that technology doesn’t grow on trees ;)
I think Fabbers will change everything, and they already exist. I hope to see a time where people live less to work, and work to be productive, and find meaning, not just to support themselves.
People are creative.
AIG, this and your previous post beat me to the punch. Worries about ZEV are nothing more then a modern realization of the Malthusian critique which, time and again, have proven to be wrong.
Exactly. anonymous had a post about the fabbing revolution recently. Technology is a force multiplier on labor. We have *no idea* today what the jobs of the future will be.
Right – this is sorta the point I was trying to make earlier. Some people will transition well, some won’t, but the ones that won’t are typically the older workers or the ones still hanging around geographic locales where industry used to be – they either won’t leave or are paid (through welfare of various kinds) to not leave.
Consider the number of hours, on average, we spend working compared to 100 years ago. We have more leisure time than ever, and hobbies galore to fill that time (and industries well developed around those hobbies).
The video game industry would not exist if people did not have lots of time to play games.
Amen to that.
If your point is that technology has enabled a range of choices unavailable in even recent history then, yes. If your point is that increased leisure time is somehow indicative of ZEV then I have to disagree.
What is the solution? We’re not sure there is one. Government is too slow and stupid. Education, even if the unions weren’t resisting change, probably can’t keep up either. And as our machines get smarter they will continue capturing jobs ever further up the IQ scale.
Well, there are always the old-fashioned solutions. War, plague, and famine.
Where do I sign up for that life?
Yes, well said, Sir.
Look, right now, many married women get to work the jobs they want to work to be fullfilled. They do this because they have a husband who is working to bring home money ( I know this might be reversed, but it most often is not). My point is, how cool would it be for everyone to do a job they love, instead of something that just pays the bills?
Put another way, Star Trek is pretty commie feeling because there is no scarcity of anything. Now, they also don’t seem to have stupid people, but still, the main thrust of the OP is somehow replicators and unlimited energy would be a *bad* thing. Huh?
I might also point out, that I work with people who already struggle to work at all. They are often disabled and getting a government check. You know what? With the right coaching and support they are able to work.
Now you might argue the the time we put into coaching and supporting them is a net loss over what they produce. Maybe the numbers show that. However, the people doing the supporting and the coaching are getting more than a paycheck out of it, they also get meaning. So do the clients we help.
Work is more than money. People work for meaning. This so called problem will lead to more people working for meaning than for a paycheck.
It was when enough extra food could be produced so maybe 2 people out of a hundred could not work on the farm all damn day that we started to get new art and new ways of thinking about the world.
More leisure for more people is a good thing, something that Mankind has been striving for our whole lives. Look at how many people “retire” to part time work that is more fullfilling that the grind they left?
Yes there will be some sort of dislocation in the middle of this change, but in the long run it is going to be fantastic.
The OP isn’t making that kind of judgement. He’s simply asking whether this productive replacement is “destiny” and then how we might respond as individuals and as a society. To say that there will be massive change from what we have now is not to say that we should reject replicators and unlimited energy; it might benefit us to think a little about what that will mean for us, though.
Your Star Trek example gets to one of the points I might be concerned with: what about the average and less than average people? Let’s face it, expert craftsman and engineers aside, most of us likely reside in the fat part of the curve or to its left.
What’s the problem, is the real question here.
1) Technology creates more jobs, allows us to be more productive and efficient, which also translates to lower costs of goods. Not only are things getting cheaper, but we’re getting more productive, and have greater choices.
2) The fact those some people can’t transition with technology…isn’t that much of a problem. That is, the problem is over-blown, and is only temporary.
Here’s the link I wanted to find in my earlier post, a report from the Federal Reserve Bank of Atlanta:
http://macroblog.typepad.com/macroblog/2014/11/for-middle-skill-occupations-where-have-all-the-workers-gone.html
So, most of these people transitioning out of “blue collar jobs”, end up in higher-skill jobs, with higher wages.
I.e., the majority is transitioning well, and the rate of transition to higher-skilled jobs is getting higher.
Think about these few facts:
1) The average US household spends about…6%…of their income on food (one of the lowest, if not the lowest, in the world). Imagine that! One of the most highly automated industries in the world, US food production, didn’t lead to poverty and misery as millions of farm workers were no longer needed. It led to a massive increase in disposable income and food abundance for everyone (as well as much richer farmers).
2) A $100 smart phone today can do more things that $2,000 worth of equipment could do 20 years ago. Did the demise of the PC, stereo industry, CD industry, home entertainment industry, land-line phone industry, Radio Shack and about a dozen other industries over these 20 years, and replaced by a simple $100 smart phone…lead to any problematic outcomes? I don’t see it.
3) Consider the drawing attached at the top of this post. It seems to be some sort of a CAD drawing.
Consider the development of CAD software. In the past it took rooms full of engineers spending their days drawing on paper. It took warehouses full of drawings to store all of them, and offices full of people to manage them.
Now 1 engineer with 1 PC with 1 CAD software to make as many drawings, to store as much info and to manage as many revisions as in the past took probably 100 people to do.
Did that lead to a decrease in demand for engineers? Did that lead to decrease in their wages? Is there some long line at the unemployment office of former drafters, unable to find jobs because their skills add no value anymore?
Nope.
I’ve been saying for decades that the Star Trek movie that needs making is about the war that follows the invention of the matter replicator. Because there would be one.
Several things happen:
1) Tech makes things cheaper. Hence, even if we assume that someone’s income drops because they are not as “needed” anymore, they may still be able to have a better standard of life than before when they were “working”.
The average “poor” person today lives better than the average “middle class” person 30 or 40 years ago.
2) The impact of “automation” and “technology” is over-blown. I.e., it’s been happening for 200 years now, with some industries being completely automated (like farming). But the economy is pretty diverse.
3) The impact of “automation” and “technology” is also complementary. I.e., it makes you more productive in your job, even if it’s a “low skill” job. It doesn’t necessarily substitute for you. In most jobs in the US, that’s the real case.
Consider a person stacking shelves at Walmart.
1) That job wouldn’t exist were it not for the massive automation in supply chain that Walmart has developed.
2) That person has an automatic bar code reader which interfaces with the warehouse. They can now do a lot more work, using that piece of technology, than they could do in the past.
3) Tech and automation has allowed Walmart to stock so much and such varied merchandise on their shelves. He’s now got a lot more stuff to stack, and scan.
I.e., that person’s “low wage” job wouldn’t even exist were it not for the advancements in technology.
PS: And even though that person stocking shelves at Walmart might be making minimum wage, they can still afford a lot more stuff than a middle-class person could 50 years ago!
Required reading for the ZEVocalypse: Player Piano by Kurt Vonnegut, and The Midas Plague by Frederick Pohl. For extra credit The Space Merchants by C. M. Kornbluth and Frederick Pohl.
Alternatively, an EMP from an Iranian or North Korean nuke touched off anywhere over over the East Coast, West Coast, or Kansas and being replaced by intelligent machines becomes the least of our problems.
Bill Whittle does a good piece on this phenomena here.
That’s a good video that gets to the point.
What is amazing is that pretty much all these arguments about technology etc etc could be addressed through 2 things:
1) Understanding a simple demand and supply graph.
2) Understanding the difference between change in demand and change in quantity demanded
Just knowing these 2 things is enough to see why there is no problem here.
All that is taught in your very first econ 101 class you take as a freshman in undergrad. Most people just…don’t think that way.
Bingo.
And later, the civilizational collapse that having both replicators and holodecks would cause.
Oh, is that why “Republicans” are (were, thank God they have stopped talking about it!) so focused on “ebola” and “ISIS”? I thought it was just cheap scare tactics to appeal to the lowest common denominator of voters.
Little did I know they were actually trying to solve another made-up problem that didn’t exist.