August 14, 2018

The Super Bowl of Economics: Capitalism vs. Technology

Technology is the odds-on favorite.

In the multi-author collection Does Capitalism Have a Future?, Randall Collins, Emeritus Professor of Sociology at the University of Pennsylvania, observes that capitalism is subject to a “long-term structural weakness,” namely “ the technological displacement of labor by machines.”

Technology eliminating jobs is nothing new. From the end of the 18th Century through the end of the 20th, the Industrial Revolution swept a huge number of manual labor jobs into the dustbin of history. It didn’t happen instantly: at the turn of the 20th Century, 40% of the USA workforce still worked on the farm. A half century later, that figure was 16%. I grew up in rural Minnesota, where farm kids did chores before school, town kids baled hay for summer jobs, and everybody watched the weather and asked how the crops were doing. We didn’t know we were a vanishing species. In fact, “learning a trade” so you could “work with your hands” was still a moral and societal virtue. I chose carpentry. It was my first fulltime job after I graduated with a liberal arts degree.

Another half century later, at the start of the 21st Century, less than 2% of the U.S. workforce was still on the farm. In my hometown, our GI fathers beat their swords into plowshares, then my generation moved to the city and melted the plows down into silicon. And now the technological revolution is doing the same thing to mental labor that the Industrial revolution did to manual labor — only it’s doing it way faster, even though most of us aren’t aware that “knowledge workers” are a vanishing species. The following is from The Stupidity Paradox: The Power and Pitfalls of Functional Stupidity at Work:

1962… was the year the management thinker Peter Drucker was asked by The New York Times to write about what the economy would look like in 1980. One big change he foresaw was the rise of the new type of employee he called ‘knowledge workers.’

A few years ago, Steven Sweets and Peter Meiksins decided they wanted to track the changing nature of work in the new knowledge intensive economy. These two US labour sociologists assembled large-scale statistical databases as well as research reports from hundreds of workplaces. What they found surprised them. A new economy full of knowledge workers was nowhere to be found.

The researchers summarized their unexpected finding this way: for every well-paid programmer working at a firm like Microsoft, there are three people flipping burgers at a restaurant like McDonald’s. It seems that in the ‘knowledge’ economy, low-level service jobs still dominate.

A report by the US Bureau of Labor Statistics painted an even bleaker picture. One third of the US workforce was made up of three occupational groups: office and administrative support, sales and related occupations, and food preparation and related work.

And now — guess what? — those non-knowledge workers flipping your burgers might not be human. This is from “Robots Will Transform Fast Food” in this month’s The Atlantic:

According to Michael Chui, a partner at the McKinsey Global Institute, many tasks in the food-service and accommodation industry are exactly the kind that are easily automated. Chui’s latest research estimates that 54 percent of the tasks workers perform in American restaurants and hotels could be automated using currently available technologies — making it the fourth-most-automatable sector in the U.S.

Robots have arrived in American restaurants and hotels for the same reasons they first arrived on factory floors. The cost of machines, even sophisticated ones, has fallen significantly in recent years, dropping 40 percent since 2005, according to the Boston Consulting Group.

‘We think we’ve hit the point where labor-wage rates are now making automation of those tasks make a lot more sense,’ Bob Wright, the chief operations officer of Wendy’s, said in a conference call with investors last February, referring to jobs that feature ‘repetitive production tasks.’

The international chain CaliBurger, for example, will soon install Flippy, a robot that can flip 150 burgers an hour.

That’s Flippy’s picture at the top of this post. Burger flippers are going the way of farmers — the Flippies of the world are busy eliminating one of the three main occupational groups in the U.S. And again, a lot of us aren’t aware this is going on.

Burger flipping maybe to particularly amenable to automation, but what about other knowledge-based jobs that surely a robot couldn’t do — like, let’s say, writing this column, or managing a corporation, or even… practicing law?

More to come.

 

Kevin Rhodes writes about individual growth and cultural change, drawing on insights from science, technology, disruptive innovation, entrepreneurship, neuroscience, psychology, and personal experience, including his own unique journey to wellness — dealing with primary progressive MS through an aggressive regime of exercise, diet, and mental conditioning.

Check out Kevin’s latest LinkedIn Pulse article: Leadership and Life Lessons From an Elite Athlete and a Dying Man.

Print Friendly, PDF & Email

Speak Your Mind

*