In my last blogpost, I referred to the gap that exists between our progress in material prosperity and technological progress on the one hand and human work on the other. That is, despite our many achievements, we still live in a world in which a healthy balance of work and leisure is unattainable, jobs leave many people unfulfilled and worse yet unable to meet their needs.
Back in the 1930’s, John Maynard Keynes had speculated that technological innovations would usher in a life of leisure and prosperity for workers. And yet, despite countless innovations since then, this remains an elusive dream. But now, if the optimists about the potential of AI are correct, human work will face new uncertainties when robots and virtual assistants replace human workers. Which raises the question “What jobs and how many of them will be left for humans?” This could be the latest in a long series of transformations of human work. Each major transformation has been followed by significant civilizational changes. Now we stand before one more such possibility. So why don’t we give it some serious consideration? After some reading and reflection, this is what I would like to share on this subject.
The move away from direct production. Farming was the first major innovation that removed humans from direct production (hunting and gathering) to bureaucratic jobs for record keeping, storage, organizing and planning. All that was possible because farming generated enough food surplus, that is, energy, to feed and sustain the bureaucratic or administrative class. Then came mechanization and fertilizers that raised farming productivity, producing a surplus of farm workers who moved on to the factories as capitalism emerged as the new economic organizing order. And then all the way to us, more technological progress (automation and robotics) released increasing numbers of manufacturing workers who had no choice but to become part of the service sector of the economy.
Today, about 75% of workers are employed in the service sector of advanced economies. Although many of them are engaged in the direct production of services (nurses, teachers, firefighters, hospitality workers) perhaps half of them hold desk jobs. For example, it is estimated that only 30% of workers in the health care industry are involved in direct service work. And in higher education in the US, the ranks of administrators have mushroomed at a much higher rate than that of faculty lines.
Now after the gradual removal of humans from hunting and gathering, farming, and industrial work, the service sector itself is faced with the replacement of humans by AI innovations. To remain oblivious to the civilizational changes such work transformations caused in the past would be inexplicable as the impact of AI will certainly be equally consequential.
The growth of work and jobs. If historically the amount of work grows and leisure remains elusive it is because of the unending growth of needs and the impact of innovations. Keynes, again, had grouped needs into absolute (for food, health, and shelter) which are quite finite and relative needs which tend to grow with no end. Therefore, it seems that the amount of work grows mostly out of the growth of relative needs. Not only they create new work but they also compel people to work more to meet them. Innovations also create more work because not only they inspire or enable new relative needs to be met but also because they create negative externalities (financial crime, cybercrime, pollution) as well as complexities (unforeseen changes and shocks) that must be managed. For example, we had no idea how social media would reshape social relationships and affect the psychological health of young people. The more complex our ecosystem becomes the more work and especially energy we need to use to avert catastrophic outcomes.
The value and pay of work. Living in market economies has conditioned us to believe that the value of work and its price or remuneration are determined by market forces. Normally that would mean that the price (wages) of labor is close to its value. But how is this value set? By market or social standards? Shouldn’t the work of those directly involved in the production of basic products and services be valued more than those who stand behind filling all those administrative jobs? Why do we become aware of the social value of a farmer or a nurse or a medical emergency worker during periods of crises when our basic (absolute) needs for food, health or life, are threatened but we forget their value as soon as the crisis goes away?
It seems to me that the value of work has less to do with its social value and more with the values of power centers. Or put in a different way, the social value of work becomes what power centers want it to be. In the old days these were the monarch, the nobility, or the Church. But in the modern economy we have seen the emergence of a new power center, that of the industrial-tech-financial complex. It is served by cadres of executives and managers looking out for economic efficiencies and profit maximization. They are now those who sit at the apex of the hierarchy of power and privilege. Modern societies, even communist China, have entrusted them to manage and innovate, introduce new needs and products, create and cancel jobs, and dictate how work is done.
The value of the managerial and executive class saw a dramatic appreciation when in the 1980’s the concept of wealth was linked to the value of the firm, and more narrowly, the value of the firm that belongs to shareholders as equity. There is a direct line that explains how one thing begets another. This line starts with emphasis on wealth (shareholder value) creation and continues with the search for economic efficiencies, the need for technological and managerial innovations, and ends with the indispensable executives and managers as the safeguards and creators of wealth. Accepted in this narrow sense, wealth creation is the source of the inordinate social value bestowed upon the executive class. No wonder it commands pay packages many times higher than the wages of workers. Direct-production workers who form the bulk of the working class have been especially left behind in this arrangement. Their jobs have been downsized, consolidated, outsourced, and blocked from having a voice through unions. The social outcome of this neglect has been the loss of work dignity and social cohesion. The political outcome is the current wave of populism and discontent though out the Western economies.
Unless we take a fresh look at what economic goals societies ought to pursue, what determines the social value of work, and what the role of work is in relation to our human nature, we risk walking into a future shaped exclusively by the vision of those few who control the technologies and not by the many who will bear the consequences.
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