Tuesday, May 7, 2013

No, technology is not an unmixed blessing

Jaron Lanier cautions against the common wisdom that technology will replace the jobs it eliminates. His new book, Who Owns the Future? he tries to make this point among others.

A rather good example is mentioned in this article from Time.

The bankruptcy of the photography-giant Kodak occurred within months of Facebook‘s billion-dollar acquisition of the photo-sharing site Instagram. This would be just one example of the destructive dynamism of American capitalism, a process through which old companies are overtaken by new technology and new firms more in tune with the needs of customers — and that arguably benefits us all.

Except for one thing, that is: Whereas Kodak employed 140,000 workers during its heyday, Instagram employed just 13 people when it was purchased in April 2012.

“Where did all those jobs disappear to?” Lanier asks. “And what happened to the wealth that those middle-class jobs created?” Lanier’s answer is that the new “information economy,” which is now superseding the manufacturing economy, is developing in such a way that the rewards are filtering to an elite few at the expense of everybody else.

Anyone who has read a variety of posts I've made for a while now in various places will realize that this ties in to what I've believed for a while. The new economy just doesn't need as many people to produce things. Data centers of thousands of square feet might employ a hundred people. For a comparison Facebook is currently valued at $67.8 billion as of February according to Forbes and employees 4619 people according to an article on TechCrunch whereas Ford Motor is valued at $55.6 billion and employs 171,000 people. This is fairly typical so far as I can tell.

But it's not just the differing nature of technology companies versus manufacturing. There is also another way in which technology affects jobs in the modern world. As noted in the article:

One popular view of the American economy’s recent troubles is that we’ve become too decadent, that we no longer make anything the rest of the world wants, and that our economy will not recover until we can learn to overcome our addiction to debt and cheap, foreign-made goods. And if one were to look at where the average American gets his paycheck these days, there’s evidence to support this worldview. Fewer and fewer Americans are employed in making physical goods — just 9% of the population works in manufacturing, compared with 40% during World War Two. But total manufacturing output – that is, the dollar-value of all the things American companies make — has continued to increase. In fact, by some measures the U.S. produces more stuff than any other country in the world, including China.

The missing variable in this equation is automation. We’re still making a ton of stuff here; it’s just that machines are doing more and more of the making. As a technologist, this dynamic is obvious to Lanier, though it tends to sneak up on the rest of us.

Do these changes inevitably portend doom for our society as we know it? Well, probably. But that isn't necessarily a bad thing if for once we admit to ourselves that this is a possible outcome of what lots of people and businesses are doing and try to adapt without judgement or labels, just by looking for something that works.