I finished the book The Rise of Robots by Martin Ford. I want to talk about something that is self-evident but needs repeating. I already talked about the chapter on "White Collar Jobs at Risk" and I'm going to skip the chapters on "Transforming Higher Education" (basically about MOOCs), "The Health Care Challenge" and "Technologies and Industries of the Future" (self-driving cars, nanotech). Instead I want to talk about what it means when robots (or software) takes over about 50% of the jobs in the next 10 years (I think it is likely to reach about 90% of jobs due to our inability to fathom the rapid machine learning that is going on).
Basically, think about what happens if robots take over 50% of jobs. Those workers who used to do those jobs will be unemployed. The tech industries are not creating a large number of jobs and most people are probably not capable of doing technological type jobs (otherwise, they would have gone to college and majored in engineering - that' where the money is). So if people can't upgrade their skills and become employable that means they can no longer be consumers. If 50% of the people can no longer be consumers because they no longer have any source of income, then the growth of companies should start to stall out some time in the future. Companies can't grow if they are losing consumers. Instead, companies will have to lay off more people in the effort to survive. This starts a vicious cycle as companies lay off more people to survive, leading to a decline in the population of consumers, thus kicking off further rounds of layoffs.
Martin Ford talks about this very end game. He mentions that machines are not consumers and thus can't buy goods and services to sustain companies. He lays out a possible end game as thus:
"The most frightening long-term scenario of all might be if the global economic system eventually manages to adapt to the new reality. In a perverse process of creative destruction, the mass market industries that currently power our economy would be replaced by new industries producing high-value products and services geared exclusively toward a super-wealthy elite. The vast majority of humanity would be effectively disenfranchised. Economic mobility would become nonexistent. The plutocracy would shut itself away in gated communities or in elite cities, perhaps guarded by autonomous military robots and drones. In other words, we would see a return to something like the feudal system that prevailed during the Middle Ages. There would be one very important difference, however; medieval serfs were essential to the system since they provided the agricultural labor. In a futuristic world governed by automated feudalism, the peasants would be largely superfluous." The Rise of Robots, Martin Ford, p. 219, hardcover.
We are already kind of moving toward this scenario. We have rising inequality. The super wealthy live separately from the rest of us in their communities, so they are clueless about the rest of us. As a matter of fact, recently there was a news article about companies moving to the downtown section of cities because cities had more exciting amenities. But since downtown is expensive, only the senior executives and a certain class of desirable employees will be based downtown. The rest of the employee population, such as the back office or the front line workers, will work outside of downtown. So corporate executives are starting to segregate themselves. The middle class has been so severely hollowed out that retail stores service either the super wealthy or the poor. The mid-level stores are dying out.
So what do we do about this? The author offers a solution.