“Technological revolutions happen in two main phases: the installation phase and the deployment phase,” observes Angel of the Year and new Andreessen Horowitz GP Chris Dixon, who says that the turning point between those phases for the Age of Information is…now.
Meanwhile, “profits have surged as a share of national income, while wages and other labor compensation are down,” notes Paul Krugman. Walter Russell Mead agrees: “The old industrial middle class…has been hollowed out, and no comparable source of stable high income employment has emerged.” Recent data supports that: “Incomes rose more than 11 percent for the top 1 percent of (American) earners during the economic recovery, but barely at all for everybody else … Median household income is about 9 percent lower than it was in 1999.”
Coincidence? Nope. The great tech revolution of the last 30 years is finally beginning to metastasize into every other human domain–in other words, software is eating the world, endangering almost every job there is. I argued a few weeks ago that this means America has now hit peak jobs. Let me now unpack that a bit.
For 50 years now Moore’s Law has been (to oversimplify) doubling computing power every two years. People like Ray Kurzweil and Vernor Vinge look at that astonishing history of nonstop exponential growth and predict a technological singularity within our lifetimes.
Me, I’m pretty skeptical. Kurzweil claims that whenever technology hits a limit, “a paradigm shift (i.e., a fundamental change in the approach) occurs, which enables exponential growth to continue.” That’s not much more than a convenient article of faith. As Peter Thiel points out, “technological progress has fallen short in many domains. Consider the most literal instance of non-acceleration: We are no longer moving faster. The centuries-long acceleration of travel speeds … reversed with the decommissioning of the Concorde in 2003.”
On the other end of the spectrum from Kurzweil and Vinge, there are people who think that nothing new is going on: witness Megan McCardle’s dismissal of the economic troubles faced by America’s middle class as “a slight expected income downshift during the Great Recession” in an otherwise bizarre and statistically nonsensical piece.
The reality seems to be somewhere in between. Moore’s Law has finally escaped the confines of the tech sector; as a result, our world is no longer changing linearly, and what’s more its rate of change is increasing; but Kurzweil’s would-be exponential growth is still damped down by the enormous technological barriers outside of the relatively simple world of semiconductors, by regulatory restrictions, and by simple human unwillingness to change that fast.
So I see no mystical Singularity on the horizon. Instead I see decades of drastic nonlinear changes, upheaval, transformation, and mass unemployment. Which, remember, is ultimately a good thing. But not in the short term.
That’s all pretty abstract. Let’s take a specific example: Google’s self-driving cars. What happens when they finally make their way onto American highways en masse? (Which, to be fair, Kurzweil predicted for 2019 back in 1999.) What happens if and when it turns out that they’re much safer than human drivers? Insurance costs will make human driving very expensive, and fewer vehicles will be sold–partly because cars will last longer, partly because fractional ownership of a pool of self-driving vehicles will make more economic sense than having your own.
Improved safety, lower insurance overheads, more efficiency–that’s all great, right? Sure! Of course it is! …Unless you’re one of the more than 2 million truck and taxi drivers out of work.
Self-driving cars are a striking example of software eating jobs, but far from the only one. Almost every job, in every field, probably including yours, will increasingly be threatened by obsolescence and/or automation. That’s a simple and inevitable corollary of software eating the world and the concomitant increasing rate of change. As that rate accelerates, technology will soon start destroying jobs faster than it creates them…if it isn’t already.
Think it can’t happen to you? Already “many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers,” warns Krugman. The Economist concurs. Krugman goes on to add: “Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries.”
Mead argues in The Blue Elites Are Wrong that the information revolution is like the industrial revolution, and will lead to “empowering ordinary people.” Which, again, is true–eventually. Whether you believe that new and better jobs will be created, or whether you’re willing to think a little bigger and imagine that we’ve finally begun the slow evolution towards a post-scarcity society built around reputation economies rather than “jobs” as we understand them, almost all of these new disruptive technologies will ultimately be good for everyone. I’m no Luddite.
But in the interim, until we retool our societies around these new technologies and new economic realities, the next few decades will be extremely difficult for many people who have grown accustomed to thinking of themselves as middle class. Not everyone can become a computer programmer, genetic counselor, or startup CEO; a whole lot of Mead’s “ordinary people” will be stripped of their jobs and left behind in debt, poverty, and despair. No wonder the rich and skilled are doing their level best to entrench themselves at the top of our soon-to-be-rapidly-narrowing economic pyramid.
I’ve tried to make a point here by citing sources across America’s traditional and tedious left/right divide. This is bigger than that. (To the rest of the world: I’m sorry for fixating on the USA here. I’m not even American myself. But it’s almost certainly going to happen here first. Watch carefully.) If left-versus-right is the only lens through which you can view the world, then you really need to start thinking outside the box in which you have jailed yourself. Because everything will soon be changing, faster and faster, and I assure you that the future will be weirder than we imagine now–and you’ll need a flexible mind if you hope to prosper and thrive.