In June, TechCrunch Ethicist in Residence Greg M. Epstein attended EmTech Next, a conference organized by the MIT Technology Review. The conference, which took place at MIT’s famous Media Lab, examined how AI and robotics are changing the future of work.
Greg’s essay, Will the Future of Work Be Ethical? reflects on his experiences at the conference, which produced what he calls “a religious crisis, despite the fact that I am not just a confirmed atheist but a professional one as well.” In it, Greg explores themes of inequality, inclusion and what it means to work in technology ethically, within a capitalist system and market economy.
Accompanying the story for Extra Crunch are a series of in-depth interviews Greg conducted around the conference, with scholars, journalists, founders and attendees.
Below, Greg speaks to two academics who were key EmTech Next speakers. First is David Autor, one of the world’s most prominent economists. Autor’s lecture, Work of the Past, Work of the Future, originally delivered as the prestigious 2019 Richard T. Ely Lecture at the Annual Meeting of the American Economic Association, formed the basis for the opening presentation at the EmTech Next conference.
Susan Winterberg, an academic who studies business and ethics, was a panelist who brought important, even stirring insights about the devastating impact automation can have on communities and how companies can succeed by protecting people against those effects.
David Autor is the Ford Professor of Economics at MIT. Image via MIT Technology Review
Greg Epstein: Who do you see as the audience for your work — is it more labor or management, and how do different audiences engage with it differently?
David Autor: My primary audience, it can be argued, is other scholars. But I am aware of and pleased that my work has reached beyond that narrow group. I’m aware that it is discussed by policymakers and others and I’m sort of driven by trying to understand what is changing, who is affected, what are the opportunities, what are the challenges.
Could you help me to get a sense to the best of your knowledge of some of the key ways your ideas about the “Work of the Past, [and the] Work of the Future” of work” have been discussed by corporations or sort of those in management and business ownership roles and also by labor organizations or unions, etc.?
I met twice with President Obama. I have spoken with many people in senior governmental policy positions. I’ve spoken to a lot of private sector audiences as well, including private sector research corporations like McKinsey and so on.
I have spoken with labor people. Labor folks were initially quite hostile to my work. I got a huge amount of pushback and have throughout my career, for example, from EPI, the Economic Policy Institute, which is sort of a union shop in DC. The guy who was their chief economist for a long time, Larry Mishel, started attacking my first papers before they were even published, and it’s never stopped.
But I mean increasingly, and I find that super irritating.
In the last couple of years, I think there’s been a lot more receptivity to this discussion from many sides. I’m increasingly of the view that organized labor needs to have a more constructive role, that it’s become too marginalized. There might have been a time in the U.S. when it was too powerful, but now it’s too powerless.
I think organized labor accepted that the world’s changed in ways that are not just because of mean bosses and politicians, but there are underlying economic forces that impact the work people do. So they find the work illuminating.
What is your relationship with some of the more socialistic folks on the Democratic side?
I’m not into that. I believe in the value of the market system. I believe that it has a lot of rough edges, but I don’t think there’s a better system available that I know of. I’m very sympathetic towards market economies like Sweden and Norway and so on. I think the U.S. should move more in that direction. But those are all just variants of market economies. And actually, I think even what’s most often called socialism in the U.S. is actually, just really asking for a different variant of the market system.
That’s why I’m curious: if somebody from the camp of Alexandria Ocasio-Cortez or Bernie Sanders or even Elizabeth Warren were to call your office and say, all right, we want your perspective on how right are we getting it, or where would you advise us to course correct in our economic message? What would you say?
I met with Elizabeth Warren. I think some of what she has to say is great and some of it is dumb. I’m strongly in favor of more or better antitrust regulation, more consumer protections, more transparency, of the government doing more of certain things and getting the private sector out of it.
I think her idea, on the other hand, of paying off everyone’s student loans is a terrible idea, just a huge transfer to the affluent. So you know, she’s on the spectrum. She’s not calling for the overthrow of the state. She’s just calling for another variant of a market economy.
I take very strong issue, for example, with Bernie Sanders and his condemnation of charter schools, which I think shows how totally out of touch he is, that he doesn’t realize how much good charter schools have done for poor minority inner-city kids. He’s probably never met one. And so his white liberal teacher’s union view of, you know, charter schools are harming the public school system is just utterly, utterly misguided.
Are you familiar with a guy named Nick Hanauer? Do you consider yourself to be in his camp in some way?
I don’t know if I’m in his camp. I think he’s really concerned the level of inequality is unsustainable, and I’m concerned about that too. But again, other market economies don’t have the same level of inequality as the United States. But you could have a lot less inequality and then you’d be Germany or you could have still less and then you’d be Sweden. Right? But you’d still be a market economy.
So just to be clear. I mean, I consider myself a progressive. And before I came to MIT, before I even went to grad school I spent several years working in nonprofits doing skills education for the poor. A lot of my work has been driven by that.
What kind of skills education were you doing?
I did computer skills training for the poor at a black Methodist church in San Francisco for three years, and then I did related work as a volunteer in South Africa.
What was the church?
And it was called GLIDE Memorial church. It’s still there.
Oh, I know all about GLIDE. I’ve been there to tour their facilities and social service programs; I’ve been meaning to write them up at some point.
I was an employee of GLIDE for three years. ’89 to ’92.
Are you a Methodist? I mean, what inspired you to work at GLIDE in particular?
No, I’m Jewish. I got involved in it because I had a computer background and also a psychology background, and I wanted to figure out some way to do something related to social service that also let me use my technical skills in a way that I would find interesting. I showed up as a volunteer at this new program and ended up becoming the education director.
So anyway, I’m very engaged with these issues. My views on how to address them are probably more, you know, Alan Blinder once wrote a book, Hard Heads, Soft Hearts. I believe the market system has many, many strengths that should be harnessed, not derided. And I find economics is very useful for that. So I share many of the same objectives as the people you’re mentioning, even if I don’t think their policies are good ones.
Right. Even with your mention of Warren, you were saying that you didn’t like her loan policy because it’s a transfer to the wealthy. In other words, you’re basically saying that she’s doing it because it’s symbolically maybe compelling or it’s something to get people talking, but it’s not actually the best way to address poverty. Is that right?
It’s a terrible idea. Yeah. Most of those loans are held by middle class and upper-class families. And moreover, those are good investments. It’s like someone saying well, we ought to pay off your home loan because you have a lot of home debt. Well, my home is an investment, why should someone pay for that for me?
I mean, I think there’s lots of things that ought to be restructured about U.S. higher education finance, but I don’t think paying off the loans of most people who have them is a good idea. For most people, I mean, the people you should be worried about are the people who didn’t get those loans and didn’t go to college, not the people who took out loans and invested their human capital and very likely will get a very high rate of return on that.
How optimistic are you about our shared human future?
In the United States, on the planet?
I am talking about a global context, but you can answer it any way you want.
On a global context, reasonably optimistic. Life has gotten enormously better for a very large number of people in very short order. There’s many things to be worried about, of course, including the damage we’re doing to the environment, including the possibility of nationalist uprisings. I’m not as worried about nuclear war, but I worry about terror attacks.
But aside from these sorts of upheavals, the general progression is very positive in terms of more people leading lives where they’re not starving, where they’re not under constant threat of being executed or just killed for plunder, and where they have some voice in the way that their societies are run.
So I think it’s hard to look at the last few hundred years and think that the world hasn’t gotten much, much better.
Susan Winterberg is a Fellow in the Technology and Public Purpose Project for the Harvard Kennedy School’s Belfer Center for Science and International Affairs. Image via MIT Technology Review
How would you summarize your work?
Susan Winterberg: I come from the corporate social responsibility field and that covers lots of different challenges that businesses face with society.
The project I’m doing at the Belfer Center is very much in startup. We work with members of Congress and government agencies; the work I do with them [connects to the] private sector, thinking about how can we make sure this next generation of technologies is developed in a way that considers public good and actively tries to prevent potential harms that could result because of those technologies.
We’re looking to engage with venture capital funds and startup companies building some of these frontier technologies to ask: What could we do now to make sure technologies are used in ways that benefit society? Do you think about this? Does it factor into your evaluation process? Will you not invest if you see a company building a particular application? Do you say no to certain technologies altogether because of the risk? [For example,] technologies that have the potential for deep fakes. Does the harm of the technology outweigh the potential benefit? Or how does that factor into your decision making?
How is the venture capital community expressing a willingness to do social good — and what are some of the biggest challenges you’re seeing there?
I got interested in this particular challenge [while] doing a lot of work at my previous role with investors and banks. 70% of institutions like the MIT endowment or a pension fund have something called ESG: environment, social governance integration as part of their investment mandate. For some reason, venture capital as an asset class, [these issues were] not being considered. Private equity has really taken this on the last few years where for some reason, VC has lagged behind. Our question is, why?
What we’ve heard from the limited partners so far is that they don’t know how to evaluate it. Part of the first step of investment is having data and clear guidelines when you’re assessing a potential company. With things like artificial intelligence, one of them said, “We have nothing to work with, so we don’t even know where to begin assessing these impacts.” Versus climate change: because of the Paris climate agreement, we now have standardized metrics and activities that you look for, whether that’s zero deforestation, use of renewable power, GHG, greenhouse gas emissions. They have metrics, so there are ways to evaluate it.
With tech, we’re just not there. As a result it’s not factored into the investment process. Same thing with venture capitalists. Some are saying they don’t see a lot of mandate from their limited partners, that this is not something that’s factored in. They’re not quite sure how to evaluate it. And with young companies it’s also very challenging because they don’t know yet what the impacts will be. It’s a prototype in a lab.
When you’re talking about the future, it’s different than in mature companies where you’re looking at the past and saying, how can we do better? A new methodology needs to be built.
Something that comes up a lot in ethics conversations around the tech industry is that there’s a difference between not knowing what impact you’re going to have and not thinking about it.
Yeah. Or not caring.
Right. Or not caring. I’ve been hearing about two categories of problems. One is the startup trying to make money quickly and not interested in social good. The other is the kind of company that might think of itself as having a dual purpose of doing social good, but hasn’t fully thought things through. Often the kind of social good they’re doing may benefit 10 people but inadvertently cause harm to 100.
That’s true. What we’re seeing in the venture capital industry is an all or nothing approach. It’s either “we’re an impact fund,” or “we don’t do any assessment at all.” In private equity, we split these into two functions. One is called ESG: environmental, social, governance integration or management. You hear that term in the industry. Then there’s something called impact investing.
ESG integration would look at your entire portfolio in a private equity fund. That would be whether you’re building widgets that go into aircraft or hot dogs or anything; versus impact investing, [where] the mission of the company is to positively impact a marginalized group of people or the planet.
Sometimes there are different rates of return. In the impact portfolio they might be accepting less — what they call below market-rate returns. Then they [have what they call] their market-rate return portfolio. In private capital, that’s how it tends to be split up. In private equity though, there’s been a big push to have ESG integration across the whole portfolio.
Some of the venture capitalists we interviewed didn’t even know the term ESG. They weren’t familiar with it even though technically [because] they’re LPs, most of them have ESG departments and mandates. I think part of the solution is bringing ESG into venture capital.
You have to know what the challenge is, how do you measure it, and then how do you manage it as a team.
To what extent is impact investing itself an exception that proves the rule? Maybe there are some impact investing firms that actually do a heck of a lot of good measured against nothing. But when you look at investment in ventures as a whole, globally, is impact investing even a significant piece of that?
I’m not sure on the numbers, but I would say it is a smaller portion of the overall market for ventures.
In your session today you told this terrific story about Nokia. You wore a different hat when doing that research?
Yes, that was research I did at Harvard Business School.
Okay. So your anecdote was about how Nokia became one of the world’s largest cellphone manufacturers in the early years of cellphone technology in the ’90s and the early 2000s. They were the best phones at the time, if I recall. And then, as smartphones began to dominate, they weren’t able to take hold in that market.
Yeah. It became competitive very quickly — [other companies] jumped in earlier and Nokia was on the back end of [smartphones]. When they did try to launch their products in that space, they just weren’t as competitive as the Apple and Android platforms.
The first story I told took place in 2008 in Germany. Basically, they closed a mobile phone assembly plant in Germany that year right after they’d posted record profits, on the basis that it was not “cost-competitive;” that these operations needed to be done in eastern Europe or in Asia or someplace else.
It didn’t have a good response from the factory workers, politicians or the German public. They ended up with a massive boycott campaign against Nokia. Unions organized people to throw their Nokia phone into a box and ship it back to the headquarters in Finland.
After this happened, we went back and took a look at the impact of this campaign. It was, I believe, 700 million euros in lost sales.
You then told the story of how, rather than closing up shop and abandoning people or allowing people to feel displaced and dismissed, Nokia undertook a massive campaign to mitigate the displacement on their workers. I believe you said there were metrics by which it had a thousand to one return on investment.
Yes. Whenever you do cases on business, people ask, “What’s the ROI?” I think the company didn’t really know what it was. We tried to go back and put some numbers to it. What would you [lose] if you just dismissed all of your R&D employees one day? Well, all of them were in the middle of projects. Whatever you’ve invested into those projects, even if you’re not going to continue them all the way, you’re going to lose that and the revenue for that. We went back and said, “Well, how much, if we just killed the projects there, would you’ve lost in revenue in just the next two years?” I think the number came back around $4 billion.
We went back and tried to estimate if we’d had badly managed factories and worker disruptions, if we had lawsuits from governments, things that they saw from this other event, what would the cost of that be? There’s not an exact science to doing the ROI of these programs, which is a problem across corporate social responsibility. They’re just like, “Show me the ROI.” [Often] you don’t know your ROI until you do it wrong, which is why a lot of change in companies tends to be crisis-driven. It’s so hard to make the business case to do the right thing without knowing what the cost of the wrong thing is.
For my purposes it’s not crucial for there to have been exactly $1000 of return for every dollar of investment. What I’m interested in is why they did that and what could similar initiatives accomplish in places like say, Detroit? Why do you think Nokia was able to successfully undertake this initiative where others don’t?
It’s their values, and it came from the very top of the company. It came from the chairman of the board basically saying, “Find a way to do this in a way that treats people with respect that’s compatible with our values and will help us achieve the transformation we want to achieve with this business, and report back to us.” From the financial point of view, they said, “Bring us a convincing program and we’ll support you.” The Detroit story is very interesting, particularly Flint, Michigan. I’m a little bit more familiar with that one.
You had one company, General Motors, dominating Flint’s [economy]. [They] saw their only responsibility to their shareholders, not to the people of Flint or anything else. Flint is a particularly interesting example because in the 80’s they had a really big layoff; literally, if you didn’t get out of the city in the first six months after this layoff, your house went underwater on your mortgage and you couldn’t get out at all. The whole economy collapsed. All the small businesses closed down. It was just a very tragic situation. But at no point did the company really say, ‘we have some responsibility to manage this process differently.’ We saw this across the Rust Belt back in the ’80s and ’90s.
Nokia learned from [situations] like this. There was a small town somewhere in Finland where they’d gone through something [similar] earlier; I think that’s what inspired them to say, we need a better way to do this where we think about it like an economic impact analysis across the portfolio. Not just looking at our company, but what is going to be the impact of taking these jobs out of this community?
Then they said for the [job losses] where they felt they would have the biggest impact, they [provided] extra support. I gave the example of how they went out and recruited new companies to come in and buy their factory and build new factories. They took that initiative because what can happen is if you’re leaving it up to the local government authorities, sometimes they’re learning about it after the fact. They’re already in crisis.
I think that’s what you saw in Michigan. The backstory behind places like Flint is that the local government, for various reasons, weren’t able to do it because [things were] already in crisis. Their goal was trying to prevent their workers and communities from getting into that crisis based cycle by trying to put everything back into place before they left the country or left their communities.
I think people don’t fully appreciate the harm that this causes. Before you can be motivated to care, you need to understand what the cost is of this. Unless you come from the Midwest. I’m from the Midwest.
Where are you from originally?
I’m from the Cincinnati area; I went to the University of Cincinnati. As an undergrad, I took a field trip up to Detroit, and that’s how I got my Master’s in Urban Planning. It just made such an impression. Like, how could something like this happen?
Where everybody’s well educated, they’ll talk about layoffs almost like they’re a bonus. “Yeah, I just got laid off and got four months of severance, awesome. Bonus.” Then the tech company across the street picks them up the next day. It’s very hard, when you engage with very educated, very mobile workers, to get them to understand what someone else’s experience is.
If you’re living in a small town and don’t have great tech skills, your future is very dim. For most people, this is devastating and a lifelong change.
I think that’s really affected our political climate in this country: when you talk to people in the Midwest, they don’t want to hear, “The economy is great. There’s so many jobs. Go get one. What’s wrong with you.” They have homes, they have families, they’ve been there for generations and not everybody can pick up and move to the coasts. Having politicians and business people say to you, “It’s your fault that this is happening,” They’re very hurt by it.
Do you think that’s helped Donald Trump?
Yes. He understands that from a political point of view. He’s been able to use that. We see that with politicians that are taking right-wing populist stances across Europe. Brexit was a couple months before our elections here happened. It was the same thing.
Both venture capital and corporate social responsibility seem to me to either be overlooking places like the Midwest or giving them a drop in the bucket.
Yeah. For me, that was the hard part about working in corporate social responsibility. I felt like it was really focused on overseas workers. The field grew up in the 1990s during globalization where there were a lot of abuses in factories in places like Asia and Mexico. The field is really still very, very focused, at least on the social side, on those places and on developing countries.
They’ve missed what was happening in the advanced world over the last decade. When I first joined my last organization, BSR, I was actually brought in to bring a spotlight and a focus onto this. The day I was hired was actually the day of the Brexit votes. Business leaders, at that point, we’re ready to hear about it because I think they could actually see the implications of it. [Earlier there had been] just no discussion of it whatsoever. Everything was focused on overseas supply chains.
Last question. How optimistic are you about our shared human future?
It depends what we do with it. It could go either way. I think in the world I operate in, I’m seen as a pessimist because I mostly work around people who are extremely optimistic. Yeah, I would say, I think if we make the right decisions from the beginning and have the right values, anything is possible, But what I see now is that people aren’t doing that and that’s what I’m working to try to change. So it’s up to us.