June 25, 2013

How Technology Is Destroying Jobs | MIT Technology Review

How Technology Is Destroying Jobs | MIT Technology Review: "­Brynjolfsson, a professor at the MIT Sloan School of Management, and his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that impressive advances in computer technology—from improved industrial robotics to automated translation services—are largely behind the sluggish employment growth of the last 10 to 15 years."

I read Brynjolfsson and McAfee's book in 2011 and remain persuaded they are correct in their analysis. This piece in the MIT Technology Review is highly recommended reading and, of course, the hundreds of comments following in are equally insightful. Read the book if you have the inclination.

I am also convinced that nearly all our policy-makers and politicians are clueless about what to do about the job dislocations in the short term. Meanwhile, government policies are driven not by reality, but by perceived political power and gains. Traditional thinking that the Great Recession will end and things will improve for the U.S. based on past history is likely wrong, particularly so Keynesian economics which drives so much government policy and spending which does not produce the same results as previously. The fundamentals have changed.

Some experts argue (Harvard economist Lawrence Katz in this piece argues that this technological upheaval of the past two decades is merely part of a long term trend that began with the Industrial Revolution.) this is just a continuation of the technological progress of mankind

I think we are in a period of profound change driven primarily by advances in software and extremely capable and fast hardware that can mine and capture the value of 'Big Data.' The combination of technologies is creating capacity and capabilities that supplant the need for more and more human labor to produce goods and services that drive the economy.
"W. Brian Arthur, a visiting researcher at the Xerox Palo Alto Research Center’s intelligence systems lab and a former economics professor at Stanford University, calls it the “autonomous economy.” It’s far more subtle than the idea of robots and automation doing human jobs, he says: it involves “digital processes talking to other digital processes and creating new processes,” enabling us to do many things with fewer people and making yet other human jobs obsolete."
The wild card of course is that the negative effects of technology on jobs is seen mostly in advanced economies and less so in the underdeveloped world where manual processes prevail. The big question is will these countries and peoples grab the advantages of these advances in technology and raise their living standards or will religious, ethnic and cultural factors retard economic gains and better living conditions?

From the Story:

WHY IT MATTERS

Economic theory and government policy will have to be rethought if technology is indeed destroying jobs faster than it is creating new ones.

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