on September 14, 2011
Martin Ford's book, The Lights in the Tunnel, is one of the latest in a progression of books addressing the economic and social problems partially attributable to rapidly advancing technology. I think his problem analysis is spot on. However, I think his proposed solutions are impractical and probably unworkable. The allocation (or misallocation) of wealth created by the prevailing economic system is an historical problem, one that is being exacerbated by the growing skill-bias of technology. But I can't imagine that any non-market-based wealth allocation scheme developed and administered by government would end up being other than a welfare program or a mechanism for rewarding political "favorites." Politics and cronyism would replace merit and effort. Government can't escape the specter of politics. Like it or not, the market imposes a reality and discipline that is simply not present in most government decision making.
All of the above said, the economic and resultant social problems associated with the increasing skill-bias of technology are serious and not likely to be a temporary phenomenon. Moreover, I don't believe that solutions will be easy to develop or implement. In my line of work (a psychologist working systems acquisition for the US Department of Defense), we began to encounter this problem more than 30 years ago with the widespread introduction of information technology into military systems. Back in those days, we referred to it as "skill creep," and understood that it had significant design, aptitude, and training implications. What came in on cat's paws back in the 1970s is now becoming a perfect storm across the economic spectrum. I should also note that in spite of 30 years of experience with it, DoD still struggles to cope with the skill-bias effect.
Based on 30 years of hands-on experience with this issue, I don't think the end result will be as extreme as Ford suggests in his book. Technology-dominated, "smart" machines will still require human support--and for the foreseeable future, "guidance." However, fewer people will be required to fill this role, and their aptitude, educational, and training requirements will be high. This is the essence of the skill-bias problem. More and more people will be displaced from the traditional job ladder and find themselves either unable to get on or only able to get on at a lower level in so-called service industries. Many proposed solutions will run up against what might be called the bell-curve problem (mental ability is not evenly distributed in the population); and serious, across-the-board educational reform will be a necessity. Most current proposals for educational reform do not fit my definition of serious. It should also be noted that most of our efforts in the area of job "retraining" have not been particularly successful. Many of the things we are going to be required to do to manage this problem will not be politically correct or will not fit into our prevailing political and social worldview.
I agree with Ford that current trends in job off-shoring likely are a temporary expedient. China, India, and other low-cost countries eventually will face the many of the same issues we in the developed world now face. It will be interesting to see how China fares in its Red Queen race between economic growth and the rising expectations of the hundreds of millions of non-participants in its economic miracle.
on October 13, 2010
Other reviewers have summarized the book in detail, so I won't. I'll just emphasize the bottom line:
Machines are fast approaching humans in terms of *mental* labor capacity, not just *physical* labor capacity. In the past as machines took over much of our physical labor, we were then free to turn to more valuable mental labor. But once machines take over much of our mental labor, then what do we turn to for employment?
The author makes a very compelling case that this situation will arise, and likely within the next few decades. And he also lays out some rather bold suggestions to delay the shock of the resulting high unemployment and allow us to transition to an inevitably new type of economy as smoothly as possible. Though, even with these suggestions, I expect this transition is not likely to be smooth.
This book is a very important, frank discussion of a pending time-bomb for our precious mass market economy. Read it and recommend it to others. And think about how you and your family and friends will manage the forthcoming transition.
on August 16, 2011
Someday, we will need to understand and deal with the fact that human labor will become increasing superfluous in the functioning of the global economy. The Creedance Clearwater Revival song "Someday Never Comes" counters the notion that understanding or grasping reality somehow can be deferred rather than by confronting the signs and signals of that inevitable future evident in the present. The seeds and roots of a radically different form of economy have been germinating and growing in humanity's inexorable drive to leverage and exploit increasingly advanced technology.
Martin Ford's primary thesis in his brave and thought-provoking work "The Lights in the Tunnel" confronts us with the prospect of the disruptive impact of rapidly advancing technology which will eventually obviate the market-based economic system. In a market economy, the product market/factor market cycle flows goods and services from firms to workers' households in exchange for workers' labor at those same firms. Ford challenges the "conventional wisdom of economists" that product markets will continue to expand, that technology will continuously drive down prices, and he presents a solid case for the advent of an economy characterized by systemic unemployment (some signs of which are already apparent in the economy of the early 21st century). Off-shoring and automation will continue, but at some "tipping point," technology and machines will become sophisticated enough that the need for human labor will diminish - rapidly and with severe consequences for our market economy and the principles upon which it is founded.
While Ford presents a compelling case for his thesis, his valiant attempt at offering potential solutions finds itself on less solid foundations as a consequence of appeal to somewhat idealistic assumptions and questionable premises. Massive changes in the current tax structure including progressive wage deductions and consumption taxes seem reasonable to consider but some of the proposed redistribution schemes may be counterproductive. The notion of representative government is attacked in the section "Defeating the Lobbyists" where Ford suggests that Congress delegate its Constitutional authority to legislate tax policy to "a board of highly skilled professionals" that are "removed from the political process" (147). So we are to remove responsibility from our elected, accountable (by the electoral process) representatives and hand over decision-making for restructuring the economy to a small cadre of "we-know-what's-best-for-you" elites. The justification for this change is that we Americans, as a rule, do not "...have the time, energy or attention span to take an active interest in the intricate and mundane details of the legislative process" (ibid). Unless lobbyist influence is removed, there will be "dramatically reduced opportunities for the type of behind the scenes bargaining and compromise that was once an integral part of the political process" (ibid)! Brings to mind the "behind the scenes bargaining and compromise" that led to passage of the problematic healthcare reforms and the equally problematic hidden machinations and lack of transparency in non-legislative decision-making whereby billions of taxpayer dollars were mysteriously distributed as part of the Troubled Asset Recovery Program (TARP). Missing in action in the latter are identification of the beneficiaries, the benefits, and accountability to the people. Ford seems to advocate as well a Federal Reserve with no oversight and an abridgement of first amendment rights (148) that would curtail freedom of expression by lobbyists and special interest groups.
Implied in the latter half of the book in which Ford focuses on solutions, is a strongly Keynesian program of government intervention to steer and, eventually radically reconstitute, the free market system in order to preserve the mass market which is so crucial to continuing increases in prosperity. Some of these proposals ring hollow given the dubious record of the federal government in constructively steering the economy. Ford implies that the private sector cannot reshape itself and evolve as technology essentially eliminates the bulk of labor-intensive industry. Instead, "preservation of robust market demand...[must] become a core function of government" (161). A massive scheme of income redistribution coupled with "absolute firewalls" around government safety net funds is proposed. The notion of "absolute firewall" is anathema to situations where one group is responsible for managing someone else's assets: nothing is sacred; there are no `lock boxes.' Government policies will "provide unequal income but equal opportunity" (169). But isn't this the definition of the consequence of free markets? Isn't a "highly-regulated, market-oriented" system an oxymoron?
Ford points out the problematic issues of externalities which concerns benefits or costs from marketplace actions that do not accrue to those who create the benefits or costs, for example, the destruction of a public good like clean air by industries that reap the benefits of production but do not pay the cost in terms of damage to the environment. However, Ford seems to reflexively appeal to government `solutions' to manage externalities. He advocates that government get in the business of journalism (176-77), set up a "National Incentives Board" (again "staffed by professionals") to presumably engineer appropriate social and commercial behavior by "...adjust[ing] incentives...in much the same way that the Federal Reserve controls interest rates" (178). Ford mentions the crucial issue of "moral hazard" and the myriad problems involved in transitioning to an economy that is less, perhaps much less, based in labor-intensive production, but does not reconcile proposed solutions with the disruptive impact on `normal' competitive dynamics among organizations and the `natural' and ultimately constructive process of Schumpeterian creative destruction.
Ford briefly mentions the "international view" (183-185), but underestimates the challenges of the international system whose structure, and inherent propensities for conflict, I believe will persist for generations to come. The global economy and world political system are far from the state of homogeneity implied or assumed in Ford's arguments. This is not to say that some of the scenarios outlined in the book will not come to pass, just that the transition to alternative market modes is made more complex by persistence of the international system structure that has evolved over the last several hundred years and in which our societies are deeply entrenched. Ford posits, let's assume correctly, that relaxing constraints on production reduces the role of resources, labor, and technology, leaving consumer demand as the sole persistent feature of a market economy. The section "The Evolution toward Consumption" offers a brief but interesting discussion of the implications of the idea that "an individual's consumption might someday be valued above his or her contribution to production" (206) launching questions in the inquisitive mind about the validity and implications of post-materialist (Inglhart) or post-scarcity theses. Will consumption patterns shift significantly from material goods to the intangible, i.e., to virtual experiences, artificially-generated physical or cognitive sensations; to increased epistemic appetites (seeking knowledge for knowledge's sake), to art, leisure, or spiritual activities less based on consumption of material goods and services? How will consumers' tastes and preferences change in the far future when we are healthier, have (perhaps much) greater longevity, and have hopefully conquered the challenges of subsistence living experienced by so many of the world's less fortunate?
While it is easy to take pot shots at any work that engages substantive economic, social, and political issues, my critique is not intended to diminish the power of Ford's work in broaching the important issue of the global economy in a world increasingly dominated by automation and eventually (in my view) by strong artificial intelligence (AI) in the sense that Ray Kurzweil outlines in his book "The Singularity is Near." Ford's is a bold work and well worth the time to read and study. Ford offers astute observations that serve as a springboard for conversation and consideration of the impact of technology advances on the marketplace of the future.
on December 2, 2009
When manufacturing automation produced the Great Depression there were forecasts that the Price System was doomed because the income from jobs was what provided purchasing power for the mass market. But instead of collapse, a transition was begun whereby the labour market was shifted from manufacturing employment to service employment.
But in The Industrialization of Intelligence, Noah Kennedy warned us that the same processes that had eliminated jobs in manufacturing would eventually be applied to intellectual work. Martin Ford is now announcing that we are very close to massive layoffs amongst Knowledge Workers because everything from inventory re-stocking, to legal research, to medical diagnostics, will be progressively automated as well.
No jobs means no pay cheques, so a decline of 30% in the size of the workforce will bring ruin to both ordinary consumers and mass marketing. Declining sales means declining profits, and that leads to declining investments and declining innovation. The market will not be able to shift sufficient employment to any other sector to recreate jobs. Market-financed automation will undermine the incomes of virtually everyone.
It's time to rethink the way income is distributed as well as the lifestyles that consumers lead. If economic productivity is taxed at the same rate as previous labour costs, transfer payments can then be established to provide income to otherwise unemployed consumers. These transfers should be enough to cover the basics: food, clothing, shelter, medical treatment, transportation, education, and entertainment. There is literally no other way to get purchasing power into the hands of consumers.
To keep people motivated to continue "behaving themselves," the transfer rates could be tied to incentives for responsible and creative lifestyles. More education would result in a somewhat higher transfer payment, as would volunteer work, and other helpful and creative endeavours. These are some of Mr. Ford's suggestions, and they are all very carefully thought out and presented. Since we will all be impacted by the continuing process of automation, we all need to read this book, and engage in conversation regarding how and when such steps need to be taken.
on October 22, 2011
This book provides a very clear visual model about the impact of technology on the future of our economy. One area that fascinates me is the development of artificial intelligence (AI). Computers can already beat the best chess players in the world. Recently a computer called "Watson" did very well competing against humans in the TV game show called "Jeopardy".
Martin Ford describes the "Alan Turing" test: When a computer can convince a judge that it is human, during a normal conversation, it will have passed this test. Making computers so user friendly so that we can all have our private mentors seems like a great project!
The author is very concerned about the painful transitions we can expect to have as we redefine what it means to "have a job". We tend to define our own worth by the size of our paycheck. If intelligent machines do the vast majority of our mental and physical work will we lose our self respect?
For me this book provides a useful transition between the past and the future. We can summarize the past by studying the following book: "That Used to be Us", by Friedman and Mandelbaum. We can imagine the future by reading the book titled "Physics of the Future" by Michio Kaku.
One of the many books that I have read in order to keep optimistic about the future is "Seven Miracles That Saved America", by Chris Stewart and Ted Stewart.
I hope that Martin Ford is working on his next book. We clearly need more ideas from him and others like him in order to understand our world and do our best to make it a better place!
on February 4, 2011
This book provides an unusual perspective on what exponential improvements in technology will mean for our economy. It seems very likely, as the author, Martin Ford, maintains, that many workers in Western countries, both unskilled and college-educated, will lose their jobs to computers and robots. Ford presents a well-reasoned view. This doesn't mean he's right about what's going to happen. After all, an asteroid hitting the Earth tomorrow could prove him wrong. But, his book can be the starting point of a discussion as to the implications of today's fast-moving technological trends.
I think that Ford doesn't take into account the true impact that the developing countries, which hold most of the world's population, will have on the West's economies for a long time to come. These countries are just starting their own very painful industrial revolutions as rural migrants move into their cities. These countries will not be automating their factories for a long time. They have too much cheap labor and too little technological skill and capital. Yet, their populations, as they build buying power, will form huge markets for our skills in the West. Imagine the number of college professors, programmers, etc. they will need as they develop. So many educated people I know are migrating abroad to fill these needs and get better jobs than they can get in the U.S.
Eventually, as the developing countries can afford to automate, Ford's vision of a small portion of the population producing all the products we need, will likely materialize. His solution is for governments to tax production and redistribute the tax money to the unemployed, while rewarding them for desired behaviors like getting educated and helping the ecology. Then, they'll have money to spend on consumer goods and will keep the free market going.
I think that another scenario is possible and much more desirable. Let's say computers and robots produce our goods, answer our phones, and clean our floors. That will leave a large portion of the population to do what they always wanted to do. For some people, that will likely mean vegging out in front of the TV. But, I have found that many people have passions that they would love to pursue but few customers have the discretionary income to hire them. So many people would love to be artists, personal trainers, spiritual mentors, or do what is now volunteer work -- visiting people in hospitals, caring for special needs children, be docents at museums and parks. All the things that people now volunteer to do or would if they had more time and energy, they could get paid for either by private customers or non-profit orgs or government agencies, which would have more resources to throw around. They would have more resources because a smaller portion of our resources would go for the basics of survival.
I think that we are so enured to a low standard of living -- seeing homeless people in our streets, seeing old people neglected -- that we fail to imagine a more optimum life which we could create if only we weren't so tied up with bare survival. In my experience most people have hidden talents that our society isn't now able to take advantage of. If we were freed up from the needs of food and shelter, we would find many MORE things to produce and buy either for ourselves or for others in need.
I recommend "The Lights in the Tunnel" as a way to start an important conversation about the consequences of rapid technological change. I hope that it will spark a much-needed conversation that, as the author points out, hasn't started yet in the field of economics.
on January 4, 2011
You may be comfortable in the belief that while jobs are lost to automation, technology is constantly creating new opportunities. You may also believe that education is your ticket to future job/economic security. Guess again!
This book explains why technology, an unstoppable force exponentially accelerating and becoming more powerful, presents a long-term and global threat to our traditional economy. It reveals the realities of a complex situation that few of us fathom but all of us are confronting and need to understand.
It will enlighten you and also give you hope for what can be done to counter this global trend. Our economy must change in fundamental ways to assure that our future will offer opportunity and security. This book presents the changes that must be made. This is a book about today and the future.
Read the book and you will want others to read it, especially those who are shaping our future, because it makes clear a profoundly critical trend, now emerging, that affects ALL our lives, and the lives of generations to come.
Very highly recommended.
on December 6, 2009
Pretty smart and accurate overview of our technology-driven near future. The solutions for our future technological world proposed here are a little naive, but definitely worth considering. The book may be taken as a joke by many, but the many would fool themselves.
The author is correct in stating that our current mass market system will become overwhelmed by the drastic decline in the number of consumers - people without jobs because of technology displacement. This story has been around many times in the past, as the author mentions, but the core aspect we are already encountering is the accelerated technological advancements of this century. The author does a great job making this point.
But it's hard to believe that dealing with the need of a dramatic change in our politico-economic system we'd be able to remain a relatively peaceful society as the book invariably portrays. Most people in the West are civil nowadays because they can upgrade their gadgets or kitchens periodically. Should this numbness diminish when a lot of folks can't find work anymore, it's hard to believe we wouldn't have to live through some sort of anarchy. One hopes to be able to experience it, thought, however it may happen.
on November 22, 2011
I have worked in IT for well over twenty years, much of it in process automation for professional services. Mr Ford has, I believe, looked ahead and seen what I also perceive to be coming - very high levels of sustained unemployment. He states the case well that just because previously jobs have simply been shifted there is no 'law' that says this must always be the case.
I found his presented possible solutions as highly thought provoking and even if I think that they may/will be unwieldy in the implementation I believe that my time was well spent reading the ideas, as they have given me many concepts for thought and discussion and a wholly different perspective. I believe that this kind of book is valuable precisely because it is thought provoking.
I like my reading to challenge my pre-conceived notions and do not require that it match all of my own views. I agreed with large parts of the book, and found the rest a challenging idea that needs to be debated more widely, because, if Mr Ford is correct in his central premise, then we and our children will all be affected.
If you care about your and your children's future, then I would highly recommend this book as a starting point.
on April 28, 2013
I disagree with the author and, it sould seem, quite a few readers, that mans salvation lies in the continuation of the mass consumption based economy. Anyone who thinks this should take trip to the nearest land fill and look at the mountains of waste generated by the mass consumption economy then take a look at the environment laid waste and finaly look at the mountain of humanity being laid to waste because they have nothing of value to contribute to the mass consumtion economy.
Instead of finding ways to give people money so thay can continue to buy useless stuff and so support the mass consumption economy we should find ways so that work that needs to be done but is not getting done because there is no money in it to be made. I am not calling for the elimination of the consumer economy - just that it should not be the primary focus. At best, it should be in parallel and in support of the primary focus of the continuation of humanity into the future.
People do not need to be bribed and/or threatened to work unless they are being ad to do stupid meningless useless work. It is very unfortunate that the Nazis have turned the phrase "Work Makes You Free" into an abomination but the gist of it is still noble and true. People want to create, to be usefull, to contribute towards the betterment if humanity. But if there is no money to be made from it it will not happen because survival comes first and in a consumption economy money comes first.