Saturday, March 17, 2012

Modern Automation, Similarities and Differences to the Industrial Revoltuion

Setting the Stage
I write a fair bit in this blog about how technology is disrupting the world, including the role of automation in the economy. Some comment discussions on Google+ and Facebook have led me to some new thoughts comparing and contrasting the current situation with what happened around the 1920-1930s in the US as the industrial revolution automated agriculture. Prior to that time, the majority of the workers in the US worked in the field of agriculture. When automation changed that, it caused serious economic hardship, and it took a significant period of time for people and the economy to adjust.

Things Did Adjust
When you talk about technological unemployment, many economists seem to like to point to the industrial revolution as the classic example of how the disruptions of technology cause temporary pain, but lead to greater overall economic growth. The purpose of this post is to look a bit closer at some features of how that worked, and compare it with the current situation.

The bottom line is that the economists are correct in their statements about the industrial revolution. The economy did adjust to automation and become more robust in the end. However, I think a major part of that adjustment was in the form of education. If you were living in rural America in 1910 (as the majority of Americans did at that time), you probably didn't get past 8th grade if you even made it that far. There simply wasn't a need to. You were going to work on a farm. You probably wouldn't need to read, much less use algebra or trigonometry. What is more, the people you trusted, like your parents, were probably telling you that you would be better off leaving school and starting to develop "real world skills" for those jobs on the farm. They didn't lie to you, that was sound advice is 1910.

Between 1910 and 1930, the industrial revolution moved into agriculture and that advice stopped working. The jobs in agriculture went away. One man with a tractor could do the work of 100 without. As economists love to point out, new jobs were created. Those new jobs were in factories in cities. The problem was, those jobs required a bit more education. You definitely needed reading and there were a growing number that did require algebra and trig. The people designing the machines, and there were a reasonable number of them, required a lot more than that too. So now people needed more education to get the jobs.

Down, But Not Out
People don't learn overnight though. You had a bunch of people from out on the farms who are in the wrong place and have the wrong skills. It takes a while both to move those people and teach them a new skill set. I want to focus on the learning part as that is more my area. It takes a number of years to get a kid from 5th grade level to 8th or 12th grade level. It really isn't faster for adults either. So you have a period where there aren't enough people with the right skills and a lot of people with the wrong ones. It takes time to build a more educated workforce and things sucked in the meantime.

What really sucked was to be one of the last group of kids who were told to drop out and learn to farm in 4th grade only to find a few years later that all the local farms were automated and your skill set wasn't needed anymore. If that was you, you had to put in a lot of effort to build the skills needed for these new jobs. You were down, but you didn't leave school in 4th grade because you were incapable of going further, you left because you were told you didn't need to go further. So with some effort you could gain that knowledge and pick yourself back up.

Changing Advice on Education
The thing is, in 1930, there was a lot of potential in the US public for improving skills through education. Most people were undereducated. They hadn't reached their potential because they didn't need to and were advised against it. Somewhere around the 1950s, kids were being told that they really needed to graduate from High School to find jobs. By the 1980s, you needed to go to college to get a good job. By 2000, college wasn't seen as the key to the good jobs, it was the key to almost every job. We had moved into the information age and High School counselors were telling students that if they didn't get some college they were doomed to lower-end jobs.

One result of this is that the US is probably close to maxed out on education. There are inevitably some things that can happen to help certain students go further. There are definitely things that can be done to make the whole process more efficient. However, I don't think this is an area of huge untapped potential. I don't see any technology that is going to take current High School dropouts and turn them into Ph.D.s in STEM fields.

New Round of Automation
Automation has been ongoing since the beginning of the industrial revolution. We now have a mere 2% of the US population working in agriculture. Automation in factories did to certain segments of manufacturing what the tractor had done to agriculture. However, none of these later moves to automation have had quite the same impact as the automation of agriculture did around 1930, because none of them have hit such a broad segment of the population. Nothing has hit since then with the ability to disrupt 30+% of the population in such a short period of time. Nothing until today that is.

I personally believe we are at the leading edge of a decade that will disrupt the jobs of close to 50% of the population. It isn't a single product like the tractor that will do it. Instead, it is the combination of more capable computer AI software with more functional robotics. The single biggest aspect is that the AI is becoming able to handle the unexpected, and make the robotics work in unpredictable environments. The details of this argument make a whole separate blog post. What I want to focus on here is the impact of this and how society can or can't adapt.

Not a Repeat of the Past
I think the stories from the Occupy movement of people who had degrees and couldn't find jobs are a parallel to the kid in the 1920s who was told to drop out of school and start working the farm. While it is easy to take a condescending view of the 20-somethings who racked up a whole bunch of debt majoring in some field from the Humanities and can't find a job today, doing so is not only non-productive, it really isn't fair. Those kids grew up being told that they should get a college degree in something they loved and that would get them a job. That advice has worked for decades. The people giving the advice didn't lie, they simply didn't have 20/20 foresight into the future. (Something it is impossible to blame people for.)

There is a difference between today's occupiers and the unemployed farm hand of 1930 though, the unemployed farm hand had a lot of untapped potential when it came to education. The youth of today typically don't. Yes, they could go learn something different to give them more desirable skills, but I fear that doesn't scale the same way. Plus, many of these people chose the direction they went because they found that those other areas (which might be better for jobs) didn't work well for them.

Where Does This Leave Us?
So if you buy the argument above, we are hitting another time of significant disruption when large fractions of the US population will be put out of jobs, much like they were 80 years ago when the economy underwent huge change. Unlike 80 years ago, we can't just send them all back to school to further their educations, most people have basically maxed their education potential. This seems like a bleak outlook. What makes it even worse is that I'm not even throwing out the idea that computing power is growing exponentially and that if people do try to retrain, they will have a hard time learning enough of what they need before the AI becomes capable of the job they were training for.

My own thoughts on where this leaves us have changed a fair bit over the last 8 months. In some future blog posts I'll go through a few ideas of things I see as possibilities. The interesting aspect of these possibilities is that many of them are quite positive and lead to people having a better overall life.