Second, Surowiecki claims, "economic evidence at this point suggests that trade and in particular trade with China since 2000 has been responsible for many, many, many more lost American jobs than automation has." He continues, "Really the jobs lost to trade is just an order of magnitude greater." The best research out there now does not support this claim. While Autor, et al. (2015) finds:
"Labour markets whose initial industry composition exposes them to rising Chinese import competition experience significant falls in employment, particularly in manufacturing and among non-college workers. Labour markets susceptible to computerisation due to specialisation in routine task-intensive activities instead experience occupational polarisation within manufacturing and non-manufacturing but do not experience a net employment decline."In other words: trade, bad - technology, meh. But science doesn't just stop with one finding. Remember, until Autor and his colleagues began looking into trade, the prevailing hypothesis was that skill-biased automation had more to do with widening income distribution and stagnating wages. To falsify the hypothesis that technology matters (and possibly a lot) you need a lot more than that. So Acemoglu, et al. (2017) took a stab at it. They find:
The impact of robots is distinct from the impact of imports from China and Mexico, the decline of routine jobs, offshoring, other types of IT capital, and the total capital stock (in fact, exposure to robots is only weakly correlated with these other variables). According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent.Who's right? We don't know yet. I tend to favor the conventional view about technology until more than one or two papers come in from the other direction (and preferably not all of them by Autor and some combination of coauthors).
Both of these posts on AI or artificial intelligence really interested me because of the fact this could be a reality in the future. In the first video the person being interviewed sort of made it seem like this AI was going to completely change our lives fairly soon but in the podcast he explained this is many decades away if it does happen. I thought it was interesting that he brought up that productivity in humans would be increasing if this were the case, and productivity is instead declining. Another part of this story was what would happen if AI did come into our everyday lives, would they kill us all? I would have to say there is a very small chance of that happening and more than likely the robots would work alongside of us and help us with certain tasks. Overall we won’t have to worry about any of this for many years to come so instead we can worry about all the other threats in the world.
ReplyDeleteJames Surowiecki makes a statement that really peaked my interest. Speaking of the future of automation, he states, "We will then face the question of how to distribute the benefits of that economic growth." This statement was by far the most interesting point in the discussion for me. I would like to believe, as a hopeful member of society, that the fear within our society surrounding automation is based solely in the fear that the wealthy would use automation to increase their wealth, and not distribute the benefits to others. However, basic economics can show us that this would not be true, as if individuals cannot purchase the products from automation, then automation loses its purpose. Automation that further consolidated the wealth within a nation would lead to negative economic growth. There would be incentive for businesses to continue to distribute the benefits of automation, or face downturn in the economy. This idea can be supported by ideas which we have already discussed in class. Automation within one country would provide a boost to their terms of trade as long as they were a small member in the global market. For a large country in the global market, such as the United States, automation could potentially lead to an over-saturation of the market for the exports, causing the price of the exports to fall, eventually harming the economy. Automation is an intriguing idea, and it is probably best to prepare for it now, then to wait until it is already here.
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