Is it Getting Better All The Time?

My mother in law, while she was able to focus on such things bless her, always took the view that things were getting worse, going to the dogs and sliding towards catastrophe. All through the 70s, 80s and 90s news of job losses, the occasional riot, or missing child (or cat) fuelled her belief that the country, and indeed the world, was becoming a poorer, more dangerous, crime infested and anarchic sort of place. TV news of any factory closure would deepen her gloom. Any attempt at explaining that bad news travels more and that traditional labour intensive industries, often with dangerous or unhealthy conditions and low pay, were being replaced by safer, better paid jobs in service industries was met with an icy stare of incomprehension.

I used to resort to parody - well, sarcasm probably - noting what an awful invention the plough was, let alone the combine harvester, as things were so much better when more than 90% of the population had to work in the fields to produce enough food for survival.

Reputable academic studies have proved that the world has been on a long run trend over hundreds of years of becoming a more civilised place. The Harvard psychologist Steven Pinker wrote a book in 2011 called "The Better Angels Of Our Nature" in which he showed, by careful statistical analysis, how the world has become steadily less violent. Despite - or maybe because of - the advent of weapons of mass destruction, casualties in time of war have reduced, from 300 per 100,000 people in the Second World War to a figure in the 20s for the Korean war and the teens for Vietnam. For most of the 20th Century there has been less than one death in conflict per 100,000 people. Pinker also found a long term historical decline in the levels of murder, genocide and terrorism. One of the main reasons people feel otherwise is the speed with which modern media conveys bad news from around the globe, so we are aware of events that previously would never have been brought to our attention and definitely without real time pictures.

So, it's getting better. But is it going to get better all the time? (Yes, of course it was a Sgt Pepper/Beatles reference. After all, it was 50 years ago today on the 1st of June).

There is a lot of concern that the software-driven automation of processes currently carried out by people will lead to a world in which full employment becomes impossible. After all, some newspaper stories are now created directly from data (for example, earthquake tremors in California) and you can create all sorts of legal and contractual documents without recourse to a person, for example challenging parking tickets. Talking of software-driven change, there are half a million taxi drivers and 1.5 million truck drivers in the USA whose jobs could all be threatened in time by driverless technology. And Mckinsey say 45% of American "work activities" are at risk from automation. (Note they didn't say "jobs").

I take a more positive view than the doom-mongers on this. I think it's mainly a matter of whether there will be enough wealth to fuel the massive potential for jobs in leisure-based activities if people have more time to spend. And the health and care sectors could absorb vastly more labour if it could be paid for. And, despite the advent of the Siris and Alexas, which in time just feed you more of what they've gleaned you "like", wouldn't you want to chat to a person once you're old and unable to do much else? And hear about something new, or be reminded of something you've forgotten (so Siri and Alexa wouldn't be much help)?

We've known for around 200 years that replacing a means of production with a cheaper one generally makes us all wealthier, even if it means there are short term losers. (I'm probably bastardising Ricardo's theory of comparative advantage here which was more about trade than efficiency, but bear with me). So if driverless technology meant there were 2 million unemployed drivers in the USA - so a few hundred thousand here in the UK - everybody should be paying less for all transported food and goods, making society wealthier. In this view, all those jobs that would be displaced by a new wave of automation represent an opportunity cost, a cost which could be saved and re-allocated in a very different future where personal services such as health and care are not so restricted in terms of what can be done. There would be no need for anybody to work 60 or 80 hours a week and the demand for leisure services would boom.

It wouldn't all happen overnight - this will be the mother of all transitions, not Brexit! - and governments will need to make sure that markets operated to make enough of the benefits accrue in reduced prices and did not all disappear in untaxed profits. Bill Gates offered an answer for this part of the problem a few months ago - as the exchequer's take from employment taxes (the equivalent of our National Insurance) will be hit by a large expansion in robotics, then governments will just have to tax the use of robots by companies. Bill said "robots" but really it may have to be "software" - sorry Bill - or the definition of what a robot is would have to be broad. I suspect if we want to define a robot, while we might start with the old Isaac Asimov books - good though they were - we might have to think rather more broadly. This should keep an absolute army of legal draughtsmen in clover for ages.

If full employment became a thing of the past, society might have to function through a living wage tax credit type of arrangement. I know this all sounds both rose-tinted and Brownite, if not Corbynite-communistic compared with my normal rather dry economic view. And David Smith, writing in the SundayTimes (5 February 2017) pointed out that studies have shown introduction of such a system would currently double the cost of the welfare state (this was actually a study in Austria) while also reducing benefits for people in real need, to pay for the cost of benefits to everyone. But, just as our grandparents could not anticipate how jobs in heavy industries would be replaced by jobs that did not exist then, the future will undoubtedly be different in ways most of us can't anticipate. Indeed, I don't rule out the inventiveness of the market system creating opportunities for full employment in the future, whether or not some employment takes the form of community service in return for what is currently viewed as "benefits". I know this is politically fraught (should you "earn" benefits or are they a "right") but in a positive world most people would willingly do worthwhile things to keep themselves active and stimulated. Everywhere you look you can see things that society would benefit from if it could be paid for or if volunteers would do it for free. (I know, when people try the health and safety elfs block them. But there must be an answer....)

I realise this analysis is significantly flawed by lack of quantification but I refuse to be drawn into what I think of as a "mother in law" view of the future, rather than one where things, broadly and with major bumps on the road, continue on a generally improving trend, at least over the timescales that are relevant to us and our children. After all, unless we let ISIS or Kim Jong Un take over the world, why wouldn't it?

Beyond that, eventually the world heats up and burns, either relatively quickly (global warming) or in the very, very long run, as the earth gets incinerated by the sun evolving into a red dwarf. So in the long run, as John Maynard Keynes said and my mother-in-law instinctively knew, we're all dead. But there's plenty of meantime for us to make hay and enjoy what life has to offer.

I started drafting this post about a year ago, prompted by the first flush of publicity on Google's driverless cars. I have kept returning to it to tweak it and add extra quotes, like the Bill Gates robot tax. And over that time many commentators have picked up aspects of these issues, like the extent of jobs at risk, living wage type benefits, etc. Not that I'm claiming to have got there first by any means. Indeed, none of todays commentators can claim that. For it was Keynes who predicted, in 1928, that rapid technological progress over the next century would afflict with us with a new disease, which he called "technological unemployment". He saw this as a temporary phase, creating wealth and leisure and enabling us to "prefer the good to the useful". I read that quote last weekend in Irwin Stelzer's Sunday Times column and it prompted me to attempt to bring this rambling essay together. It neatly summarises what I've been mulling over for months.

I'm with Keynes rather than the mother in law. It's a shame I can't sensibly attempt to debate it with her.