March 21, 2017 by Speakers' Spotlight
Robots Are Only the Latest in a Long Line of Job Killers — Yet Employment’s Never Been Higher
Andrew Coyne delivers insightful, provocative commentary on political and economic issues to Canadians across the country. The former national editor of Maclean’s, and currently a nationally syndicated columnist with Postmedia, his topical and timely presentations are sure to ignite debate and discussion with every audience. In this column below, Andrew refutes the idea that robots are killing the job market:
The first caveman to pick up a rock was putting somebody out of a job. Sharpened into a knife, it enabled him to scrape the meat off a mastodon’s bones twice as fast; attached to the end of a spear, it allowed him to kill twice as many in the same hunt.
This ought to lend some perspective to the current panic over the robots who are Coming to Take Our Jobs — the subject, we are told, of much heavy thinking in Ottawa. For in truth there is nothing new in it. Technological progress is not a phenomenon only of our times. It is as old as man.
However much of a break with the past today’s technologies — robots, computers, artificial intelligence — may seem, they are in fact part of a continuum. Every tool, every advance, every thing that enables one man to do more deprives two men of the chance to do less. But without it living standards would never have risen above subsistence levels. Had no jobs ever been displaced, even in the past century, we should still be 80 per cent employed on the farm. There is no more case for a tax on robots, as Bill Gates of all people has proposed, then there is for a tax on backhoes.
Neither is technological progress the only means by which labour is displaced. Defenders of free trade like to suggest it is technology, rather than trade, that is responsible for most job losses, but in truth it is neither: the biggest single source of job loss is competition from other workers. All of us are in competition with one another to sell our services, just as every employer is in competition with each other to buy them.
The result is enormous and constant upheaval in the market for labour — more than three million people leave their jobs every year, and still more people are taken on — dwarfing anything that might be attributed to trade or even technology. Employers do not need technological change as an excuse to shed workers. That is their aim at all times and in all weather: to make do with as little labour as they possibly can, while still filling their orders.
And yet the sum of all their efforts over the decades is not only the highest median standard of living in our history, but also the highest level of employment, both in absolute terms and (until very recently) as a percentage of the population.
Ah, but this time is different, we are told. Then, what was being replaced was simple physical labour — backbreaking, dirty, often dangerous tasks we should be thankful to have been spared. But now, my God, the robots are coming for us: the highly educated, the symbolic analysts, the lawyers and investment advisers and, gulp, journalists, all the folks who’d been told they were irreplaceable, immune. If even these jobs can be replaced, surely there is nothing left for us to do, as a species, but sit around and collect our basic income cheques.
But in fact there is no reason to think this, and not only because it has never proved to be the case before. Jobs, as economists like to say, are costs: the technology that wipes out jobs also lowers costs, and therefore prices, leaving consumers with more income to spend on other goods and services, creating jobs in those sectors.
But where, today’s pessimists demand, are the jobs going to come from? To which the answer is: where did today’s jobs come from? All sorts of people are employed today in industries that not only did not exist 30 years ago, or 20, or 10, but hadn’t even been dreamt of. And the industries that will employ them in future are those that have not been dreamt of yet.
How can I be so sure? Two things: the limitlessness of consumer wants, and the infinitude of human ingenuity. There is no fixed amount of work to be done in an economy. There are only restless entrepreneurs thinking of new ways to separate people from their money, by meeting needs they did not know they had.
At that, the potential for robots to replace even existing jobs is probably overstated. According to a new study by the C. D. Howe Institute, the kind of mass-extinction events foretold in some of the more dire projections are likely to be confined to a narrow range of industries, representing just 1.7 per cent of employment. In part this is because humans possess certain skills robots are unlikely to be able to duplicate, particularly interpersonal skills, the kind that require not just analysis but empathy.
But it also has to do with the complementarity, rather than conflict, between human and robot abilities. Rather than simply replace human labour, robots will in many cases augment it. Garry Kasparov, generally considered the greatest chess player of all time and the first world champion to lose to a computer, predicts that the future of chess will be neither humans vs. humans, nor computers vs. computers, but teams of humans and computers competing against each other; the winners will be those who best combine the relative strengths of each.
I suspect we will find the relationship between robots and humans to be governed by the principle, familiar to students of international trade theory, of comparative advantage: the notion that, even if China is better than Canada at everything, it will still be in China’s interest to specialize in the things it is “most best” at, and leave to us the rest. It used to be said, as a homely example of this, that a lawyer who can type faster than his secretary should still focus on his legal work, and leave the typing to his secretary. Perhaps the example in future will speak of robots and humans instead.