“Americans fear technology in the near future because they see it as a replay of the globalization of the near past. But the situations are very different: people compete for jobs and for resources; computers compete for neither.” – Peter Thiel
In the future will computers and humans compete for jobs? Will the outcomes of technological innovation benefit or hurt a future society? Technological innovation does not mean that humans have to compete with computers in the job market. What it really means is that these new technologies serve as a complement to human labor.
People who fear technological innovation taking over industries and decimating the workforce can be considered techno-pessimists. These pessimists use outdated examples the 19th century industrial revolution to argue that innovation replaces human labor. This is a strawman argument – innovation led only to a short term job loss for people. With the rise of technology, companies have outsourced jobs to third-world nations and have increased the supply of labor in those areas. In industrialized nations such as the United States, a majority of people in an American household are working. Today, 70% of American households have both adults employed, when compared to 1960 when only 20% of mothers worked.
Technological labor and innovation cannot alone take over an industry. Yes, computers and technology make life easier, but no one should fear that these machines will make humans obsolete. Computers and machines need humans to operate them and to tell them what to do. Computers cannot make decisions on their own without the help of human beings; what computers and machines do best is process data that humans can use to make better decisions about their customers.
Thiel suggests that technological innovation does not take away value from workers and industries but instead creates greater value for businesses and human laborers. Instead of working in the fields, workers displaced by technology are freed to innovate and develop new ideas and businesses. They then increase their productivity by becoming more entrepreneurial and learning new trades that more closely align with market demands.
In the early 20th century, new machines began to make agriculture more efficient. Some jobs became obsolete, but at the same time these farmers who were displaced from their jobs could now learn new skills and become more productive. Not only did technological innovation allow for these farmers to increase their value, but it also made food cheaper and more accessible. More people in the world now have greater access to food while the cost of food has gradually declined.
Clearly, industries that employ lots of technology still have many regular employees. One can even argue that there are now more jobs in these industries since they have adjusted to the demand from consumers. Technology makes growth easier for these industries since it enables new jobs to be created. For example, the medical, health, and sharing-economy companies have been able to create more jobs and have become increasingly efficient due to the innovation of technology.
How will computers and technology innovation in the labor market ultimately improve the lot of future generations? Will technological innovation become so advanced that it takes over human production in the labor field? If this is true, will technological innovation and artificial intelligence affect jobs on a short-term basis or on a long-term basis?
A recent FEE article by Sandy Ikeda titled “Will Robots Put Everyone Out of Work?” addresses these questions. Ikeda points out that “machines might substitute for labor in the short term, but in the long term they complement labor and increase its productivity.” He goes on to argue that these technological innovations will be used in producing goods and that they will become more sophisticated as people become smarter and more innovative. Isn’t that how the production of labor works? Shouldn’t we expect both machines and people to increase their intelligence as they work together?
We have seen this pattern throughout history, and machines have yet to eradicate human labor. As machines and artificial intelligence strengthen, humans adjust and become more intelligent as well.
Technological innovation will not take away jobs in the long-term– it will only strengthen society and allow it to become more prosperous. If people are allowed to be innovative and live in a free society that encourages entrepreneurism, whether that be through human labor or through technological innovation to complement human labor, then there will always be plenty of jobs for people to take.