Book Club: The Code [Robot] Economy (pt. 2)

Welcome to EvX’s book club. Today we’re discussing Philip Auerswald’s The Code Economy, Introduction.

I’ve been discussing the robot economy for years (though not necessarily via the blog.) What happens when robots take over most of the productive jobs? Most humans were once involved in directly producing the necessities of human life–food, clothing, and shelter, but mostly food. Today, machines have eliminated most food and garment production jobs. One tractor easily plows many more acres in a day than a horse or mule team did in the 1800s, allowing one man to produce as much food as dozens (or hundreds) once did.

What happened to those ex-farmers? Most of us are employed in new professions that didn’t exist (eg, computer specialist) or barely existed (health care), but there are always those who can’t find employment–and unemployment isn’t evenly distributed.

Black unemployment rate

Since 1948, the overall employment rate has rarely exceeded 7.5%; the rate for whites has been slightly lower. By contrast, the black unemployment rate has rarely dipped below 10% (since 1972, the best data I have.) The black unemployment rate has only gone below 7.5 three times–for one month in 1999, one month in 2000, and since mid-2017. 6.6% in April, 2018 is the all-time low for black unemployment. (The white record, 3.0%, was set in the ’60s.)

(As Auerswald points out, “unemployment” was a virtually unknown concept in the Medieval economy, where social station automatically dictated most people’s jobs for life.)

Now I know the books are cooked and “unemployment” figures are kept artificially low by shunting many of the unemployed into the ranks of the officially “disabled,” who aren’t counted in the statistics, but no matter how you count the numbers, blacks struggle to find jobs at the same rates as whites–a problem they didn’t face in the pre-industrial, agricultural economy (though that economy caused suffering in its own way.)

A quick glance at measures of black and white educational attainment explains most of the employment gap–blacks graduate from school at lower rates, are less likely to earn a college degree, and overall have worse SAT/ACT scores. In an increasingly “post-industrial,” knowledge-based economy where most unskilled labor can be performed by robots, what happens to unskilled humans?

What happens when all of the McDonald’s employees have been replaced by robots and computers? When even the advice given by lawyers and accountants can be more cheaply delivered by an app on your smartphone? What if society, eventually, doesn’t need humans to perform most jobs?

Will most people simply be unemployed, ruled over by the robot-owning elite and the lucky few who program the robots? Will new forms of work we haven’t even begun to dream of emerge? Will we adopt some form of universal basic income, or descend into neo-feudalism? Will we have a permanent underclass of people with no hope of success in the current economy, either despairing at their inability to live successful lives or living slothfully off the efforts of others?

Here lies the crux of Auerswald’s thesis. He provides four possible arguments for how the “advance of code” (ie, the accumulation of technological knowledge and innovation,) could turn out for humans.

The Rifkin View:

  1. The power of code is growing at an exponential rate.
  2. Code nearly perfectly substitutes for human capabilities.
  3. Therefore the (relative) power of human capabilities is shrinking at an exponential rate.

If so, we should be deeply worried.

The Kurzweil View:

  1. The power of code is growing at an exponential rate.
  2. Code nearly perfectly complements human capabilities.
  3. Therefore the (absolute) power of human capabilities is growing at an exponential rate.

If so, we may look forward to the cyborg singularity

The Auerswald View:

  1. The power of code is growing at an exponential rate [at least we all agree on something.]
  2. Code only partially substitutes for human capabilities.
  3. Therefore the (relative) power of human capabilities is shrinking at an exponential rate in those categories of work that can be performed by computers, but not in others.

Auerswald notes:

In other words, where Kurzweil talks about an impeding code-induced Singularity, the reality looks much more like one code-induced bifurcation–the division of labor between humans and machines–after another.

The answer to the question, “Is there anything that humans can do better than digital computers?” turns out to be fairly simple: humans are better at being human.

Further:

1. Creating and improving code is a key part of what we human beings do. It’s how we invent the future by building on the past.

2. The evolution of the economy is driven by the advance of code. Understanding this advance is therefore fundamental to economics, and to much of human history.

3. When we create and advance code we don’t just invent new toys, we produce new forms of meaning, new experiences, and new ways of making our way in the world.

What do you think?