The Age of Automation: How Can We Adapt?

This article is an excerpt from the Shortform book guide to "Doughnut Economics" by Kate Raworth. Shortform has the world's best summaries and analyses of books you should be reading.

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Does automation contribute to unemployment? How can we adapt to the world where most jobs are performed by technology?

The age of automation is upon us. Already, many jobs that used to be performed by humans can be completed by robots, and this is only the beginning. To address the looming challenges of automation, we must build a people-centered economy.

Keep reading to learn about the looming challenges increasing automation brings.

Adapting to Automation

The age of automation has arrived: The economy’s productivity is no longer linked to employment—firms can produce more output with fewer workers, largely thanks to automation. Raworth notes that the trend is no longer confined to blue-collar manufacturing jobs. Even white-collar professional “knowledge economy” work is increasingly being cannibalized by software and AI. This presents a major social problem as an ever-growing share of the population may find itself without any useful labor to sell.

Automating Human Cognition

In 21 Lessons for the 21st Century, Yuval Noah Harari expands on this idea of automation, painting a bleak picture of the future in which technological innovation enables AI to perform an increasing number of jobs—causing massive unemployment and creating an entirely redundant or useless class.

Harari writes that past periods of automation created at least as many jobs as they eliminated—for example, a piece of equipment that replaced a human laborer also required someone to operate the equipment and another person to maintain it. This is because these innovations substituted human workers’ physical capabilities, but not their cognitive abilities. No matter how quickly a machine could sew a shirt compared to a seamstress, the machine couldn’t take customers’ measurements.

However, Harari warns, the dual rise of infotech and biotech is creating technologies that could truly replace the need for human workers. New discoveries in neuroscience have revealed that human skills such as analyzing, decision-making, communicating, and interpreting other people’s emotions are the results of specific brain algorithms—not the elusive forces of free will. This means that technologists can replicate those processes with AI. As a result, not only can machines do a human’s job, but they can do it better than humans, because they’re immune to human error and biases.

Raworth proposes using the tax code to shift the incentives for businesses. Right now, businesses have to pay payroll taxes for human workers, but can write off investments in robots and other automation technology as a business expense—the government is, in effect, subsidizing automation. Raworth recommends taxing automation and rewarding firms for investing in humans.

She also champions giving citizens a stake in the private gains accrued by technology companies—gains that are often only possible because of the initial public investment in the underlying technologies. Raworth writes that this could take the form of public redistributed royalties from companies that benefited from taxpayer investments or from their use of public assets.

(Shortform note: Although Raworth proposes giving the public a stake in technology companies because of historical government investments in technology, she doesn’t acknowledge just how far-reaching the implications of this could be. Using her logic, any company that harnesses the technology of the internet—which, today, is all companies—would have to cede an equity stake to the government. This is because the technology that created the internet itself traces its earliest roots to US government research in the 1960s, when Pentagon analysts created ARPANET—the protocol that formed the base of today’s internet.)

The Age of Automation: How Can We Adapt?