Horses, Cars, & the AI Boom of 2023 - Sanjit's Weekly Notes #20

I have been excessively and obsessively thinking about AI over the past couple of months. Any form of innovation excites me; however, I often have to refrain from celebrating this collective success of our species due to widespread suspicions over AI's role in our future, which still stands tall as a gigantic question mark.

Do we fear active conversations around AI?

At the macro level, I'm seeing a very "we'll-see-when-it-happens" kind of approach across all kinds of organizations. These are some reasons why AI is a topic that people do not want to actively talk about, and give a lot of thought to (Source: OpenAI ) -

• One possible reason is the fear of the unknown. Many people may not fully understand what AI is or how it works, which can create a sense of uncertainty and apprehension.
• They may also be concerned about the potential impact of AI on society, such as the displacement of jobs or the loss of privacy.
• Another reason could be the ethical concerns surrounding AI. As AI becomes more advanced, there are growing concerns about the possibility of biased or unethical decision-making by machines. People may be hesitant to discuss AI for fear of promoting or condoning such behavior.
• There may also be cultural or social factors at play. In some cultures, discussions about new technology or the future can be seen as taboo or inappropriate.
• Additionally, some people may view AI as a topic that is reserved for experts and academics, which can make them hesitant to engage in discussions about it.

Overall, the hesitation to talk about AI is likely due to a combination of these factors and others, and it is important to address these concerns in order to promote open and informed discussions about the topic.

These are all legitimate fears and causes for suspicion over the role of AI in our collective future. To compensate for the lack of insight into the future, I dug up a case study from the past that might bring more clarity to what this AI transition phase could evolve into in the coming years.

Let's now take a deeper dive into the last time the world saw an extreme displacement of work and labor -

From the Horse's Mouth

Until the 1860s, the Fire Department of New York City relied on manpower to pull extinguisher carts. With the introduction of horses in other similar operations across the city, FDNY decided to swap manpower with horses.

But the pride of the firemen was a huge obstacle. They believed that their strength could not be matched by the horses. On one occasion, a team of men were able to pull a cart to the scene faster than the horse pulled cart, and that stuck with them for a long time.

"There was a fire up in Broadway, and we and Hook and Ladder No. 1 ran side by side. Going up the hill at Canal Street was the proudest moment of my life. We beat the horse, and No. 1 did not get to the fire till sometime after us", said one of the firemen involved in that incident.

But advances in equipment and in the firehouse itself, including sliding poles, electric alarms and quick hitch horse collars, eventually allowed horses to relieve volunteers of their duties hauling hoses by hand. By 1869, well-trained horses and men could exit a firehouse in 30 seconds flat.

As the second Industrial Revolution churned to life in the latter 19th century, the new economy required the mass movement of people and goods. While inventors tinkered with engines of the future, the present relied on horses to do the heavy lifting of daily work, pulling trolleys, carriages, delivery carts, brewery wagons, city vehicles, and omnibuses.

It’s difficult to overestimate the degree to which the American economy and broader society revolved around horses. In urban areas, the reliance was even more striking. This dependence hit home in the fall of 1872, when a serious strain of horse flu spread throughout the northeast U.S. and for some weeks horses could not be used. City life ground to a halt as streetcars stopped running, urban goods stopped moving, and construction sites stopped operating. Consumers suddenly confronted shortages when buying groceries. Perhaps even more disturbing for some, saloons ran out of beer. There was nothing like the horses’ illness to demonstrate that such a large part of the American economy and its jobs revolved around horses.

But beyond New York and the other big American cities, inventors were forging a new world, one which did not rely on horsepower. By 1908, entrepreneurs were producing cars in earnest and their work couldn’t have come at a more fortuitous time.

By the start of the 20th century, Americans had grown weary of the “disorder” of society and called for better sanitation, order, safety and, above all, efficiency. The hard-working horse seemed antiquated and a wasteful, dangerous means of urban transportation. In 1908, New York’s 120,000 horses produced a pungent 60,000 gallons of urine and 2.5 million pounds of manure every day on the city’s streets.

No more horsing around

Auto enthusiasts dreamed of a horseless city with “streets, clean, dustless and odorless, with light, rubber-tired vehicles moving swiftly and noiselessly over their smooth expanse, would eliminate a greater part of the nervousness, distraction, and strain of modern metropolitan life.”

As Americans’ obsession with automobiles grew, their fondness for horses as a means for transportation declined. And the arrival of the car and electrified railways proved the horse’s death knell. People rapidly adopted mechanized transportation. In 1900, 6,000 horses hauled New York trolleys, more than all U.S. cities combined. But just 17 years later, the horse-pulled trolley took its last trip and the electric trams took over. By 1902, 97% of America’s streetcar tracks were running on electricity. Motorized buses also stole routes from the horses, and in July 1907, the final horse-drawn coaches were replaced by the country’s first urban motor bus line. The five bright green automobile omnibuses that ran along Fifth Avenue may have cost 10 cents – double the cost of a horse-drawn fare – but were extremely popular.

By the late 1910s, cities became inhospitable to the poor horse. Slippery asphalt was replacing dirt roads, neighborhoods began banning stables, and growers were opting for imported fertilizers instead of manure. As horses vanished, so did the numerous jobs that relied on the horse economy. In 1890 there were 13,800 companies in the United States in the business of building carriages pulled by horses. By 1920, only 90 such companies remained!

What happened to those involved in the horse economy after it collapsed?

As the horse industry collapsed, another industry came to life. In 1903, the year Henry Ford founded Ford Motor Company, 11,235 automobiles were sold to Americans. Just a decade later, Ford flipped the switch on the first assembly line in 1913, cutting the time it took to build a car from 12 hours to 2 ½ hours. That year, the number of cars produced in the United States mushroomed to 3.6 million — a 300-fold increase since Ford founded his company. By 1923 the country was producing 20 million automobiles per year. And of course this fueled the growth for all the components and raw materials that went into the production and use of cars, from steel and rubber to glass, and oil.

By 1917, New York was the epicenter for the country’s automobile sales rather than urban horses. Shops that sold wagons, carriages, harnesses, and saddlery on Broadway were replaced by supply stores selling tires, ignitions, speedometers, batteries, and carburetors. Where the American Horse Exchange once stood, tall office towers owned by Benz, Ford, General Motors, and Oldsmobile sprung up. Repair shops, parking garages, gasoline filling stations and taxi companies were desperate for new, skilled talent to fill their ranks and support America’s growing obsession.

The U.S. auto industry created new companies and jobs – and a lot of them. According to the McKinsey Global Institute, between 1910 and 1950, the auto industry created 6.9 million net new jobs in the United States, equivalent to 11 percent of the country’s workforce in 1950. This includes 7.5 million jobs created and 623,000 jobs destroyed. These jobs represented new occupations that serviced cars and that utilized motorized vehicles for transportation and delivery.

The linkage between the collapse of the horse economy & the AI boom of 2023

As one author has noted, what appears today as obvious – the transition from horses to cars – was in many respects far less than inevitable. As she points out, “the replacement of animal power took a particular form that was the result of cultural choices made about energy consumption at the turn of the century.”

The Progressive moment in the United States championed efficiency, sanitation, and safety improvements in cities, spurring not just the rapid adoption of automobiles that appeared to symbolize these benefits, but the rejection of horse-drawn travel that had problems in all three areas that urban dwellers understood all too well. In short, cultural values and a political movement contributed to the more rapid adoption of cars.

Similarly, it would be a mistake to assume that technology trends such as automation and the use of artificial intelligence will be driven by technology and economics alone. Individuals, companies, and even countries will make choices based on cultural values that will manifest themselves in everything from individual consumer preferences to broader political trends that lead to new laws and regulations.

Nobody ever would have thought that the replacement and collapse of the horse economy would instead end up creating 5x the number of jobs that it rendered useless. 10-15 years ago, we never had a very strong need for jobs like "digital marketing specialist", "social media specialist" - but they did come about, and are now almost critical to an organization's success from a marketing & PR perspective.

Conclusion & Key Takeaways:

While technological advancements bring increased efficiency and productivity, they also pose a threat to traditional jobs. However, rather than fearing the rise of AI and automation, we should focus on developing new skills and adapting to the changing job market.

Collaboration between technology companies, educators, and policymakers to prepare the workforce for the changing job market is going to be extremely important.

Schools need to change how they do things, your companies need to double down on L&D, and governments need to reconsider and review policies and structures to enable accelerated growth in AI & supporting technologies.

So, the horse is once again about to lose its relevance, inevitably. The core takeaway here is for us to embrace this growth and change in the world. This case study serves as a call to action for individuals and organizations to embrace the opportunities presented by AI and automation while preparing for the inevitable changes to the workforce.

Godspeed. Thanks for reading.

--- Sanjit.

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