Man and Superman: Human History Bifurcates

I recently wrote a series titled The Future and also gave a talk on The Future of Capitalism.

In those, I said that I am optimistic about the next couple of decades. I believe, strongly, that entrepreneurship and entrepreneurial capitalism can be democratized, and wealth can be created in the middle of the pyramid using capitalistic principles. In the next 2-3 decades, the potential for distributed capitalism is very high and the outcome should be extremely positive around the world. That is the mission upon which my current work with One Million by One Million is based.

However, there is tremendous inequality due to technology and automation on the horizon. In the 30-50 year timeframe and beyond, technology and automation will create tremendous disruption. 60-80% of ALL jobs will, likely, get automated. Now, that is a scary situation.

I am sure you’re thinking, ‘Oh, I’ve heard this before. Machines replacing jobs. New jobs always emerge.’ Yes, in the Industrial Revolution, for instance, that was a major concern, but we’ve seen tremendous job growth since then. This technology revolution is, however, different. Before, machines could not think. Now, they can. And because of the processing power available in tiny chips, they can think incredibly fast. Process unbelievable amounts of data in a nanosecond. Artificial Intelligence, Machine Learning, and Robotics are moving forward at breakneck pace right now. The march of automation looks pretty much unstoppable.

Let me give you an example. China managed to do tremendous poverty reduction on the back of manufacturing over the last couple of decades. But no longer can industries employ huge masses of people and drag populations out of poverty. FoxConn, one of the largest manufacturing companies in China that makes iPhones for Apple, this May, eliminated 60,000 people out of their 150,000 work force. These people were replaced by robots. We can safely assume that India’s poverty reduction strategy cannot be manufacturing, because new factories would inevitably use robotics, not people. Agriculture is seeing very similar levels of automation as well, by the way.

I’ll give you another example, this time software, not hardware. In the advertising industry, media buying and allocating budget to various types of advertisements, and various media outlets has been a crucial job. Today, advertising is shifting online rapidly. And media buying in the context of online advertising is a 100% automated job that is performed by software, not human beings. It’s all done with mathematical precision, measured in real-time, and human beings just cannot play in this rapid-fire software application game. Same thing happens in finance by the way, with real-time high-frequency trading where human beings simply play no role. Machines think, machines look at data, machines make decisions in split seconds. And machines replace white-collar jobs, not just blue-collar factory workers.

Let’s talk about the field of medicine. If you think about what a doctor needs to do to diagnose an illness, she needs to consider all the symptoms, take into account all the test results, consider all the treatment options, factor in all the side-effects of various medications and their interplay with other medications the patient is already taking. This is, effectively, a multi-variate optimization problem that a doctor has to do in her head. And, she needs to keep up with all the new research and advances in medical science, and factor those in as well. The field of medicine is full of incorrect diagnosis and mistreatment of illnesses. Now, if you replace this whole process with software, which IBM is trying to do with their Watson supercomputer, medical diagnosis becomes a truly scientific, deterministic process. I can tell you, if I have the option of being diagnosed by software versus a human doctor, I would always prefer software. It will be far more accurate.

In the medical field, there are also tremendous advances in robotic surgery. So, the medical field will get dramatically disrupted in the next 30 years. The legal profession will face similar disruption with lawyers getting replaced by software.

There are, of course, both pros and cons in this disruption. If the medical profession can be automated to that extent, billions of people can have access to quality medical care. Today, this number is relatively low. That’d be a huge positive outcome of automation in the medical field, for example.

In another industry – transportation – there’s already huge disruption underway. Some of you are already using services like Uber and Ola – these are replacements for taxis. Well, the taxi industry is a major employer, and this trend is going to destroy an enormous number of jobs, and this one isn’t even a few decades away – it’s here. Now. It’s upon us.

Then we have self-driving cars. Autonomous vehicles including trucks that drive themselves. This technology is almost ready. If governments allow autonomous vehicles, this will eliminate the requirement for drivers. If you have a combination of ride-sharing a la Uber and autonomous cars, PricewaterhouseCoopers predicts that 99% of the vehicles on the roads can be removed altogether. The total size of the fleet will fall from 245 million vehicles to just 2.4 million vehicles. That eliminates entire professions like truck drivers, taxi drivers. Car ownership drops. That shrinks the car manufacturing industry dramatically. Car insurance industry gets decimated. Car service industry shrinks. Massive disruption. 10 million jobs will disappear.

Of course, if you are sitting in New Delhi or Beijing, you are thinking, ‘Boy, it would be much better if fewer cars were on the roads; may be, India and China can leapfrog to ride sharing on self-driving cars and no car ownership – huge improvement in quality of life … pollution goes down. We can breathe. Congestion goes down. That’s right. That’s the positive outcome of this disruption. New Delhi, today, has the dubious distinction of being the most polluted city in the world. In China, a million people die of pollution-related illnesses each year.

One thing that we should consider in this context is the role of Government policy. There are certain aspects of this disruption where Government cannot play any role. For instance, whether a factory uses massive automation or not is their business, not the Government’s. The Government cannot stop a manufacturing plant from automating its operations. But, the Government can choose not to authorize self-driving cars and trucks. So, the government can choose to slow down the march of technology, especially one that is likely to impact 100 million jobs as the autonomous vehicles innovation would do.

At MIT, Erik Brynjolfsson and Andrew McAfee have been modeling these changes and have published a huge body of work. If what I am talking about is something you want to investigate further, please look at their findings.

So, to net this disruption out, in about 30 to 50 years, 60-80% of all jobs will be automated; even software can be developed by code-generators. What WON’T get automated? Scientific research will survive. Creation of Art, of Music, of Films, of culture will survive. Playing professional sports will survive. But the vast majority of people will have nothing to DO professionally.

And this has already started. In 1990 the top three carmakers in Detroit had a market capitalization of $36 billion and 1.2 million employees. In 2014, the top three firms in Silicon Valley, with a market capitalization of over $1 trillion, had only 137,000 employees.

So, what does society look like in an all-play-and-no-work world? You see, work is an essential block of the human existence today. Work offers identity, structure, and meaning. If you take work out, human beings will have to figure out what their identity is all about. If they don’t have to go to work for significant chunks of the day, they need to find alternative means of creating structure. These are not easy things to come up with on the fly. In a post-work world, there is the danger of people with nothing to do becoming zombies who watch television all day long, or play computer games. An idle brain is a devil’s warehouse, as the saying goes. I find the idea of a society comprising mainly of idle people extremely scary.

Now, this is also a scenario in which Capitalism fails. Most people don’t earn money anymore and have to be put on some sort of welfare. Inequality grows to extreme levels. Only a very small percentage of people make huge fortunes. There’s a small affluent class. The rest has no jobs and hence, no means of subsistence.

Welfare, in that scenario, needs to grow tremendously. People are already talking about Universal Basic Incomes. That’s an option. People are paid a small amount of basic income to cover all their basic expenses. It’s very expensive to implement if 7-9 billion people need to be supported on such programs. But say, we can figure out a way to afford Universal Basic Income.

At that point, society looks very close to a Communist dream. Everyone has a basic income, food-clothing-shelter needs are met. The basic needs on Maslow’s hierarchy are well addressed. Yes, there is tremendous inequality with the concentration of wealth at the tip of the pyramid, but the bulk of society operates in a Communist model, with a lowest common denominator level of lifestyle. Except, it’s an utterly discouraging and uninspiring mass mediocrity scenario.

There are, needless to say, two schools of thought. A Utopic one, in which society becomes so rich that people’s basic needs are all met, and people have infinite leisure to pursue art, music, scientific research, sports, hobbies, friendships, spiritual contemplation, etc.

A Dystopic one, in which people become zombies. 8-12 hours a day of television watching and playing immersive video games, instead of going to work. Long unproductive days. Identity crisis. Social unrest. Crime.

And by the way, people are quite poor. Basic needs are met, but no one has any money to buy anything discretionary. So people don’t have any incentive to produce anything of value either except the basics. Or some luxury products for the super rich which no one else can afford. The super rich go on vacation to Mars on Elon Musk’s space ship. Humanity, otherwise, lives an uninspiring existence.

All this is not that far away. 30-50 years. Capitalism will come under tremendous duress if not an existential threat. We will go back to a fortune at the tip of the pyramid society, and that tip will be incredibly small. A few thousand people will control all the wealth in the world. Capital will drive wealth, not labor. There is no reason to work. Hence, there is no incentive to work. People who own the machines will make the money. And that’s one of the key issues driving the concerns over the future of Artificial Intelligence.

French Economist Thomas Piketty has written extensively on the subject of inequality and concentration of wealth in recent years. His book, Capital in the Twenty First Century, calls for massive wealth redistribution through taxation. I can’t say I am necessarily comfortable with his ideas – his solutions – but he is certainly pointing to the right problems. This level of inequality, without some well thought through strategy for social re-engineering, will lead to revolution and anarchy.

Karl Marx, of course, predicted that Capitalism will eventually destroy itself, giving way to Socialism. In the last hundred years, the opposite happened. Capitalism has emerged victorious. Communism failed, and the socialist countries aren’t looking so bright and shiny. But in fifty years, if Capitalism does indeed destroy itself, then perhaps Marx would be proven right. I don’t know. I am neither a Communist, nor a Socialist, I happen to be a Capitalist. So all this makes me rather queasy. Nonetheless, I cannot help but acknowledge that Capitalism will, in the not too distant future, hit the wall. And then what?

I don’t have answers. I urge you to think about what a post-Capitalism society might look like. What a post-work society might look like. I don’t know if this transition will happen in my lifetime, but it will definitely happen in the lifetimes of those who are 20 years younger. And it will happen within the next 30-50 years.

Since I wrote The Future series, I read two books by Israeli Historian Yuval Noah Harari, Sapiens: A Brief History of Humankind and Homo Deus: A Brief History of Tomorrow. This series, Man and Superman, will reflect heavily on both my previous series and these two books.

The first major conclusion that I have arrived at, and Harari’s writing reinforces this, is that human history is about to bifurcate into two distinct classes: the wealthy, powerful, highly educated class that will come to dominate the future; and the useless zombie class that will be the planet’s majority.

In upcoming segments, I shall further explore various aspects of this bifurcation.

Photo credit: Hafsteinn Robertsson/Flickr.com.

This segment is a part in the series : Man and Superman