Automation hits the professions. Most remain delusionally confident, so far.

Summary: This chapter about the new wave of automation examines its effects on professionals. They’ve complacently smiled as previous waves trashed the lives of blue collar workers, seeing that as a just and proper fate for proles. Now it’s their turn. But it need not work out so painfully. There is a better path. But it’s difficult for us to see.  {1st of 2 posts today.}

A Better World

Pilots show what lies ahead for many of us.

Carr argues that as professional jobs grow increasingly automated, “more and more, we’re all kind of turning into variations on computer operators.” He uses pilots as a prime example of what can happen when a professional role is transformed into that of a button pusher.  Autopilot has increased aviation safety, but pilots typically spend under five minutes manually controlling the plane during a flight.
Interview with Nicholas Carr, author of The Glass Cage: Automation and Us.

Commercial pilots were an enviable lot in the post-WWII era, with travel, status, security, and high pay. Now they’ve been crushed by mergers of their employers (less bargaining power) and increased tech (fewer jobs per plane with less value-added). Ahead lies still more automation and a massive rise in foreign competition — doing to them what it did to American merchantmen (now existing only in small numbers as a government-protected species.

See The Truth About the Profession, What Can New Pilots Make? Near Minimum Wage. There’s a Pilot Shortage: Salaries Start at $21,000. Note the economics, something still not understood by most economists. Corporations run wages down to the point where there is a shortage of workers willing to train themselves for those jobs. Profits are maximized at this magic point of a slight shortage, where increasing wages would supply but reduce profits.

The Third Industrial Revolution begins, but remains mysterious.

The articles that describe the emerging industrial revolution mix fact and fancy, as does this in the NYT.

 

The future of automation
The future of automation

Flying a plane is largely automated today and will become more so. And at Google, the biggest seller of online ads, software does much of the selling and placing of search ads, meaning there is much less need for salespeople. … Even jobs that become automated often require human involvement, like doctors on standby to assist the automated anesthesiologist, called Sedasys.

Think about that last sentence. Anesthesiology becomes more automated, as anesthesiologists become standby helpers for routine surgery. How many lost jobs does that simple sentence imply? Lots. It’s the automation strawman: it won’t take all our jobs. True, but enough could be lost to substantially tilt the supply-demand balance against workers, so that even the people with jobs earn far less from them.

The Guardian gives a colder and more accurate assessment.

Knowledge-based jobs were supposed to be safe career choices, the years of study it takes to become a lawyer, say, or an architect or accountant, in theory guaranteeing a lifetime of lucrative employment. That is no longer the case. Now even doctors face the looming threat of possible obsolescence. Expert radiologists are routinely outperformed by pattern-recognition software, diagnosticians by simple computer questionnaires. In 2012, Silicon Valley investor Vinod Khosla predicted that algorithms and machines would replace 80% of doctors within a generation.

… So where does that leave the professions, whose hard-won expertise is beginning to fall within the power of computers and artificial intelligence to emulate? The efficiency of computerisation seems likely to spell the end of the job security past generations sought in such careers. For many, what were once extraordinary skillsets will soon be rendered ordinary by the advance of the machines. What will it mean to be a professional then?

“We’ll see what I call decomposition, the breaking down of professional work into its component parts,” says leading legal futurist professor Richard Susskind. Susskind’s forthcoming book Beyond the Professions, co-authored with his son Daniel Susskind, examines the transformations already underway across the sectors that once offered jobs for life. He predicts a process not unlike the division of labour that wiped out skilled artisans and craftsmen in the past: the dissolution of expertise into a dozen or more streamlined processes.

Even here, however, futurists like Susskind remains blind to the inexorable law of supply and demand.

In a previous book Tomorrow’s Lawyers, he predicts the creation of eight new legal roles at the intersection of software and law. Many of the job titles sound at home in IT companies: legal knowledge engineer, legal technologist, project manager, risk manager, process analyst.

“Many traditional lawyers will look at that and think: ‘Yes, they might be jobs, but that’s not what I went to law school for. And that’s not what my parents’ generation did as lawyers.'” That, says Susskind, is not his concern: whether we call these new positions lawyers or not, the legal sector will survive.

“What I often say is that the future of law is not Rumpole of the Bailey, and it’s not John Grisham,” explains Susskind. “It’s not a version of what we have today slightly tweaked. It will be people working in the legal sector but offering legal services and legal help in new ways.” It may be the end of the profession as immortalised in courtroom dramas, but as software eats the old jobs it will have to create new ones too.

Susskind describes legal services jobs, but these are not the jobs that made it a solid middle-class profession. These jobs are to attorneys what H&R Block tax advisers are to accountants. The value-added comes largely from the software, and the job pays accordingly.

The Guardian article then surveys Law, Medicine, and Architecture — making the same mistake in each. The number of jobs might remain the same after automation, but often with lower incomes for most in the field. Paralegals with powerful software will provide legal services to the remnants of the middle class. Optometrists will increasingly replace ophthalmologists as providers of many services (including computer-controlled laser surgery), as their own work also gets automated — leaving a surplus of optometrists.

What about the creative class?

What happens to the creative class? They became part of the middle class for a heartbeat in time, and now large numbers of them drop from the middle class to the blue collar ranks, becoming laborers with insecure incomes and low savings (fate of most in winner-take-all competitions). It’s back to the future, a return to conditions before the 20th century.

Look at musicians. Tech allows us to listen to more professionally produced music than ever before, and this demand seems likely to increase. But a middle class life for musicians becomes ever less likely.  The evidence is now clear. CBS: “Musicians: Streaming will sweep us into poverty.” — New tech exacerbates an already severe imbalance in the share of income going to the artists.  “A Grammy Nominated Artist Shares His Royalty Statements.” — “Someone’s making money, … it’s not the artists.”  “The music industry is still screwed.” — “Why Spotify, Amazon and iTunes can’t save musical artists. Pandora, Spotify and Beats aren’t making a profit. If they never do, your favorite band will need a day job.” An example of their economics: Pomplamoose 2014 Tour Profits (or Lack Thereof). Here’s a study of the numbers: A study on musicians’ revenue in the U.S.

Writers, editors, reporters — everybody is on the same slide down. Tech creates a labor surplus, then wages fall for most in the field (even when the numbers employed increase, which is not always the result).

Conclusion

Industrial revolutions improve our lives in many ways. They challenge us politically, as our system gives most of the rewards to the rich. It’s about distribution, about our choices. We’ve overcome this problem in the past, although with severe social unrest — and often violence. We can learn from the past and manage this transition painlessly to a better world.

Other posts in this series

  1. A graph showing the end of America as we know it. – The gap between growth in wages & GDP.
  2. At last economists see the robot revolution. Here’s why they worry.
  3. Automation hits the professions. Most remain delusionally confident, so far.
  4. Education, the glittering but fake solution to automation.
  5. Automation is a race with the Red Queen. Let’s play a different game & win.

For More Information

I recommend these books about the new industrial revolution: Martin Ford’s Rise of the Robots: Technology and the Threat of a Jobless Future (2015) and The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (2014) by Eric and Andrew McAfee.
Our world in their hands.
See all posts about these topics: The 3rd Industrial Revolution has begun. and About inequality & social mobility. Posts of special interest:

  1. Krugman discovers the Robot Revolution!.
  2. How do we respond to the Robot Revolution?
  3. 2012: the year people realized the robots are coming.
  4. Journalists warn us about the coming revolution, but we don’t listen.
  5. The next industrial revolution starts. Beware the Pied Pipers who lull us into passivity.

11 thoughts on “Automation hits the professions. Most remain delusionally confident, so far.

  1. I work in a bank, traditional banking is a dinosaur, I feel like management is walking backwards with its back towards the future. Even now software is taking over the loan officer position, because the government scrutinizes any loan for discriminatory practices so loan officers are afraid to make a decision themselves.

  2. Your thoughts, as usual, extremely rational and well-considered, FM. I think they are very accurate (or perhaps a bit optimistic) for the near future (10-30 years out). But I suspect (perhaps I should say, hope) that they are as inaccurate as Karl Marx in the longer run.

    I base my case on the long-term benefit to the 1%. Yes, automation can, and probably will, cause tens of millions of jobs to fall from middle class (and lower upper class) incomes to minimum wage. This will give the robot owners (likely to be the 0.001%) fantastic profits in the short-run but will cause them considerable harm them in the long run. This will cause society to collapse into two groups, one of which will be tiny and own all of the robots and resources, the other 99.999% will effectively be serfs.

    What will the economic incentive for the wealthy to trade? Each individual in that group will have fantastically more resources than they need. There will be no reason for schools, the very, very, very few children of the wealthy will be home-schooled (probably in increasingly bizarre beliefs about their place in the world) and the serfs cannot possibly get ahead through education because the machines are so much more efficient. It might even be in the best interests of this tiny minority to exterminate the serfs. This world reminds me of Solaris in “The Naked Sun” by Isaac Asimov. Asimov observed (correctly to my way of thinking) that this world is static and prone to crumbling in a generation or two. Furthermore, it would be a terribly boring place to live.

    There are two ways for the wealthy to generate more wealth for themselves. I am going to unfairly assign labels to them as the English model and the Hispanic model. We’ve already described the Hispanic model, which is simply that the wealthy generate more wealth for themselves by taking it from the not-wealthy (aka “expanding their share of the pie”). This works great until the not-wealthy (a) have nothing left to give or (b) decide to fight back. Either way, you’ll notice that Central and South America are not historically world thought-leaders.

    The English model is equally simple and was described in part by Adam Smith. Don’t grow your share of the pie, find ways to make the pie larger. This encourages investment, new technology and culture, and reasons for economic mobility. The interesting thing is that the 0.001% benefit greatly from doing this. It gives them things to think about, new markets, more interesting politics, and a healthier political environment. Although individuals (sometimes tens of millions of individuals) can and will suffer as a result of excesses of this system.

    Yes, we may go down the Hispanic route for a considerable amount of time but at some point some hyper-aggressive wealthy person will rediscover the English model and a new balance will be found. I just hope this occurs sooner than later.

    1. Pluto,

      “But I suspect (perhaps I should say, hope) that they are as inaccurate as Karl Marx in the longer run.”

      “Inaccurate” is incorrect. As usual, here I just looking at one factor — and its likely evolution over the near future. My goal is to get people to prepare for what’s coming, and act together. I leave long-term forecasts to people at higher pay grades.

      I have faith that these things will work out over the long-term as they did in the past. But in the past “working out” meant several generations of suffering and social unrest, so I don’t feel the joy you do at that prospect.

    2. FM: “the joy you do at that prospect”

      Joy is a strong word, FM, because I know that the new balance will likely include acceptance of practices that I would likely find aberrant. But at least the future I envision doesn’t involve the likely destruction of the human race.

    3. Pluto,

      As Keynes said, in the long run we are all dead. Discussions of public policy are about how we get to the future. Speculation that things will eventually work out are just chaff. Nobody talks like that about the fate of their own children (as in their lives will be awful, but I don’t care because a few gen later life will be wonderful.

      It’s just another of American’s endless series of excuses for apathy.

      “But at least the future I envision doesn’t involve the likely destruction of the human race.”

      That statement makes no sense whatsoever in this context, so far as I can see.

    4. “Furthermore, it would be a terribly boring place to live.”

      What makes you believe that your 0.001% could not keep himself entertained by raping, torturing and hunting the serfs? Even in the old days when peasants were actually necessary abuse was hardly unheard of. If they are surplus then the sky is the limit.

    5. Marcello,

      Unfortunately there are countless historical examples of what you describe. Still, I suspect that your vision of our future is excessively bleak. Our 1% will probably content themselves with the usual pleasures of the rich during the past few centuries of western civ. Conspicuous consumption, commanding (and demeaning) their servants, domineering their mistresses (choosing them at will, breeding them, dismissing them), playing with public police, and — above all — with the exercise of power.

      But you rightly remind us that there are societies run differently, as described by George Orwell in 1984. As in our own history in the antebellum South.

      O’Brien: “The Party seeks power entirely for its own sake. … The object of torture is torture. The object of power is power. … How does one man assert his power over another, Winston?”

      Winston: “By making him suffer.”

      O”Brien: “Exactly, by making him suffer. Obedience is not enough. Unless he is suffering, how can you be sure that he is obeying your will and not his own. Power is inflicting pain and humiliation. … Do you begin to see the kind of world we are creating? … Always there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. … If you want a picture of the future, imagine a boot stamping on a human face — forever.”

  3. Three points:

    1) When talking about “knowledge-based” jobs, we must not forget that a significant number of those are still blue-collar professions. Case in point: I remember a highly skilled auto mechanic (friend of the family) who could diagnose problems just by the ear and used to fine-tune racing cars. He was deeply concerned (some two decades ago!) for the future of his profession: motors full of electronics components that are not supposed to be repaired but merely swapped, diagnostics carried out automatically via black-boxes provided by the manufacturer, etc. I presume that other professions — such as electricians and electronicians — are similarly affected by the phenomenon of IT-fication of everything.

    2) Regarding musicians, the game is basically over. Artists can no longer live from sales to the public (electronic or live), but requires sponsors, or side-activities that have nothing to do with music, to survive. For instance, since 2011, festivals in the UK have not been able to make a profit in excess of the corporate sponsorship which they received (i.e. without sponsors, you go bankrupt). In Brazil, famous bands no longer bother too much with CD and the like; they organize concerts that are actually giant fiestas where they make their profit from the sale of food, beverages, t-shirts — and drugs.

    3) The process of dequalification is hierarchical and present everywhere. An example (again, relatives): in hospitals, an increasing number of tasks are taken from physicians and given to (lower-paid) nurses, while tasks formerly assigned to qualified nurses are transferred to (even lower-paid, lower qualified) “health care aides”. But concomitantly, there is an inflation in the _formal_ qualifications required from the personnel at even the lowest rung of the professional ladder (of course, without any wage increase).

    1. guest,

      Thanks for the nice elaboration of points in this post!

      I wonder about the extent to which musicians are a model of what’s happening. It’s back to the future, a return to a premodern model. Traveling musicians playing for crowds (a blue-collar career), plus a small number of court musicians. All living insecure lives.

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