Carrol,
You forwarded an inquiry from another list.
I have read the book Race Against the Machine, and have recommended it on this
list in the past. The book is important enough to take up some space now.
Forward to your correspondent if you like.
The book is important for several reasons.
The authors, Brynjolfsson and McAfee, have titles more exalted than mentioned
in the post that you forwarded from the Progressive and Critical Sociologist
network. Brynjolfsson is a professor at the MIT Sloan School of Management,
Director of the MIT Center for Digital Business, chairman of the Sloan
Management Review, and a research associate at the National Bureau of Economic
Research. Andrew McAfee is a principal research scientist and Associate
Director at the MIT Center for Digital business. These credentials, and their
place of employment, MIT, make the book much more powerful in public discourse
than if they were employed at a community college somewhere. In time that will
prove to be important.
An important argument, but not the most important in the book was mentioned in
the post that you forwarded, is that the current unemployment is structural
more than cyclical. And structural not in the sense claimed by the
conservatives, who fatuously argue that the unemployed have skills no longer of
value, or live in the wrong place for jobs and refuse to relocate. The
structural point about unemployment that Brynjolfsson and McAfee make is that
we may have reached the End of Work, in the sense that automation is rapidly
replacing human labor. I believe that is the correct analysis of the current
situation. And in making that point, Brynjolfsson and McAfee take on, in
effect, liberals such as Krugman, Dean Baker and others who stress that the
only cure we need is more stimulus. They also dismiss the stagnationists like
Tyler Cowan. So that's the first important point they make, but more important
things follow.
Given their employment at the center for Digital Business, you will not be
surprised to learn that digital technologies are only at the beginning of the
revolution they are going to bring to the economy. For those of us not focused
on digital technologies the information and the background that they provide is
valuable. Relentless exponential growth in technology eventually may result in
astoundingly large reductions in necessary human employees.
In a section with the subhead of "How Technology Can Destroy Jobs" they take on
another stronghold of economics. This is the most valuable section in the
book, for they attack neoclassical economics head on. A key belief of
neoclassical economists is that technology creates more jobs than it destroys.
The authors assert that as technology eliminates jobs, many, many people will
be worse off. It's clear that they believe strongly in the possibility that
technology will eliminate more jobs than can or will result from the adoption
of that technology. Pen-l members know from the work of Tom Walker that
economists in great numbers sneer at the idea replacing disappearing jobs by
cutting working hours with the phrase "Oh, that's the Lump of Labor Fallacy."
Brynjolfsson and McAfee have ended that without ever mentioning the phrase. It
is worth quoting in a few paragraphs from page 36 of their book.
“At least since the followers of Ned Ludd smashed mechanical looms in
1811, workers have worried about automation destroying jobs. Economists have
reassured them that new jobs would be created even as old ones were
eliminated. For over 200 years, the economists were right. Despite massive
automation of millions of jobs, more Americans had jobs at the end of each
decade up through the end of the 20th century. However this empirical fact
conceals a dirty secret. There is no economic law that says everyone, or even
most people, automatically benefit from technological progress.
People with little economics training intuitively grasp this point.
They understand that some human workers may lose out in a race against the
machine. Ironically, the best educated economists are often the most resistant
to this idea, as the standard models of economic growth implicitly assume
that economic growth benefits all residents of a country. However, just as
Nobel prize-winning economist Paul Samuelson showed that outsourcing and
offshoring do not necessarily increase the welfare of all workers, it is
also true that technological product progress is not a rising tide that
automatically raises all incomes. Even as overall wealth increases, there can
be, and usually will be, winners and losers. And the losers are not
necessarily some small segment of the labor force like buggy whip
manufacturers. In principle, they can be a majority or even 90% or more of the
population.”
Note their point about how ““... the best educated economists are often the
most resistant to this idea ... .“ Surely a large majority of economists now
denounce the idea that technological unemployment can happen. So these
paragraphs strike at a core belief of economics, that the market will solve
everything. For if the inexorable march of technology results in a relentless
increase in unemployment, something beyond the market will be required. The
obvious something is a sharp cut in standard working hours. That obvious
response is not mentioned in this book.
At the end of page 38, having written what up that point is a powerful and
important book, their economic training and conventional beliefs cloud their
minds and the remainder of the book is a sad failure. Read it for yourself.
They embrace without reservation that what people are paid, from CEOs to
janitors and part-time scufflers is not only determined by the market but is a
just wage. It's the sort of analysis that flows out of wages determined by the
marginal revenue product, or people being paid their "just desserts".
They go on to pose the question "What Is To Be Done?" and give us some
feel-good background. They list 19 numbered specific steps to take. Most of
these are not incompatible with recommendations to be found on the editorial
pages of the Wall Street Journal. They stress education and to their credit it
seems that they want to produce individuals, a relative few creative
individuals who will invent a series of the "next new things" so as to create
jobs in the production of those things. This is in sharp contrast with the
stress on education by many other economists who incorrectly believe that if we
were all better educated we could work as symbolic analysts a la Robert Reich,
and be highly paid. But the function of symbolic analysts is to eliminate the
need for symbolic analysts, so educated as we might be, our pay will still be
commensurate with our jobs which will be over at McDonald's.
I hope every economist reads this book to benefit from the first 38 pages and
then goes on to see through the conventional apologetics which follows.
Gene
On Oct 15, 2012, at 10:58 AM, Carrol Cox wrote:
>
>
> -----Original Message-----
> From: Progressive and Critical Sociologist Network
> [mailto:[email protected]] On Behalf Of Russell Rockwell
> Sent: Sunday, October 14, 2012 7:31 PM
> To: [email protected]
> Subject: [PSN-CS] race against the machine
>
> Has anyone looked at the Race Against the Machine, which was published last
> year, authored by MIT Business Management professors, Erik Brynjolfsson and
> Andrew McAfee? They are making a serious attempt to interest people in the
> notion that automation, especially its acceleration over the past decade,
> explains more about the current economic crisis than cyclicality and
> stagnation.
>
> Brynjolfsson and McAfee argue that theirs is a view that "remains on the
> fringes", citing as a reason low unemployment levels in the U.S. throughout
> the 1980s, '90s, and first seven years of the millennium. They cite IMF
> papers, as well as a 2010 Federal Reserve Bank of Richmond report on a
> long-term rise in unemployment which, "does not contain the words, computer,
> hardware, software, or technology in its text."
>
> I began to have questions about the current significance of automation in
> today's economic crisis recently while working on the volume of
> correspondence between Raya Dunayevskaya, the Marxist humanist theoretician,
> and two prominent members of the Frankfurt School, Herbert Marcuse and Erich
> Fromm (see
> http://marxist-humanistdialectics.blogspot.com/2012/08/marxist-humanist-dial
> ectics-russell.html). Among the topics in the correspondence that provoked
> the most fireworks between Dunayevskaya and Marcuse especially were the
> social implications of automated production. Automation was taking hold
> particularly in heavy industries, such as coal mines and automobile plants,
> racing ahead from the 1940s to the mid-1960s. Though it continued until
> 1978, the bulk of the Dunayevskaya-Marcuse correspondence took place between
> 1954 and 1965, years in which Dunayevskaya published Marxism and Freedom,
> and Marcuse published One-Dimensional Man (as well as Eros and Civilization
> and Soviet Marxism). Dunayevskaya and Marcuse agreed that technology and
> automated production were of the utmost importance to understand both the
> current social conditions and the contemporary relevance (or lack of such)
> of Hegel's philosophy and Marx's theory. Marx's Grundrisse was an especially
> important text here, having fairly recently been published in a more
> accessible edition, though still not in English translation. In a nutshell,
> while Marcuse tended to argue that "complete automation" could end the long
> night of alienated labor, essentially abolishing the "realm of necessity",
> finally allowing the "realm of freedom" to prevail, Dunayevskaya argued that
> the potentials of automated production did raise the question of what kind
> of labor people should do, but could never abolish the realm of necessity.
> As Marx wrote in Capital, Volume 3, "The true realm of freedom, the
> development of human powers as an end in itself, begins beyond [the realm of
> necessity], though it can only flourish with this realm of necessity as its
> basis. The reduction of the working day is the basic prerequisite."
>
> Especially important for Brynjolfsson and Mcfee's argument are 3 graphs:
>
> The first graph shows that, beginning in the 1950s, productivity has
> increased in every decade, including 2000-2009. In fact, while the 1960s
> showed the greatest growth in productivity (2.7%), the decade with the
> second greatest growth in productivity after the 1960s, was 2000-2009
> (2.5%).
>
> The second graph shows that the last decade is the first since figures have
> been compiled to show a decline in real median household income.
>
> The third graph shows job growth to have been in the 20% to 30%+ range in
> every decade from the 1940s through the 1990s. However, in the decade 2000
> to 2010 job growth actually declined 1.1%.
>
> Brynjofsson and Mcfee write:
>
> "This reflects a pattern that was noticeable in the 'jobless recovery' of
> the early 1990s, but has worsened after each of the two recessions since
> then.The historically strong relationship between changes in GDP and changes
> in employment have appeared to weaken as digital technology has become more
> pervasive and more powerful."
>
> Marcuse tended to argue that even in a society in which increasing
> automation was the major "centrifugal force" threatening social stability,
> as long as the "administered population" had the "goods delivered"
> (employment, rising standard of living), not many realistic prospects for
> social change appeared on the horizon. But now that we have just completed
> the first decade in more than half a century in which productivity has
> continued to soar, but income and job growth have plummeted, where to now
> for theory and practice?
>
>
>
>
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