"The previous one, the industrial revolution, created lots of jobs"
That industrial revolution caused massive unemployment in India, in the Ottoman empire, in China... almost everywhere that had once been a famous textile center. The idea that the industrial revolution did not cause unemployment is an illusion that is caused by looking at only one nation state. But Britain was the winner of the early industrial revolution, and it was able to export its unemployment. And because of this, a breathtaking gap opened up between wages in the West and wages everywhere else. The so-called Third World was summoned into existence. You can get some sense of this by reading Fernand Braudel's work, "The Perspective of the World"
I'm fairly convinced that eventually there will be two and only two choices: universal income and a shortened work week, or such extreme wealth divisions that stability demands a totalitarian police state resembling the worst sort of comic book cyberpunk dystopia. Age of abundance or feudal hellhole. Your pick. There simply will not be enough economically viable work to sustain any system that demands labor to maintain cash flows. Automation will be too efficient, programmable, adaptable.
... I suppose there is a third option: an anti-technology crusade that bans automation to restore employment. But a make-work economy sucks, and is not likely to succeed in the long term.
That's the contemporary situation. We have something close to a police state with mass surveillance, militarised police and heavy restrictions on protesting. At the same time we're also seeing more interest in Basic Income and I expect there will be more of a political push for that in the near future. All of the above are about trying to keep the lid on a situation where technology is facilitating greater inequality. In the current situation oligarchs with large capital reserves and the ability to purchase legislation can continue to exfiltrate much of the wealth created by the population.
> I suppose there is a third option: an anti-technology crusade that bans automation to restore employment. But a make-work economy sucks, and is not likely to succeed in the long term.
That is, unless we start harvesting magic dust from some desert planet with really big omnivorous worms.
Why not both? We certainly have all kinds of societies on earth today. What makes you think we won't have areas that are highly progressive but also areas that are extremely sadistic in the treatment of their people?
"If feudal hellhole is more efficient eventually only hellholes will remain."
Probably true. Evolution is amoral. If suffering has higher fitness, suffering wins. Just look at the ordeal that is human birth and infancy, for both mother and baby.
Another option is self-enforced population decline (already happening in many developed countries) - for now it's artificaly solved by immigration from not-so-well developed countries, but this will stop at some point.
While I see legitimate reasons to reduce population, that won't solve this problem. In fact it might make it worse.
While the future economy will be heavily automated, it will still be an economy. Declining demand will still do ugly things to it. It's likely that a drop in demand will do more to squeeze out human labor than machine labor, since the former is more expensive and in a declining economy everyone tries to squeeze margin.
It's not so much that the industrial revolution net created jobs -- like you, I'm not sure it did (even domestically). It's that the industrial revolution not only created jobs, it created the modern labor market.
Before it happened you had a much more distributed economy with many much smaller centers of production (many at the household level or close) in agriculture, trades, and craft manufacturing.
Afterwards in any domestic industry where economy of scale was a competitive advantage, you had a small number of much larger centralized producers. Almost certainly with many fewer jobs in actual production (consolidation corresponding to efficiencies of scale). If there was any net gain over time since it would have been in new products being made and some new support positions needed. It is not clear to me there was ever a trend to a net gain over timescales longer than a two decades or so.
So by and large it moved us to an economy with a profusion of increasingly competitively manufactured products to buy, and selling labor itself is the de facto form of subsistence rather than direct production.
I think you're correct that there's always been some externalization of unemployment and a lot of the visibility depended on industry specifics. This isn't new. But what is new is that software gives us essentially a higher order of automation that means (a) it sure looks like we're automating out old jobs even faster than we're creating new ones and (b) with more unemployment we get fewer places to externalize it. :/
I'm not sure that's fair. Laboring on construction projects, joining armies, digging minerals out of holes, seasonal work on farms, serving on ships, and so on have been ways for people to earn a living for millennia, selling their labor, not their produce. Having the capital to ply a trade or craft - money to buy raw materials, and tools to add value to them - would have been beyond the reach of most people for a lot of history. There's always been a labor market.
I guess what you mean is that the industrial revolution massively increased the amount of capital you needed to be able to produce goods competitively. Buying a set of tools and some raw materials to make things by hand stopped being a viable route out of the labor market into 'entrepreneurship' when mass machine-produced goods could be supplied more cheaply. Your option was to sell your labor to someone who owned some big machines, much like your ancestors sold theirs to people who owned a patch of fertile land, or a big pile of wood they wanted making into a ship.
So in a sense it created the modern labor market in that it locked a lot more people into it, and obviously diversified the kinds of jobs that existed. On the other hand, it was, as you say, a massive productivity multiplier which meant we were able to create more and more wonderful and complex goods for, in real terms, less and less cost, to the point where nowadays by exchanging your labor for cash, you can soon have enough money to afford a box of electronics that fits in your pocket and allows you to access all the world's information.
Every revolution has its downsides. But i think this revolution might just give us a break through from boring tasks and create opportunities for creative exploration one that we currently have in very small quantity.
> And because of this, a breathtaking gap opened up between wages in the West and wages everywhere else. The so-called Third World was summoned into existence.
Just picking a nit, but the Third World came into existence during the Cold War, long after the industrial revolution. Third world countries are countries that were non-aligned or neutral during the Cold War.
Yeah. I usually don't pick this particular nit in common speech, but when you talk historically, it sounds really weird to say that the Industrial Revolution gave rise to the Third World.
>And because of this, a breathtaking gap opened up between wages in the West and wages everywhere else.
This was because of the West getting richer, not everyone else getting poorer. Had the 'third world' countries had the right economic structures in place they too would have gotten richer like the West, much as East Asia has caught up to the West's economic development since economic and social reforms after WW2.
This is factually incorrect, the extensive documentation of the era makes it clear that the east India company and British rule made it a point to destroy native industry, vaccum raw material, on top of introducing laws and acts which penalized you for being a particular race.
All of those economic structures were destroyed and perverted by the conquerors.
I really think that's too simplistic a view. As has been pointed out, plenty of countries that were not colonised lagged behind in industrial development. Many of those that were colonies (and I do agree colonisation had a pernicious effect) have been independent for several generations now.
As counter-examples, Japan went from being extraordinarily backward to being an industrial powerhouse in a single generation, in time to go toe-to-toe with Russia and the USA in the early 20th century, and walk all over Korea and China. For that matter, once it got it's act together China has surged forward, growing GDP by a factor of 20 in only 25 years. So why did Japan go through this revolution almost 100 years earlier than China? Why has India lagged behind industrially, while surging ahead in terms of IT?
There are a host of cultural factors at play here. Japan responded to US colonial interference by deciding to modernise to prevent that ever happening again. China responded to the humiliation of colonial aggression by tearing itself apart for 100 years. Lebanon, Jordan and Egypt have gone nowehere since the end of colonialism, while Israel is a technological powerhouse. Turkey always seems so close to finally truning a corner and becoming an advanced modern state, but never quite manages to get it done. 'Because colonialism' just isn't enough of an explanation for any of this.
I recognize this, my short comment is in rebuttal to the theory that a difference in economic plans would have led to a difference in outcome.
To an extent it seems that this was the result of disruptive technologies being used to build a monopoly/exploitative position by first movers. Post independce, both India and China were caught up in the big ideological questions of that era and have been fine tuning their models ever since. China is the larget economy in the world today, and India has essentially taken its place in the race from 1990 onwards.
For me, the cultural factor argument has had its emphasis lowered of late. I used to assume that pre colonial India showed little activity or inclination to learn, but it turns out that there did use to be business families which would have explored and harnessed the new tech. this doesn't mean cultural factors didn't play a role of course.
Yeah, cultural, political, social, there are a lot fo factors that affect economic outcomes. Ironically, it may well be India's tendency towards socialist command-economy, privilleged special-interest economics (subsidies), etc that is holding it back.
The lack of a need for an electoral mandate has freed the Chinese government from the need to actualy implement socialist policies (or on fact any particular policies, they can do what they like, regardless of what the people think about it using their communism 'with chinese characteristics' get-out clause).
The fact that the East India company was a bunch of jerks doesn't change the fact that most of the world became richer, just at a slower rate. The results of a quick google search:
I took a look at those articles and they don't support the position with sufficient authority or evidence.
Consider two charts from those two blogs - chart from blog 2 shows the contribution to global GDP of India and China.
Chart 1 from blog 1 shows how growth spiked by 1820 onwards.
Even if we take the data into consideration without question, 1857 is the year when the revolt of 1857 took place in India, and the British east India gave up control of India - handing it over to the crown. So at this juncture wealth transfer to the west has already begun from India at the very least.
Should that wealth transfer not occurred, I beleove we would have had even better outcomes than what we see today.
Britain and the west was able to take advantage of new technologies and increasingly build monopolies, while abusing government regulation and dictat to pauper competition, and disenfranchise and enslave huge swathes of people.
It was known policy to convert subject colonies into markets for cheap goods, after sucking out resources via slavery on low pay. Competing businesses or crafts were also removed from the picture where possible, and it's obvious that local rulers and governments were sacked or taxed regularly.
Logically we know that a fair market creates more wealth for all who participate. Given that this was a perversion of these ideals, I suggest that the British were at the right place at the right time, and ensured a standard of living for their country men at the cost of almost every country they touched.
If on the other hand, if countries had been able to compete and import technologies - which many business men of the time did try to do - it's certain that this would have driven even more competition and innovation globally.
I didn't say wealth wouldn't have been higher if colonization didn't occur, though I'm definitely unconvinced of that. I merely said that growth did occur everywhere.
Logically we know that a fair market creates more wealth for all who participate. Given that this was a perversion of these ideals...
We don't know this. The relevant counterfactual is not a perfect free market, but whatever the assorted kings of India would have imposed. I don't know enough about the history to comment on their likely economic policies.
Sorry, I have information which would be useful I'm aware that there were merchant communities in the kingdoms that would became India who did and we're looking into looms and technologies.
Since Britain was also monarchical, so the equation is - relatively- balanced.
Did you sleep through the entire 20th century? The one where the US was in a spending match with Russia. China collapsed under the weight of corruption. USSR collapsed under the weight of corruption. Depending on who you ask, the US is collapsing under the weight of {corruption|bureaucracy|congress}.
"The previous one, the industrial revolution, created lots of jobs"
That industrial revolution caused massive unemployment in India, in the Ottoman empire, in China... almost everywhere that had once been a famous textile center. The idea that the industrial revolution did not cause unemployment is an illusion that is caused by looking at only one nation state. But Britain was the winner of the early industrial revolution, and it was able to export its unemployment. And because of this, a breathtaking gap opened up between wages in the West and wages everywhere else. The so-called Third World was summoned into existence. You can get some sense of this by reading Fernand Braudel's work, "The Perspective of the World"
http://www.amazon.com/gp/product/0520081161/ref=pd_lpo_sbs_d...
The software revolution will be similar with some nations winning and many others losing.