Wednesday, August 12, 2009

Will technological growth lead to job crisis?

Gregory Clark has written an article in Washington Post in which he has claimed that in future we would not have any job as people would be replaced by machines to do those jobs.
I recently carried out a complicated phone transaction with United Airlines but never once spoke to a human; my mechanical interlocutor seemed no less capable than the Indian call-center operatives it replaced. Outsourcing to India and China may be only a brief historical interlude before the great outsourcing yet to come -- to machines. And as machines expand their domain, basic wages could easily fall so low that families cannot support themselves without public assistance.
Interesting. But this is not something that I hear for the first time. As an engineer, I was in the receiving side of this blame, during several instances when I met some old bank employees and typewriter mechanics who were pushed to the verge of fear of loosing jobs when computers were introduced.

So does the innovation lead to crisis? If so, why were we not happy being cavemen; hunting rabbits and hunted by saber-tooths? So is the evolution of mankind as an intellectual animal actually a negative thing?

I disagree with Gregory Clark and this is my perspective. There is a strange feature about technology growth - that it never stops. In a competitive environment, people always want to make their product better in the market and faster to reach the market. Only way of doing it is through technology. So every technical innovation has a lifetime, which ends when something better is invented.

When cavemen invented wheels, many people who used to push big blocks of stones might have lost their jobs. But their kids might have got jobs as wheel-makers. The important part is that even the son of the jobless caveman should have access to the school of wheel-making. Once that is assured, this cycle would continue endlessly. So the unskilled workers just need the pay to keep up themselves and provide education for their kids to become a skilled worker. Governmental intervention must ensure that this happens through several means like minimum wage policy, inflation control, subsidy on education, etc.

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