Why The Techonomy Conference Is Stupid, Wrong And Could Destroy The Economy

September 18, 2013, 9:06 AM

The Techonomy Detroit conference, held Tuesday at Wayne State University, purported to explore (to quote the Free Press) “the role of technology in the job creation and urban revitalization.”

That official line is a bit of fiction, however. It's a delightfully bipartisan fiction, which is why the Techonomy conference featured Republican Gov. Rick Snyder and former Democratic secretary of state candidate/WSU Law School Dean Jocelyn Benson -- but it’s a fiction nonetheless.

Here’s the cold truth about technology’s economic impact: In the long run, it exists to destroy jobs rather than create them.

Just ask a video store clerk. Or the single cashier managing four self-checkout registers at Kroger. Or any of the gals in your company’s stenography pool. Referring to “the gals the stenography pool” would be sexist if stenography pools had survived long enough to see the day when “gals” was seen as a pejorative term for women in the workplace. Lean in, ladies. Lean in.

This isn’t conjecture based on anecdotal evidence. It’s the data-driven conclusion of Erik Brynjolfsson and Andrew McAfee at MIT’s Sloan School of Management.

MIT Technology Review: Perhaps the most damning piece of evidence, according to Brynjolfsson, is a chart that only an economist could love. In economics, productivity — the amount of economic value created for a given unit of input, such as an hour of labor — is a crucial indicator of growth and wealth creation. It is a measure of progress. On the chart Brynjolfsson likes to show, separate lines represent productivity and total employment in the United States. For years after World War II, the two lines closely tracked each other, with increases in jobs corresponding to increases in productivity. The pattern is clear: as businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs.

Then, beginning in 2000, the lines diverge; productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the “great decoupling.” And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs.

That’s not necessarily a bad thing. In fact, the ability to produce more with less effort or (potentially) less ecological impact is a good thing. I wish I spent my lunch hour in a travel agent’s office instead of booking vacation reservations with Expedia while sitting on the couch and watching the Tigers game is something said by no one ever.

Recognize the trickle-down impact

So, let's not mourn for jobs of time past. We're better off without them.

However, the enormous time-saving (and therefore labor-saving) innovations of the post-industrial economy cannot benefit only those in the executive suites and at shareholders conventions. We cannot, as a society and an economy, ignore how all of this efficiency-producing technology radically reduces our economy’s demand for labor. 

So long as we maintain industrial-era ideas about work in a post-industrial economy, we will create (are creating) a permanent, structural underclass of people who will never find jobs because we’ve literally run out of things for them to do. 

History tells us that a structural underclass quickly becomes a second-class citizenry unable to fully participate in the economy or society. History also tells us, from the Barbarous to the Jacobins to the Bolsheviks, that such set-ups end badly for all.

A better division of labor

It might behoove the tech industry to spend some time on Edmund Burke’s Wikipedia page to learn what I’m talking about here. Five minutes with Burke beats an eternity with one’s head writhing on a pike.

Just as the 40-hour workweek was developed to ensure an equitable division of labor for the industrial era, this post-industrial economic age must craft its own standard for the equitable division of labor — something that, I should note for the benefit of caterwauling paranoids everywhere, is very different from the division of wealth.

Unfortunately, that conversation isn’t happening within the tech sector or society at large. Industry is too busy producing self-congratulatory spectacles dressed up as introspective conversation, with too many “reporters” happily participating in that ruse, for anyone to bother with such unpleasantness.

But we desperately need to face this challenge head on. All that’s at stake is the future of the most prosperous, most productive, and most innovative economy in the history of the world. It would be a shame to run that off the rails because we’re too busy swallowing the pleasant fictions of old men wearing T-shirts and blazers.

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