Robobacklash: do we even need to worry about automation in the workplace?

Where there's a popular view, there's always a backlash.

The trendy view that robots — or the ever increasing automation of human labour, at least — are going to cause major economic problems in the near future has started getting its backlash.

The argument is that we are entering a period when automation will very quickly replace huge numbers of jobs — some estimates say up to 70 per cent of existing American jobs won't exist by 2100 — and that that shift has already begun, explaining a number of concerning economic phenomena over the last 30 or so years, including the declining labour share of income, increasing inequality, and the decoupling of the median wage from GDP.

That analysis has led to some strange contortions from mainstream economists trying to conceive of capitalism in a world in which work was not necessary, leading some, myself included, to suggest that in that extreme example, it might be worth re-examining the basic tenets of economics.

But once the robots problem hit the mainstream, as evidenced by the Financial Times' Edward Luce writing that Obama must face the rise of the robots, it started being re-examined with a more critical eye. 

The Atlantic's Derek Thompson argues that our problem now is "a deficit of demand", and our problem in the future can be dealt with in the future.

Matthew O'Brien, writing for the same publication, points out that what that deficit of demand means is that in the near term, automation won't lead to job losses, but it will keep pay well below where we'd like it. He concludes that "globalization, mechanization, and the decline of unions have all helped capital and hurt labor, but so has inadequate demand the past decade."

The TUC's Duncan Weldon has addressed the case of robots in the present day, and came to much the same conclusion. He writes that the rising profit share of income is concentrated almost entirely in the finance sector, and argues the likely cause is that that sector managed to ensure that the distribution of risk in innovation was spread widely, while the distribution of the the rewards was increasingly narrow.

Wheldon's conclusion is that the problem in the present day is less of a problem than it seems: with well-targeted redistribution of wealth, the benefits of productivity growth in the sectors where innovation has been successful can be used to pay for decent services everywhere else. What we're seeing is not, then, a crisis in automation, but a simpler crisis in distribution.

I am inclined to agree with Weldon when it comes to the present day. The effect of automation today isn't categorically different from from the effect thirty years ago, but it combines with the receding desire for redistribution and the slack demand stemming from the financial crisis with pernicious results.

But when it comes to the effects of future automation, no-one the attitude that "we'll deal with it when we come to it" strikes me as dangerous. We don't know a huge amount about what the effects will be, but it's clear they'll happen gradually, over the next century; there's the very real risk of a "boiled frog" problem, where we don't realise that the entire system is in crisis until its too late.

At best, if the predictions are accurate, we've got an upheaval of similar magnitude to the Industrial Revolution. That resulted in massive gains the world over, but only after well over a century of struggle. Life for the average factory worker in the 1800s was hardly better than it was for the average agricultural labourer in the 1750s, though you can be certain that the merchant class saw a hefty improvement. It took world wars, nationalised industries, continued worker's struggle and massive redistribution of wealth to temper the distortions down to a level which could be described as sustainable.

Ideally, we should be planning to achieve the gains of the Industrial Revolution without the 18-hour days, sundering of families and massive environmental upheaval that came alongside it. Burying our heads in the sand until the 21st century's dark satanic mills have already arisen is not the best way to bring that about.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Arsène Wenger: how can an intelligent manager preside over such a hollowed-out team?

The Arsenal manager faces a frustrating legacy.

Sport is obviously not all about winning, but it is about justified hope. That ­distinction has provided, until recently, a serious defence of Arsène Wenger’s Act II – the losing part. Arsenal haven’t won anything big for 13 years. But they have been close enough (and this is a personal view) to sustain the experience of investing emotionally in the story. Hope turning to disappointment is fine. It’s when the hope goes, that’s the problem.

Defeat takes many forms. In both 2010 and 2011, Arsenal lost over two legs to Barcelona in the Champions League. Yet these were rich and rewarding sporting experiences. In the two London fixtures of those ties, Arsenal drew 2-2 and won 2-1 against the most dazzling team in the world. Those nights reinvigorated my pride in sport. The Emirates Stadium had the best show in town. Defeat, when it arrived in Barcelona, was softened by gratitude. We’d been entertained, more than entertained.

Arsenal’s 5-1 surrender to Bayern Munich on 15 February was very different. In this capitulation by instalments, the fascination was macabre rather than dramatic. Having long given up on discerning signs of life, we began the post-mortem mid-match. As we pored over the entrails, the curiosity lay in the extent of the malady that had brought down the body. The same question, over and over: how could such an intelligent, deep-thinking manager preside over a hollowed-out team? How could failings so obvious to outsiders, the absence of steel and resilience, evade the judgement of the boss?

There is a saying in rugby union that forwards (the hard men) determine who wins, and the backs (the glamour boys) decide by how much. Here is a footballing equivalent: midfielders define matches, attacking players adorn them and defenders get the blame. Yet Arsenal’s players as good as vacated the midfield. It is hard to judge how well Bayern’s playmakers performed because they were operating in a vacuum; it looked like a morale-boosting training-ground drill, free from the annoying presence of opponents.

I have always been suspicious of the ­default English critique which posits that mentally fragile teams can be turned around by licensed on-field violence – a good kicking, basically. Sporting “character” takes many forms; physical assertiveness is only one dimension.

Still, it remains baffling, Wenger’s blind spot. He indulges artistry, especially the mercurial Mesut Özil, beyond the point where it serves the player. Yet he won’t protect the magicians by surrounding them with effective but down-to-earth talents. It has become a diet of collapsing soufflés.

What held back Wenger from buying the linchpin midfielder he has lacked for many years? Money is only part of the explanation. All added up, Arsenal do spend: their collective wage bill is the fourth-highest in the League. But Wenger has always been reluctant to lavish cash on a single star player, let alone a steely one. Rather two nice players than one great one.

The power of habit has become debilitating. Like a wealthy but conservative shopper who keeps going back to the same clothes shop, Wenger habituates the same strata of the transfer market. When he can’t get what he needs, he’s happy to come back home with something he’s already got, ­usually an elegant midfielder, tidy passer, gets bounced in big games, prone to going missing. Another button-down blue shirt for a drawer that is well stuffed.

It is almost universally accepted that, as a business, Arsenal are England’s leading club. Where their rivals rely on bailouts from oligarchs or highly leveraged debt, Arsenal took tough choices early and now appear financially secure – helped by their manager’s ability to engineer qualification for the Champions League every season while avoiding excessive transfer costs. Does that count for anything?

After the financial crisis, I had a revealing conversation with the owner of a private bank that had sailed through the turmoil. Being cautious and Swiss, he explained, he had always kept more capital reserves than the norm. As a result, the bank had made less money in boom years. “If I’d been a normal chief executive, I’d have been fired by the board,” he said. Instead, when the economic winds turned, he was much better placed than more bullish rivals. As a competitive strategy, his winning hand was only laid bare by the arrival of harder times.

In football, however, the crash never came. We all wrote that football’s insane spending couldn’t go on but the pace has only quickened. Even the Premier League’s bosses confessed to being surprised by the last extravagant round of television deals – the cash that eventually flows into the hands of managers and then the pockets of players and their agents.

By refusing to splash out on the players he needed, whatever the cost, Wenger was hedged for a downturn that never arrived.

What an irony it would be if football’s bust comes after he has departed. Imagine the scenario. The oligarchs move on, finding fresh ways of achieving fame, respectability and the protection achieved by entering the English establishment. The clubs loaded with debt are forced to cut their spending. Arsenal, benefiting from their solid business model, sail into an outright lead, mopping up star talent and trophies all round.

It’s often said that Wenger – early to invest in data analytics and worldwide scouts; a pioneer of player fitness and lifestyle – was overtaken by imitators. There is a second dimension to the question of time and circumstance. He helped to create and build Arsenal’s off-field robustness, even though football’s crazy economics haven’t yet proved its underlying value.

If the wind turns, Arsène Wenger may face a frustrating legacy: yesterday’s man and yet twice ahead of his time. 

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit