The new industrial revolution: this time, it's different

We've been here before, in the 19th century and the 1960s. Why's it different now?

Automation has been scaring a lot of people in the last couple of years. As more and more jobs are replaced by machines, particularly in a period of already high unemployment, is there a crisis looming? The fear doesn't just cover old-style automation, of robots and assembly-lines, but also now a new class (and, perhaps explaining some of the fear, more middle-class) of jobs are being replaced: algorithms threaten paralegals, financial journalists and, of course, traders. All of which has led the Ad Hoc Committee on the Triple Revolution to write a memo to the US President, warning:

A new era of production has begun. Its principles of organization are as different from those of the industrial era as those of the industrial era were different from the agricultural. The cybernation revolution has been brought about by the combination of the computer and the automated self-regulating machine. This results in a system of almost unlimited productive capacity which requires progressively less human labor. Cybernation is already reorganizing the economic and social system to meet its own needs.

Very much of-the-minute, of course. Except that, though the problems listed are indeed ones economists are worrying over today, The Triple Revolution was actually a memo sent in 1964 to then-President Lyndon Johnson by a group of visionaries including chemist Linus Pauling, economist Gunnar Myrdal and futurist Robert Theobald (an early advocate for a universal basic income). Frank Levy and Richard J. Murnane, economists at MIT and Harvard respectively, have dug up the old claim to make the point that these fears are hardly new. So what's different this time?

In their report, Dancing With Robots, the economists point out what the last generation missed — "that computers have specific limitations compared to the human mind. Computers are fast, accurate, and fairly rigid. Human brains are slower, subject to mistakes, and very flexible.

"By recognizing computers’ limitations and abilities, we can make sense of the changing mix of jobs in the economy. We can also understand why human work will increasingly shift toward two kinds of tasks: solving problems for which standard operating procedures do not currently exist, and working with new information— acquiring it, making sense of it, communicating it to others."

So the way we deal with the rise of the machines is by identifying the sort of work those machines will displace, and encouraging people who do that work to develop new skills in areas that humans excel at. That needn't necessarily involve moving everyone to highly skilled desk jobs, either. Levy and Murnane give the example of a mechanic, whose daily job involves a lot of easily-automatable diagnostic procedures, but also a lot of lateral thinking to solve more unusual problems. (Admittedly, the example given is a result of human error, which leads to the thought of mildly dystopian possible future where all humans do is fix each other's mistakes while machines just quietly get on with running the world.) It's important, as well, to remember that some jobs are improved by working with machinery, and entirely new avenues of work created. The report gives the example of a surgeon who "watches continuous X-ray images on a digital screen as she inserts a coil into an arterial aneurism next to the brain of a young man. Without continuous imaging, the surgeon would have relied on one X-ray of the brain taken before the operation began, a far riskier procedure."

But some worries remain unaddressed. The fear for most has never been that automation would destroy jobs in their entirety; instead, it's that the gains of automation may be entirely one-sided, while the skills mismatch that results may take generations to clear. Without targeted training – starting now – there's the risk that people whose entire industries are automated may find themselves unemployable for the rest of their lives. We don't even need to look back to previous waves of mechanisation to see how damaging that can be. Instead, the current state of the mining communities left in the lurch by the Conservatives in the 1980s should be all the warning we need.

Harder to deal with will be the risk of growing inequality. Unlike a skills mismatch, it's a struggle to even get that classed as a problem (until, perhaps, it's too late). But it's in the nature of automation that, in each individual case of a job being lost to a machine, the employer wins and the employee loses. Even if this boosts the economy in aggregate, it's not hard to see how that could lead to all the gains going to the shareholder class, and none of them going to the workers.

A basic income would be one potential fix to that problem, and common ownership of the means of production would be another. Both of those proposals were made during the last great wave of automation: the industrial revolution of the 19th Century. That saw one of the greatest increases in aggregate living standards the world has ever seen, but was also a century of turmoil for millions, with poverty in the great industrial cities reaching unimaginable levels.

What's different this time is that we can see it coming. Hopefully, that means we do something about it.

A robot. 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