Automation and Technology Continue to Increase Living Standards

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Automation and Technology Continue to Increase Living Standards

Automation and technology offer the potential to solve many of the world’s problems while improving our quality of life. Just consider a few examples of the benefits of automation:

  • Artificial intelligence (AI) will accelerate the drug discovery process from decades to months by testing the interactions of all known compounds.
  • Driverless cars and trucks will improve traffic safety, eliminating traffic jams, saving hundreds of thousands of lives each year, and even reducing the cost of ground transportation.
  • Robots will assist humans in providing eldercare to the aging members of society, starting with the Baby Boom generation.
  • AI will enhance national security; for example, by using facial-recognition software to detect known terrorists and criminals in crowded places.

The applications are endless. However, according to pessimists, the negative consequences of technology are just as significant.

The primary fear that automation inspires in these people is that computers, robots, and AI will take over most of the work done by humans, leading to massive job losses, a wider income gap between highly-skilled and low-skilled workers, and ultimately the collapse of civilization.

What does history tell us?

Every revolution in technology disrupts industries and displaces workers through the process of creative destruction. But inevitably, workers end up learning new skills and taking jobs in the new businesses that are built around the new technology.

For example, 100 years ago, one in three Americans worked on farms. Because food was so expensive to produce, the typical U.S. household spent 50 percent of its income on food. Then automation—including technologies such as the tractor—made agriculture more productive. By 1960, less than one in ten Americans worked on farms.

But this technological revolution did not lead to widespread unemployment. Instead of working on farms, millions of Americans worked in factories and offices. And because they needed to spend less money on food, they could buy the products that came flowing out of those factories—everything from toothpaste to televisions.

Then the economy went through another shift, as machines and robots gradually performed more and more of the work done in factories. Between 1960 and 2014, according to the U.S. Bureau of Labor Statistics, the proportion of Americans working in the manufacturing sector plunged from 28.4 percent to 8.8 percent.

Again, the displaced workers landed on their feet—this time in the service sector. Millions of new jobs were created, and consumers enjoyed both cheaper manufactured goods and new services...

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