I am dictating this column to my laptop. An inexpensive piece of software is converting my words into text with surprising accuracy. Such technology, in the view of Gregory Clark, an economic historian at the University of California, is bad news for low skilled workers and for the skilled whose taxes will have to support them. The former, unable to command a living wage, may well, Clark thinks, have to become permanent wards of the latter.
Clark had an epiphany of sorts while making some complicated airline bookings over the telephone. He found himself talking to a computer. “My mechanical interlocutor,” he wrote in the Washington Post last week, “seemed no less capable than the Indian call center operatives it replaced.”
Machines have been displacing workers forever, of course, but even something as simple as processing an order for a McDonald’s Big Mac has called for “an astonishing repertoire of spatial and language skills”, in Clark’ phrase, that cannot easily, let alone economically, be outsourced to a robot. Hitherto. The question is: for how much longer can the hamburger flipper maintain his or her edge? Not long, says Clark.
He argues that “for much of the past 200 years, unskilled workers benefited greatly from capitalism”. Before the Industrial Revolution, an unskilled construction worker could expect to earn half the wages of his skilled counterpart. The gap narrowed dramatically between 1914 and 1945 in the US, to around 33%. The middle of the last century may, in Clark’s view, turn out to have been a high water mark for “the common man” (his phrase). More recently, as average US incomes have doubled, the unskilled wage has stagnated.
Clark is skeptical that those who lack the skills to compete with increasingly skillful machines can be made more competitive through education and training. Thus far, he says, the only reliable means of improving academic results in the US has been to lower academic standards. The result, in the US at any rate, will be an “underclass” of up to 100 million people largely dependent on public subsidy.
America, Clark says, can and does tolerate abject poverty juxtaposed with great wealth but tends to get squeamish over reports of poor people being turned away from hospitals and dying for want of care. Poor people in the US suffer disproportionately from adult-onset diabetes, perhaps because of farm policies that ensure the calories they can most afford are those, corn-based sugars, for example, most likely to make them chronically ill. Treating the diabetic poor will, by itself, cost some$ 2.1 trillion over 15 years, Clark estimates.
At all events, keeping the legions Clark believes will be rendered un- or underemployed by technology at levels consistent with American moral hygiene will be very expensive — fiscally unsustainable even if President Barak Obama manages to get reforms that reduce US health care expenditures from 16% to somewhere nearer the 11% spent by the most generous European welfare states.
“In the end,” Clark concludes, ” we may be forced to learn to live in a United States where, by stealth, ‘from each according to his ability, to each according to his need’ becomes the guiding principle of government — or else confront growing, unattended poverty.”
Clark, though highly admired in his profession, is not averse to controversy. In his nervously acclaimed 2007 book, A Farewell to Alms: A Brief Economic History of the World, he propounded a politically incorrect thesis on why some countries have been economically successful and others not so much.
Jared Diamond, in his bestseller, Guns, Germs and Steel, proposed geography as the historical differentiator. Clark, from a study of British wills and other documents stretching back to the 13th century, posited that development was a product of genetically transferred culture: Max Weber plus DNA.
Britain, he argued, was uniquely placed to be at the vanguard of the Industrial Revolution because Britons with what Marx would call bourgeois values had, since 1250, propagated far more successfully than the lumpen poor, whose lives had been Hobbesian – nasty, brutish and short. This critical mass of proto-bourgeois, thrifty, settled, hard-working, averse to violence, was finally able to break through the Malthusian grass ceiling. It could grow without outgrowing the capacity to feed itself.
The data Clark gathered for A Farewell to Alms was groundbreaking, and his scholarship, if not always his conclusions, received wide applause. One hopes he will flesh out his argument in the Post piece and put it into global context.
Are the millions of Africans who, for one reason or another, lack the formal skills (not to mention other prerequisites like infrastructure, access to markets and overall enabling environment) to compete in a global marketplace, to be condemned by advancing technology to rely on the kindness of strangers forever. And what kindness will there to be to rely on if an ever growing share of rich countries’ GDP has to be spent subsidizing their own left-behinds.