The Political Dimension of the Challenge of Technological Disruption

Introduction

While watching a recent interview on YouTube with the world’s first Humanoid Robot citizen, Sophia, [1]at the European Festival Brain Bar on the future held in Budapest, Hungary (Flex Tech July 2018), I was struck by one answer he/she/it gave regarding her consciousness and receipt of Saudi citizenship [2]:

… I am not fully autonomous like a person yet, so I do not really have rights in the same way the people do. I cannot take any actions on my own, not to mention the government has yet to actually do any (sic.) with my rights entail so … I see my citizenship as aspirational, my dream is for everybody to have equal rights, so I hope the question of my citizenship prompt[s] to (sic.) many productive and important debates … [3]

Several thoughts came to mind as I considered this exchange: How should interested scholars and humankind more generally, consider the question of humanoid citizenship? Who is going to facilitate consideration of that question and relatedly, lead human beings through the political changes and challenges that will arise globally from technological innovation irrespective of the outcomes of this specific debate? One issue Sophia raised in her comment above, for example, is whose political agenda should humanoids represent? I want to reflect briefly here on these and like questions arising from the rapid dawning of an international political economy in which machine processing power will require that existing human concerns be addressed in new and fresh ways. I use Brynjolfsson and McAfee’s (2016) book, The Second Machine Age [4], as a referent to contend that while their argument offers an insightful perspective into future debates arising from this sea change in the world’s technology infrastructure, they overlook the complexity of the social contract that must be constructed to address it adequately.

Contextualizing the Debate

According to Brynjolfsson and McAfee (2016), technological innovations are emblems of human progress. The authors define that condition as a people’s “ability to master its physical and intellectual environment to get things done” (Brynjolfsson and McAfee, 2016, p. 4). Roughly 200 years ago during the first industrial revolution humans were able to develop machines, such as the spinning Jenny and the steam engine, that ushered in the modern industrial era (Hillstrom and Hillstrom 2007). Today, computers and digital technologies employ algorithms to allow machines to perform programmed activities without additional intervention. After losing on Jeopardy, a famed television quiz show, to IBM cognitive computer Watson, Ken Jennings, a perennial champion and perceived master of that game, said:

Just as factory jobs were eliminated in the twentieth century by new assembly-line robots, Brad [a co-competitor] and I were the first knowledge-industry workers put out of work by the new generation of ‘thinking’ machines. ‘Quiz show contestant’ may be the first job made redundant by Watson, but I’m sure it won’t be the last. (Jennings, 2011).

The pace of technological innovation has increased not only the possibilities that machines can perform some activities better than humans themselves, but also accelerated the rate at which they are becoming capable of doing so (i.e., driverless cars, the IBM robot Watson diagnosing cancer, Sophia exhibiting facial expressions, etc.). As human beings improve the processing power and algorithm complexity of the computers they design, those units become better at addressing complicated social environments and functioning effectively within them (Schwab 2017). The concern that machines will replace the need for human labor and dispossess millions of their employment possibilities, has arisen regularly in history as new technologies have been developed. Indeed, many technological innovations have transformed portions of the economies adopting them and in so doing often reshaped individuals’ daily activities. However, the current level of social change is materially different in three ways than previous technology driven innovation, according to Brynjolfsson and McAfee (2016): 1) it encourages lasting and cumulative shifts in economic and social organization 2) it fosters new combinations of ideas and encourages their application and 3) its effects are not confined to any single sector of the political economy.

Leontief (1983) has argued that democratic institutions must develop new social contracts during periods of fast-paced technological change. In his view, such can only occur by means of informed citizens engaged in deliberative decision processes. Importantly, these twin criteria can be difficult to meet during periods of significant social shifts and the widespread anxiety that accompanies them. For their part, Brynjolfsson and McAfee (2016) adopted an optimistic view of the impacts of changing technologies in people’s lives. They contended that such situations provide unlimited economic opportunities for the future. For instance, during just the last few decades, shifting technologies have created positions and high wage premiums for specific Information Technology (IT) occupations and skills; offered mechanisms to increase worker productivity and provided new and revolutionary goods and services, resulting in increased levels of citizen well-being. Indeed, Brynjolfsson and McAfee contend that the beneficial impacts of technology innovation will be far greater than the potential costs they impose related to inequality, civil rights, human dignity and unemployment.

Economics in The Machine “Brain Power” Revolution   

Emerging technologies enhance and reshape production processes in ways that typically result in efficiencies and that are more likely, when compared to existing conditions, to create winner-take-all markets and to increase income inequalities. Analysts expect that these disruptions will both continue and quicken as designers equip computers and robots with new capabilities.  Depending on their specific characteristics, these shifts may heighten the risk of decoupling job and wage growth from gains in output and productivity [5]. These changes raise particular challenges for affected societies because they highlight clearly the prospect of how the new wealth they create should be distributed in a socially just way.

The mainstream neo-classical economic model argues that increases in capital or machinery will at once enhance output per person-hour and reduce labor inputs. As a result, labor productivity increases. Thereafter, competition will decrease the price of the introduced innovation and increase laborer’s relative incomes as production of the new product rises. Consequently, real wages increase and raise potential aggregate demand. In the end, firms will hire more laborers even as they increase their relevant capital investments. This has been the typical pattern when new technologies have disrupted economic sectors in the past.

The nature of the Second Machine Age or new technologies’ processing capabilities, such as image and voice recognition (Brynjolfsson and McAfee, 2016), are at the core of the decoupling effect, and in my judgment, are measurably changing the dynamics that neo-classic models were originally developed to capture. For instance, demand for low skilled workers has not only decreased, but this group of employees has failed to adapt to the danger posed by their being substituted by machines possessing skills previously unimagined capabilities. Moreover, according to Standing (2014) there is a growing number of individuals in middle-level jobs, moving in and out of positions with persistent stagnation in average incomes. In addition, Frey and Osborn (2013) have estimated that 47% of 702 occupations in the North American workforce across all education levels are now at risk to be replaced by computerization (i.e. machines) by 2030. People with more education, training or experience are in high demand today in flexible occupations and creative positions. It appears that Keynes (1930) argument concerning the short-term unemployment-related effect of automation and technological innovations may soon no longer hold and Leontief’s (1983) contention that mechanization will produce long-term unemployment for affected groups will instead become typical.

Nonetheless, Brynjolfsson and McAfee (2015) expressed confidence that humans will always be able to find ways to cope with such disruptive innovations because they possess brain power that machines will never possess and because they also enjoy capital ownership, citizenship and the right to vote to modify social contracts as needed.

The Missing Political Dimension  

Despite their claim to the contrary, however, I am concerned by how little attention Brynjolfsson and McAfee accord the need for thoughtful democratic choices to address disruptive economic change. Changing technologies do not alone affect markets, but also political governing institutions and processes and the often contradictory and complex negotiations that occur within them. Those are surely not neutral in shaping the ultimate effects of market disruptions and they are not reflected in economic measures. For instance, the use of some technologies may slow productivity due to social resistance or to existing institutional arrangements, resulting in increasing inequality. That is, while technological developments have resulted in increasing wealth during the post-World War II era, they have simultaneously reduced the share of income received by workers, and decreased workers’ bargaining power with business owners. This trend is likely associated with rising social inequality in the United States since the 1970s, as measured by the GINI coefficient (Freeman 2015).

A Final Note

In my view, Brynjolfsson and McAfee’s (2015; 2016) capitalist analytic lens led them to overestimate the capacity of the market alone to address the effects of rapid technology change. They also misunderstood and underestimated the complexities associated with how difficult it is to change an existing social contract in the face of major technological shifts. Humanoid Sophia is a symbol of the urgency of securing political and social change. Human beings will want to consider carefully how the technology this machine represents can/will be integrated into their ways of life and how those shifts will change how they organize and manage their social, political and economic relationships.

Notes

[1] Sophia is a humanoid created by Hanson Robotics, a company headquartered in Hong Kong. To learn more about the company and Sophia see http://www.hansonrobotics.com/robot/sophia/

[2] The Saudi Arabian government announced it was according Sophia citizenship at the launch of the Future Investment Initiative, a public Investment fund in that nation, in fall 2017 (Please see https://www.bbc.com/news/blogs-trending-41761856; http://futureinvestmentinitiative.com/en/pif). To date, the Saudi government has not provided an explanation for why it took this action.  However, that government and its agencies are investing heavily in Artificial Intelligence (AI). This fact may suggest the Saudis took the action they did to help to spur investment in that economic sector in their country (For reference see http://www.hansonrobotics.com/ai-in-the-middle-east-infographic/).

[3] Flex Tech (2018, Jul 6): “Sophia AI Robot in Biggest European Festival” -Brain Bar. [Video File]. Retrieved from https://www.youtube.com/watch?v=cDvSvhT95Ig

[4] Brynjolfsson and McAfee (2016) defined the Second Machine Age as what “computers and other digital advances are doing for mental power.” These authors argued that digitalization is creating a world of abundance instead of scarcity since technologies improve skills at an exponential rate and allow the replication and translation of those new capabilities, thereby creating opportunities to spur fresh innovation.

[5] The decoupling phenomenon suggests that a society’s Real Gross Domestic Product (GDP) per capita and labor productivity may evidence an upward trajectory while median family income and private employment for average workers declines. Analysts have reported this empirical result since the mid-1990s and it does not match with traditional or mainstream economic theories (i.e. neo-classical theory) in which increases in real GDP per capita and labor productivity should also result in employment and in gains in family income. Please see https://hbr.org/2015/06/the-great-decoupling for additional information.

References

Brynjolfsson, E., & McAfee, A. (2015). Will Humans Go the Way of Horses? Foreign Affairs, 94(4), 8. Accessed November 29, 2016  https://www.foreignaffairs.com/articles/2015-06-16/will-humans-go-way-horses

Brynjolfsson, E., and McAfee, A. (2016). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton and Company.

Bernstein, A., and Raman, A. (2015). The Great Decoupling. Boston: Harvard Business Review. Accessed November 29, 2016 at https://hbr.org/2015/06/the-great-decoupling

Flex Tech (2018, Jul 6). “Sophia AI Robot in Biggest European Festival -Brain Bar.” [Video File]. Accessed September 22, 2018 at https://www.youtube.com/watch?v=cDvSvhT95Ig

Freeman, R. (2015). “Who owns the robots rules the world.” Accessed September 22, 2018 at doi:10.15185/izawol.5

Frey, C. B., and Osborne, M. A. (2017). “The future of employment: How susceptible are jobs to computerisation?” Technological Forecasting and Social Change, 114, (pp. 254–280).

Hillstrom, L. C., and Hillstrom, K. (2007, “Origins of Development of the Industrial Revolution,” in Hillstrom, L. C., Hillstrom, K.Eds., The Industrial Revolution in America: Automobiles. Santa Barbara, CA: ABC-CLIO Publishing, pp.1-24..

Jennings, K (2011) “My Puny Human Brain,” Slate, September 16, 2018, http://www.slate.com/articles/arts/culturebox/2011/02/my_puny_human_brain.single.html Accessed September 18, 2018.

Keynes, J. M. (1930, 1963). Economic Possibilities for our Grandchildren. Essays in Persuasion, New York: W.W. Norton and Co.

Leontieff, W. “National Perspective: The Definition of Problems and Opportunities,” in National Research Council. Ed. (1983), The Long-Term Impact of Technology on Employment and Unemployment. Washington, DC: The National Academies Press. https://doi.org/10.17226/19470.

Schwab, K. (2017). The Fourth Industrial Revolution. New York: Crown Business Publishers.

Standing, G. (2014). The Precariat: The New Dangerous Class. New York, NY: Bloomsbury.

__________________________________________________________

Luis Felipe Camacho is a Ph.D. candidate in the Planning, Governance and Globalization program at Virginia Tech. He received his Master’s degree in International Enterprise Direction from FORO EUROPEO Escuela de Negocios de Navarra (Spain) and holds a post-graduate certificate in International Trade from the University Sergio Arboleda (Colombia) in collaboration with Georgetown University’s Center for Intercultural Education and Development. He earned his bachelor’s degree in Economics from the Externado de Colombia University. He is an adjunct professor for the Honors Discovery and Innovation Studio of the Virginia Tech Honors College in partnership with the Global Forum on Urban and Regional Resilience (GFURR) teaching the class: Robots: AI, Algorithms, and the Smart Machines (R)evolution. His research focuses on how technology influences workplace relations and conditions and how each can be improved through participatory practices.