Latest posts by Andrew Barr (see all)
- Binders Full of Distortion: Smoke, Mirrors and Decision 2012 - October 28, 2012
- The Dollars and Sense of Tax Havens: The Necessity of the Offshore Economy - July 24, 2012
- Heartland, the Art of Protest, and the Desire for Real Debate - May 31, 2012
Businesses strive to make profit, and profit is achieved through a cogent business model, sound financial decisions, and perhaps most importantly, efficiency. Business grows and flourishes when it becomes more efficient.
Advances like the Ford Motor Company’s creation of the assembly line or Johannes Gutenberg’s invention of printing press, are among the revolutionary ideas and milestones in the production process that have helped shape modern manufacturing into the economic powerhouse it is today.
But when they were first instituted, there is no doubt that the innovations of Ford and Gutenberg were hailed as “job-killers” and “bad for the economy.” Ford’s use of interchangeable parts certainly worried those who before had the job of assembling a car from start to finish. And what of the monks who formerly having a monopoly on the lucrative art of book-copying, were replaced by Gutenberg’s contraption of metal and ink?
People are afraid to accept advances in technology because there is a lag in adapting to it. While at the onset Ford may have let a few workers go, the industry that was created through the efficiency afforded by the assembly line system created hundreds of thousands of new jobs for Americans.
Gutenberg’s exponentially more efficient press allowed for the widespread distribution of books, again creating more jobs, and leaving the monks to other pursuits. Time and time again this phenomenon occurs throughout history, from the mechanization of gas stations to farm equipment, machines are taking jobs humans could not or would not do.
This doesn’t mean that humans have been replaced, in any sense. Machines (at least none readily available) can do the work of the American farmer — knowing when to plant, gauging specific soil and weather conditions, etc. In gas stations, machines now do the pumping, but humans are still required for cash transactions and as supervisors. Machines have become man’s pack mule, doing the work we’d rather not while we devote ourselves to higher pursuits.
It comes as a surprise then, when the commander-in-chief blames technology for the nation’s unemployment rate. President Obama’s comments last week linking advances in technology to job losses are the words of a Luddite, not the leader of the free world. He specifically lays the blame on ATMs, according to Fox News:
“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers,” lectured Obama in an interview with NBC’s Ann Curry. “You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
What the president neglects to mention when he talks about “a lot fewer workers” is the freeing up of said workers to pursue other more complicated tasks better suited to humans. In areas like customer service and advanced or secure transactions in banks, humans play a vital role, a role that can only be expanded with machines taking over other tasks.
If the automation of manufacturing and other business processes is truly as bad as the president makes it out to be, why isn’t the unemployment rate at 50% or more? Because the American worker, without Mr. Obama’s Luddite tendencies, has learned to cope. They develop professionally, learn new skills adapt to new conditions. They themselves become more efficient.
The free market adapts, as George Mason University’s Russell Roberts explains in a recent Wall Street Journal article:
Somehow, new jobs get created to replace the old ones. Despite losing millions of jobs to technology and to trade, even in a recession we have more total jobs than we did when the steel and auto and telephone and food industries had a lot more workers and a lot fewer machines.
Why do new jobs get created? When it gets cheaper to make food and clothing, there are more resources and people available to create new products that didn’t exist before. Fifty years ago, the computer industry was tiny. It was able to expand because we no longer had to have so many workers connecting telephone calls. So many job descriptions exist today that didn’t even exist 15 or 20 years ago. That’s only possible when technology makes workers more productive.
Workers improve, production efficiency improves, and the job market expands. Sounds very much like an increase in the standard of living. Mr. Roberts agrees:
The average worker has to work fewer and fewer hours to earn enough money to buy a dozen eggs or a pair of shoes or a flat-screen TV or a new car that’s safer and gets better mileage than the cars of yesteryear. That higher standard of living comes from technology. It isn’t just the rich who get cheaper TVs and cars, plus the convenience of using an ATM at midnight.
This is not “The Matrix.” The machines are not about to rise up, take our jobs and create an alternative reality. Ours is a responsible, cost-effective use of technology for the betterment of the American economy and American workers. The only alternative reality here is the president’s indictment of that technology.
Though Mr. Obama’s Luddite attitudes are representative of what is fairly commonplace liberal naiveté, it is fortunate that business continues to be a shining example of development and ingenuity in these uncertain times. It is fortunate for America that leaders in manufacturing and production have the courage and vision to develop and innovate, to create new processes and implement new technology that allows our economy to flourish.