Can Technology Save Us?

Can Technology Save Us? BY BRIAN MAHER for Daily Reckoning

The economy has been trapped in a one-step-forward, two-steps-back cycle nearly a decade running.

One door opens, two slam shut.

A ray of sun cracks through, the overcast patches the hole.

Rapidly advancing technology offers a way out, its drummers claim.

They insist automation, robotics and artificial intelligence (AI) will soon catapult the economic system into vastly more productive realms.

By 2030 alone, they believe it could yield an additional $16 trillion to global GDP.

They further claim 40–50% of human occupations will be subject to automation over the next 15–20 years.

These are not limited to trucking, taxi driving or manufacturing and construction.

To these we must add white-collared jobs in law, finance, medicine, accounting, etc.

What will become of the attorney at law, we wonder — and the human conductor of the ambulance he chases?

We are unconvinced automation will proceed at the projected gallop.

But let us suspend all assumption for the moment… and drive on to the inevitable question:

What happens when robots acquire the brains to perform nearly all human labor?

Economist Joseph Schumpeter (1883–1950) put the term “creative destruction” into general circulation.

For Schumpeter, capitalism was the “perennial gale” of creative destruction.

Capitalism blows away the old and inefficient. In comes the new and improved.

Because of capitalism’s perennial gale, today’s serf lives more royally than yesteryear’s king.

Explains economist Richard Rahn of the Cato Institute:

The average low-income American, who makes $25,000 per year, lives in a home that has air conditioning, a color TV and a dishwasher, owns an automobile and eats more calories than he should from an immense variety of food…

Louis XIV lived in constant fear of dying from smallpox and many other diseases that are now cured quickly by antibiotics. His palace at Versailles had 700 rooms but no bathrooms (hence he rarely bathed), and no central heating or air conditioning.

Here is progress itself. All because capitalism’s creative gales flattened everything in sight.

The obvious benefits of capitalism are why most focus on the “creative” side of the ledger.

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