People ridiculed the Luddites for opposing technological change that ultimately created new work, but did they have a point? Moshe Y Vardi examines the economic indicators for today.
If you put water on the stove and heat it up, it will at first just get hotter and hotter. You may then conclude that heating water results only in hotter water. But at some point everything changes – the water starts to boil, turning from hot liquid into steam. Physicists call this a “phase transition”.
Automation, driven by technological progress, has been increasing inexorably for the past several decades. Two schools of economic thinking have long been engaged in a debate about the potential effects of automation on jobs, employment and human activity. Will new technology spawn mass unemployment, as the robots take jobs away from humans? Or will the jobs that robots take over release – or even create – demand for new human jobs?
The debate has flared up again recently because of technological achievements such as deep learning, which recently enabled a Google software program called AlphaGo to beat Go world champion Lee Sedol, a task considered more challenging than beating the world’s chess champions.
Ultimately, the question boils down to this: are today’s technological innovations like those of the past, which made the job of buggy-maker obsolete, but created the job of car manufacturer? Or is there something markedly different about today?
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