The wheels of industry grinds on for about two centuries after the Industrial Revolution and before long, according to Yuval Harari, humanity encounters a new problem: “As those factories and offices absorbed the billions of hands and brains that were released from fieldwork, they began pouring out an unprecedented avalanche of products. Humans now produce far more steel, manufacture much more clothing, and build many more structures than ever before. In addition, they produce a mind-boggling array of previously unimaginable goods, such as light bulbs, mobile phones, cameras and dishwashers. For the first time in human history, supply began to outstrip demand. And an entirely new problem was born: who is going to buy all this stuff?”
Recall that industrialists and investors alike will go bust if there is not enough people to buy whatever new stuff industry produces. The wheels of industry grinds to a halt if there is no further growth on planet Earth. Consumerism can only do so much to delay, but not to forestall, the inevitable. After all, there are only seven billion of us on planet Earth, and not everybody can afford to, or would want to, pay for everything that industry produces. There is in addition a biological limitation to human consumption of food, drinks, clothing, books, movies, games, and toys. What this means is that the capitalist creed of always to ‘invest for growth’ would one day becomes untenable for an increasingly larger swath of the capitalist economy.
What would happen when surplus capital accumulated over the last two hundred years begins to chase after increasingly smaller returns or riskier opportunities for investment around the globe? The phenomenon of zero interest rates that we have witnessed in recent times may well be the harbinger of a new normal for capital in the 21st century. When this day approaches, capital for production reverts to wealth for consumption, the long-term uptrend of the stock market disappears and the economy goes back to being a basically zero-sum game just as it was a mere two hundred years ago before the Industrial Revolution.
“Capitalism distinguishes ‘capital’ from mere ‘wealth’,” explains Yuval Harari in his book Sapiens: A Brief History of Humankind. According to Harari, “Capital consists of money, goods and resources that are invested in production. Wealth, on the other hand, is buried in the ground or wasted on unproductive activities. A pharoah who pours resources into a non-productive pyramid is not a capitalist. A pirate who loots a Spanish treasure fleet and buries a chest full of glittering coins on the beach of some Caribbean island is not a capitalist. But a hard-working factory hand who reinvests part of his income in the stock market is.”
Indeed, the idea that ‘profits from production should be reinvested in increasing production’ sounds simple enough today. Yet, according to Harari, it was an alien concept for most people throughout history. Before the modern era, people believed that production was more or less constant. So why reinvest your profits if production won’t increase by much, no matter what you do? Better to spend revenues on tournaments, banquets, palaces and wars, and on charity and monumental cathedrals, than reinvest surplus into increasing their manors’ output, developing better kinds of wheat, or looking for new markets. And that’s exactly what medieval noblemen did. Capitalism later changed all that.
Capitalism began as a theory about how the economy functions. It offered an account of how money worked and promoted the idea that reinvesting profits into production leads to faster economic growth. Historically, labor as an economic factor of production has always been in critical shortage since the dawn of human civilization. Therefore, it would be quite unimaginable to kings, priests, or merchants a thousand years ago that peace would reign across most of the world’s population for any period of time and that human unemployment would be a social and economic problem despite the benefits of higher education. By extension, for industrialists and investors today to imagine a world thirty to fifty years into the future where capital would be ‘under-deployed’ because there are comparatively fewer places to put surplus capital into productive use would be equally unthinkable. But it is a plausible scenario, short of wars (i.e., arms-dealing) or natural disasters (i.e., reconstruction), that could have potentially destabilizing socio-economic consequences. After all, our modern capitalist economy on planet Earth depends on an unwavering belief in long-term growth with seemingly no end in sight. But just how realistic is this expectation of never-ending growth on planet Earth?
The prevailing optimism and unquestioned belief in a technology driven world of the future generating bounties for the masses of humanity is comforting thought. Evolving technology continues to drive down the marginal costs of basic goods and services in a race to the bottom. However, the underlying premise of such a techno-worldview skews towards addressing technological bottlenecks of production, and ignores the inherent biological limits of consumption by humans. Throughout most of history, humans live in conditions of scarcity. Therefore, the assumption by classical economists that human wants and needs are unbounded and will never be satisfied may seem reasonable and logical. However, in the coming age of ever greater abundance in production when supply outstrips demand for the first time in human history, can we still make such a general assumption about human wants and needs? It might be argued that there is no easy cultural remedy for moderating human consumption beyond simple affordable luxuries. Conspicuous consumption by definition incurs massive waste of resources that would be unsustainable at a global scale; and the mass media is certainly of no help in this area. Whichever way one chooses to study the situation, the problem of the 21st century remains: who is going to buy all this stuff, despite their falling prices?
Now imagine also a future some time in this century where humans are no longer needed for production. The machines have taken over and everything is fully automated, from tricorders in every home to self-driving cars to hamburger-flipping robots. The paramount question then becomes one of existential purpose: what are humans still good for, beyond consumption of goods and services that industry produces? Do we as humans then simply live to consume, just so the industrial machinery and the capitalist economy continues to hum along? And how does one make a living in such a futuristic world where neither human brains nor brawn are needed anymore? What remains of humanity as we know it? There are no easy answers. We simply do not know, but we can certainly speculate.
Let’s consider a representative brainy profession, e.g., a white-coated scientist working in a lab, along with a traditionally blue-collar profession that requires mostly brawn but also human skills and judgment, e.g., a hard-hat machine operator at a construction site. We look for objective evidence today that might give us some clue as to what the future might hold for these two professions at opposite ends of the spectrum from brains to brawn. For example, are the days far off before machines would start building scientific hypotheses all by themselves – unassisted by humans – which they in turn can proceed to test automatically? When and how might machines operate in a construction site that currently employs human operators in hard hats? The answer actually came sooner than anyone might expect; it had already happened. In fact, we are in the midst of a quiet revolution, i.e., industrial automation, that sees humans becoming gradually displaced by machines across many industries in the name of lower costs and greater efficiency.
Meet Adam, the world’s first robot scientist. Built at the Universities of Aberystwyth in 2009, Adam is the first machine ever to discover novel scientific knowledge independently of its human creators. Adam is able to perform independent experiments, up to 1,000 a day, with the genome of baker’s yeast to test hypotheses and interpret findings without human guidance. To his credit, Adam had already uncovered three novel genes that together coded for an orphan enzyme. A second generation robot scientist, Eve, follows in 2015 and is designed at the University of Manchester and Cambridge to automate early-stage drug development, i.e., drug screening, hit conformation, and cycles of hypothesis learning and testing. Eve is capable of screening over 10,000 compounds per day, and has already discovered a compound that could be used to fight malaria.
The future lab may very likely be staffed by “teams of humans and machines,” according to Ross King who led the design of Adam and Eve. “Robots will be doing more and more of actual experimental work and simple cycles of hypothesis generation. Humans would migrate to more strategic and creative positions.” But with advances in artificial intelligence, it is conceivable that the role of robots would sooner or later encroach upon the human realm, progressing from lab technician to lab head. After all, as King commented, “there isn’t any intrinsic reason why that wouldn’t happen.”
But what about work at a construction site that require both human brawn and brains? To improve productivity while also solving a potential shortage of construction workers in Japan, construction-equipment maker Komatsu developed the idea of letting drones and driverless bulldozers do part of the work. It is said that bulldozers are more difficult to operate than many other construction equipment. Typically, it takes about three years of experience before a human worker is considered qualified and competent to operate bulldozers. According to Komatsu, a unmanned team of drones, bulldozers and excavators can automate much of the early foundation work on construction sites. Under Komatsu’s plan, drones made by Skycatch would scan job sites from the air and send images to computers to build three-dimensional models of the terrain. Komatsu’s unmanned bulldozers and excavators would then use those models to carry out design plans, digging holes and moving earth. Both the drones and construction equipments would move along largely pre-programmed routes. All that a human needs to do is to program the machines, then simply push a button to send the machines to work and monitor their progress.
The upshot of it all is that in the future there will be fewer scientists and bulldozer operators who will be buying stuff that industry produces. But the alternate scenario arising from an apocalyptic world could easily be far worse.
Woe to us humans when neither brains nor brawn nor blood matter anymore in the brave new world of silicon and software and steel. Should this fateful day eventually arrive, from among the many possible outcomes of our future history, know that we have brought it upon ourselves through our collective actions and complicity in the name of technology and progress, and shed no tears. The slippery slope of industrial automation may well turn out to be another trap for humanity after all. Only time will tell.
- Harari, Yuval Noah (2015). Sapiens: A Brief History of Humankind. Harper.
- Piketty, Thomas (2014). Capital in the Twenty-First Century. Belknap Press.
- Rifkin, Jeremy (2014). The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. Palgrave Macmillan. Talk at: https://www.youtube.com/watch?v=5-iDUcETjvo
- Buchen, Lizzie (2009, April 2). Robot Makes Scientific Discovery All by Itself. Wired. Retrieved from: http://www.wired.com/2009/04/robotscientist
- Nicas, Jack (2015, January 20). Drones’ Next Job: Construction Work. Wall Street Journal. Retrieved from: http://www.wsj.com/articles/drones-next-job-construction-work-1421769564
- Construction Equipment for the Future and with a Future. Komatsu Report 2013. Retrieved from: http://www.komatsu.com/CompanyInfo/ir/annual/pdf/2013/ar13e_03.pdf