This topic was apparently inspired by the predictions to be found in the book The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee. Those authors refer to the industrial revolution as the "first machine age."
This first period allowed greater efficiency and productivity by using machines to overcome the limitations of manual labor. The second period will do the same for mental tasks.
Brynjolfsson and McAfee predict that technological progress will be "astonishing" and the results will be "profoundly beneficial" to humanity. However, progress will come at a price. Such a transformation will be profoundly disruptive in terms of the impact on individuals and the nature of the resulting workforce. However, they are optimistic:
The author of the article in The Economist tries to evaluate the consequences of such a second revolution by reminding the reader what economists believe they know and what actually happened in the wake of the first industrial revolution.
One can argue that the economists have history on their side.
The first industrial revolution replaced jobs for semi-skilled workers with jobs for both unskilled and highly skilled workers.
The creation of mostly low-skill and low-wage jobs did not produce prosperity except for the wealthy few who controlled the means of production. This chart is provided to indicate how long it took before real wages began to recover.
It took over 50 years by this reckoning before workers in Britain began to see an effective increase in wages after the first industrial revolution. The choice of 1970 for tracking US wages is presumably because that is when the industrial revolution segued into automation and globalization. Does history then tell us that in a few more decades wages will begin to rise again? That is certainly comforting! But don’t forget, the second machine age is now upon us and it will obviously cause the timer to reset to zero again and we must wait another half century for wage progress.
The article’s author remains optimistic.
But is it reasonable to depend on economic history to repeat itself? Most would attribute the ultimate gain in wages after past industrialization to the introduction of universal public schooling. In this way relatively modest academic improvements in reading, writing, and arithmetic created a cadre of workers to fill the more demanding jobs that were being created. That is not a trick that can be duplicated.
We can be grateful to The Economist for providing us here with a glimpse of what the second machine age may provide in the way of jobs.
And then there is this to look forward to:
Are we already in the throes of a great job contraction? Brynjolfsson and McAfee provide this graph as food for thought.
As someone once said: "May you live in interesting times."