MSP144 [] I Am Robot: A Post Work World

This is a download from BFM 89.9, the Business Station. BFM 89.9, the Business Station. This is Matt Slain, I'm Rich Madbury, and last week on Matt Slain, we were talking about end sourcing, a term that Matt Armitage has come up with to describe the phasing out of human workers in a growing number of sectors of the economy. This week, we're developing the argument further to ask, are we prepared for a post-work world?

Do you want to remind us, Matt, what you meant by end sourcing? I will in a second, but I really hope one day we get to have an episode about BFM, the business spaceship, which is something we were just talking about off air. But we'll come back to that. End sourcing, yes, it's a term I'm using to refer to recruitment practices that are replacing human workers with machines.

Now, obviously, that's not a new process. We have been doing it for hundreds of years, but usually with these technological replacement systems, there's a person there to manage or operate the machine. Now, end sourcing is a very different beast. It might combine elements of insourcing and outsourcing, these are terms we're familiar with.

Insourcing, of course, is bringing talent internally, often on a temporary or contract basis to fulfil certain needs. And outsourcing, of course, is the practice of using third-party companies or contractors to do tasks for a company rather than hiring those roles internally. Now, outsourcing is often seen as a cheaper and more cost-effective solution for companies to hire labour, but to keep them off their own employment sheets. Big tech companies love to use this kind of model.

There are plenty of stories about Silicon Valley companies that pay six-figure salaries to coders and lay on all kinds of free services from food to medical care to exercise facilities on their amazing world-beating campuses. Yet, the people who make that food and provide those services are often not employees of the tech companies at all. They work for minimum wage for contract service companies. So we've seen this situation where there are huge disparities, because one set of workers comes to the workplace from their comfortable homes with their big salaries, while another set, the set essentially that serves them, live in garages and in their cars, because they can't afford the rental prices around Silicon Valley.

Now, before the pandemic, we were seeing rises in insourcing in certain areas, so big companies increasing their capacity to handle their social media and media buying operations were just one of them. And how does end sourcing differ from either in or outsourcing? Well, as I said, end sourcing may contain elements of either insourcing or outsourcing, but usually end sourcing solutions are automated. So examples we gave last week include the UV robots that are being deployed to clean hospitals and semi-public spaces like malls, or the machines being used to patrol streets in countries like Tunisia, robots that are reminding people to obey pandemic restrictions, or more ubiquitously, cloud-based business automation tools like chatbots.

Now, these are, as I said, automated and largely autonomous tools that come with, of course, a serious capital investment cost. So once a human worker has been replaced by one of these systems, it's unlikely that we're going to see them in that role again. And as a source of human unemployment, that role, at least, at that company or location, will no longer exist. We've always viewed that type of progress with a sense of inevitability.

What makes end sourcing any different? Well, as we mentioned last week, in the past technology has created more jobs than it replaces. So, for example, the shift from hand-built to production line cars, it allowed the car industry to expand massively, and the economies of scale made cars affordable to ordinary working people. So it directly created tens or hundreds of thousands of jobs, but it also helped to create supply industries that supported millions more jobs.

So here, the evolution is not so much about new economic sectors emerging. This is more about technology being deployed in a widespread manner, in existing businesses or industries to displace human workers. To be clear, yours isn't the only point of view here, is it? Sure.

So we quoted last week the new scientist piece, Boston University economist James Besson, and his point of view is that the changes are likely to lead to more churn rather than fewer jobs. Examples he gave of occupations where there will be more demand for humans, included drone operators, data scientists, cryptographers, video tech support, and a bunch more tech support type roles. And he made the point that the biggest challenge that we will have is to ensure that workers continue their education, so that they can upskill and adapt to more volatility in the employment market. But your view is more in line with a McKinsey study from 2017 that suggests 800 million jobs may be displaced by automation by 2030.

Yes, and I also quantified that by saying that it's almost one in four of existing jobs. And to the examples, James Besson gives, you know, I can't see that there's any reason why most of those jobs won't be rapidly automated either. You know, we talk about the paradox of AI, that the smarter it becomes, the less we understand its thinking process. But that brings us back to that thought point, will the best people in inverted commas to design the next generation of even smart machines, be the machines themselves?

So where do we get to the point where having a human hand in these programming decisions just introduces human inefficiencies or biases that limit the machines? We're not going to get into limits of machines today, or else we'll never bring you back to end sourcing. Back to the topic of today, man, are we prepared for a post-work world? And what might that even look like?

Can you paint the picture for us? Well, the simple answer to that, if you want to, you know, go home now, is no. It's not really something that governments anywhere have spent a lot of time on in terms of legislation. I'm sure there are plenty of think tanks and blue sky labs on government retainers who are looking into this.

But for most politicians, I imagine this was just an abstract discussion. Think of all the precedents and disaster preparation exercises that governments have conducted since SARS and MERS and Ebola. Yet this pandemic is infecting tens of millions of people, killing millions and bringing the global economy to its knees. So even in countries that were better equipped to deal with the emergence of this threat because of those earlier pandemic threats.

And that includes countries like Malaysia. We're still experiencing subsequent waves and intermittent lockdowns, like the one we currently find ourselves in. So in other words, there are very few plans for a world where very few people work. Yeah, exactly.

You know, something else I find interesting as well about all of this is that even our notion of careers is itself quite a new idea. You know, historically rich people owned land, they didn't work. Poor people largely followed their parents into whatever job that they were doing in the same place that they were born. And usually they would be working for the people who owned the land.

And there wasn't too much, actually, in the middle. Certainly nothing like the huge middle class that we accept as normal today. Careers and callings became vogus, I think, in the mid-19th century when the well-heeled children, usually the sons, of course, of landowners, decided that they wanted to dedicate their lives to science or medicine or other progressive or noble pursuits. But their incomes didn't arrive from those so-called jobs.

It came still from the land the families held. So what we have is this looming reset, where we may have to define ourselves by who we are, rather than where we work and what we do. But back to the bigger picture question that you asked. Are we ready for a world where people don't work?

No, of course not. Crackpots are running round burning down 5G masks because they think that electromagnetic waves can give you a virus. So you can chalk up a lot of the dissatisfaction around the world to the speed of change in our world. And that the technology and ideas are becoming increasingly remote from ordinary people.

We're told to accept 5G because it's faster and better. But very few of us have even the faintest clue how it works, or you wouldn't think it could give you a virus, or how all that information turns from ones and zeros into a website on our screen. So the trust deficit? Yeah, admittedly, you know, that's not the core topic of today.

But yes, we have no choice but to put our trust in technology. But that doesn't mean that we aren't uneasy about it, especially when we see the way that politicians and companies abuse that trust. The increase in surveillance capitalism and the monetization of our lives, yet we feel so removed from the way that anything functions that we seem to be helpless or feel that will help us to do anything about it. And we're about to see something similar happen to that same world of work.

And one of the things that we're going to have to contend with is separating what we do for a living with who we are as people, as I said. And accepting that in the future, we may have jobs, but we won't necessarily get paid for them. When we come back, dark dystopias and fragrant Matopias here on BFM 89.9, the business station. Baba from Malacca, BFM 89.9, the business station.

BFM 89.9, the business station, and Rich Bradbury. This is Matt Splaind, of course, on the phone with Matt Armitage from CulturePop.com. Matt, that was quite a bleak picture you painted in the first half. Does the future, does it always have to be dark and dystopia?

No, of course not, but just to something that you just said, I'm not on the phone, I'm in the phone, Richard. But this brings us back to a point that we've made on the show a lot over the past few years. You know, be careful who your idols are, and certainly don't make me your idol. The Titans of Silicon Valley have created some amazing things for us and transformed our world in numerous ways.

Now, none of this supposed fourth industrial revolution would be possible without the internet, or the processes that have allowed us to create the microprocessors that have taken computers out of warehouses and put them into our hands. So the idea that this little device in your pocket is accessing information from cloud servers that may be thousands of kilometers away, and our perception of that system is that it's instant and interrupted. I mean, that's a really incredible thing. Or that we already have a couple of generations of people who have never known life without that feeling of instant connectivity.

These are all incredible things. But it doesn't mean that the vision of those Titans is one that we should embrace. No, because very often there's a vision of the future where our privacy rights as individuals run secondary to their methods to generate profits. But it often seems as though it's presented to us as being the only model for the future, especially when we see global lawmakers responding in such a reactive way.

The legislation gap? Well, partly, I mean, obviously there's always a long time before a bill can be formulated and passed and that process can take years, technology moves in minutes. But there's also a generation gap, I think, when we say that so few of us know how the technology running our world works, well, that's exponentially more so the further away you get from the generation that was actually born into this technology. So the narrative we get is very one-sided.

You have people like me running canter opinions. But by and large, the people with the bigger profiles, people like Sharon Lanier, they have much less reach and influence than say a Mark Zuckerberg or an Elon Musk who have tens of millions or hundreds of millions of followers and fans. OK, so let's forward to 2030 when those 800 million people are out of work. What does that world look like?

Do we have to accept that n-sourcing is the defining reality of the age? Well, the answer to that changes, depending on whether we move from reactive to proactive for one to the better world. And within that curve, there are potentially a lot of different outcomes. One extreme, you have the total utopian post-s of the world.

Well, simply because of the way the world works, our economies are highly interdependence, supply chains are global, we talk about American companies, Chinese companies, all that kind of thing. But it's an increasingly meaningless distinction because the companies don't see themselves that way. Their global registered HQs often have more to do with taxation jurisdictions than national loyalties. But that economy is still powered by people who buy the goods and services that those companies make.

As much as we talk about the market and stock values, even companies like Tesla that are largely nominal or speculative in value, they have to sell us something at that point. And to buy those things, we need money. And either we earn it or we're given it. We can't earn it if robots have our jobs.

If we're given it, then the chances are it will derive from taxation. Which brings us back to the point about reactive politics? Yes, we need to start planning for this now. In the same way that we should be looking at rights for sentient machines, because it's about saying what kind of world we want to plan to live in.

Automation isn't a bad thing. Most of us do jobs that we would happily walk away from if we had enough money. Machines could give us that kind of freedom, but only if we plan for it. And of course, part of planning for it is figuring out how to fund it.

Which is where we slip into speculative mode? Shall we start with the dark model? Well, that's not really a question. The real question is whether we'll have time to get to the more upbeat model.

Without any kind of intervention, I think what we'll see is this devolution into a hyper-competitive gig economy, where on a casual basis, people fill in for the tasks that machines can't do. And that's not likely to be fun, because we're talking about roles that are effectively feeding the machines. So these are going to be fiddly manual labor jobs to do things that the machines are not yet capable of doing. And I think one of the defining characteristics of that kind of model will be a race to the bottom, because there will always be someone who is just a little bit more desperate than you, who's willing to do the job faster and cheaper.

So a shrinking tax base leading to a radical reduction in public services and health care? Yeah, I mean, we'll probably become much more reliant on the largesse of philanthropists for services like health and education. In a way, it will be a return to the world of the 18th and early 19th century, rolling back a lot of the gains that ordinary people have made over the last couple of years. It'll be a world of small government, because governments and citizens will essentially have very little economic independence or power.

And I think you'll see people trading in those assets that their families have gathered, whether it's a house or a pension fund, just to cover their immediate living costs. And that uncertainty that people have felt this year, the salary reductions, the furloughs, for a lot of people that desperate search for a new job, those feelings could well become the norm in an automated society. Could we just resist the automation? Well, the Luddites tried that at the end of the 18th century.

It didn't go very well for them. Societies that try to deny technology don't tend to fare very well. Certainly, we could have much more of a role in say in how those services are rolled out and implemented. One example that's been given is a robot tax that companies are free to automate, but they pay a levy to do so, and that money helps to pay the social costs of the people made redundant.

As I said before, automation isn't necessarily the problem. It's the lack of a plan or infrastructure to cope with those changes. That's where we find those really problematic examples. Now, we talk about the surveillance economy.

Couldn't using Facebook or whatever platform become our jobs? Well, I think a lot of our listeners will have seen that episode of Black Mirror, where they do exactly that. Essentially, it's a bit like a 19th century workhouse for the poor. But again, there's a logic step missing there.

Social media companies sell access to our data to companies that want to sell us things. Facebook would be paying us to buy the things its customers spent money to advertise. So as Facebook takes a cut, companies would have to spend more on social media advertising than they made in revenue, just to generate the income flow for consumers to buy those goods and services. So however you tilt it or twist it in a post-work world, our economic model fundamentally breaks down.

Okay, I know you could probably depress us for a few more hours. Can we move on to the more hopeful model? I was just getting into that actually. Yeah, no, this is the model in terms of getting a bit lighter.

This is the model where we have proactive lawmakers actively planning for automation. That means global coordination to shut down tax havens, shut down low tax locales, the removal of loopholes for licensing and services costs that companies charge back to themselves to turn profits into paper losses. And of course, as I said, some kind of robot or automation tax. In the meantime, we might need some sort of transition mechanism.

One way that I know think tanks on both the left and the right have been looking at these things would be to eliminate individual income tax and transfer the burden back to employers. So effectively, the companies we work for would be paying us smaller salaries because we're not being taxed. And that would give governments an idea of what kind of tax base to try and maintain from these companies in a post-employment world. Which brings us to that part.

What will we do? Well, in a sense, in a lot of countries, we can see that reality. It might be an either or a combination type model. I think a lot of countries will massively expand their public sectors, which is the opposite of the economic orthodoxy we've seen over the past few decades, especially if economists like James Besson say one of the focuses will be ongoing education.

So we'll see an expansion of education programs. In terms of teachers and institutions and participants, a lot of people will probably be doing things like outreach and community work. There'll probably be a lot of public sector roles that we haven't even thought about yet. But hopefully, they will be meaningful and useful ones, not just make busy type jobs.

What about the interpretive dances you mentioned? Absolutely valuable social function. They have an alternative or a combination is that we might see some kind of income support scheme. It might be universal income.

It might be more along the lines of benefits in kind. You hear a great deal of chat about income support schemes and supposed laziness of the people that receive them. But I think that often tells you more about the mindset of people making the comments than it does about the people receiving them. I think part of the disillusionment we see in a lot of people is the realization that their jobs really don't matter.

Because people by and large, they're not lazy. They just want to know that what they do has value and worth, that they're making some kind of difference. You know, as yet, there's no basis to suggest that giving millions of people enough money to cover their essential needs and live comfortably will lead to them staying in bed all day. You know, why are all those community activists out there digging communal gardens in the evenings and the weekends?

Because they want to improve not only their own lives, but the lives of the people that they live alongside. So I think we have to start thinking a lot better of people in general. People have talked about the revitalization of public life. Is that what you see this as?

Well, in a sense, you know, we've conveniently forgotten the role that public investment played in the economic booms of the post-Second World War period. People jump on things like the Green New Deal in the US as some wishy-washy nonsense. It's an ideal. You know, the original New Deal was all about public investment in innovative infrastructure that the US lacked.

And it ushered in one of the longest periods of economic growth and reduction of inequalities that the world has ever seen. It built roads and bridges and ports and airports and universities and schools. It championed the importance of academic research and scientific discovery. University research teams making those medical and materials science breakthroughs.

We forget that a lot of private companies acquire their patents from publicly funded research. So somehow the public private narrative has been twisted so that the heroes of innovation have become profit-led people like Steve Jobs and Elon Musk. But oddly, it's the digital generation that doesn't have a direct link to that past that is the one that's out there demanding this modern version of it. And in doing so, providing a possible path back to what many people remember as a golden age of hope and prosperity.

Thank you very much, Matt. That, of course, was Matt's Blamed here on BFM 89.9 the Business Station. If you'd like a transcript of this show or if you want to listen to the podcast, first you can download the BFM app which is available on the BFM website or you can go to Apple App Store or Google Play. You can also head over to culturepop.com to find out more.

This has been Matt Blamed here on BFM 89.9, the Business Station.