Hire that algorithim

I’m all for living in the present. For getting through the next minute, hour, day, or week without any major catastrophe. I’m in favour of seizing the moment, of being at one with whatever it is I’m doing, of living the experience. I subscribe to the philosophy of being present, even if it’s something that most of the time I fail miserably in doing.

I’m not a planner. I’ve only ever had one plan and when that ended in abject failure at the age of 16, I resolved that the only plan I would have would be to have no plan. And yes, my pension has suffered accordingly. It only recently dawned on me that someone would have to look after me in my old age and, without children to depend on, it is either going to be shacking up with my similarly placed girlfriends in a real-life version of the US TV series The Golden Girls, or… well … I don’t even have a plan B.

But it seems that I’m not alone. In a talk at the American Enterprise Institute think-tank earlier this month, Bill Gates put into words what so many are failing to fully realise: the day is fast approaching whereby human endeavour will be replaced by technology. Yes, technology will take our jobs and do them for us. We’ll have no income, no pensions – and then what?

The whole idea of software substitution may sound a tad alien – honestly, can you imagine people being replaced by software programs? Before you say ‘no way’, think back to 20 years ago and ask yourself if you could have imagined a voice called Siri scheduling meetings for you on your iPhone or being able to find out where your mate is by tracking their last post on Facebook.

Maybe the heart surgeons are safe, but those that do less skilful jobs certainly have cause for concern. And if the business of business is to make a profit, I can’t see many CEOs refusing cost-saving initiatives that prefer algorithms to people. But is it only low-paying jobs that would be subsumed by software? Apparently not. Last year, the Economist predicted that relatively high wage earners like accountants, real estate agents, and even commercial pilots would lose their jobs (and incomes) to software in the next two decades. And if there is no need for accountants, then think of all those business schools having to reinvent themselves. Are they planning for this eventuality now?

If this is the road we’re heading down, how can we prevent the predictable social unrest that will result from wide-scale unemployment? Accordingly to Bill Gates, governments will need to get business on side. This is particularly relevant in Hungary where taxes are so onerous that employing people is a very expensive venture. I asked a number of business owners what it would cost to hire one employee and pay them a net salary of 100 000 huf – the answer was the same from everyone – double. Is it any wonder that the grey economy is alive and well here?

Were I up for re-election or even hoping to unseat the incumbent ruling party, I’d be thinking of substantially reducing (or even doing away with) employment taxes. I’d be doing everything I could to incentivise companies to employ more people so that we could reach a state of full employment where everyone who can work is working and paying the appropriate taxes.  But then again, I’m not a politician.

First published in the Budapest Times 21 March 2014

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8 Responses

  1. Sadly (well in my view) this move away from people to machines has been on the March from probably the openeing of the machine age. There was a time when among some people, the thought was that the machine would be managed by people, working shorter hours while full employment was maintained. And people had time for families, friends, and all sorts of leisure activities. What an altruistic and innocent view. Truth is, the more machines there are, the less people that are needed, until eventually almost (You and Bill Gates) no one is needed. The reverse of that is quite “rosy”, if fewer and fewer people are needed in any business, then fewer and fewer people have any money to spend, to the point where all this “human hands free” production, grinds to a halt as there is no one with any money to buy the goods being produced. One then has to develop a massive welfare system, supported by taxing the machines, to the point where the machine is down graded because it is less expences to employ people, and total social mayhem is avoided.

    1. If social mayhem is avoided, Caroline, that’s a win. And while machines have been gradually replacing people, we’ve never really had the intelligent ones we’re seeing today – ones that can practically think for themselves with little or no oversight. I remember being awed by the first fax I received and today, that looks like child’s play.

  2. Have you read ‘Player Piano’ by Kurt Vonnegut? Quote from http://www.vonnegutreview.com/2013/06/player-piano-one-dimensional-society.html
    “This ability for machines to run themselves throughout time without the need for human ingenuity and human bodies to accompany it is the bleak dystopian core of Player Piano. Much like Brave New World, a novel Vonnegut was happy to admit he all but copied from, the rotten core of this industrialized society is not its denigration of human bodies and the call for militarized obedience (like in1984). The rotten core buried under a façade of shining machines is that this society has made humanity superfluous, sucked all meaning out of the world, and replaced humanist values with a machine ethic predicated upon a new holy trinity: ‘Efficiency, Economy, and Quality.'” … He wrote the book in 1952, and I read it 20 years later… (yikes, 40 years ago?) … and it is still scary.

    1. ‘… society has made humanity superfluous, sucked all meaning out of the world, and replaced humanist values with a machine ethic predicated upon a new holy trinity: ‘Efficiency, Economy, and Quality.’ And yet we can’t seem to get enough of technology … the mind boggles

  3. Great point Mary!

    Here is a TedX talk: Are droids taking our jobs?

    Companies are making more money than ever with fewer people than ever, and this will only continue in the future. His point is that the labour for wage game is coming to an end, which means that societies will need to find a new way to distribute resources.

    I think the minimum income for everyone (without work) movements are the first steps and many will follow. If we are intelligent about this, the future looks very bright: the basic necessities of every person will be covered without having to work for it, which will free people to do more of what they want. But if we don’t adjust the system to the new reality, social unrest is inevitable.

    1. Or another way would be to view wealth as a common good and redistribute it…. or cap working hours so that everyone has a chance to work … and a chance to volunteer and do other stuff in the time they say they don’t have now… NEF (a London-based think-thank ) www. neweconomics.org is doing a lot of work on this Zsolt – might be of interest to you

  4. The current government is pushing “Industrialization”. And this is mostly geared for large foreign corporations. Because the low wage earned in this sector means that even when doubling employee income costs and taxes this corporate cost is really almost nothing. Almost like doubling zero: it is still zero. So there is little pressure on the government from this investment group to deal with this issue.

    But employee taxes are killing small and medium businesses. Despite claims to “support” such businesses, such businesses really have not seen much real legislative or tax relief or support. While dolling out EU grant money they should get in any case is almost like that scene in the “Bridge Over the River Kwai” where the prisoners were given special “gifts”, which were just their Red Cross packages they were suppose to receive anyway.

    It is like in the book “Relations” (Zsigmond Móricz). Small businesses (represented by small land owners in that book) were despised and ignored by the political elite, in preference for their politically created, promoted, and idealized grand pig farm (which was bankrupt and corruption ridden). Little has changed in the past 80 years since that book was written.

    I hate to say this, but Hungary is not a small business friendly country. A pity. Since from small businesses comes most innovation. And Hungarians can be quite clever and innovate when given the chance.

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