Monday, 12 November 2012

The Lesson of Ludd

Two hundred years ago, in 1812, there was a strike at the Rawfolds Mill in Yorkshire. Today, we know know it as the first defeat of the machine-breaking Luddite Movement, a contemporary reaction to the first wave of disruptive technology that marked the start of the Industrial Revolution and a period of history which may hold lessons for us today, in a period of great economic uncertainty, where productivity is increasingly automated and removed from human labour.

Simply taking a moribund Europe and a struggling United States economy, as examples, every statistic of the last decade warns of trouble ahead, as the rapidly climbing curve of automation and intelligent computing overtakes the millions of individual that make-up the traditional workforce.

Some fundamental jobs requiring manual labour and human skills remain irreplaceable in a service economy but huge swathes of knowledge-based careers are rapidly disappearing into cyberspace or to the digital sweat-shops of the Far East, leaving an army of unemployed young University graduates without real prospects for the future.

Europe, in particular, floats on generous, entitlement-based, socialist economies with a disproportionately large public sector and a rapidly shrinking number of workers that pay the taxes to support it. As the poorly educated migrant-driven populations continue to grow in countries such as France, the potential for opportunity and unemployment-driven unrest in the largest cities grows with it because the jobs required no longer exist in the volumes needed.

Once upon a time, Governments would introduce huge public sector projects, such as the Pyramid of Giza or the Great Wall of China or canals and railways to employ Karl Marx's growing proletariat but today the finances no longer exist, Governments are facing chronic debt challenges or are simply bankrupt, like Greece and the intellectuals are as vulnerable to the advancing machine age as the uneducated,

What I also observe around me today is ageism in the workplace. Outside of the more senior positions in business, how many people over the age of 50 are actually employed any more? Most recently and here in the UK, you'll see the public sector 'streamlining-out' the over-fifties with generous redundancy packages, as their pensions can no longer be supported. In the private sector and particularly among technology businesses 50+ is as old as Methuselah.

Transition periods in human history never pass without pain and I can't quite subscribe to the rosy optimism in Andrew McAfee's 'Ted Talk' shown below. Luddism failed because ultimately new types of work appeared to replace the old and which delivered the mass-employment that led to the the industrial revolution. However, digital technology is rapidly displacing the widest spectrum of human skills and continues to grow at a geometric rate. If you follow the progress of Moore's Law and concede that 75% of human skills and intelligence can be automated out of the workplace, making companies more profitable as a consequence, then the outlook for the workforce and for employment looks increasingly bleak.

So where do we go in this expanding transition economy where large numbers of human workers are no longer needed? 'Economies run on ideas' but no politician or economist can answer this riddle without using 'Hope' somewhere in the answer.