[MUSIC PLAYING]
CARL FREY: Thanks very much.
It's a real pleasure to be here.
And thank you all for coming,
despite the nice weather.
I was slightly tempted to sit
out on the terrace myself.
So it's really nice to see
that so many of you are here.
Back in 2013, Michael
Osbourne and I
published a paper, in which we
estimated roughly 47% of jobs
are at risk of automation.
And a question that we
got quite frequently
since then is, is
there something
different about this time?
Because we've been through
periods of technological
change before.
And what I would
like to do today
is to take you through some of
the history about mechanization
and jobs.
And because one thing that I
found quite extraordinary when
researching this book
is that, technology
has progressed enormously
over the past 200 years,
but the debate surrounding
its effects has not.
And, as many of you
will have noted,
we are living in a period
of automation anxiety, where
few people feel enthusiastic
about the tornado that's
coming for the office.
And, in fact, the
majority of Americans
now think that governments
should impose restrictions
on how many machines businesses
can install and implement
in production.
And this seems puzzling
from an economic historian
point of view because, if you
take a really long view, what
you see is that economic growth
looks like this hockey stick.
It was slow, stagnant
for millennia,
and only took off in
extraordinary fashion
around 1800.
And the standard
story behind this
is that this was
roughly the time when
the mechanized
factory arrived, that
with its extreme
divisions of labor
and the implementation of
machinery and production,
allowed us to produce
more with fewer people.
And as a result of that, we are
roughly 40 times richer today,
adjusted for inflation,
than we were in 1750
at the dawn of the first
Industrial Revolution.
And needless to say,
that, if anything,
understates the transformation
that has taken place.
Because the consumer
baskets that you
can buy with that income
today is so much more diverse
than it was in 1750, right?
People back then could only
look at the lives of the wealthy
in envy, who had
servants to do the most
tedious things for them.
Today we all have access
to the electric servant,
in terms of dishwashers, washing
machines, vacuum cleaners,
and so on, that relieve us
of a lot of tedious work, not
to mention other minor
inventions like the automobile
and antibiotics.
And if that isn't evidence
of progress enough,
consider the fact that
producing those goods
and earning those higher incomes
is much more comfortable today
as well.
Back in 1900, a lot of people
still worked in coal mining.
Explosions and cave-ins were
part of everyday working life.
Lung disease came as
part of the work package.
And today, most of us work
in air conditioned offices.
I was just told that you
have a massage room next door
and a gym that you can go to
during lunch break if you like.
So it's quite extraordinary
how much the working conditions
have improved, and in large part
because of technology, right?
Even occupations that
still exist today
have been transformed
beyond recognition.
Back in 1900, a
farmer would have
walked the fields with nothing
more than animal power.
And today, that same
worker can sit-in
in an air conditioned tractor
and listen to the music
of his or her choice.
So there's no doubt that a
lot of progress has been made.
I'm here to tell you
that, unfortunately, that
is just half of the story.
The Industrial Revolution
created the foundations
for the modern world
we live in today.
But getting there involved
painful transition.
In 1844, Benjamin
Disraeli, before he became
prime minister of Britain.
Published a novel,
called "Calling Speed,"
in which one character remarks
that, "I see cities, people
with machines,
certainly Manchester
must be the most wonderful
place of modern times."
The same year Friedrich Engels
published his conditions
on the working
classes in England,
which was written during a
stay in, precisely, Manchester.
And Engels, needless to say,
had a very different take
on the matter .
He argued that machinery only
served to downgrade people,
to deprive them of
their jobs and incomes.
And as a result
of that, he argued
that it was not in the
interest of the working classes
for mechanization to progress.
Now, Friedrich Engels was
clearly wrong about the future.
But as the economic historian,
[INAUDIBLE] has pointed out,
he was actually
right about the past.
Because for seven decades,
even as the British economy
took off, wages were
stagnant or even falling
at the bottom end of
the income distribution.
The wage data for this period
is admittedly not that great.
But even if you look at
other sources of data,
like consumption, you see that
spending on non-essentials,
for example, declined
during this period.
And if you look at biological
indicators of well-being,
like height, you find that
the cohorts born in 1750
was actually taller than
the cohorts born in 1850.
So it seems that this
had also an impact
on peoples and incomes, their
nutrition, and life expectancy,
more broadly.
And the reason for
this was in large part
the mechanization of industry.
The fact that machines
replaced middle income artisan
jobs with low paid
jobs, often performed
by children in factories.
In fact, early spinning
machines were specifically
designed to be
tended by children.
It was only after
1840, when steam power
became more pervasive
in production,
that the adult
population regained
the comparative
advantage in production.
But it took time for
people to learn new skills.
It took time for production
to be standardized
across factories, so
people could credibly
threaten to leave their job
for another factory job, which
increased their
bargaining power.
Labor unions, of course,
played a role as well,
but that was
actually much later.
So the upsurge in wages
during the later stages
of the Industrial Revolution,
as argued in the book,
is best explained by the
industrialization process
itself, but getting
there took a long time.
Now, one puzzle to many economic
historians has been, why would
people have voluntarily
agreed to participate
in the industrialization process
if it reduced their utility?
The simple answer
is that they didn't.
They petitioned to
Parliament to block
the introduction of
labor-replacing technologies.
And they frequently rioted
against the mechanized factory.
Some of you will have heard
about the Luddites riots,
but they were only part
of a long wave of riots
that spread across continental
Europe, Britain, and even
China.
And how did the
British government
respond to those riots?
Well, not too
infrequently they sent up
troops against the rioters.
And, in fact, the army that
was sent against the Luddites
was larger than the
army that Wellington
took against Napoleon the
Peninsula War of 1808.
So I think it's
important to remember
that a lot of
revolutionary technologies
also spread a lot of political
revolutionaries along the way.
What began with the introduction
of the first machines
in factories and ended with the
construction of the railroads,
also ended with the publication
of the "Communist Manifesto."
Now, I'm not here to predict
the socialist revolution,
but I do know that levels
of income inequality
have increased rapidly
in recent decades
and have been approaching
levels not seen
since the Industrial Revolution
of the 18th and 19th century.
And needless to say,
what's driving this
is not spinning machines
and steam power,
but there's a new
technology, it's
essentially computerization.
The first electronic
computer was
developed at the University
of Pennsylvania in 1947.
But it was probably too large
to be fitted into this room.
And as a result of that,
it had virtually no impact
on the labor market and
productivity growth.
It was only around 1980s,
with the introduction
of the personal
computer, that a,
companies were able to
restructure supply chains
to take advantage of cheap
labor in countries like China,
and b, that companies
became able to automate
a lot of routine
rule-based activities
that have disappeared in
offices and factories.
And this automation has been
very good for some of us,
right?
So, most people in
this room, we are
able to work more productively
with the help of computers
and we can reach a
global marketplace
to export our ideas.
But it hasn't been that
great for everyone.
And if you look at prime-age men
with no more than high school
degree in the United
States, their wages
have actually fallen for
three consecutive decades.
They have been worse
off in the labor market,
due to, in large
part, automation.
Now we have already seen a
backlash against globalization.
But automation and
globalization have
had very similar
effects on the unskilled
and their communities.
Where the robots
are is also where
many of America's problems are.
And a variety of studies have
shown that when jobs dry up
you get a lot of social
problems in those communities,
such as rising crime,
faltering marriage rates.
And you even see what
economists Anne Case and Angus
Deaton have called the
'depths of despair,"
A lot of people
dying prematurely
because of alcohol
related causes, liver
disease, and suicide.
And, not too surprisingly,
these are also
the electoral districts
that are most likely to opt
for radical political change.
Our studies shows that
much of the 2016 election
actually played out in electoral
districts which adopted
robots very extensively.
And if you want to explain
why three key swing
states, like Michigan,
Wisconsin, and Pennsylvania,
who had voted for the
Democratic candidate
every single election since
1992, all of the sudden
and ended up voting
for Donald Trump,
automation is definitely
part of the story.
Now, the worrying part is
that we have seen nothing yet.
Because past automation
was essentially
based on top-down
computer programming,
with a person specifying
what the technology
should do at every
given contingency.
We are now in an era of
bottom-up machine learning,
where new technologies can
essentially infer the rules
of the game themselves
through a, data--
tapping into our experience,
and trial and error.
And at some risk of
oversimplification,
this is what driving everything
from recent developments
in autonomous driving
to Google Translate.
Now, when I make this
presentation, I'm sorry to say,
some people sometimes point out
that Google Translate is not
perfect.
But at the same time,
it's important to remember
that every revolution
in technology
began with imperfect technology.
The early steam
engines were merely
used to drain coal
mines, and even that they
didn't do particularly well.
And we've seen
exponential improvements
in many of these
technologies in recent years.
The second thing to point out is
that we are not perfect either,
right?
This is a study
of Israeli judges
and their decision
making during the day.
And what you see
here is that we make
a high share of
favorable decision
just after we have
a morning snack,
and then the share drops down
during the morning and bumps
back again as insulin levels
go up, after the lunch break,
and so on and so forth.
And perhaps we can
actually use algorithms
to make better decisions
in some domains
where we perform poorly.
Thirdly, I think it's
worthwhile pointing out
that much automation
doesn't happen
by replicating exactly what
the human worker does, right?
We didn't automate laundry
work by building robots that
walked out from the
kitchen into the forests,
chopped down trees, carried
wood and buckets of water
into the home, heated
it on the stove,
and then performed the
motions of hand washing.
We did that by inventing the
electric washing machine.
In the same way, we didn't
automate the way the work
of lamp lighters by
building robots that are
capable of climbing lampposts.
And engineers have,
at least historically,
been very good at circumventing
some engineering bottlenecks
by simplifying tasks.
And I suspect that is
likely to continue.
That being said
though, there's still
certain domains in which
computers perform poorly.
Simple things for
us, like deciding
what's a piece of rubbish
lying on the floor
and what's a really
important document,
is still something that
is very hard to explain.
And there are no
general purpose robots
that are able to do all of the
things that your cleaner does,
for example.
When it comes to
more complex tasks,
like creativity and complex
social interactions,
we also see that
technologies are still
performing quite poorly.
And I think this is well
captured by the Turing test
where chatbots try to
convince human judges of them
being a person.
Some people argue that there
was a breakthrough, a couple
of years ago when
one chatbot actually
managed to convince 30% of human
judges of it being a person.
But it did so by
pretending to be
a 13-year-old
orphan Russian boy,
speaking English as
a second language,
with no understanding
of English culture.
And if you think about
the variety of much more
complex social interactions
you do in your daily jobs,
I think it's almost
inconceivable
that you will be replaced in
those tasks in the near future.
Now, the key question
that emerges from this
is then, how intensive
are our jobs in tasks
that correspond to these
engineering bottlenecks
to automation?
According to our
estimates, quite a few
are actually not more
intensive in such tasks.
Roughly 47% of jobs we estimate
are at risk of automation.
And that's no longer
just production jobs,
it's everything from
transportation, logistics,
warehouses, retailing,
construction,
and so on and so forth.
And when we published this
study a couple of years ago,
we actually published
a very detailed list
of 702 occupations and
their relative exposure
to automation.
And you can imagine that
quite a lot of people
dug through this list and tried
to come up with silly examples.
And my friend, [INAUDIBLE],,
at "The Economist,"
used to tease us because we
found that fashion models are
highly exposed to automation.
These models on these
pictures actually don't exist.
They've been created by
generative adversarial
networks, which
have generated them
from thousands of pictures.
And they're already being used
by some companies like Dior.
At the same time though, we did
say that technology is clearly
not the only factor that drives
decisions to automate, right?
When Nissan produces
cars in Japan,
it relies heavily on robots.
When it does the
same thing in India,
it relies more heavily
on cheap labor.
When tractors were
first invented,
they were long not
adapted because there
weren't any operatives
that could actually
run the machines.
And "The New York
Times" noted in 1918,
that the tractor is
too good a machine
to be put in the hands
of a poor operator.
And to spur adoption,
colleges were actually
created that provided training
courses for tractor operators
to spur adoption.
And there are essentially
restaurants today,
which are vending machines,
which have cut out
the waiter from the process.
And that may be good
for certain events,
like going for a
quick lunch, but we
are unlikely to prefer
having an automated waiter
for a pleasant dinner, right?
So consumer choices also
matter a lot for decisions
to automate.
And even if Google Translate
became perfect tomorrow,
human translators still,
or for certain document,
you still need certification.
So unless we certify
Google Translate,
those jobs are not going
to be replaced tomorrow.
And lastly, as I
pointed out earlier,
adverse public opinion
can matter as well.
These are dock workers who
went on strike in Los Angeles
last month because of the
introduction of machinery
in the harbor in
which they work.
And I think that a big
difference between today
and the Industrial Revolution
is that people today actually
have, at least in the industrial
west, political rights.
And I think that the economist,
Leontief, was onto something
when he suggested that if
horses could have joined
the Democratic Party and vote,
what happened on the farms
might have turned
out differently.
They may have used
the political rights
to bring the spread of
the tractor to a halt.
And in the case of the Luddites
was essentially hopeless,
right?
Because in the 19th
century Britain,
property ownership was still
a requirement for voting.
So their words were
essentially left and unheard.
Now, I'm actually an optimist
about our long run future.
I'm 100% certain that
artificial intelligence
are going to make education
and medicine better.
It will rise productivity,
boost our people's wages.
It's going also to
create a lot of new jobs
that we can't even
imagine today.
And it's already created
new jobs in recent years.
LinkedIn recently did a
survey on their platform,
where they looked at the
fastest growth occupations.
And among those, you find
jobs like IOS Developers,
Social Media Interns,
Big Data Architects,
but also Zumba Instructors.
And you find jobs like Digital
Marketing Specialist and also
Beachbody Coaches.
And I think this
reflects a broader trend
that we are actually
seeing in recent years,
with tech jobs clustering
in skills cities,
like London like Stockholm
and the Bay Area, and so on,
and those people demanding
more specialized in-person
type of services.
And the result of this
is that more people
are clustering in these places.
And that has been great
for cities like London.
But it hasn't been
great for certain people
in the countryside,
who have seen
jobs vanish due to automation.
And this has created
very much of the divide
that we are seeing
today between these hubs
for technology and
the rest, essentially.
And I would predict that unless
we do something about this,
these trends are
likely to continue.
The book is called
"The Technology Trap."
And "The Technology
Trap" actually refers
to pre-industrial times
when workers frequently
resisted the implementation
of new technologies
and governments fearing social
unrest essentially sided
with angry workers.
And as a result of
that, new technologies
were often resistant and
often outright blocked.
And this meant that
economic growth was also
slow for a very long time.
The question I ask in
the book is, could we
return to this technology
trap in which governments
tax robots and break up
technology companies,
and essentially try to hinder
the spread of automation
technologies?
The simple truth is that I'm
far from sure about that,
but I do think that
it is a real risk.
And I think, to
harvest the long term
gains from artificial
intelligence
and other technologies
on the rise,
we need to think through
the short term dynamics
quite carefully.
And I think that's
probably a good place
to open up for questions.
Thank you all for coming
and great to be with you.
[APPLAUSE]
AUDIENCE: So, if you were
then advising policymakers
on what action
should they be taking
knowing these trends, what would
be the big policies that you
think they should
be prioritizing?
CARL FREY: I think the key
word there is, in a way, big.
Because everybody thinks that
they have a big challenge
and you need a big policy
change to sort of solve it.
And unfortunately, I
don't think that there
is this one big policy to
deal with the challenges
that we face.
It's more of a
package of many things
that, individually
may sound minor,
but that collectively can
make a big difference.
So take one example, I
grew up in southern Sweden,
close to a city called Malmo.
And Malmo was a city
that specialized
in building ships, an industry
that went down in the 1990s.
And the city was actually doing
quite poorly for a long time,
and, essentially,
only took off again
with the construction
of the bridge
to Copenhagen, which meant that
people could stay put in Malmo,
where housing was
cheap, commuting
to Copenhagen, where there was
a greater abundance of new jobs,
spend their money
locally, in Malmo,
which gave a boost to
the local service economy
there, and essentially
created this virtuous cycle.
And I think that one of the
key drivers of both and wealth
inequality has actually
been that there
are significant constraints
on housing supply to places
like London, where these
new jobs are emerging.
And a lot of people
can actually not
afford to live in
places that provide
the most opportunity and that is
the reason why some people are
leaving the Bay Area for places
like Austin, because it makes
it harder to actually
attract talent.
So I think that a
lot can actually
be achieved by building more
in, a, places that are expanding
and b, connecting them
through investments
in smart infrastructure.
Because people ideally want to
stay put in their communities.
And if you can you
connect declining places
to expanding ones, a
lot can be achieved.
Now, looking into
the future, there
may be better transportation
technologies than we have now.
There's currently
a feasibility study
being done of connecting
Cleveland and Chicago
with the Hyperloop.
So that's currently
a 6 hour drive.
If that was to be
successful at some point,
that would be a
28 minute commute.
So two labor markets
would essentially be one.
And I also think
that a lot could
be achieved by investing more
in early childhood education.
So we don't know exactly
what the skills of the future
will be, but we know what some
of the hurdles to acquiring
new skills are.
And if you have early deficits
in math and basically reading,
you are much less likely to
learn new skills later on,
you're much less likely
to go to college,
and you're much less
likely to participate
in civic activities, and so on.
So I think by investing in
early childhood education,
particularly in deprived areas,
a lot can be achieved as well.
AUDIENCE: If you ask people
in many of those towns
that say we don't want to be a
dormitory town to a big capital
city, we want good jobs
back like we've had before,
like farming jobs, fishing
jobs, manufacturing jobs,
would your argument be,
well, that would effectively
be like the Luddites
were trying to do,
hanging onto jobs that
will no longer exist?
Or would your
argument be you need
to invest in those other
kind of jobs as well?
CARL FREY: Yes.
I mean, I don't believe
in conserving old jobs.
And bringing old jobs
back is essentially
conserving the past.
And if we would have done
that for the past 100 years
a lot of people would still
be working coal mining.
And coal mining
communities might
have been better off than
in a way than they are now.
But, on average, we are
so much more better off
because of the changes
in the labor market
and the changes in technology
we've seen over the long run.
And I think in the short
run, a lot of people
are likely to be made worse
off by changes in technology.
I think a problem
when economists
speak about the short run
is that we're usually not
very specific about
what that means,
and whether it's 20 hours,
20 days, or 20 years.
and it kind of matters.
During the Industrial
Revolution that was a long time.
But in sort of the
grand scheme of things,
and later generations have
been made so much better off
as a consequence of that.
And if we value
later generations
as we value current
ones, then we
should think that it's
instilled in the greater good.
AUDIENCE: I was interested by
the robot map, if you will,
showing kind of
that correlation,
if there is a correlation.
Because I guess the
loudest explanation
that I've heard about why the US
shifted was offshoring of jobs.
Do you think that there's
maybe a lack of awareness
among those that are kind of
at greatest risk of automation?
I know you showed the 47%
statistic in the L.A. Harbor,
but do you think there's a
great recognition of that?
And do you think that
kind of narrative
is going to get
louder over time?
CARL FREY: Yes.
I think, first of all, I
mean offshoring is enabled
by a technology as well.
So to disentangle
the two is tricky.
But it's absolutely clear that
both offshoring and automation
has contributed to
deindustrialization.
And if you look at
the United States,
you see that manufacturing
employment peaked in 1979
and the manufacturing
employment share
has fallen steadily since then.
But the output
share of the economy
has actually been constant
over the same period of time.
So still a lot of stuff
being produced in the US,
but with fewer people.
And I think, and as I mentioned,
globalization and automation
have both played a
significant role.
I think looking forward,
though the rise of China
has already happened,
we've already
seen a lot of offshoring.
Most people today actually
work in non-trade sectors
of the economy that
can't be exported,
and so they are relatively
shielded actually
from future globalization,
but they aren't
shielded from automation.
So the roughly 3.5
million cashiers
in the US, which are
exposed to technologies
like Amazon Go, another 3.5
truck, bus, and taxi drivers,
which are exposed to
autonomous vehicles.
And so there are a lot of jobs
that are not offshoreable,
but are automateable.
And I think and that is
also one of the reasons
to be concerned
that it may actually
shift more towards technology.
AUDIENCE: Facebook
recently made the argument
against the breakup of big
tech, that if big tech is being
broken up, somebody else, as
you mentioned in this case,
Chinese company would take over.
Do you believe that we've
reached a point where
globalization trumps the power
of single governments to stop
or, in this case, globalization
would encourage or accelerate
the spread of automation?
CARL FREY: So one
of the key reasons
that the Industrial
Revolution happened in Britain
was not that there was
an absence of resistance
to technological change,
quite the contrary.
And the reason that
it happened in Britain
was that governments,
for the first time,
sided with innovators
and pioneers of industry.
And the reason for that in
time was, in large part,
actually early globalization
and competition
between nation states.
So the craft
guilds, for example,
which sort of
forcefully resisted
new technologies became
weakened by globalization
because their
political clout didn't
extend beyond the city
in which they worked.
And so as a result of that,
the threat from the below
was essentially reduced
and because governments
increasingly realized that
their military muscle depended
on their economic
strength, they also
invested more in mechanization
and allowed it to thrive.
And I think that essentially
goes to your question,
in the sense that
we are concerned
about an outside
threat, a competitor,
gaining from imposing
essentially new technologies
potentially on their
population, even
if there is resistance to them.
And now, in most
modern democracies,
we we're more worried
about the short run
than the Chinese
government is, for example.
And you know whether we
have Jeremy Corbyn or Boris
Johnson in office, they all
worry about being elected
in the next general election.
So they are much more likely
to take the democratic process,
or the threat from below if
you like, more seriously than,
let's say, the
Chinese government is.
So, I mean, I take
the point that China
may have an advantage
in that regard,
but I still think it's
a difficult selling
proposition to voters
and say look, it
may be your jobs
that are at stake,
but we are still
going to implement
these technologies
because of competition
with China and some other place.
AUDIENCE: One question I have
is one of the kind of things,
or components, of the processes
that are happening today
is the environmental challenges
and limits that we're reaching.
How do you see this play out
within the kind of processes
that are occurring right now?
And do you see it as
different from before?
CARL FREY: Sorry,
your asking about
the environmental challenges
related to automation?
AUDIENCE: Yes.
CARL FREY: OK.
So, I mean, I don't have
a strong view on that.
So I think there's a
tendency of new industries
to be less carbon intensive
than past industries.
And I think as the
economy dematerializes
that is going to be less of an
issue with new and innovations.
I mean, if you speak to
our group of engineering
at Oxford Martin
school, they actually
think that to reach
the 2% target you
need technical solutions.
Because even if you stop
carbon emissions tomorrow,
you're not going to reach it.
So I think sort of stopping
the technological clock
due to environmental
concerns, which
I take to be slightly
implicit in your question,
maybe it was not,
it's not a great idea.
AUDIENCE: My question
was more about
whether you think that the
limits that we're reaching
are kind of configuring a
different scenario to what
was happening in the previous
Industrial Revolution, when
those limits just
simply weren't there
because we had to all
of the resources to use?
And I was wondering
whether you see
this factor play out
within the processes that
are occurring right now?
You then said-- you
kind of answered, so.
CARL FREY: But
there were actually
some significant limits.
I mean, the early Industrial
Revolution in part
also happened in
northern England
because it was close to coal
and transportation costs
were still relatively high.
So there was actually a
cost constraining factor
in the early days of
industrialization as well.
AUDIENCE: I think you mention
it in the introduction
of the book, the
impact on communities.
So, for example, during
the Industrial Revolution
and what we have
witnessed until now,
probably social order is very
similar, right, roughly, right?
I mean, people moved
into factories,
they still worked
together, the community
was much more stronger.
Well, actually now
with technology,
I think there is a much
more shift to individualism,
the concentration of power
even more in less people.
How do you compare the
societal impact of technology
during the Industrial Revolution
versus what we just saw?
CARL FREY: I think in
that regard the Industrial
Revolution was mainly more
disruptive in the sense
that a lot of
people still worked,
but few people
actually had jobs.
Most people were working at
their own pace and at home,
often close to their
relatives and children
and everybody was
under one roof.
And what the factory
city essentially did
is to take a lot of
people from various places
across the country and
bringing them all together
in a rather unhealthy,
aesthetically unappealing
environments, and at wages,
which hardly compensated
for those working conditions.
So I think in that sense the
Industrial Revolution might
have been more disruptive and
then what we've seen today.
AUDIENCE: You've
touched a little bit
about the policy level
and some of the things you
could do there.
What would be your advice
at the individual level,
if you're speaking
to somebody who
is facing, say, an imminent
threat to their role,
maybe due to the Amazon
type of situation
of automation of
checkout or something?
Is it simply reskill?
And also, is there a
role that government
ought to be playing
in terms of helping
them find that next role
in terms of that reskilling
journey?
CARL FREY: Right, so
that's a great question.
I'm an academic, not
a career advisor.
But broadly speaking,
I think you do well
in focusing on things
that machines do poorly.
So I think a lot of
work that involves
complex social interactions,
creativity, for example,
it's a good start.
I do note that
computer science--
we struggle to keep PhD students
for the first six months,
right, because they get hired
by Google and other companies.
And it's clearly a skill set
that's enormously in demand.
Broadly speaking, I
mean, also, if you
think that data is the new
oil, it's actually a cliche.
But nonetheless, statistics
and machine learning,
generally, is
probably a good idea.
But I think people
need to figure out
for themselves what
they enjoy and what
they're good at as well.
So I don't have a very
strong opinion on that.
AUDIENCE: I see
technology as something
that essentially humans created
to make their lives easier.
So even if there
was a limit imposed
by an authoritative body
on technology progressing,
the humans will always find a
way to make their lives easier.
Would the question
not be about, say,
the distribution of resources?
And I only mention
this because you
mentioned the
"Communist Manifesto"
earlier in your presentation.
But isn't that essentially
one of the questions
that Marx answered when we reach
a certain level of technology
that resources have
to be distributed?
Obviously, he
visioned a world where
robots are working in
the farms and people
are frolicking about
picking flowers and stuff.
But--
CARL FREY: Yes, so Marx
thought that people
would have to acquire
the means of production.
He didn't think that
wages would rise
as mechanization progressed.
Things happen quite differently.
And well, I mean,
I'm not sure that I
agree with the basic premise
that people just innovate
to make their lives easier.
So I think a lot
of innovation is
happening in businesses today.
And it's happening to meet
a certain consumer demand.
But I do agree that it's very
much a distributional issue.
If you look at the country
like Saudi Arabia and a country
like Norway, right,
they both have oil.
They have essentially black
gold coming out of the ground.
But they have very
different economies.
They're very
different societies.
It's more widely shared in
one place than the other.
And obviously, that is due
to the result of institutions
and culture and factors
that have nothing
to do with technology in itself.
So clearly, that's right.
AUDIENCE: You drew the parallels
between the rise of automation
in certain parts of America and
the rise of the Republicans--
switch the Republican vote.
So I'm further drawing the
parallel between the rise
of populism with that.
Are there any parallels
in what happened
with Industrial Revolution?
And is there any sort
of light at the end
of the populist
tunnel that we seem
to be going down at the moment?
CARL FREY: So, sorry
if there is a parallel
with the rise of populism in--
AUDIENCE: With the rise of--
with industrialization--
with the automation, how did
that pan out in a similar way
back in the
Industrial Revolution?
Was there a shift in politics
in how that responded to that?
And then how did it evolve once
things had kind of established
themselves?
CARL FREY: Right, so not really.
I think one key difference
is sort of actually
in sphere of economic ideas.
So a lot of people at the
time of Industrial Revolution
still believed that the
world was Malthusian, right?
And that was the idea
that larger higher incomes
would only result in larger
populations with no benefit
to the average people
in per capita terms.
And as a result of
that, there was also
believed that any
sort of redistribution
was essentially meaningless,
because it would only translate
into a larger population.
And this idea was
actually very popular.
It led to the reform
of the poor laws
in 1834, which essentially
took away the safety
net that had existed.
So the policy direction
in that regard
was more sort of in
the other way around.
I think today most
people realize
that there are things
that governments can
do to smooth the transition.
And the other big difference
is that even with the Reform
Act of 1867, property ownership
still remained a requirement
for voting.
So most people were essentially
politically disenfranchised.
AUDIENCE: You made the
point that, perhaps,
if horses had had the vote, then
maybe the Industrial Revolution
wouldn't have played
out as planned.
You could say that some of the
beneficiaries of technology
change have the vote today.
But many don't.
And so in advanced
Western democracies,
how does this all play out?
CARL FREY: So I'm not sure
if I follow your question.
AUDIENCE: In a world
where everyone--
in advanced economies, where
most people have the vote,
but perhaps, many people
won't be beneficiaries
of technology change, how does
this play out in a democracy?
CARL FREY: Yes, I think that
that's the key point, right?
So I mean, if people are
not happy with the verdict
of the market, they
can opt against it
through various mechanisms.
And I think that
somebody who is sort
of tapping into this concern,
like Andrew Yang in the United
States today, is gaining
a lot of traction on that.
So I think it's
extremely hard to predict
how this is going to play out.
And that's sort of also one
of the key points of the book
because this 47% study
that we published back
in 2013, in a sense, created
literature in which people were
trying to predict exactly
how many jobs that were
going to disappear or
appear by 2030 and so on.
And we merely looked at
potential scope of automation.
I think the pace of it
is much more complex.
It depends on what we do.
It depends of acceptance
for new technology.
And much of that
sort of lab is going
to play out in the sphere
of political economy.
And we struggle to predict the
outcome of the general election
in the very same days.
I think we need to be rather
humble about the ability
to predict such outcomes.
AUDIENCE: Thank you.
And with that, please
join me in thanking Carl.
CARL FREY: Thank you.
[APPLAUSE]
