Sixty years ago Hannah Arendt argued that the advent of automation was one of the two great events threatening the modern age. Against the Marxist hope that machines will free us from the need to labor so that we can pursue hobbies and nurture the soul, Arendt worried that freedom from labor would be soul crushing. We are a jobholding culture in which people find meaning in their employment. Without work, she argued, people will have little to nourish their sense of self. Most people will fall back on consumption, which requires them to labor to earn money to consume more, in a cycle of soul-crushing monotony. Today, many economists and social prophets are coming to see that Arendt had a point. Derek Thompson writes in The Atlantic that the worries that machines will end the need for human labor are finally coming true: "After 300 years of people crying wolf, there are now three broad reasons to take seriously the argument that the beast is at the door: the ongoing triumph of capital over labor, the quiet demise of the working man, and the impressive dexterity of information technology." According to Thompson, "The share of U.S. economic output that's paid out in wages fell steadily in the 1980s, reversed some of its losses in the '90s, and then continued falling after 2000, accelerating during the Great Recession. It now stands at its lowest level since the government started keeping track in the mid-20th century."
In the 1950s, Henry Ford II, the CEO of Ford, and Walter Reuther, the head of the United Auto Workers union, were touring a new engine plant in Cleveland. Ford gestured to a fleet of machines and said, “Walter, how are you going to get these robots to pay union dues?” The union boss famously replied: “Henry, how are you going to get them to buy your cars?”
As Martin Ford (no relation) writes in his new book, The Rise of the Robots, this story might be apocryphal, but its message is instructive. We’re pretty good at noticing the immediate effects of technology’s substituting for workers, such as fewer people on the factory floor. What’s harder is anticipating the second-order effects of this transformation, such as what happens to the consumer economy when you take away the consumers.