SUMMARY
  • Automation and Anxiety
  • U.S. Fiscal Policy Takes A Turn for the Worse
  • Giving Up On The 2% Solution
The first computer I ever used was a monster. I have no idea how they got the device up to the second floor of my grade school (which was more than 80 years old and had no elevator), and the lights in the library flickered every time we turned the thing on. To bring the machine to life, we had to dial a number on an adjacent telephone, wait for a tone, and then plunge the receiver into a set of suction cups.


Interestingly, the first thing I ever did on that contraption was play Mancala, a game invented by Bedouins thousands of years ago using sand pits and stones. The computer defeated me the first few times, but then I began to recognize patterns in its play that made its moves easy to anticipate. After I began to beat it consistently, I rapidly lost interest because the opponent was overly robotic.

That vintage computer seems as primitive today as the idea of playing games in the sand was back in the 1970s. Computers have become much more powerful, and they are able to learn from their experiences; today’s software plays chess and Gomoku better than top grandmasters. With artificial intelligence now trained on more commercial applications, many are wondering what other things machines might eventually do better than people. And that prospect is creating economic unease around the world.

The transition from man to machine is a long-running industrial theme. Two hundred years ago, steam-powered mills began replacing human weavers (prompting destructive retaliation from the Luddites). In the 1800s, the advent of automated reapers disrupted agriculture. In the last century, robots took deep root on the factory floor. And, most recently, the internet has deeply diminished the need for transaction agents like travel consultants, bank tellers and retailers.



Despite the inexorable march of innovation, employment has continued upward. When change occurs, it is fairly easy to identify the jobs that might be at risk but more difficult to identify the ones that will arise to take their places. But those new opportunities have always appeared, and market economies adapt to embrace them. Thirty years ago, few would have foreseen that thousands of people would be working in cybersecurity, genetic medicine or driverless logistics. But all are growth fields today.