Imagine you are a farmer in a remote village in the woods. You are working your field all year, planting beetroot and other healthy and nutritious plants. Your harvest is more than enough to feed your family, and you can sell some at the village market.
Now technology advances, and at some point you can use your proceeds from the village sales to buy a tractor. But you have to take a loan, and the tractor needs to be serviced. You couldn’t pay for that from the profit you had so far, so you cannot work less and spend more time relaxing on the farmhouse veranda. What you do instead is you clear some more of the woodland, and expand the fields. This way, not only can you pay for your tractor’s loan and servicing, but you have a bit more money at the end of the day.
Maybe for some time you can go on planting beetroot, and sell it at the village. But at some time people have enough beetroot, especially since other farmers have bought tractors, too. So you wouldn’t make any profit from your increased productivity of beetroot.
Instead you turn to putting your means of production to some other use, maybe berries. People in the village all have some more money left because of the technological evolution, and are happy to top up their beetroot meals with some desert. Everybody is happy about this.
Then technology advances further, and you can buy a self-driving tractor. It wipes away part of your work, and if you haven’t had enough engineering skills to do the planning, programming and tractor servicing yourself, you may not have anything useful to do on the farm. In principle, you are facing the same two questions all over again: What do you do with your free time? And how can you make sure you earn enough money to afford the tractor – especially because by now the margin you can make on selling beetroot and berries will be rather low.
Again, the answer is that you will turn your superfluous resources to producing something else that can be of value. You clear some more wood, and plant flowers so that all the lovers in the village can delight each other with wonderful bouquets. And since the self-driving tractor takes care of growing the flowers, your job now is to compose beautiful flower arrangements, and maybe with your taste, experience and conversation make the bouquet something personal, so that your customers can take home a gift that is special, “just for you darling”.
And so the development goes on and on. With every activity taken over cheaper by technology, humans will not just sit and starve, but turn to producing something else of value to each other. And humanity progresses from eating beetroot to having desert, to having flower arrangements on their table.
Where are the limitations? In the present discussion about tech taking over jobs, it looks like it is human creativity and skills. It’s true, drivers and warehouse employees may not be ready to become software engineers. But I believe that there is no limit to what human creativity can find to produce something of value to each other. Remember: Silicon Valley is famous for the increasing number and quality of farmer’s markets.
Turning back to our story, I think other limitations are more pressing: What if we don’t have enough woodland available to clear and grow the flowers? How can we be sure that the villagers can afford the flowers? And probably the most important of all: Imagine that the farm in the story was a bit larger, and you have an owner and several farm hands. Now the increased profits from the berries and the flowers go to the owner, but not necessarily to the farm hands. The farm hands won’t be part of those who can afford berries. And if they had been tractor drivers, the self-driving tractor would drive them out of a job. Now they don’t have the money to clear some new land. They cannot take a loan for a tractor of their own. They have free time, but whatever value-creating activity they turn to, they cannot afford the upfront investment to build a new basis for their existence.
I suggest that when looking at the social effects of technology substituting jobs, we closely observe the growing gap between what you can earn from what you do, and what you can earn from what you own.