Mir 1

Mustafa Hafeez Mir

COM 1101-15

Professor Alexandra Soya

26April 2017

Research Paper Draft 2

Humans have made discoveries throughout history. Fire, water, gravity

to electricity, penicillin, DNA double helix and so on. Although some more

than others, all human discoveries have helped mankind to evolve as a

specie. Automation is one such discovery; however, the only difference is

that Automation was discovered because humans had invented

mechanization, most notably in the industrial revolution. Automation is

defined as the combined use of computers and machinery to perform tasks

that are repetitive such as manufacturing or to reduce human intervention in

tasks that are operational in nature such as aircraft control.

As with all discoveries, automations arrival in the last century received

mixed views and the role this invention could play was a topic of huge

debate. Interestingly, this debate reached no conclusive result. Instead, over

the passage of time, the process of automation integrated into almost every

aspect of human life. It has answered a lot of questions posed on it at its

birth and falsified many potentially negative predictions about its future.

Automation is also one of those unique discoveries that upgrades perpetually

 Mir 2

with the rising technology. Decades after automations origin, the human

race is better equipped to understand and concentrate on whether

automations positive effects outweigh its negative ones or the other way

around. Therefore, the study of statistics is the main source of evidence in

this research.

Automation has proven itself as a great tool for the various processes it

contributes to. In that context, it has helped in establishing new industries

with low number of people producing substantially huge amount of output. It

has resulted in tremendous advances in manufacturing plants and power

production. Through automation humans have realized the true potential of

computers. As a result, there have been huge gains in banking, engineering,

programming, law and so on. It has been the key factor in forming the global

world of today which increasingly is sharing the marketplace. Generally,

automation has lived up to most of the valid positive speculation made by

the economists and sociologists of the previous century. Yet a vast number of

people still believe that automation will ultimately bring on unemployment.

A present-day example of automation is the popular picture video

sharing application called Instagram. This company came into prosperous

existence only because automation had already made a digitalized,

networked economy. Moreover, it only took fourteen people to form this

company in 2010. Unlike the past, it did not require a huge amount of capital

nor a large pool of labor. In fact, after barely two years of operation, the

company sold for almost three quarters of a billion dollars when the creators
 Mir 3

decided to merge it with Facebook in 2012 (Brynjolfsson, McAfee, Spence 4-

5).

However, this example also shows the reason for the criticism

automation has received. The fact that automation will designate a few

individuals the capacity to produce roughly ten thousand times larger output

than a company from the past with a huge pool of employees was well

predicted by the former economists. For instance, at the time Instagram was

being sold, there was another well-known photography company moving

towards bankruptcy called Kodak. This company at its prime employed

around 145,000 workers.

Many people in the twentieth century were skeptical about Automation.

They saw it as a threat to employment. Brian Hayes, in his article Automation

on the Job, mentions the Full-Employment Paradox (13-14) in which he

explains that providing people the control of their own day to day affairs such

as booking a hotel room, buying an airplane ticket or making an international

phone call has put a line of people, previously employed to do these tasks, at

risk of losing their jobs. In Hayes view, these professions are on their way to

permanent elimination. Hayes supports his claim by mentioning a picture

from 1963 by Life magazine. In this picture, the Milwaukee-Matic, an

industrial machining tool, can be seen along with the eighteen workers it

would replace. A union worker at that time reported that without a shorter

work week, sixty percent of his fellow workers would lose their jobs due to

the introduction of the machine. Then a year later, Robert Heilbroner, a

 Mir 4

prominent economist of that time, asserted that rapid technological change

has already resulted in loss of jobs in manufacturing and agriculture and its

next likely target is the office worker.

Many theories that economists presented turned out to be true as the

office worker of today has become the victim of automation. In their 2014

article New World Order Erik Brynjolfsson, Andrew McAfee and Michael

Spence reveal that incomes of executive office workers in the U.S. on an

average were seventy times as large as the salaries of other workers in the

year 1990. In 2005, the number incremented to three hundred times as

large. The authors consider many factors that contributed in this increase

and validate the information by comparing with salary trends in the rest of

the world. They conclude that a portion of the income growth is because of

greater reliance on information technology. As only a few people hold such

managerial positions, this further led the authors to emphasize that

automation will cause a rift in the national economy as most people will be

below the average salary line. The support for this claim was that the U.S.

alone has the worlds highest level of GDP per capita yet the median income

has seen no increase in the past twenty years. Such statistics are impossible

to challenge and go on to show that the argument against automation is

justified.

Brynjolfsson, McAfee and Spence also explain the role which labor and

capital play as inputs to a marketplace. Firstly, they consider automation in

labor and capital to have converted many local marketplaces to come

 Mir 5

together and form a global marketplace. Secondly, the authors explain that

with the arrival of automation both assets, labor and capital, have started to

equalize their effects on producing services and goods in an economy. Prior

to automation, labor had a greater effect but now robots and computers,

which are forms of capital, are increasing whereas labors effect is

decreasing. The authors then suggest that this could result in equal or low

difference incomes for people in both sectors. Thus, with the increasing

interaction of new machines and robots, salaries of the average worker may

drop in the future.

For many, the choice between jobs will become limited. The authors

Brynjolfsson, McAfee and Spence describe and introduce a special form of

capital, which they call digital capital, that has arisen due to automation.

The authors prove that this is the game changing form of input to a global

marketplace today which has capacity to devalue all other inputs. The

replication of programmed robots and computers to perform menial tasks is

a relatively easier and virtually zero cost exercise. Therefore, the authors

conclude that in the coming future neither the laborers nor capital sector will

gain much from market but rather innovators, people who can create and

present new ideas will benefit the most. As a result of this, most of the

working class will not receive increases in incomes any time soon. Another

way to put it would be that due to automation, being educated and adept

with the advances in technology has started becoming a compulsion rather

than a choice.
 Mir 6

Technology has always advanced forwards since the beginning of the

human race and in the process, it has always created new jobs. However,

automation combined with the fact that the world is at its peak population

leads many theorists to believe that this time it will be different. That this

time the human race will actually run out of a means of sustenance. Yet

many people today feel that they are working more than ever. Hayes, in his

article, mentions an essay written by John Maynard Keynes, a British

economist. Keynes in his essay was right to predict that the total workforce

and the total number of jobs will increase in the future as Hayes supports

this by mentioning that the U.S. labor force has increased 2.5 times since the

1950s according to the Bureau of Labor Statistics in the U.S. department of

labor. The one thing Keynes was wrong about was the time spent on jobs.

Certainly, neither the Europeans nor the Americans are anywhere close to a

fifteen-hour work week as predicted by Keynes (11-12).

There are various examples that show that automation has made

permanent change in the lives of people and even more so that show that

automation has opened new jobs and horizons that were never thought

about. Take banking for example. In developed countries of today, cash

management has been thoroughly revised with the new technologies being

introduced every year. As a result, people have been granted more financial

accessibility than ever before. Sitting at the office, a person can pay his or

her apartment lease, buy a book, send a friend or relative some emergency
 Mir 7

money, and so on. Forty years ago, the idea of a person doing so many

things was a weak one if not impossible.

Similarly, for the past forty to fifty years, automations role in

manufacturing is intriguing. Hayes mentions the Ford Motor Company of the

1950s in his article. He says that the companys plant in Cleveland used to

receive raw metal castings as input and the plant produced finished engine

blocks as outputs. He then mentions that any advance in the engine required

the company to severely change its machinery. However, this problem was

addressed when programmable metalworking tools were introduced

commercially. Later, these became remote controlled as well. Today, a lot of

work in automobile manufacturing and other large scale production

establishments make use of robots. With robots, some factories can operate

all year. Sure, the number of employees have reduced but the output from

these plants have increased dramatically. Today, the laborers who

supposedly lost their jobs have a fair chance to excel in business,

entrepreneurship, teaching and so on. Some even resort to design and

manufacture of new robots (12-13).

A lot of the controversy behind automations role in the society and

economy is fed by those people who have yet to come upon the true and

maximum potential of automation. Reza Najafbagy, an Iranian professor of

public administration, proves in his article Banking Automation in Iran, its

Social and Banking Effects that despite the Governments and private bank

owners fifteen-year attempt to advance the banking system in Iran, the

 Mir 8

banks are still crowded as before and that electronic cashiers are still not

available in most banks. As a result, people are still going to bank branches

for withdrawing cash and paying invoices. Najafbagy insists that the culprit

for this unproductive behavior towards technology are banking management

who do not prioritize expanding ATMs and POS services in Iran. Therefore,

the problem still remains unhinged with the growing population (1-13).

Possible solutions to aforementioned kinds of problems by theorists

and economists is to educate people particularly about automation and

technology. This can only be done so if people acquire a certain threshold of

basic education. Many theorists insist that all those people who have a

unique skill must share this with the people around them for the betterment

of mankind. This solution and the emphasis on education of the masses is an

easy task to comprehend but a much difficult and gradually progressive task

if taken on. Therefore, all those people who are worried about automations

role should start worrying about the education of their children and

grandchildren because without education the children and grandchildren of

the people of today would also be cynically speculating automations role.

 Mir 9

Work Cited

Akst, Daniel. "Automation Anxiety. (Cover Story)." Wilson Quarterly, vol. 37,

no. 3, Summer 2013, pp. 66-78.

http://wilsonquarterly.com/quarterly/summer-2014-where-have-all-the-

jobs-gone/theres-much-learn-from-past-anxiety-over-automation/

Erik Brynjolfsson, Andrew McAfee, and Michael Spence. "New World

Order." Foreign Affairs, vol. 93, no. 4, Summer 2014, pp. 44-53.

https://www.foreignaffairs.com/articles/united-states/2014-06-04/new-

world-order
 Mir 10

Hayes, Brian. "Automation on the Job: Computers were Supposed to be

Labor-Saving Devices. How come were still working so

hard?" American Scientist, vol. 97, Fall 2009, pp.10-14.

http://www.americanscientist.org/issues/pub/automation-on-the-job

Mather, Yassamine. "Automation in the Era of Economic Crises." Critique, vol.

44, no. 1-2, Summer 2016, pp. 67-84.

http://www.tandfonline.com/doi/full/10.1080/03017605.2016.1173824

Najafbagy, Reza. "Banking Automation in Iran, its Social and Banking

Effects. Journal of Performance Management, vol. 23, no. 1, 2010, pp.

11-22.

Phillips, Fred Y., and Deog-Seong Oh. "Technology Assessment and the Social

and Human Impact of Innovation." Bulletin of the Atomic Scientists, vol.

72, no. 6, 2016, pp. 402-411.

http://www.tandfonline.com/doi/full/10.1080/00963402.2016.1240484

Stevens, Yvonne A. "The Future: Innovation and Jobs." Jurimetrics, vol. 56, no.

4, Summer 2016, pp. 367-385.