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Carlos Fenollosa

Carlos Fenollosa

Engineer, developer, entrepreneur

Carlos Fenollosa — Blog

Thoughts on science and tips for researchers who use computers

Living in a disrupted economy

July 21, 2016 — Carlos Fenollosa

There is this continuing discussion on whether technology destroys more jobs than it creates. Every few years, yet another tech revolution occurs, journalists publish articles, pundits share their opinions, politicians try to catch up, and those affected always voice their concerns. These couple years have been no exception, thanks to Uber, Airbnb, and the called sharing economy.

I'm a technologist and a relatively young person, so I am naturally biased towards technological disruption. After all, it is people like me who are trying to make a living by taking over older jobs.

I suggest that you take a few minutes to read a fantastic article titled The $3500 shirt. That essay reveals how horrible some industries were before they could be automated or replaced by something better. Go on, please read it now, it will only take three minutes.

Now, imagine you had to spend a couple of weeks of your time to make a t-shirt from scratch. Would that be acceptable? I guess we all more or less agree that the textile revolution was a net gain for society. Nevertheless, when it occurred, some Luddites probably complained, arguing that the loom put seamstresses out of work.

History is packed with dead industries. We killed the ice business with the modern fridge. We burn less coal for energy, so miners go unemployed. And let's not forget the basis of modern civilization, the agricultural revolution, which is the only reason us humans can feed ourselves. Without greenhouses, nitrates, tractors, pest protection and advancements in farming, humanity would starve.

Admittedly, it transformed the first sector from a 65% in workforce quota into the current 10%. Isn't it great that most of us don't need to wake up before sunrise to water our crops? In hindsight, can you imagine proclaiming that the 1800s way of farming is better because it preserves farming jobs?

The bottom line is that all economic transformations are a net gain for society. They may not be flawless, but they have allowed us humans to live a better life.

So why do some characters fight against current industry disruptions if history will prove them wrong?

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As a European and a social democrat, I believe that States must regulate some economies to avoid monopolies and abuses, supporting the greater good. Furthermore, I sympathize with the affected workforce, both personally and in a macroeconomic level. All taxi drivers suddenly going jobless because of Uber is detrimental to society.

However, it pains me to see that European politicians are taking the opposite stance, brandishing law and tradition as excuses to hinder progress.

Laws must serve people, not the other way around. If we analyze the taxi example, we learn that there is a regulation which requires taxi drivers to pay a huge sum of money up front to operate. Therefore, letting anybody get in that business for free is unfair and breaks the rules of the game. Unsurprisingly, this situation is unfair not because of the new players, but because that regulation is obsolete.

It isn't ethically right that somebody who spent a lot of money to get a license sees their job at risk. But the solution isn't to block other players, especially when it's regulation which is at fault. Let's sit down, think how to establish a transition period, and maybe even reimburse drivers part of that money with the earnings from increased taxes due to a higher employment and economic activity.

There is a middle ground solution: don't change the rules drastically, but don't use these them as an excuse to impede progress.

At the end of the day, some careers are condemned to extinction. That is a real social drama, however, what should we do? Artificially stop innovation to save jobs which are not efficient and, when automated or improved, they make the world better for everyone?

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Us millennials have learned that the concept of a single, lifetime profession just does not exist anymore. Previous generations do not want to accept that reality. I understand that reconverting an older person to a new career may be difficult, but if the alternative is letting that person obstruct younger people's opportunities, that's not fair.

Most professions decline organically, by the very nature of society and economy. It is the politicians' responsibility to mediate when this process is accelerated by a new industry or technology. New or automated trades will take their place, usually providing a bigger collective benefit, like healthcare, education, or modern farming.

Our duty as a society is to make sure everyone lives a happy and comfortable life. Artificially blocking new technologies and economic models harms everyone. If it were for some Luddites, we'd be still paying $3500 for a shirt, and that seamstress would never have been a nurse or a scientist.

Tags: law, startups

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