by Michio Kaku
In stage IV, both electricity and running water have become utilities. They are so cheap, and we consume so much of them, that we meter the amount of electricity and water that runs into our home.
The computer follows the same pattern. Companies that understood this thrived and prospered. Companies that didn’t were driven almost to bankruptcy. IBM dominated stage I with the mainframe computer in the 1950s. One mainframe computer was so precious that it was shared by 100 scientists and engineers. However, the management of IBM failed to appreciate Moore’s law, so they almost went bankrupt when we entered stage II in the 1980s, with the coming of the personal computer.
But even personal computer manufacturers got complacent. They envisioned a world with stand-alone computers on every desk. They were caught off guard with the coming of stage III, Internet-linked computers by which one person could interact with millions of computers. Today, the only place you can find a stand-alone computer is in a museum.
So the future of the computer is to eventually enter stage IV, where it disappears and gets resurrected as a fashion statement. We will decorate our world with computers. The very word computer will gradually disappear from the English language. In the future, the largest component of urban waste will not be paper but chips. The future of the computer is to disappear and become a utility, sold like electricity and water. Computer chips will gradually disappear as computation is done “in the clouds.”
So the evolution of computers is not a mystery; it is following the well-worn path of its predecessors, like electricity, paper, and running water.
But the computer and the Internet are still evolving. Economist John Steele Gordon was asked if this revolution is over. “Heavens, no. It will be a hundred years before it fully plays out, just like the steam engine. We are now at the point with the Internet that they were with the railroad in 1850. It’s just the beginning.”
Not all technologies, we should point out, enter stages III and IV. For example, consider the locomotive. Mechanized transportation entered stage I in the early 1800s with the coming of the steam-driven locomotive. A hundred people would share a single locomotive. We entered stage II with the introduction of the “personal locomotive,” otherwise known as the car, in the early 1900s. But the locomotive and the car (essentially a box on rails or wheels) have not changed much in the past decades. What has changed are refinements, such as more powerful and efficient engines as well as intelligence. So technologies that cannot enter stages III and IV will be embellished; for example, they will have chips placed in them so they become intelligent. Some technologies evolve all the way to stage IV, like electricity, computers, paper, and running water. Others stay stuck at an intermediate stage, but they continue to evolve by having incremental improvements such as chips and increased efficiency.
WHY BUBBLES AND CRASHES?
But today, in the wake of the great recession of 2008, some voices can be heard saying that all this progress was an illusion, that we have to return to the simpler days, that there is something fundamentally flawed with the system.
When taking the long view of history, it is easy to point to the unexpected, with colossal bubbles and crashes that seem to come out of nowhere. They seem random, a by-product of the fickleness of fate and human folly. Historians and economists have written voluminously about the crash of 2008, trying to make sense out of it by examining a variety of causes, such as human nature, greed, corruption, lack of regulation, weaknesses in oversight, etc.
However, I have a different way of looking at the great recession, looking through the lens of science. In the long term, science is the engine of prosperity. For example, The Oxford Encyclopedia of Economic History cites studies that “attribute 90 percent of income growth in England and the United States after 1780 to technological innovation, not mere capital accumulation.”
Without science, we would be thrown back millennia into the dim past. But science is not uniform; it comes in waves. One seminal breakthrough (for example, the steam engine, the lightbulb, the transistor) often causes a cascade of secondary inventions that then create an avalanche of innovation and progress. Since they create vast amounts of wealth, these waves should be reflected in the economy.
The first great wave was steam power, which eventually led to the creation of the locomotive. Steam power fed the Industrial Revolution, which would turn society upside down. Fabulous wealth was created by steam power. But under capitalism, wealth is never stagnant. Wealth has to go somewhere. Capitalists are ceaselessly hunting for the next break, and will shift this wealth to invest in even more speculative schemes, sometimes with catastrophic results.
In the early 1800s, much of the excess wealth generated by steam power and the Industrial Revolution went into locomotive stocks on the London Stock Exchange. In fact, a bubble began to form, with scores of locomotive companies appearing on the London Exchange. Virginia Postrel, business writer for the New York Times, writes, “A century ago, railroad companies accounted for half the securities listed on the New York Stock Exchange.” Since the locomotive was still in its infancy, this bubble was unsustainable, and it finally popped, creating the Crash of 1850, one of the great collapses in the history of capitalism. This was followed by a series of minicrashes that occurred nearly every decade, created by the excess wealth spawned by the Industrial Revolution.
There is irony here: the heyday of the railroad would be the 1880s and 1890s. So the Crash of 1850 was due to speculative fever and the wealth created by science, but the real job of railing the world would take many more decades to mature.
Thomas Friedman writes, “In the 19th century, America had a railroad boom, bubble and bust …. But even when that bubble burst, it left America with an infrastructure of railroads that made transcontinental travel and shipping dramatically easier and cheaper.”
Instead of capitalists learning this lesson, this cycle began to repeat soon afterward. A second great wave of technology spread, led by the electric and automotive revolutions of Edison and Ford. The electrification of the factory and household, as well as the proliferation of the Model T, once again created fabulous wealth. As always, excess wealth had to go somewhere. In this case, it went into the U.S. Stock Exchange, in the form of a bubble in utility and automotive stocks. People ignored the lesson of the Crash of 1850, since that had happened eighty years earlier in the dim past. From 1900 to 1925, the number of automobile startup companies hit 3,000, which the market simply could not support. Once again, this bubble was unsustainable. For this and other reasons, the bubble popped in 1929, creating the Great Depression.
But the irony here is that the paving and electrification of America and Europe would not take place until after the crash, during the 1950s and 1960s.
More recently, we had the third great wave of science, the coming of high tech, in the form of computers, lasers, space satellites, the Internet, and electronics. The fabulous wealth created by high tech had to go somewhere. In this case, it went into real estate, creating a huge bubble. With the value of real estate exploding through the roof, people began to borrow against the value of their homes, using them as piggy banks, which further accelerated the bubble. Unscrupulous bankers fueled this bubble by giving away home mortgages like water. Once again, people ignored the lesson of the crashes of 1850 and 1929, which happened 160 and 80 years in the past. Ultimately, this new bubble could not be sustained, and we had the crash of 2008 and the great recession.
Thomas Friedman writes, “The early 21st century saw a boom, bubble and now a bust around financial services. But I fear all it will leave behind are a bunch of empty Florida condos that never should have been built, used private jets that the wealthy can no longer afford and the dead derivative contracts that no one can understand.”
But in spite of all the silliness that accompanied the recent crash, the irony here is that the wiring and networking of the world will take place after the crash of 2008. The heyday of the information revolution is yet to come.
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sp; This leads to the next question: What is the fourth wave? No one can be sure. It might be a combination of artificial intelligence, nanotechnology, telecommunications, and biotechnology. As with previous cycles, it may take another eighty years for these technologies to create a tidal wave of fabulous wealth. Around the year 2090, hopefully people will not ignore the lesson of the previous eighty years.
WINNERS AND LOSERS: JOBS
But as technologies evolve, they create abrupt changes in the economy that sometimes lead to social dislocations. In any revolution, there are winners and losers. This will become more evident by midcentury. We no longer have blacksmiths and wagonmakers in every village. Moreover, we do not mourn the passing of many of these jobs. But the question is: What jobs will flourish by midcentury? How will the evolution of technology change the way we work?
We can partially determine the answer by asking a simple question: What are the limitations of robots? As we have seen, there are at least two basic stumbling blocks to artificial intelligence: pattern recognition and common sense. Therefore, the jobs that will survive in the future are, in the main, those that robots cannot perform—ones that require these two abilities.
Among blue-collar workers, the losers will be workers who perform purely repetitive tasks (like autoworkers on the factory line) because robots excel at this. Computers give the illusion that they possess intelligence, but that is only because they can add millions of times faster than we can. We forget that computers are just sophisticated adding machines, and repetitive work is what they do best. That is why some automobile assembly-line workers have been among the first to suffer from the computer revolution. This means that any factory work that can be reduced to a set of scripted, repetitive motions will eventually disappear.
Surprisingly, there is a large class of blue-collar work that will survive the computer revolution and even flourish. The winners will be those who perform nonrepetitive work that requires pattern recognition. Garbage collectors, police officers, construction workers, gardeners, and plumbers will all have jobs in the future. Garbage collectors, in order to pick up the trash at different homes and apartments, have to recognize the garbage bags, place them in the truck, and haul them out to the waste yard. But every piece of trash requires a different method of disposal. For construction workers, every task requires different tools, blueprints, and instructions. No two construction sites or two tasks are the same. Police officers have to analyze a variety of crimes in different situations. Moreover, they also have to understand the motives and methods of criminals, which is far beyond the ability of any computer. Similarly, every garden and sink is different, requiring different skills and tools of the plumber.
Among white-collar workers, the losers will be those involved in middleman work taking inventory and “bean counting.” This means low-level agents, brokers, tellers, accountants, etc., will be increasingly thrown out of work as their jobs disappear. These jobs are called “the friction of capitalism.” Already, one can buy a plane ticket by scanning the Web for the best prices, bypassing a travel agent.
Merrill Lynch, for example, famously stated that it would never adopt online stock trading. It would always do stock trading the old-fashioned way. John Steffens, Merrill’s brokerage chief, said, “The do-it-yourself model of investing, centered on Internet trading, should be regarded as a serious threat to America’s financial lives.” So it was humiliating, therefore, when it was finally forced by market forces to adopt online trading in 1999. “Rarely in history has the leader in an industry felt compelled to do an about-face and, virtually overnight, adopt what is essentially a new business model,” wrote Charles Gasparino of ZDNet news.
This also means that the corporate pyramid will be thinned out. Since the people at the very top can interact directly with the sales force and representatives in the field, there is less need for middlemen to carry out orders from the top. In fact, such job reductions occurred when the personal computer first entered the office.
So how will middlemen survive in the future? They will have to add value to their work and provide the one commodity that robots cannot deliver: common sense.
For example, in the future, you will be able to buy a house on the Internet via your watch or contact lens. But no one is going to buy a house this way, since this is one of the most important financial transactions you will perform in your life. For important purchases like a home, you want to talk to a human who can tell you where the good schools are, where the crime rate is low, how the sewer system works, etc. For this, you want to talk to a skilled agent who adds value.
Similarly, low-level stockbrokers are being thrown out of work by online trading, but stockbrokers who give reasoned, wise investment advice will always be in demand. Brokerage jobs will continue to dry up unless they offer value-added services, such as the wisdom of top market analysts and economists and the inside knowledge of experienced brokers. In an era when online trading mercilessly drives down the cost of stock trades, stockbrokers will survive only if they can also market their intangible qualities, such as experience, knowledge, and analysis.
So among white-collar workers, the winners will be those who can provide useful common sense. This means workers involved with creativity—artwork, acting, telling jokes, writing software, leadership, analysis, science, creativity—qualities that “make us human.”
People in the arts will have jobs, since the Internet has an insatiable appetite for creative art. Computers are great at duplicating art and helping artists to embellish art, but they are miserable at originating new forms of it. Art that inspires, intrigues, evokes emotions, and thrills us is beyond the capability of a computer, because all these qualities involve common sense.
Novelists, scriptwriters, and playwrights will have jobs, since they have to convey realistic scenes, human conflicts, and human triumphs and defeats. For computers, modeling human nature, which involves understanding motives and intentions, is beyond their capability. Computers are not good at determining what makes us cry or laugh, since they cannot cry or laugh on their own, or understand what is funny or sad.
People involved in human relations, such as lawyers, will have jobs.
Although a robolawyer can answer rudimentary questions about the law, the law itself is constantly changing, depending on shifting social standards and mores. Ultimately, the interpretation of the law boils down to a value judgment, where computers are deficient. If the law were cut-and-dried with clear-cut interpretations, there would be no need for courts, judges, and juries. A robot cannot replace a jury, since juries often represent the mores of a specific group, which are constantly shifting with time. This was most apparent when Supreme Court justice Potter Stewart once had to define pornography. He failed to do so, but concluded, “I know it when I see it.”
Furthermore, it will probably be illegal for robots to replace the justice system, since our laws have enshrined a fundamental principle: that juries be made up of our peers. Since robots cannot be our peers, it will be illegal for them to replace the justice system.
On the surface, laws may seem exacting and well-defined, with precise and rigorous wording and arcane-sounding titles and definitions. But this is only an appearance, since the interpretations of these definitions constantly shifts. The U.S. Constitution, for example, appears to be a well-defined document, yet the Supreme Court is constantly split down the middle on controversial questions. It is forever reinterpreting every word and phrase in the Constitution. The changing nature of human values can be easily seen simply by looking at history. For example, the U.S. Supreme Court in 1857 ruled that slaves could never become citizens of the United States. In some sense, it took a civil war and the death of thousands to overturn that decision.
Leadership will also be a prized commodity in the future. In part, leadership consists of sizing up all the available information, viewpoints, and options and then choosing the most appropriate one, consistent with certain goals. Leadership becomes especially complicated b
ecause it deals with inspiring and providing guidance to human workers, who have their own personal strengths and weaknesses. All these factors require a sophisticated understanding of human nature, market forces, etc., that is beyond the ability of any computer.
FUTURE OF ENTERTAINMENT
This also means that entire industries, such as entertainment, are undergoing a profound upheaval. For example, the music industry since time immemorial was based on individual musicians who went from town to town, making personal appearances. Entertainers were constantly on the road, setting up shop one day and then moving on to the next village. It was a hard life, with little financial reward. This age-old pattern changed abruptly when Thomas Edison invented the phonograph and forever changed the way we hear music. Suddenly, one singer could produce records sold by the millions and derive revenue on a previously unimaginable scale. Within a single generation, rock singers would become the nouveau riche of society. Rock stars, who might have been lowly waiters in a previous generation, became the venerated idols of youth society.
But unfortunately, the music industry ignored the predictions of scientists who foresaw the day when music would be easily sent over the Internet, like e-mail. The music industry, instead of laying the groundwork for how to earn money selling online, instead tried to sue upstart companies that offered music at a fraction of the cost of a CD. This was like trying to sweep back the ocean. This neglect is causing the present turmoil within the music industry.
