1 00:00:16,340 --> 00:00:18,171 Here's a startling fact: 2 00:00:18,195 --> 00:00:21,916 in the 45 years since the introduction of the automated teller machine, 3 00:00:21,940 --> 00:00:24,796 those vending machines that dispense cash, 4 00:00:24,820 --> 00:00:27,996 the number of human bank tellers employed in the United States 5 00:00:28,020 --> 00:00:29,276 has roughly doubled, 6 00:00:29,300 --> 00:00:32,595 from about a quarter of a million to a half a million. 7 00:00:32,619 --> 00:00:35,656 A quarter of a million in 1970 to about a half a million today, 8 00:00:35,680 --> 00:00:39,916 with 100,000 added since the year 2000. 9 00:00:39,940 --> 00:00:42,356 These facts, revealed in a recent book 10 00:00:42,380 --> 00:00:45,516 by Boston University economist James Bessen, 11 00:00:45,540 --> 00:00:47,716 raise an intriguing question: 12 00:00:47,740 --> 00:00:49,636 what are all those tellers doing, 13 00:00:49,660 --> 00:00:53,676 and why hasn't automation eliminated their employment by now? 14 00:00:53,700 --> 00:00:55,036 If you think about it, 15 00:00:55,060 --> 00:00:58,196 many of the great inventions of the last 200 years 16 00:00:58,220 --> 00:01:01,020 were designed to replace human labor. 17 00:01:01,820 --> 00:01:03,596 Tractors were developed 18 00:01:03,620 --> 00:01:07,956 to substitute mechanical power for human physical toil. 19 00:01:07,980 --> 00:01:10,316 Assembly lines were engineered 20 00:01:10,340 --> 00:01:13,676 to replace inconsistent human handiwork 21 00:01:13,700 --> 00:01:15,636 with machine perfection. 22 00:01:15,660 --> 00:01:18,876 Computers were programmed to swap out 23 00:01:18,900 --> 00:01:21,556 error-prone, inconsistent human calculation 24 00:01:21,580 --> 00:01:23,340 with digital perfection. 25 00:01:23,860 --> 00:01:26,036 These inventions have worked. 26 00:01:26,060 --> 00:01:28,116 We no longer dig ditches by hand, 27 00:01:28,140 --> 00:01:30,196 pound tools out of wrought iron 28 00:01:30,220 --> 00:01:32,500 or do bookkeeping using actual books. 29 00:01:33,340 --> 00:01:39,111 And yet, the fraction of US adults employed in the labor market 30 00:01:39,200 --> 00:01:42,056 is higher now in 2016 31 00:01:42,079 --> 00:01:44,915 than it was 125 years ago, in 1890, 32 00:01:44,940 --> 00:01:47,956 and it's risen in just about every decade 33 00:01:47,980 --> 00:01:50,300 in the intervening 125 years. 34 00:01:50,860 --> 00:01:52,540 This poses a paradox. 35 00:01:53,060 --> 00:01:56,116 Our machines increasingly do our work for us. 36 00:01:56,140 --> 00:02:00,276 Why doesn't this make our labor redundant and our skills obsolete? 37 00:02:00,300 --> 00:02:03,996 Why are there still so many jobs? 38 00:02:04,020 --> 00:02:05,756 (Laughter) 39 00:02:05,780 --> 00:02:08,116 I'm going to try to answer that question tonight, 40 00:02:08,139 --> 00:02:11,876 and along the way, I'm going to tell you what this means for the future of work 41 00:02:11,900 --> 00:02:16,076 and the challenges that automation does and does not pose 42 00:02:16,100 --> 00:02:17,540 for our society. 43 00:02:18,820 --> 00:02:20,580 Why are there so many jobs? 44 00:02:21,980 --> 00:02:25,356 There are actually two fundamental economic principles at stake. 45 00:02:25,380 --> 00:02:28,076 One has to do with human genius 46 00:02:28,100 --> 00:02:29,516 and creativity. 47 00:02:29,540 --> 00:02:32,396 The other has to do with human insatiability, 48 00:02:32,420 --> 00:02:33,996 or greed, if you like. 49 00:02:34,020 --> 00:02:36,756 I'm going to call the first of these the O-ring principle, 50 00:02:36,780 --> 00:02:38,956 and it determines the type of work that we do. 51 00:02:38,980 --> 00:02:41,596 The second principle is the never-get-enough principle, 52 00:02:41,620 --> 00:02:45,100 and it determines how many jobs there actually are. 53 00:02:45,740 --> 00:02:48,076 Let's start with the O-ring. 54 00:02:48,700 --> 00:02:51,476 ATMs, automated teller machines, 55 00:02:51,500 --> 00:02:54,836 had two countervailing effects on bank teller employment. 56 00:02:54,860 --> 00:02:57,556 As you would expect, they replaced a lot of teller tasks. 57 00:02:57,580 --> 00:03:00,260 The number of tellers per branch fell by about a third. 58 00:03:01,140 --> 00:03:04,956 But banks quickly discovered that it also was cheaper to open new branches, 59 00:03:04,980 --> 00:03:08,116 and the number of bank branches increased by about 40 percent 60 00:03:08,140 --> 00:03:09,636 in the same time period. 61 00:03:09,660 --> 00:03:13,740 The net result was more branches and more tellers. 62 00:03:14,340 --> 00:03:17,756 But those tellers were doing somewhat different work. 63 00:03:17,780 --> 00:03:21,436 As their routine, cash-handling tasks receded, 64 00:03:21,460 --> 00:03:23,596 they became less like checkout clerks 65 00:03:23,620 --> 00:03:25,436 and more like salespeople, 66 00:03:25,460 --> 00:03:27,516 forging relationships with customers, 67 00:03:27,540 --> 00:03:28,756 solving problems 68 00:03:28,780 --> 00:03:32,996 and introducing them to new products like credit cards, loans and investments: 69 00:03:33,020 --> 00:03:36,860 more tellers doing a more cognitively demanding job. 70 00:03:37,740 --> 00:03:39,380 There's a general principle here. 71 00:03:40,020 --> 00:03:41,716 Most of the work that we do 72 00:03:41,740 --> 00:03:45,220 requires a multiplicity of skills, 73 00:03:46,060 --> 00:03:49,236 and brains and brawn, 74 00:03:49,260 --> 00:03:52,876 technical expertise and intuitive mastery, 75 00:03:52,900 --> 00:03:55,860 perspiration and inspiration in the words of Thomas Edison. 76 00:03:56,380 --> 00:03:59,636 In general, automating some subset of those tasks 77 00:03:59,660 --> 00:04:01,876 doesn't make the other ones unnecessary. 78 00:04:01,900 --> 00:04:04,860 In fact, it makes them more important. 79 00:04:05,980 --> 00:04:07,956 It increases their economic value. 80 00:04:07,980 --> 00:04:09,996 Let me give you a stark example. 81 00:04:10,020 --> 00:04:13,836 In 1986, the space shuttle Challenger 82 00:04:13,860 --> 00:04:16,156 exploded and crashed back down to Earth 83 00:04:16,180 --> 00:04:18,100 less than two minutes after takeoff. 84 00:04:18,620 --> 00:04:21,716 The cause of that crash, it turned out, 85 00:04:21,740 --> 00:04:25,276 was an inexpensive rubber O-ring in the booster rocket 86 00:04:25,300 --> 00:04:28,156 that had frozen on the launchpad the night before 87 00:04:28,180 --> 00:04:31,556 and failed catastrophically moments after takeoff. 88 00:04:31,580 --> 00:04:34,395 In this multibillion dollar enterprise 89 00:04:34,419 --> 00:04:36,116 that simple rubber O-ring 90 00:04:36,140 --> 00:04:38,715 made the difference between mission success 91 00:04:38,739 --> 00:04:41,580 and the calamitous death of seven astronauts. 92 00:04:42,500 --> 00:04:46,236 An ingenious metaphor for this tragic setting 93 00:04:46,260 --> 00:04:48,476 is the O-ring production function, 94 00:04:48,500 --> 00:04:50,996 named by Harvard economist Michael Kremer 95 00:04:51,020 --> 00:04:53,036 after the Challenger disaster. 96 00:04:53,060 --> 00:04:55,636 The O-ring production function conceives of the work 97 00:04:55,660 --> 00:04:57,996 as a series of interlocking steps, 98 00:04:58,020 --> 00:04:59,276 links in a chain. 99 00:04:59,300 --> 00:05:02,996 Every one of those links must hold for the mission to succeed. 100 00:05:03,020 --> 00:05:05,156 If any of them fails, 101 00:05:05,180 --> 00:05:08,476 the mission, or the product or the service, 102 00:05:08,500 --> 00:05:09,820 comes crashing down. 103 00:05:10,460 --> 00:05:15,396 This precarious situation has a surprisingly positive implication, 104 00:05:15,420 --> 00:05:17,316 which is that improvements 105 00:05:17,340 --> 00:05:20,316 in the reliability of any one link in the chain 106 00:05:20,340 --> 00:05:24,116 increases the value of improving any of the other links. 107 00:05:24,140 --> 00:05:29,116 Concretely, if most of the links are brittle and prone to breakage, 108 00:05:29,140 --> 00:05:31,596 the fact that your link is not that reliable 109 00:05:31,620 --> 00:05:32,876 is not that important. 110 00:05:32,900 --> 00:05:34,900 Probably something else will break anyway. 111 00:05:34,924 --> 00:05:38,916 But as all the other links become robust and reliable, 112 00:05:38,940 --> 00:05:42,436 the importance of your link becomes more essential. 113 00:05:42,460 --> 00:05:44,780 In the limit, everything depends upon it. 114 00:05:45,540 --> 00:05:49,076 The reason the O-ring was critical to space shuttle Challenger 115 00:05:49,100 --> 00:05:51,820 is because everything else worked perfectly. 116 00:05:52,380 --> 00:05:54,956 If the Challenger were kind of the space era equivalent 117 00:05:54,980 --> 00:05:57,516 of Microsoft Windows 2000 -- 118 00:05:57,540 --> 00:05:59,636 (Laughter) 119 00:05:59,660 --> 00:06:02,116 the reliability of the O-ring wouldn't have mattered 120 00:06:02,140 --> 00:06:03,998 because the machine would have crashed. 121 00:06:04,022 --> 00:06:05,502 (Laughter) 122 00:06:06,860 --> 00:06:08,436 Here's the broader point. 123 00:06:08,460 --> 00:06:12,276 In much of the work that we do, we are the O-rings. 124 00:06:12,300 --> 00:06:15,836 Yes, ATMs could do certain cash-handling tasks 125 00:06:15,860 --> 00:06:18,876 faster and better than tellers, 126 00:06:18,900 --> 00:06:20,956 but that didn't make tellers superfluous. 127 00:06:20,980 --> 00:06:24,276 It increased the importance of their problem-solving skills 128 00:06:24,300 --> 00:06:26,916 and their relationships with customers. 129 00:06:26,940 --> 00:06:30,236 The same principle applies if we're building a building, 130 00:06:30,260 --> 00:06:32,796 if we're diagnosing and caring for a patient, 131 00:06:32,820 --> 00:06:35,956 or if we are teaching a class 132 00:06:35,980 --> 00:06:38,436 to a roomful of high schoolers. 133 00:06:38,460 --> 00:06:40,836 As our tools improve, 134 00:06:40,860 --> 00:06:42,956 technology magnifies our leverage 135 00:06:42,980 --> 00:06:46,876 and increases the importance of our expertise 136 00:06:46,900 --> 00:06:49,100 and our judgment and our creativity. 137 00:06:49,900 --> 00:06:52,140 And that brings me to the second principle: 138 00:06:53,060 --> 00:06:54,260 never get enough. 139 00:06:55,180 --> 00:06:57,596 You may be thinking, OK, O-ring, got it, 140 00:06:57,620 --> 00:07:00,716 that says the jobs that people do will be important. 141 00:07:00,740 --> 00:07:03,716 They can't be done by machines, but they still need to be done. 142 00:07:03,740 --> 00:07:06,636 But that doesn't tell me how many jobs there will need to be. 143 00:07:06,660 --> 00:07:09,116 If you think about it, isn't it kind of self-evident 144 00:07:09,140 --> 00:07:11,676 that once we get sufficiently productive at something, 145 00:07:11,700 --> 00:07:13,796 we've basically worked our way out of a job? 146 00:07:13,820 --> 00:07:16,596 In 1900, 40 percent of all US employment 147 00:07:16,620 --> 00:07:17,876 was on farms. 148 00:07:17,900 --> 00:07:20,156 Today, it's less than two percent. 149 00:07:20,180 --> 00:07:22,356 Why are there so few farmers today? 150 00:07:22,380 --> 00:07:24,236 It's not because we're eating less. 151 00:07:24,260 --> 00:07:26,916 (Laughter) 152 00:07:26,940 --> 00:07:29,676 A century of productivity growth in farming 153 00:07:29,700 --> 00:07:31,876 means that now, a couple of million farmers 154 00:07:31,900 --> 00:07:34,636 can feed a nation of 320 million. 155 00:07:34,660 --> 00:07:36,316 That's amazing progress, 156 00:07:36,340 --> 00:07:40,476 but it also means there are only so many O-ring jobs left in farming. 157 00:07:40,500 --> 00:07:43,516 So clearly, technology can eliminate jobs. 158 00:07:43,540 --> 00:07:45,276 Farming is only one example. 159 00:07:45,300 --> 00:07:46,940 There are many others like it. 160 00:07:48,340 --> 00:07:52,316 But what's true about a single product or service or industry 161 00:07:52,340 --> 00:07:55,116 has never been true about the economy as a whole. 162 00:07:55,140 --> 00:07:57,636 Many of the industries in which we now work -- 163 00:07:57,660 --> 00:07:59,796 health and medicine, 164 00:07:59,820 --> 00:08:02,036 finance and insurance, 165 00:08:02,060 --> 00:08:03,700 electronics and computing -- 166 00:08:04,620 --> 00:08:07,356 were tiny or barely existent a century ago. 167 00:08:07,380 --> 00:08:10,196 Many of the products that we spend a lot of our money on -- 168 00:08:10,220 --> 00:08:12,356 air conditioners, sport utility vehicles, 169 00:08:12,380 --> 00:08:14,076 computers and mobile devices -- 170 00:08:14,100 --> 00:08:15,756 were unattainably expensive, 171 00:08:15,780 --> 00:08:18,220 or just hadn't been invented a century ago. 172 00:08:18,820 --> 00:08:23,796 As automation frees our time, increases the scope of what is possible, 173 00:08:23,820 --> 00:08:27,036 we invent new products, new ideas, new services 174 00:08:27,060 --> 00:08:28,636 that command our attention, 175 00:08:28,660 --> 00:08:30,196 occupy our time 176 00:08:30,220 --> 00:08:31,860 and spur consumption. 177 00:08:32,659 --> 00:08:35,876 You may think some of these things are frivolous -- 178 00:08:35,899 --> 00:08:38,674 extreme yoga, adventure tourism, 179 00:08:38,700 --> 00:08:39,956 Pokemon GO -- 180 00:08:39,980 --> 00:08:41,299 and I might agree with you. 181 00:08:41,879 --> 00:08:45,356 But people desire these things, and they're willing to work hard for them. 182 00:08:45,380 --> 00:08:47,556 The average worker in 2015 183 00:08:47,580 --> 00:08:51,836 wanting to attain the average living standard in 1915 184 00:08:51,860 --> 00:08:55,196 could do so by working just 17 weeks a year, 185 00:08:55,220 --> 00:08:56,660 one third of the time. 186 00:08:57,140 --> 00:08:59,316 But most people don't choose to do that. 187 00:08:59,340 --> 00:09:01,035 They are willing to work hard 188 00:09:01,059 --> 00:09:04,940 to harvest the technological bounty that is available to them. 189 00:09:05,380 --> 00:09:09,476 Material abundance has never eliminated perceived scarcity. 190 00:09:09,500 --> 00:09:12,076 In the words of economist Thorstein Veblen, 191 00:09:12,100 --> 00:09:14,740 invention is the mother of necessity. 192 00:09:16,420 --> 00:09:17,620 Now ... 193 00:09:18,300 --> 00:09:20,156 So if you accept these two principles, 194 00:09:20,180 --> 00:09:23,076 the O-ring principle and the never-get-enough principle, 195 00:09:23,100 --> 00:09:24,436 then you agree with me. 196 00:09:24,460 --> 00:09:25,860 There will be jobs. 197 00:09:26,460 --> 00:09:28,636 Does that mean there's nothing to worry about? 198 00:09:28,660 --> 00:09:31,436 Automation, employment, robots and jobs -- 199 00:09:31,460 --> 00:09:33,380 it'll all take care of itself? 200 00:09:34,020 --> 00:09:35,236 No. 201 00:09:35,260 --> 00:09:37,316 That is not my argument. 202 00:09:37,340 --> 00:09:39,876 Automation creates wealth 203 00:09:39,900 --> 00:09:42,476 by allowing us to do more work in less time. 204 00:09:42,500 --> 00:09:44,076 There is no economic law 205 00:09:44,100 --> 00:09:46,876 that says that we will use that wealth well, 206 00:09:46,900 --> 00:09:48,700 and that is worth worrying about. 207 00:09:49,700 --> 00:09:51,516 Consider two countries, 208 00:09:51,540 --> 00:09:53,676 Norway and Saudi Arabia. 209 00:09:53,700 --> 00:09:55,276 Both oil-rich nations, 210 00:09:55,300 --> 00:09:58,876 it's like they have money spurting out of a hole in the ground. 211 00:09:58,900 --> 00:10:00,436 (Laughter) 212 00:10:00,460 --> 00:10:05,676 But they haven't used that wealth equally well to foster human prosperity, 213 00:10:05,700 --> 00:10:06,900 human prospering. 214 00:10:07,340 --> 00:10:10,076 Norway is a thriving democracy. 215 00:10:10,100 --> 00:10:13,756 By and large, its citizens work and play well together. 216 00:10:13,780 --> 00:10:16,796 It's typically numbered between first and fourth 217 00:10:16,820 --> 00:10:19,556 in rankings of national happiness. 218 00:10:19,580 --> 00:10:22,236 Saudi Arabia is an absolute monarchy 219 00:10:22,260 --> 00:10:25,876 in which many citizens lack a path for personal advancement. 220 00:10:25,900 --> 00:10:29,396 It's typically ranked 35th among nations in happiness, 221 00:10:29,420 --> 00:10:31,516 which is low for such a wealthy nation. 222 00:10:31,540 --> 00:10:32,876 Just by way of comparison, 223 00:10:32,900 --> 00:10:35,700 the US is typically ranked around 12th or 13th. 224 00:10:36,300 --> 00:10:38,396 The difference between these two countries 225 00:10:38,420 --> 00:10:39,676 is not their wealth 226 00:10:39,700 --> 00:10:41,436 and it's not their technology. 227 00:10:41,460 --> 00:10:42,780 It's their institutions. 228 00:10:43,460 --> 00:10:46,636 Norway has invested to build a society 229 00:10:46,660 --> 00:10:49,996 with opportunity and economic mobility. 230 00:10:50,020 --> 00:10:52,196 Saudi Arabia has raised living standards 231 00:10:52,220 --> 00:10:55,476 while frustrating many other human strivings. 232 00:10:55,500 --> 00:10:58,276 Two countries, both wealthy, 233 00:10:58,300 --> 00:11:00,020 not equally well off. 234 00:11:00,780 --> 00:11:05,116 And this brings me to the challenge that we face today, 235 00:11:05,140 --> 00:11:07,276 the challenge that automation poses for us. 236 00:11:07,300 --> 00:11:09,756 The challenge is not that we're running out of work. 237 00:11:09,780 --> 00:11:11,716 The US has added 14 million jobs 238 00:11:11,740 --> 00:11:13,876 since the depths of the Great Recession. 239 00:11:13,900 --> 00:11:16,436 The challenge is that many of those jobs 240 00:11:16,460 --> 00:11:17,756 are not good jobs, 241 00:11:17,780 --> 00:11:20,876 and many citizens cannot qualify for the good jobs 242 00:11:20,900 --> 00:11:22,100 that are being created. 243 00:11:22,740 --> 00:11:26,236 Employment growth in the United States and in much of the developed world 244 00:11:26,260 --> 00:11:27,716 looks something like a barbell 245 00:11:27,740 --> 00:11:31,116 with increasing poundage on either end of the bar. 246 00:11:31,140 --> 00:11:32,356 On the one hand, 247 00:11:32,380 --> 00:11:35,196 you have high-education, high-wage jobs 248 00:11:35,220 --> 00:11:38,796 like doctors and nurses, programmers and engineers, 249 00:11:38,820 --> 00:11:40,556 marketing and sales managers. 250 00:11:40,580 --> 00:11:43,596 Employment is robust in these jobs, employment growth. 251 00:11:43,620 --> 00:11:47,636 Similarly, employment growth is robust in many low-skill, 252 00:11:47,660 --> 00:11:50,716 low-education jobs like food service, 253 00:11:50,740 --> 00:11:52,996 cleaning, security, 254 00:11:53,020 --> 00:11:54,260 home health aids. 255 00:11:54,980 --> 00:11:58,076 Simultaneously, employment is shrinking 256 00:11:58,100 --> 00:12:02,156 in many middle-education, middle-wage, middle-class jobs, 257 00:12:02,180 --> 00:12:05,996 like blue-collar production and operative positions 258 00:12:06,020 --> 00:12:08,996 and white-collar clerical and sales positions. 259 00:12:09,020 --> 00:12:11,276 The reasons behind this contracting middle 260 00:12:11,300 --> 00:12:12,516 are not mysterious. 261 00:12:12,540 --> 00:12:14,516 Many of those middle-skill jobs 262 00:12:14,540 --> 00:12:17,036 use well-understood rules and procedures 263 00:12:17,060 --> 00:12:20,156 that can increasingly be codified in software 264 00:12:20,180 --> 00:12:22,540 and executed by computers. 265 00:12:23,100 --> 00:12:26,476 The challenge that this phenomenon creates, 266 00:12:26,500 --> 00:12:29,036 what economists call employment polarization, 267 00:12:29,060 --> 00:12:31,676 is that it knocks out rungs in the economic ladder, 268 00:12:31,700 --> 00:12:33,516 shrinks the size of the middle class 269 00:12:33,540 --> 00:12:36,676 and threatens to make us a more stratified society. 270 00:12:36,700 --> 00:12:40,756 On the one hand, a set of highly paid, highly educated professionals 271 00:12:40,780 --> 00:12:42,196 doing interesting work, 272 00:12:42,220 --> 00:12:45,636 on the other, a large number of citizens in low-paid jobs 273 00:12:45,660 --> 00:12:51,316 whose primary responsibility is to see to the comfort and health of the affluent. 274 00:12:51,340 --> 00:12:53,676 That is not my vision of progress, 275 00:12:53,700 --> 00:12:55,580 and I doubt that it is yours. 276 00:12:56,340 --> 00:12:58,356 But here is some encouraging news. 277 00:12:58,380 --> 00:13:03,236 We have faced equally momentous economic transformations in the past, 278 00:13:03,260 --> 00:13:05,956 and we have come through them successfully. 279 00:13:05,980 --> 00:13:10,916 In the late 1800s and early 1900s, 280 00:13:10,940 --> 00:13:15,476 when automation was eliminating vast numbers of agricultural jobs -- 281 00:13:15,500 --> 00:13:17,836 remember that tractor? -- 282 00:13:17,860 --> 00:13:20,556 the farm states faced a threat of mass unemployment, 283 00:13:20,580 --> 00:13:24,396 a generation of youth no longer needed on the farm 284 00:13:24,420 --> 00:13:26,180 but not prepared for industry. 285 00:13:26,980 --> 00:13:28,556 Rising to this challenge, 286 00:13:28,580 --> 00:13:30,076 they took the radical step 287 00:13:30,100 --> 00:13:32,916 of requiring that their entire youth population 288 00:13:32,940 --> 00:13:35,796 remain in school and continue their education 289 00:13:35,820 --> 00:13:37,940 to the ripe old age of 16. 290 00:13:38,500 --> 00:13:40,476 This was called the high school movement, 291 00:13:40,500 --> 00:13:43,316 and it was a radically expensive thing to do. 292 00:13:43,340 --> 00:13:45,596 Not only did they have to invest in the schools, 293 00:13:45,620 --> 00:13:48,316 but those kids couldn't work at their jobs. 294 00:13:48,340 --> 00:13:51,636 It also turned out to be one of the best investments 295 00:13:51,660 --> 00:13:53,876 the US made in the 20th century. 296 00:13:53,900 --> 00:13:56,236 It gave us the most skilled, the most flexible 297 00:13:56,260 --> 00:13:58,956 and the most productive workforce in the world. 298 00:13:58,980 --> 00:14:03,516 To see how well this worked, imagine taking the labor force of 1899 299 00:14:03,540 --> 00:14:05,756 and bringing them into the present. 300 00:14:05,780 --> 00:14:08,716 Despite their strong backs and good characters, 301 00:14:08,740 --> 00:14:12,516 many of them would lack the basic literacy and numeracy skills 302 00:14:12,540 --> 00:14:15,476 to do all but the most mundane jobs. 303 00:14:15,500 --> 00:14:17,740 Many of them would be unemployable. 304 00:14:18,740 --> 00:14:22,476 What this example highlights is the primacy of our institutions, 305 00:14:22,500 --> 00:14:24,276 most especially our schools, 306 00:14:24,300 --> 00:14:26,836 in allowing us to reap the harvest 307 00:14:26,860 --> 00:14:29,156 of our technological prosperity. 308 00:14:29,180 --> 00:14:31,596 It's foolish to say there's nothing to worry about. 309 00:14:31,620 --> 00:14:33,820 Clearly we can get this wrong. 310 00:14:34,540 --> 00:14:38,036 If the US had not invested in its schools and in its skills 311 00:14:38,060 --> 00:14:40,316 a century ago with the high school movement, 312 00:14:40,340 --> 00:14:41,996 we would be a less prosperous, 313 00:14:42,020 --> 00:14:45,636 a less mobile and probably a lot less happy society. 314 00:14:45,660 --> 00:14:48,396 But it's equally foolish to say that our fates are sealed. 315 00:14:48,420 --> 00:14:50,116 That's not decided by the machines. 316 00:14:50,140 --> 00:14:51,876 It's not even decided by the market. 317 00:14:51,900 --> 00:14:54,540 It's decided by us and by our institutions. 318 00:14:55,260 --> 00:14:57,836 Now, I started this talk with a paradox. 319 00:14:57,860 --> 00:15:00,516 Our machines increasingly do our work for us. 320 00:15:00,540 --> 00:15:02,796 Why doesn't that make our labor superfluous, 321 00:15:02,820 --> 00:15:04,036 our skills redundant? 322 00:15:04,060 --> 00:15:07,476 Isn't it obvious that the road to our economic and social hell 323 00:15:07,500 --> 00:15:09,700 is paved with our own great inventions? 324 00:15:10,940 --> 00:15:15,116 History has repeatedly offered an answer to that paradox. 325 00:15:15,140 --> 00:15:18,756 The first part of the answer is that technology magnifies our leverage, 326 00:15:18,780 --> 00:15:21,396 increases the importance, the added value 327 00:15:21,420 --> 00:15:24,956 of our expertise, our judgment and our creativity. 328 00:15:24,980 --> 00:15:26,180 That's the O-ring. 329 00:15:26,780 --> 00:15:29,516 The second part of the answer is our endless inventiveness 330 00:15:29,540 --> 00:15:30,996 and bottomless desires 331 00:15:31,020 --> 00:15:33,356 means that we never get enough, never get enough. 332 00:15:33,380 --> 00:15:35,540 There's always new work to do. 333 00:15:36,860 --> 00:15:40,196 Adjusting to the rapid pace of technological change 334 00:15:40,220 --> 00:15:41,676 creates real challenges, 335 00:15:41,700 --> 00:15:44,676 seen most clearly in our polarized labor market 336 00:15:44,700 --> 00:15:47,220 and the threat that it poses to economic mobility. 337 00:15:48,220 --> 00:15:50,660 Rising to this challenge is not automatic. 338 00:15:51,300 --> 00:15:52,796 It's not costless. 339 00:15:52,820 --> 00:15:54,236 It's not easy. 340 00:15:54,260 --> 00:15:55,460 But it is feasible. 341 00:15:56,020 --> 00:15:57,836 And here is some encouraging news. 342 00:15:57,860 --> 00:15:59,996 Because of our amazing productivity, 343 00:16:00,020 --> 00:16:01,276 we're rich. 344 00:16:01,300 --> 00:16:04,436 Of course we can afford to invest in ourselves and in our children 345 00:16:04,460 --> 00:16:07,796 as America did a hundred years ago with the high school movement. 346 00:16:07,820 --> 00:16:10,100 Arguably, we can't afford not to. 347 00:16:11,020 --> 00:16:12,796 Now, you may be thinking, 348 00:16:12,820 --> 00:16:15,676 Professor Autor has told us a heartwarming tale 349 00:16:15,700 --> 00:16:17,476 about the distant past, 350 00:16:17,500 --> 00:16:18,876 the recent past, 351 00:16:18,900 --> 00:16:22,196 maybe the present, but probably not the future. 352 00:16:22,220 --> 00:16:26,156 Because everybody knows that this time is different. 353 00:16:26,180 --> 00:16:28,996 Right? Is this time different? 354 00:16:29,020 --> 00:16:30,916 Of course this time is different. 355 00:16:30,940 --> 00:16:32,636 Every time is different. 356 00:16:32,660 --> 00:16:36,276 On numerous occasions in the last 200 years, 357 00:16:36,300 --> 00:16:39,076 scholars and activists have raised the alarm 358 00:16:39,100 --> 00:16:42,636 that we are running out of work and making ourselves obsolete: 359 00:16:42,660 --> 00:16:47,276 for example, the Luddites in the early 1800s; 360 00:16:47,300 --> 00:16:50,236 US Secretary of Labor James Davis 361 00:16:50,260 --> 00:16:52,676 in the mid-1920s; 362 00:16:52,700 --> 00:16:57,876 Nobel Prize-winning economist Wassily Leontief in 1982; 363 00:16:57,900 --> 00:17:01,156 and of course, many scholars, 364 00:17:01,180 --> 00:17:03,316 pundits, technologists 365 00:17:03,340 --> 00:17:05,180 and media figures today. 366 00:17:06,500 --> 00:17:09,819 These predictions strike me as arrogant. 367 00:17:10,700 --> 00:17:13,396 These self-proclaimed oracles are in effect saying, 368 00:17:13,420 --> 00:17:16,836 "If I can't think of what people will do for work in the future, 369 00:17:16,859 --> 00:17:19,756 then you, me and our kids 370 00:17:19,780 --> 00:17:21,494 aren't going to think of it either." 371 00:17:22,660 --> 00:17:24,594 I don't have the guts 372 00:17:24,619 --> 00:17:27,796 to take that bet against human ingenuity. 373 00:17:27,819 --> 00:17:30,796 Look, I can't tell you what people are going to do for work 374 00:17:30,820 --> 00:17:32,716 a hundred years from now. 375 00:17:32,739 --> 00:17:35,340 But the future doesn't hinge on my imagination. 376 00:17:36,180 --> 00:17:39,956 If I were a farmer in Iowa in the year 1900, 377 00:17:39,979 --> 00:17:43,516 and an economist from the 21st century teleported down to my field 378 00:17:43,540 --> 00:17:46,060 and said, "Hey, guess what, farmer Autor, 379 00:17:46,900 --> 00:17:48,436 in the next hundred years, 380 00:17:48,460 --> 00:17:52,236 agricultural employment is going to fall from 40 percent of all jobs 381 00:17:52,260 --> 00:17:53,476 to two percent 382 00:17:53,500 --> 00:17:55,500 purely due to rising productivity. 383 00:17:56,300 --> 00:17:59,460 What do you think the other 38 percent of workers are going to do?" 384 00:18:00,300 --> 00:18:03,116 I would not have said, "Oh, we got this. 385 00:18:03,140 --> 00:18:05,996 We'll do app development, radiological medicine, 386 00:18:06,020 --> 00:18:08,996 yoga instruction, Bitmoji." 387 00:18:09,020 --> 00:18:10,556 (Laughter) 388 00:18:10,580 --> 00:18:11,866 I wouldn't have had a clue. 389 00:18:12,740 --> 00:18:15,236 But I hope I would have had the wisdom to say, 390 00:18:15,260 --> 00:18:19,276 "Wow, a 95 percent reduction in farm employment 391 00:18:19,300 --> 00:18:21,436 with no shortage of food. 392 00:18:21,460 --> 00:18:23,876 That's an amazing amount of progress. 393 00:18:23,900 --> 00:18:27,276 I hope that humanity finds something remarkable to do 394 00:18:27,300 --> 00:18:29,180 with all of that prosperity." 395 00:18:30,020 --> 00:18:33,100 And by and large, I would say that it has. 396 00:18:34,860 --> 00:18:36,116 Thank you very much. 397 00:18:36,140 --> 00:18:41,195 (Applause)