WEBVTT 00:00:00.885 --> 00:00:03.175 Here's a startling fact: 00:00:03.175 --> 00:00:07.145 in the 45 years since the introduction of the automated teller machine, 00:00:07.145 --> 00:00:09.810 those vending machines that dispense cash, 00:00:09.810 --> 00:00:13.092 the number of human bank tellers employed in the United States 00:00:13.092 --> 00:00:14.579 has roughly doubled, 00:00:14.579 --> 00:00:17.916 from about a quarter of a million to a half a million, 00:00:17.916 --> 00:00:21.171 from a quarter a million in 1972, about a half a million today, 00:00:21.171 --> 00:00:24.971 with 100,000 added since the year 2000. NOTE Paragraph 00:00:24.971 --> 00:00:27.473 These facts, revealed in a recent book 00:00:27.473 --> 00:00:30.616 by Boston University economist James Bessen, 00:00:30.616 --> 00:00:33.048 raise an intriguing question: 00:00:33.048 --> 00:00:34.807 what are all those tellers doing, 00:00:34.807 --> 00:00:38.899 and why hasn't automation eliminated their employment by now? 00:00:38.899 --> 00:00:40.194 If you think about it, 00:00:40.194 --> 00:00:43.341 many of the great inventions of the last 200 years 00:00:43.341 --> 00:00:46.872 were designed to replace human labor. 00:00:46.872 --> 00:00:48.856 Tractors were developed 00:00:48.856 --> 00:00:52.846 to substitute mechanical power for human physical toil. 00:00:52.846 --> 00:00:55.211 Assembly lines were engineered 00:00:55.211 --> 00:00:58.686 to replace inconsistent human handiwork 00:00:58.686 --> 00:01:00.525 with machine perfection. 00:01:00.525 --> 00:01:03.923 Computers were programmed to swap out 00:01:03.923 --> 00:01:06.653 error-prone, inconsistent human calculation 00:01:06.653 --> 00:01:08.969 with digital perfection. 00:01:08.969 --> 00:01:11.263 These inventions have worked. 00:01:11.263 --> 00:01:13.155 We no longer dig ditches by hand, 00:01:13.155 --> 00:01:15.252 pound tools out of wrought iron, 00:01:15.252 --> 00:01:18.548 or do bookkeeping using actual books. 00:01:18.548 --> 00:01:23.085 And yet, the fraction of U.S. adults employed in the labor market 00:01:23.085 --> 00:01:26.093 is higher now in 2016 00:01:26.093 --> 00:01:28.150 than it was 125 years ago, in 1890, 00:01:28.150 --> 00:01:31.420 and it's risen in just about every decade 00:01:31.420 --> 00:01:34.579 in the intervening 125 years. NOTE Paragraph 00:01:34.579 --> 00:01:36.764 This poses a paradox. 00:01:36.764 --> 00:01:39.869 Our machines increasingly do our work for us. 00:01:39.869 --> 00:01:42.127 Why doesn't this make our labor redundant 00:01:42.127 --> 00:01:44.115 and our skills obsolete? 00:01:44.115 --> 00:01:47.959 Why are there still so many jobs? NOTE Paragraph 00:01:47.959 --> 00:01:49.578 (Laughter) NOTE Paragraph 00:01:49.578 --> 00:01:52.009 I'm going to try to answer that question tonight, 00:01:52.009 --> 00:01:55.472 and along the way, I'm going to tell you what this means for the future of work 00:01:55.472 --> 00:01:59.733 and the challenges that automation does and does not pose 00:01:59.733 --> 00:02:02.603 for our society. NOTE Paragraph 00:02:02.603 --> 00:02:05.310 Why are there so many jobs? 00:02:05.310 --> 00:02:09.045 There are actually two fundamental economic principles at stake. 00:02:09.045 --> 00:02:11.756 One has to do with human genius 00:02:11.756 --> 00:02:13.415 and creativity. 00:02:13.415 --> 00:02:17.804 The other has to do with human insatiability, or greed if you like. 00:02:17.804 --> 00:02:19.912 I'm going to call the first of these the O-Ring principle, 00:02:19.912 --> 00:02:22.573 and it determines the type of work that we do. 00:02:22.573 --> 00:02:25.403 The second principle is the Never Get Enough principle, 00:02:25.403 --> 00:02:29.612 and it determines how many jobs there actually are. NOTE Paragraph 00:02:29.612 --> 00:02:32.038 Let's start with the O-Ring. 00:02:32.038 --> 00:02:34.855 ATMS, automated teller machines, 00:02:34.855 --> 00:02:38.062 had two countervailing effects on bank teller employment. 00:02:38.062 --> 00:02:40.824 As you would expect, they replaced a lot of teller tasks. 00:02:40.824 --> 00:02:44.145 The number of tellers per branch fell by about a third. 00:02:44.145 --> 00:02:46.942 But banks quickly discovered that it was cheaper to open 00:02:46.942 --> 00:02:48.152 new branches, 00:02:48.152 --> 00:02:51.610 and the number of bank branches increased by about 40 percent 00:02:51.610 --> 00:02:53.043 in the same time period. 00:02:53.043 --> 00:02:57.427 The net result was more branches and more tellers. 00:02:57.427 --> 00:03:00.884 But those tellers were doing somewhat different work. 00:03:00.884 --> 00:03:04.624 As their routine, cash-handling tasks receded, 00:03:04.624 --> 00:03:07.007 they became less like checkout clerks 00:03:07.007 --> 00:03:08.680 and more like salespeople, 00:03:08.680 --> 00:03:10.817 forging relationships with customers, 00:03:10.817 --> 00:03:14.355 solving problems, and introducing them to new products like credit cards, 00:03:14.355 --> 00:03:16.243 loans, and investments: 00:03:16.243 --> 00:03:20.912 more tellers doing a more cognitively demanding job. 00:03:20.912 --> 00:03:23.106 There's a general principle here. 00:03:23.106 --> 00:03:24.971 Most of the work that we do 00:03:24.971 --> 00:03:28.592 requires a multiplicity of skills, 00:03:28.592 --> 00:03:32.303 brains and brawn, 00:03:32.303 --> 00:03:35.715 technical expertise and intuitive mastery, 00:03:35.715 --> 00:03:39.476 perspiration and inspiration in the words of Thomas Edison. 00:03:39.476 --> 00:03:42.860 In general, automating some subset of those tasks 00:03:42.860 --> 00:03:45.230 doesn't make the other ones unnecessary. 00:03:45.230 --> 00:03:48.682 In fact, it makes them more important. 00:03:48.682 --> 00:03:51.269 It increases their economic value. NOTE Paragraph 00:03:51.269 --> 00:03:53.564 Let me give you a stark example. 00:03:53.564 --> 00:03:56.693 In 1986, the Space Shuttle Challenger 00:03:56.693 --> 00:03:59.399 exploded and crashed back down to Earth 00:03:59.399 --> 00:04:01.503 less than two minutes after takeoff. 00:04:01.503 --> 00:04:04.980 The cause of that crash, it turned out, 00:04:04.980 --> 00:04:08.563 was an inexpensive rubber O-Ring in the booster rocket 00:04:08.563 --> 00:04:11.455 that had frozen on the launch pad the night before 00:04:11.455 --> 00:04:14.811 and failed catastrophically moments after takeoff. 00:04:14.811 --> 00:04:17.563 In this multi-billion dollar enterprise, 00:04:17.563 --> 00:04:19.295 that simple rubber O-Ring 00:04:19.295 --> 00:04:22.062 made the difference between mission success 00:04:22.062 --> 00:04:25.746 and the calamitous death of seven astronauts. 00:04:25.746 --> 00:04:27.568 An ingenious metaphor 00:04:27.568 --> 00:04:29.446 for this tragic setting 00:04:29.446 --> 00:04:31.717 is the O-Ring Production Function, 00:04:31.717 --> 00:04:34.182 named by Harvard economist Michael Kramer 00:04:34.182 --> 00:04:36.278 after the Challenger disaster. 00:04:36.278 --> 00:04:37.707 The O-Ring Production Function 00:04:37.707 --> 00:04:38.915 conceives of the work 00:04:38.915 --> 00:04:41.026 as a series of interlocking steps, 00:04:41.026 --> 00:04:42.518 links in a chain. 00:04:42.518 --> 00:04:44.373 Every one of those links must hold 00:04:44.373 --> 00:04:46.340 for the mission to succeed. 00:04:46.340 --> 00:04:47.628 If any of them fails, 00:04:47.628 --> 00:04:50.460 the mission, or the product, 00:04:50.460 --> 00:04:51.675 or the service, 00:04:51.675 --> 00:04:53.564 comes crashing down. 00:04:53.564 --> 00:04:58.683 This precarious situation has a surprisingly positive implication, 00:04:58.683 --> 00:05:00.669 which is that improvements 00:05:00.669 --> 00:05:03.760 in the reliability of any one link in the chain 00:05:03.760 --> 00:05:07.445 increases the value of improving any of the other links. 00:05:07.445 --> 00:05:12.441 Concretely, if most of the links are brittle and prone to breakage, 00:05:12.441 --> 00:05:14.979 the fact that your link is not that reliable 00:05:14.979 --> 00:05:16.219 is not that important. 00:05:16.219 --> 00:05:17.845 Probably something else will break anyway. 00:05:17.845 --> 00:05:19.625 But as all the other links 00:05:19.625 --> 00:05:22.127 become robust and reliable, 00:05:22.127 --> 00:05:25.696 the importance of your link becomes more essential. 00:05:25.696 --> 00:05:28.640 In the limit, everything depends upon it. 00:05:28.640 --> 00:05:31.160 The reason the O-Ring was critical 00:05:31.160 --> 00:05:32.454 to Space Shuttle Challenger 00:05:32.454 --> 00:05:35.581 is because everything else worked perfectly. 00:05:35.581 --> 00:05:38.054 If the Challenger were kind of the space era equivalent 00:05:38.054 --> 00:05:40.639 of Microsoft Windows 2000 -- 00:05:40.639 --> 00:05:42.717 (Laughter) -- 00:05:42.717 --> 00:05:45.066 the reliability of the O-Ring wouldn't have mattered 00:05:45.066 --> 00:05:46.907 because the machine would have crashed. NOTE Paragraph 00:05:46.907 --> 00:05:49.382 (Laughter) NOTE Paragraph 00:05:49.382 --> 00:05:51.684 Here's the broader point. 00:05:51.684 --> 00:05:53.497 In much of the work that we do, 00:05:53.497 --> 00:05:55.507 we are the O-Rings. 00:05:55.507 --> 00:05:58.689 Yes, ATMs could do certain cash-handling tasks 00:05:58.689 --> 00:06:01.972 faster and better than tellers, 00:06:01.972 --> 00:06:04.238 but that didn't make tellers superfluous. 00:06:04.238 --> 00:06:07.414 It increased the importance of their problem-solving skills 00:06:07.414 --> 00:06:10.254 and their relationships with customers. 00:06:10.254 --> 00:06:13.622 The same principle applies if we're building a building, 00:06:13.622 --> 00:06:16.242 if we're diagnosing and caring for a patient, 00:06:16.242 --> 00:06:19.026 or if we are teaching a class 00:06:19.026 --> 00:06:21.412 to a roomful of high schoolers. 00:06:21.412 --> 00:06:23.927 As our tools improve, 00:06:23.927 --> 00:06:26.305 technology magnifies our leverage 00:06:26.305 --> 00:06:30.201 and increases the importance of our expertise 00:06:30.201 --> 00:06:33.244 and our judgement and our creativity. NOTE Paragraph 00:06:33.244 --> 00:06:36.266 And that brings me to the second principle: 00:06:36.266 --> 00:06:38.505 never get enough. 00:06:38.505 --> 00:06:40.748 You may be thinking, okay, O-Ring, got it, 00:06:40.748 --> 00:06:44.156 that says the jobs that people do will be important. 00:06:44.156 --> 00:06:46.515 They can't be done by machines, but they still need to be done. 00:06:46.515 --> 00:06:49.277 But that doesn't tell me how many jobs there will need to be. 00:06:49.277 --> 00:06:51.806 If you think about it, isn't it kind of self-evident 00:06:51.806 --> 00:06:53.861 that once we get sufficiently productive at something, 00:06:53.861 --> 00:06:56.394 we've basically worked our way out of a job? 00:06:56.394 --> 00:06:59.499 In 1900, 40 percent of all U.S. employment 00:06:59.499 --> 00:07:01.216 was on farms. 00:07:01.216 --> 00:07:03.610 Today, it's less than two percent. 00:07:03.610 --> 00:07:05.688 Why are there so few farmers today? 00:07:05.688 --> 00:07:07.737 It's not because we're eating less. NOTE Paragraph 00:07:07.737 --> 00:07:10.115 (Laughter) NOTE Paragraph 00:07:10.115 --> 00:07:12.874 A century of productivity growth in farming 00:07:12.874 --> 00:07:15.172 means that now, a couple of million farmers 00:07:15.172 --> 00:07:17.859 can feed a nation of 320 million. 00:07:17.859 --> 00:07:19.388 That's amazing progress, 00:07:19.388 --> 00:07:23.904 but it also means there are only so many O-Ring jobs left in farming. 00:07:23.904 --> 00:07:26.748 So clearly, technology can eliminate jobs. 00:07:26.748 --> 00:07:28.505 Farming is only one example. 00:07:28.505 --> 00:07:30.875 There are many others like it. 00:07:30.875 --> 00:07:35.563 But what's true about a single product or service or industry 00:07:35.563 --> 00:07:38.322 has never been true about the economy as a whole. 00:07:38.322 --> 00:07:41.102 Many of the industries in which we now work -- 00:07:41.102 --> 00:07:42.616 health and medicine, 00:07:42.616 --> 00:07:44.819 finance and insurance, 00:07:44.819 --> 00:07:47.102 electronics and computing -- 00:07:47.102 --> 00:07:50.641 were tiny or barely existent a century ago. 00:07:50.641 --> 00:07:53.335 Many of the products that we spend a lot of our money on -- 00:07:53.335 --> 00:07:55.764 air conditioners, sport utility vehicles, 00:07:55.764 --> 00:07:57.447 computers and mobile devices -- 00:07:57.447 --> 00:08:00.729 were unattainably expensive, or just hadn't been invented 00:08:00.729 --> 00:08:01.851 a century ago. 00:08:01.851 --> 00:08:07.059 As automation frees our time, increases the scope of what is possible, 00:08:07.059 --> 00:08:08.742 we invent new products, 00:08:08.742 --> 00:08:10.336 new ideas, new services 00:08:10.336 --> 00:08:11.949 that command our attention, 00:08:11.949 --> 00:08:13.380 occupy our time, 00:08:13.380 --> 00:08:15.885 and spur consumption. 00:08:15.885 --> 00:08:19.230 You may think some of these things are frivolous -- 00:08:19.230 --> 00:08:21.946 extreme yoga, adventure tourism, 00:08:21.946 --> 00:08:23.289 Pokemon Go -- 00:08:23.289 --> 00:08:25.200 and I might agree with you. 00:08:25.200 --> 00:08:28.511 But people desire these things, and they're willing to work hard for them. 00:08:28.511 --> 00:08:30.874 The average worker in 2015 00:08:30.874 --> 00:08:35.067 wanting to attain the average living standard in 1915 00:08:35.067 --> 00:08:38.533 could do so by working just 17 weeks a year, 00:08:38.533 --> 00:08:40.182 one third of the time. 00:08:40.182 --> 00:08:42.359 But most people don't choose to do that. 00:08:42.359 --> 00:08:44.211 They are willing to work hard 00:08:44.211 --> 00:08:46.514 to harvest the technological bounty 00:08:46.514 --> 00:08:48.532 that is available to them. 00:08:48.532 --> 00:08:52.725 Material abundance has never eliminated perceived scarcity. 00:08:52.725 --> 00:08:54.979 In the words of economist ??, invention is the mother of necessity. NOTE Paragraph 00:08:54.979 --> 00:09:01.520 Now, 00:09:01.520 --> 00:09:03.562 so if you accept these two principles, 00:09:03.562 --> 00:09:06.244 the O-Ring principle and the Never Get Enough principle, 00:09:06.244 --> 00:09:07.822 then you agree with me. 00:09:07.822 --> 00:09:09.647 There will be jobs. 00:09:09.647 --> 00:09:12.063 Does that mean there's nothing to worry about? 00:09:12.063 --> 00:09:13.792 Automation, employment, robots and jobs, 00:09:13.792 --> 00:09:17.419 it'll all take care of itself? 00:09:17.419 --> 00:09:18.453 No. 00:09:18.453 --> 00:09:20.328 That is not my argument. 00:09:20.328 --> 00:09:23.315 Automation creates wealth 00:09:23.315 --> 00:09:25.703 by allowing us to do more work in less time. 00:09:25.703 --> 00:09:27.296 There is no economic law 00:09:27.296 --> 00:09:29.789 that says that we will use that wealth well, 00:09:29.789 --> 00:09:32.492 and that is worth worrying about. 00:09:32.492 --> 00:09:34.793 Consider two countries, 00:09:34.793 --> 00:09:36.851 Norway and Saudi Arabia. 00:09:36.851 --> 00:09:38.642 Both oil-rich nations, 00:09:38.642 --> 00:09:43.160 it's like they have money spurting out of a hole in the ground. NOTE Paragraph 00:09:43.865 --> 00:09:44.479 (Laughter) NOTE Paragraph 00:09:44.479 --> 00:09:49.132 But they haven't used that wealth equally well to foster human prosperity, 00:09:49.132 --> 00:09:50.328 human prospering. 00:09:50.328 --> 00:09:53.771 Norway is a thriving democracy. 00:09:53.771 --> 00:09:56.464 By and large, its citizens work and play well together. 00:09:56.464 --> 00:10:00.070 It's typically numbered between first and fourth 00:10:00.070 --> 00:10:02.787 in rankings of national happiness. 00:10:02.787 --> 00:10:05.383 Saudi Arabia is an absolute monarchy 00:10:05.383 --> 00:10:09.309 in which many citizens lack a path for personal advancement. 00:10:09.309 --> 00:10:12.812 It's typically ranked 35th among nations in happiness, 00:10:12.812 --> 00:10:14.785 which is low for such a wealthy nation. 00:10:14.785 --> 00:10:19.783 Just by way of comparison, the U.S. is typically ranked around 12th or 13th. 00:10:19.783 --> 00:10:21.655 The difference between these two countries 00:10:21.655 --> 00:10:22.998 is not their wealth 00:10:22.998 --> 00:10:24.634 and it's not their technology. 00:10:24.634 --> 00:10:26.523 It's their institutions. 00:10:26.523 --> 00:10:29.733 Norway has invested to build a society 00:10:29.733 --> 00:10:33.396 with opportunity and economic mobility. 00:10:33.396 --> 00:10:35.552 Saudi Arabia has raised living standards 00:10:35.552 --> 00:10:38.641 while frustrating many other human strivings. 00:10:38.641 --> 00:10:41.454 Two countries, both wealthy, 00:10:41.454 --> 00:10:44.068 not equally well off. NOTE Paragraph 00:10:44.068 --> 00:10:48.258 And this brings me to the challenge that we face today, 00:10:48.258 --> 00:10:50.494 the challenge that automation poses for us. 00:10:50.494 --> 00:10:52.494 The challenge is not that we're running out of work. 00:10:52.494 --> 00:10:55.089 The U.S. has added 14 million jobs 00:10:55.089 --> 00:10:57.187 since the depths of the Great Recession. 00:10:57.187 --> 00:10:59.580 The challenge is that many of those jobs 00:10:59.580 --> 00:11:01.068 are not good jobs, 00:11:01.068 --> 00:11:04.038 and many citizens cannot qualify for the good jobs 00:11:04.038 --> 00:11:06.079 that are being created. 00:11:06.079 --> 00:11:07.758 Employment growth in the United States 00:11:07.758 --> 00:11:09.547 and in much of the developed world 00:11:09.547 --> 00:11:11.306 looks something like a barbell 00:11:11.306 --> 00:11:14.382 with increasing poundage on either end of the bar. 00:11:14.382 --> 00:11:15.385 On the one hand, 00:11:15.385 --> 00:11:18.344 you have high-education, high-wage jobs 00:11:18.344 --> 00:11:20.001 like doctors and nurses, 00:11:20.001 --> 00:11:22.142 programmers and engineers, 00:11:22.142 --> 00:11:23.953 marketing and sales managers. 00:11:23.953 --> 00:11:26.949 Employment is robust in these jobs, employment growth. 00:11:26.949 --> 00:11:30.742 Similarly, employment growth is robust in many low-skill, 00:11:30.742 --> 00:11:33.863 low-education jobs like food service, 00:11:33.863 --> 00:11:36.215 cleaning, security, 00:11:36.215 --> 00:11:38.331 home health aids. 00:11:38.331 --> 00:11:41.381 Simultaneously, employment is shrinking 00:11:41.381 --> 00:11:45.343 in many middle-education, middle-wage, middle-class jobs 00:11:45.343 --> 00:11:49.404 like blue-collar production and operative positions 00:11:49.404 --> 00:11:51.964 and white collar clerical and sales positions. 00:11:51.964 --> 00:11:54.623 The reasons behind this contracting middle 00:11:54.623 --> 00:11:55.847 are not mysterious. 00:11:55.847 --> 00:11:57.714 Many of those middle-skill jobs 00:11:57.714 --> 00:12:00.313 use well-understood rules and procedures 00:12:00.313 --> 00:12:03.566 that can increasingly be codified in software 00:12:03.566 --> 00:12:06.326 and executed by computers. 00:12:06.326 --> 00:12:09.785 The challenge that this phenomenon creates, 00:12:09.785 --> 00:12:12.422 what economists call employment polarization, 00:12:12.422 --> 00:12:14.886 is that it knocks out rungs in the economic ladder, 00:12:14.886 --> 00:12:16.801 shrinks the size of the middle class, 00:12:16.801 --> 00:12:19.891 and threatens to make us a more stratified society. 00:12:19.891 --> 00:12:23.906 On the one hand, a set of highly paid, highly educated professionals 00:12:23.906 --> 00:12:25.647 doing interesting work, 00:12:25.647 --> 00:12:27.900 on the other, a large number of citizens 00:12:27.900 --> 00:12:30.334 in low-paid jobs whose primary responsibility 00:12:30.334 --> 00:12:34.514 is to see to the comfort and health of the affluent. 00:12:34.514 --> 00:12:36.878 That is not my vision of progress, 00:12:36.878 --> 00:12:39.412 and I doubt that it is yours. NOTE Paragraph 00:12:39.412 --> 00:12:41.616 But here is some encouraging news. 00:12:41.616 --> 00:12:46.409 We have faced equally momentous economic transformations in the past, 00:12:46.409 --> 00:12:49.094 and we have come through them successfully. 00:12:49.094 --> 00:12:53.601 In the late 1800s and early 1900s, 00:12:53.601 --> 00:12:58.894 when automation was eliminating vast numbers of agricultural jobs -- 00:12:58.894 --> 00:13:00.416 remember that tractor? -- 00:13:00.416 --> 00:13:03.945 the farm states faced a threat of mass unemployment, 00:13:03.945 --> 00:13:05.395 a generation of youth 00:13:05.395 --> 00:13:07.486 no longer needed on the farm 00:13:07.486 --> 00:13:10.295 but not prepared for industry. 00:13:10.295 --> 00:13:11.905 Rising to this challenge, 00:13:11.905 --> 00:13:13.363 they took the radical step 00:13:13.363 --> 00:13:16.059 of requiring that their entire youth population 00:13:16.059 --> 00:13:19.086 remain in school and continue their education 00:13:19.086 --> 00:13:21.701 to the ripe old age of 16. 00:13:21.701 --> 00:13:23.557 This was called the high school movement, 00:13:23.557 --> 00:13:26.586 and it was a radically expensive thing to do. 00:13:26.586 --> 00:13:28.586 Not only did they have to invest in the schools, 00:13:28.586 --> 00:13:30.400 but those kids couldn't work at their jobs. 00:13:30.400 --> 00:13:34.559 It also turned out to be one of the best investments 00:13:34.559 --> 00:13:37.289 the U.S. made in the 20th century. 00:13:37.289 --> 00:13:39.640 It gave us the most skilled, the most flexible, 00:13:39.640 --> 00:13:42.049 and the most productive work force in the world. 00:13:42.049 --> 00:13:46.712 To see how well this worked, imagine taking the labor force of 1899 00:13:46.712 --> 00:13:48.850 and bringing them into the present. 00:13:48.850 --> 00:13:51.924 Despite their strong backs and good characters, 00:13:51.924 --> 00:13:55.835 many of them would lack the basic literacy and numeracy skills 00:13:55.835 --> 00:13:58.755 to do all but the most mundane jobs. 00:13:58.755 --> 00:14:02.200 Many of them would be unemployable. NOTE Paragraph 00:14:02.200 --> 00:14:05.728 What this example highlights is the primacy of our institutions, 00:14:05.728 --> 00:14:07.578 most especially our schools, 00:14:07.578 --> 00:14:09.652 in allowing us to reap the harvest 00:14:09.652 --> 00:14:12.263 of our technological prosperity. 00:14:12.263 --> 00:14:14.506 It's foolish to say there's nothing to worry about. 00:14:14.506 --> 00:14:17.902 Clearly we can get this wrong. 00:14:17.902 --> 00:14:21.423 If the U.S. had not invested in its schools and in its skills 00:14:21.423 --> 00:14:23.502 a century ago with the high school movement, 00:14:23.502 --> 00:14:25.268 we would be a less prosperous, 00:14:25.268 --> 00:14:28.689 a less mobile, and probably a lot less happy society. 00:14:28.689 --> 00:14:31.369 But it's equally foolish to say that our fates are sealed. 00:14:31.369 --> 00:14:33.048 That's not decided by the machines. 00:14:33.048 --> 00:14:34.816 It's not even decided by the market. 00:14:34.816 --> 00:14:38.216 It's decided by us and by our institutions. NOTE Paragraph 00:14:38.216 --> 00:14:41.186 Now, I started this talk with a paradox. 00:14:41.186 --> 00:14:43.422 Our machines increasingly do our work for us. 00:14:43.422 --> 00:14:47.368 Why doesn't that make our labor superfluous, our skills redundant? 00:14:47.368 --> 00:14:50.833 Isn't it obvious that the road to our economic and social hell 00:14:50.833 --> 00:14:53.690 is paved with our own great inventions? NOTE Paragraph 00:14:53.690 --> 00:14:58.367 History has repeatedly offered an answer to that paradox. 00:14:58.367 --> 00:15:01.963 The first part of the answer is that technology magnifies our leverage, 00:15:01.963 --> 00:15:04.332 increases the importance, the added value 00:15:04.332 --> 00:15:08.155 of our expertise, our judgment, and our creativity. 00:15:08.155 --> 00:15:09.851 That's the O-Ring. 00:15:09.851 --> 00:15:12.689 The second part of the answer is our endless inventiveness 00:15:12.689 --> 00:15:14.172 and bottomless desires 00:15:14.172 --> 00:15:16.555 means that we never get enough, never get enough. 00:15:16.555 --> 00:15:20.042 There's always new work to do. 00:15:20.042 --> 00:15:23.386 Adjusting to the rapid pace of technological change 00:15:23.386 --> 00:15:24.957 creates real challenges, 00:15:24.957 --> 00:15:27.924 seen most clearly in our polarized labor market 00:15:27.924 --> 00:15:30.681 and the threat that it poses to economic mobility. 00:15:30.681 --> 00:15:34.424 Rising to this challenge is not automatic. 00:15:34.424 --> 00:15:36.156 It's not costless. 00:15:36.156 --> 00:15:37.520 It's not easy. 00:15:37.520 --> 00:15:39.234 But it is feasible. 00:15:39.234 --> 00:15:40.936 And here is some encouraging news. 00:15:40.936 --> 00:15:43.075 Because of our amazing productivity, 00:15:43.075 --> 00:15:44.632 we're rich. 00:15:44.632 --> 00:15:47.484 Of course we can afford to invest in ourselves and in our children 00:15:47.484 --> 00:15:50.944 as America did a hundred years ago with the high school movement. 00:15:50.944 --> 00:15:54.345 Arguably, we can't afford not to. NOTE Paragraph 00:15:54.345 --> 00:15:56.094 Now, you may be thinking, 00:15:56.094 --> 00:15:58.560 Professor Autor has told us a heartwarming tale 00:15:58.560 --> 00:16:00.625 about the distant past, 00:16:00.625 --> 00:16:02.148 the recent past, 00:16:02.148 --> 00:16:03.265 maybe the present, 00:16:03.265 --> 00:16:05.305 but probably not the future, 00:16:05.305 --> 00:16:09.517 because everybody knows that this time is different. 00:16:09.517 --> 00:16:12.261 Right? Is this time different? 00:16:12.261 --> 00:16:13.989 Of course this time is different. 00:16:13.989 --> 00:16:15.818 Every time is different. 00:16:15.818 --> 00:16:19.482 On numerous occasions in the last 200 years, 00:16:19.482 --> 00:16:22.209 scholars and activists have raised the alarm 00:16:22.209 --> 00:16:25.941 that we are running out of work and making ourselves obsolete: 00:16:25.941 --> 00:16:30.331 for example, the Luddites in the early 1800s; 00:16:30.331 --> 00:16:33.492 U.S. Secretary of Labor James Davis 00:16:33.492 --> 00:16:36.135 in the mid-1920s; 00:16:36.135 --> 00:16:41.186 Nobel Prize-winning economist Wassily Leontief in 1982; 00:16:41.186 --> 00:16:44.526 and of course, many scholars, 00:16:44.526 --> 00:16:46.691 pundits, technologists, 00:16:46.691 --> 00:16:49.111 and media figures today. NOTE Paragraph 00:16:49.111 --> 00:16:53.722 These predictions strike me as arrogant. 00:16:53.722 --> 00:16:56.754 These self-proclaimed oracles are in effect saying, 00:16:56.754 --> 00:17:00.142 if I can't think of what people will do for work in the future, 00:17:00.142 --> 00:17:02.897 then you, me, and our kids 00:17:02.897 --> 00:17:05.420 aren't going to think of it either. 00:17:05.420 --> 00:17:08.295 I don't have the guts 00:17:08.295 --> 00:17:11.188 to take that bet against human ingenuity. 00:17:11.188 --> 00:17:14.135 Look, I can't tell you what people are going to do for work 00:17:14.135 --> 00:17:16.144 a hundred years from now. 00:17:16.144 --> 00:17:18.902 But the future doesn't hinge on my imagination. 00:17:18.902 --> 00:17:21.619 If I were a farmer in Iowa 00:17:21.619 --> 00:17:23.284 in the year 1900, 00:17:23.284 --> 00:17:26.540 and an economist from the 21st century teleported down to my field 00:17:26.540 --> 00:17:30.002 and said, "Hey, guess what, Farmer Autor, 00:17:30.002 --> 00:17:31.663 in the next hundred years, 00:17:31.663 --> 00:17:35.576 agricultural employment is going to fall from 40 percent of all jobs 00:17:35.576 --> 00:17:36.647 to two percent 00:17:36.647 --> 00:17:39.114 purely due to rising productivity. 00:17:39.114 --> 00:17:42.944 What do you think the other 38 percent of workers are going to do?" 00:17:42.944 --> 00:17:46.481 I would not have said, "Oh, we got this. 00:17:46.481 --> 00:17:49.504 We'll do app development, radiological medicine, 00:17:49.504 --> 00:17:53.088 yoga instruction, ??." NOTE Paragraph 00:17:53.088 --> 00:17:54.010 (Laughter) NOTE Paragraph 00:17:54.010 --> 00:17:55.836 I wouldn't have had a clue. 00:17:55.836 --> 00:17:59.046 But I hope I would have had the wisdom to say, 00:17:59.046 --> 00:18:02.581 "Wow, a 95 percent reduction in farm employment 00:18:02.581 --> 00:18:04.582 with no shortage of food. 00:18:04.582 --> 00:18:07.214 That's an amazing amount of progress. 00:18:07.214 --> 00:18:10.664 I hope that humanity finds something remarkable to do 00:18:10.664 --> 00:18:13.346 with all of that prosperity." NOTE Paragraph 00:18:13.346 --> 00:18:17.589 And by in large, I would say that it has. NOTE Paragraph 00:18:17.589 --> 00:18:19.543 Thank you very much. NOTE Paragraph 00:18:19.543 --> 00:18:24.290 (Applause)