The USA has been the largest industrial nation for a number of years with about 20-25% of all production in the world measured by value in fixed prices. Over the same period of time, China has gone through a development from a backward economy to a gigantic factory for the whole world. We have often talked about China becoming a bigger producer of industrial goods than the Americans. That has actually happened, when we look at the numbers from 2014. There’s just the small caveat that the Chinese growth numbers in later years after the economic downturn in 2008/2009 have been agreed upon by the civil service and the government – often at the beginning of the year. That’s equivalent to the Danish government deciding what the economic growth in Denmark will be ahead of time. So it’s not necessarily very reliable information that should make you trust the later years Chinese numbers.
A lot suggests that USA is still on the Nr. 1 spot. So Trump won’t have much trouble making the American production Great Again – Because it already is. A more extraordinary case is Japan, that the older of us remember as the great industrial threat from the 1980s. Japan was going to take over the world’s production and the rest of us would have to live off of the scraps leftover. Japanese cars conquered EUropa and USA, Japanese TVs, cameras, stereos and more dominated the markets. Since then it’s been going downhill for the Japanese share of the world’s production and today the Japanese production share is only 10% - a good share, but far from dominating globally.
So we can still produce in the West. But won’t we still lose a lot to automation and robotization? The catastrophe is right around the corner! All jobs will disappear! It’s all seen before. If we go back to the second wave of the industrialization in the shape of steam engines, the electric engine and entirely new production opportunities in the 1800s, a lot of people had to find new things to do in the cities instead of the country. Almost all areas saw momentous changes. A person who was born in the countryside in the flicker of the tallow candle or the petroleum lamp, with water from the well and toilet with the animals in the stable as well as horses for work-use, might a few years later find themselves in the tramcar on their way to work in the city with electric lights, running water and automatic production processes at the factory. As he gets older, he might even pick up the phone and call his children while they discuss the latest radio broadcast, where cars and airplanes was part of a story from the modern society.
If we look at the Danish labor market today, about 30% find new jobs within a year. So we are already very flexible when it comes to the labor market. If we look at today’s jobs, half of them have been created in the last 10 years, while half of the jobs in 2006 have disappeared today. The same thing happened 20 years ago and until 2006 and in the period before. Jobs disappear all the time. It’s been happening for many years. So industry 4.0, automating and robotization aren’t special threats that we haven’t seen before. In many ways, it’s a continuation of the things we’ve seen since the industrialization began with weaving machines in the late 1700s.
So are we not supposed to fear the many lists of jobs that will disappear and professions that are threatened? Sure, it might be a problem when you’re picking an education if those jobs are being disassembled. But new jobs are continuously created and so far human abilities seem capable of going very far in order to create new needs that we want to work for to fulfill. Within the next 30-40 years, it doesn’t look like we’ll run out of new opportunities.
But didn’t Keynes say…? Yes, he did. Here’s one of the quotes from John Maynard Keynes, Economic Possibilities for our Grandchildren (1930)* :
"We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.
But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul, and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still."
That should be in ca. 14 years (2030), that we have the time to enjoy the lilies of the field. Keynes’ essay was written during the great depression in 1930, where you no longer believed that jobs would come back again. An important assessment made is that our needs would be met after 100 years. That’s probably the thing that Keynes was most wrong about. Our needs haven’t been met yet – far from it. The 2-3 billion people in former developing countries who have entered the lower-middle class want more progress. So, do 3 billion of the world’s poor people and of them, the poorest billion people may barely have enough energy to wish for that change. There are almost 6 billion people on earth who want prosperity, and based on how we live in Denmark, that’s an entirely understandable thing to want and that’s what we’ll all depend on and create jobs for in the coming 50-100 years – and perhaps even longer with the changes we’re currently making to our resources to handle this change.
And yes, someday we’ll have the time to do the things we don’t have time for today. But who says work is the thing that disappears? If it does, we need to redefine the meaning of our everyday lives. It won’t be the first time it happens, but it’s still far off in the future at this point.
Until then, there’s no reason to listen to the fallacy that there’s only so many jobs to get and that we have to share it between us. It mainly stems from a stationary view of society. Work is continually evolving into new shapes. Finally we also need to remember that Keynes in another context said that all production in the end is aimed at human consumption. In other words, we’re doing it for our own sakes – or more precisely, the large community. So if we have enough, there are billions who want to have that too.
Published here 2017