Are Candidates Even Talking About the 21st Century Economy?

Photo by duallogic.

Photo by duallogic.

It’s very common to encounter broad complaints saying things like, “Copyright law should not stop me from fixing or altering my technology.”  Often, this generalization is made by people who don’t necessarily know they’re referring to Title I of the DMCA but who have read somewhere that copyright law prevents reverse engineering, maintenance, jail-breaking, and overall tinkering with products ranging from personal small electronics to cars, trucks, and tractors.

But as I first discussed in this post, the whole concept of ownership of many of our core products may be waning faster than these apparent conflicts with intellectual property law might ever be addressed. This transformation is highlighted by what seems to be an inexorable march toward an autonomous vehicle transportation system—a change that comes with consequences far more relevant than the matter of a “right” to fiddle with the gadgets we purchase.

With the announcement last week that the federal government officially endorses the development of driverless vehicles, it is noteworthy that no candidate running for any office seems likely to address the radical social and economic implications of this seismic shift in the transportation sector. Although I cannot bring myself to compare and contrast Donald Trump with any other prospective candidate for office, for the purposes of this post, suffice to say that between Trump’s version of trickle-down economics and Hillary Clinton’s version of focusing on the middle-class, it seems to me that neither candidate is talking about the same 21st century economy in which Wall Street is investing.

Candidates across the political spectrum keep referring to fair trade deals as a common scapegoat as a prelude to their myriad promises to “bring jobs back” to America. This is already a fallacy, pretending that we can reverse globalization through tax policy alone, or without a specific plan for investments—either public or private—that might actually grow domestic jobs.  Meanwhile, VCs, Wall Street, and the tech firms are placing big bets on a more generally automated future; and nobody seems to want to talk about the jobs we are, therefore, poised to eliminate over the next decade or two.  Not outsource through trade. Just eliminate right here at home.

For instance, a truly driverless future would probably wipe out a minimum of 10 million jobs, beginning with an estimated 8.5 million who work as drivers and at least a few million who work in some capacity related to the current ground transportation industry.  Granted there would be jobs created in order to build and maintain a new, driverless infrastructure, but only a fraction of the number that would be lost.  And equally if not more challenging is the question of whose investment would build this new infrastructure?

Let’s face it. The United States is bipolar when it comes to great building projects, which I think explains why our infrastructure is antiquated in contrast to other developed—and even developing—nations.  As if to emphasize our duality in this context, it’s notable that the two eras when most American infrastructure was built happen to have been based on antithetical models.  The first era was a period of unfettered capitalism, which built the foundations of the country’s industrial capacity from the mid-19th to the early 20th; and the second era was a brief period of outright socialism—the New Deal—which built highways, buildings, dams, etc. most of which is still in use today, even if it’s looking a little rusty.

Now that the Obama administration has given a federal fist-bump to the driverless vehicle—and if this does mark a tipping point when we can say this transition is inevitable—then we’re going to have to address the question of ownership (i.e. whose investment it’s going to be).  Would Americans allow Google, Uber, Ford, Lyft, and Tesla (GULFT) to own the entire transportation infrastructure for the nation?  Or would we build the infrastructure as a public work?  Because historically, allowing private industry to make that kind of stranded investment in exchange for monopoly control has not been particularly good for consumers or innovation.

Photo by jzehnder.

Photo by jzehnder.

When the nation was first being electrified, there was debate over whether we should build a distributed versus a centralized system.  A distributed system of smaller, co-generating plants would have been safer, more energy efficient, and less monopolistic. So, naturally  we built a centralized system.  This meant massive, stranded investments by the utility companies for which they could only be compensated through monopoly control of the market until those monopolies were finally busted up in the 1990s.  Meanwhile, consumers (a.k.a. “rate payers”) had no competitive choices, and the utility owners had zero motivation to innovate. As a result of this legacy, the United States remains a follower rather than a leader in advancing new, non-carbon-based, energy solutions.

So, now we fast-forward a decade or two in the world of ground transportation. We no longer own cars. We hail a driverless vehicle to take us to the grocery store where the goods on the shelves have all been delivered by a driverless cargo vehicle from a distribution center serviced by hundreds of other driverless cargo vehicles. Accidents are very rare, the air is cleaner, and (in theory) consumer costs come down. We no longer have car payments or auto insurance, and the lower cost of transportation could lower the cost of goods.

But those benefits may easily be diminished if we haven’t considered how to address the massive shift of 10-plus million people formerly employed in ground transportation-related jobs.  Plus, we now have a more thorough consolidation of transportation service than the railroad monopolies controlled at the turn of the 20th century.  Every vehicle trip is now part of a vast, networked system that relies very little on human labor. So who owns that system?  We have to assume that the capitalists currently investing in the model expect they will own it.  That’s a lot of control to give to GULFT.

Wall Street, Silicon Valley, and now the Obama administration are all projecting a future in which the transportation sector simultaneously sheds millions of jobs and centralizes control of the lifeline of the entire nation—and not one candidate from any party thinks this is significant enough to talk about.  Instead, they’re campaigning on traditional, and at times absurd, promises that they know best how to bring 20th century jobs “back.” In this one regard, maybe the future is already here because it doesn’t seem to me like anybody’s driving the bus.

© 2016, David Newhoff. All rights reserved.

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2 comments

  • Wall Street, Silicon Valley, and now the Obama administration are all projecting a future in which the transportation sector simultaneously sheds millions of jobs and centralizes control of the lifeline of the entire nation—and not one candidate from any party thinks this is significant enough to talk about.

    I’m afraid that you hit the nail right on the head with this, David.

    Even though I admire President Obama and will cast my vote for Hillary Clinton–sorry, but to me Trump is a nightmare walking and Jill Stein and Gary Johnson remind me of characters from Idiocracy–the fact is that what you just mentioned has not been discussed enough, if not at all.

    Whenever I do bring up the possibility that millions of jobs will be lost as a result of the massive change to the transportation sector due to driverless cars and trucks, what I get back is, “Well, that’s just progress. And besides, it will be safer overall.” I keep thinking of a 60 Minutes interview with two founders of a start-up that created an app that allows for bank loans by cutting out the “middle man”; when these two were asked about the job losses that would result if their app became more widespread both of them froze–you could almost hear the gears seizing up in their heads–and they responded with, “Well, they’ll just find new jobs.”

    Oh, it’s just that simple, I guess.

    The harsh fact is that science and technology are zooming ahead long before we can actually come to grips with the true effects of “progress”–and even then it is after the effects have been felt. Add to that the fact that many are more concerned about the bankers and financial companies–which are regulated–instead of the tech industries, who constantly fight any regulations–and what lies down the road may be a future that benefits the few at the expense of the many.

    And no, I have no idea how to address this. I wish I did, but I fear that the problem is far larger than any one person to address.

    • Thanks for your thoughts, Marc. Yeah, I don’t know what the solution is either. And of course, “solutions” are often found in reactions to unforeseen events–war, environmental cataclysm, Trump becoming president. Cheers!

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