What the Presidential Candidates Overlooked

Probably the most discounted and distorted issue in the 2016 US presidential election was the displacement of American jobs by automation and machine learning. The President-elect blames these disruptions on bunk trade pacts, immigrants and overregulation. I believe this is dangerous and needs to be talked about fairly.

In 2013, Carl Benedikt Frey and Michael Osborne estimated that 47% of workers in America had jobs at high risk of potential automation. And according to a recent study by the Center for Business and Economic Research at Ball State University, productivity growth caused 85% of the job losses in manufacturing from 2000 to 2010, a period that saw 5.6 million factory jobs disappear.

While this is scary for individuals on the micro level, this is amazing progress for the economy as a whole. Underlying all the economic mumbo-jumbo is the fact that prosperity ultimately boils down to goods and services (output) per unit of time and capital (input). When computer programs put bank tellers, travel agents and taxi drivers out of work it feels shit in the short term, especially to the people displaced, but it’s better for society as a whole. Maybe that’s just the cold perspective of an economist.

Blaming the job losses on free trade deals is dangerous. Throughout human history the most prosperous civilizations were the ones with the most advanced trade networks. When trade seizes, society’s collective brain shrinks. Being able to outsource things that depend on old knowledge to free up time to acquire new knowledge and tackle bigger problems is paramount to evolving as a race. So much innovation is channeled from trade and specialization, ending free trade deals is counterrevolutionary and wrong.

Blaming the losses on immigrants is disgusting and misguided. Trump has said has called for a crackdown on immigrants, saying they “compete directly against vulnerable American workers.” Isn’t competition what we want? Isn’t competition American? 40% of fortune 500 companies were started by immigrants or their children. Those companies employ tens of millions of ‘real’ Americans.

Finally, blaming job losses on regulation is valid but deserves to be debated thoughtfully and responsibly. There’s no doubt that the Paris Agreement will make oil exploration less lucrative, or that the EPA makes it harder to compete in the coal business, or that Dodd-Frank makes it harder for large banks to lend and take risks, but are these negatives not at all offset by the positives? Decelerating climate change is better for our health, and transparent and less levered banks reduces the likelihood of another global financial crises. Certain regulations may have gone too far too fast, but that’s for another time.

The biggest problem with the truth, that most jobs are being lost to innovation, is that the trend is accelerating. This election cycle would have been a great time to bring these facts to our attention. US manufacturing jobs have been steadily disappearing for the last 50 years (while manufacturing output has increased 40%). And to think we are only in the first inning of machine learning. I think this can be spun as a huge positive.

Instead of alienating immigrants, threatening other countries with trade wars and reversing legislation designed to protect us from pollution and wall street, let’s come up with solutions to the real problem. Let’s focus money and time on educating adults. Let’s teach people skills in fields that are hiring. Let’s take specialization and world economic events into consideration at higher education institutions. Let’s drop the red herring arguments and quit exploiting the economically disenfranchised for their vote. Let’s educate them and help them.

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