Why machines haven't replaced us: the paradox of human labor
In short: For over a century, we have built machines to do our work for us. Yet, despite a revolution of automation, the proportion of adults with jobs has consistently risen. Why hasn't human labor become redundant? The answer lies in two surprising economic principles regarding human creativity and insatiability.
The history of industrial progress suggests a clear trajectory: machines should replace humans. Tractors replaced physical toil, assembly lines replaced manual handiwork, and computers replaced human calculation. These inventions succeeded in eliminating specific tasks, such as digging ditches by hand or manual bookkeeping. However, the data shows a paradox: the fraction of US adults employed in 2016 was higher than it was in 1890, with employment rising in nearly every decade over the last 125 years.
Economist David Autor explains this through the 'O-ring principle.' When a specific subset of tasks within a job is automated, it doesn't necessarily make the entire position obsolete; instead, it can make the remaining human-centric tasks more critical. A prime example is the automated teller machine (ATM). While ATMs replaced many routine teller tasks, they also made it cheaper for banks to open new locations. During that timeframe, bank locations grew by nearly 40 percent, which resulted in a higher overall count of tellers.
The reason for this continued demand for human labor rests on two pillars. First is human genius and creativity—the ability to perform complex, non-routine work that machines cannot easily replicate. Second is human insatiability, or greed. As technology makes certain services cheaper, it often expands the total volume of those services, creating new opportunities for human labor to facilitate that growth. The challenge for the future is ensuring these new roles are decent and well-paying.
The case of bank tellers illustrates this perfectly. American human teller staffing has nearly doubled over the 45 years following the ATM's debut, rising from roughly 250,000 in 1970 to 500,000 now. This growth includes 100,000 tellers added since the year 2000 alone. While their daily tasks have shifted, the human element remains a necessary component of the economic engine.
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Sources
- Summary by Intellect · source: Will automation take away all our jobs? | David Autor
- Also: Will automation take away all our jobs?
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