The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future by Martin Ford (PDF)

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What will the economy of the future look like? Where will advancing technology, job automation, outsourcing and globalization lead? This groundbreaking book by a Silicon Valley computer engineer explores these questions and shows how accelerating technology is likely to have a highly disruptive influence on our economy in the near future–and may well already be a significant factor in the current global crisis. THE LIGHTS IN THE TUNNEL employs a powerful thought experiment to explore the economy of the future. An imaginary “tunnel of lights” is used to visualize the economic implications of the new technologies that are likely to appear in the coming years and decades. The book directly challenges conventional views of the future and illuminates the danger that lies ahead if we do not plan for the impact of rapidly advancing technology. It also shows how the economic realities of the future might offer solutions to issues such as poverty and climate change.

User’s Reviews

Editorial Reviews: From the Publisher THE LIGHTS IN THE TUNNEL takes an in depth look at current trends in information technology and globalization and examines what the likely economic impact will be in the coming years and decades. Here are just a few of the questions explored in the book:How will job automation impact the economy in the future? How will the offshore outsourcing trend evolve in the coming years? What impact will technologies such as robotics and artificial intelligence have on the job market? Did technology play a significant role in the 2007 subprime meltdown and the subsequent global financial crisis and recession? Globalization. Collaboration. Telecommuting. Are these the forces that will shape the workplaces of the future? Or is there something bigger lurking? How fast can we expect technological change to occur in the coming years and decades? Which jobs and industries are likely to be most vulnerable to automation and outsourcing? Machine and computer automation will primarily impact low skilled and low paid workers. True or false? Will advancing technology always make society as a whole more wealthy? Or could it someday cause a severe economic depression? What are the implications of advancing automation technology for developing nations such as China and India? Will a college education continue to be a good bet in the future? Recent economic data suggests that, in United States, we are seeing increasing income inequality and a dwindling middle class. How will this trend play out in the future? What will be the economic impact of truly advanced future technologies, such as nanotechnology? Retail positions at Wal-Mart and other chain stores have become the jobs of last resort for many workers. Will robots and other forms of machine automation someday threaten these jobs? If so, what alternatives will the economy create for these workers? And much more… About the Author MARTIN FORD is the founder of a Silicon Valley-based software firm. He has over twenty-five years experience in the fields of computer design and software development. He holds a computer engineering degree from the University of Michigan and a graduate business degree from the University of California, Los Angeles.

Reviews from Amazon users which were colected at the time this book was published on the website:

⭐”We can expect that technological advance will give rise to entirely new industries in the future. However, the reality is that few if any of these are likely to be labor intensive. By their very nature, these new industries will tend to rely on information technology and will offer relatively few opportunities for average workers.”Eventually, this new systemic unemployment may begin to show up at nearly every educational and income level: from high school dropouts to former members of the `working wealthy.’ It’s important to note that this unemployment will result from both the direct impact of automation and the indirect, economic impact associated with depressed economic spending.” Martin Ford: The Lights in the TunnelIn Greek mythology, Cassandra was a beautiful scarlet-haired royal daughter consort of the patron god of Delphi, Apollo, who blessed her with the power of prophecy. Unfortunately, after a tiff Apollo placed a curse on her decreeing that while her predictions would be correct, they would not be believed. As a result the Athenians ignored her warning about the Trojan Horse and suffered an historic defeat.Now, after lo these many centuries, economic and social conditions in America and the world are such that it is again appropriate to ask whether we aren’t once more ignoring Cassandra–indeed a large assembly of Cassandras–who alert the nation to the enormous impact of digital automation on the American–and world– economy and society. This is not a matter for the future: it’s already well underway. Thanks to automation the number of farmers in the nation has plunged from 90% of the work force in the 18th century to the current 4%–with production increasing.This is the story that Martin Ford relates so superbly in his “The Lights in the Tunnel”–the tunnel symbolizing the mass market with each light a single person or consumer moving in the world economy. Ford traces what happens to each of these as the market changes–how this affects business investment and, most of all, employment. His particular focus is on, “What if technology progresses to the point where a substantial fraction of the jobs now performed by people are instead performed autonomously by machines or computers.” This will inevitably lead, Ford and others in his camp believe, to an “extreme future scenario with 75 percent unemployment.””Lights” is an existential `wake-up’ call. Millions of Americans, for example, watched IBM’s “Watson” soundly beat the best human experts on the popular television show, “Jeopardy,” but few grasped the ramifications of Watson’s extraordinary performance. He came brimming with the contents of all the major encyclopedias, dictionaries, travel books, Google, millions of blogs and even the Bible, all of which he evaluated in milliseconds. And keep in mind that given Moore’s law there’s already the `son of Watson’ with even more capability. In a decade or two micro-processors–plus enormous improvement in use of algorithms– will surpass the capacity of the human brain for most operations.Traditionally, economists, businessmen and the public understandably embraced increases in productivity. Sustained growth was based on ever-more productive machines, the dynamo for the colossal success of the American economy. Initially, however, although improvement in productivity often involved job losses, the workers were able to find new employment. Buggy whip makers lost their jobs but without a great deal of training migrated to the production line at Ford Motor Company. The economy proved flexible enough for these dislocations and for the most part there was no great increase in unemploymentThe current “invasion of the machines,” as some call it, is vastly different–as the marvelously prescient Jeremy Rifkin predicted in his 2004 book, “End of Work.” Far greater numbers of low-paid workers -cashiers, office clerks, security guards are losing their jobs. Even more alarming, jobs previously thought safe from machines–engineers, architects, laboratory technicians, even lawyers are being lost to microprocessors (computers, in all their variations). Their application has steadily expanded into virtually every job and profession. For most Americans (and citizens of the world) some version of microprocessing has become an extension of themselves. When internet connections break down millions feel they’ve been disconnected from the world.Jobs of ordinary workers are now threatened even more with the coming of yet another form of microprocessing machine–robots, which are far more sophisticated than most people realize. Foxconn, a Chinese company which already has 10,000 functioning robots, has announced plans for building up to one million. From an employer’s standpoint, although the initial investment in a robot might be considerable, the advantages over time are enormous. Computers don’t stop for lunch, go home at 5 p.m., have headaches or (at least not yet) pick fights with their co-robots. They don’t need insurance or retirement, and, at least up until now, they aren’t taxed. Meanwhile, the capabilities of humans has improved little with time. But computer processing speed, as Gordon Moore predicted, has doubled every eighteen months.Author Ford describes the emerging situation in America–and the world. There are two schools of thought on where things are heading. In the 19th century English textile workers, fearing their jobs would be lost through the introduction of new weaving machines, rebelled, destroying equipment and striking. The uprising, named Luddite after one instigator, Ned Ludd, failed, miserably, but what’s of importance today, all the workers ultimately found employment. Optimists who now argue from analogy that there’s nothing to be feared with the advent of automation, refer to this as the “Luddite Fallacy,” indicating the fears proved unfounded.Taking issue with this view, another school, the “modernist” with which Ford identifies, takes a far more pessimistic view, and he makes powerful case. Any comparison with the Luddites is totally off base, the situations altogether incomparable. While it’s self-evident that throughout history and down to the present day machines have become steadily more efficient, while displaced workers found jobs, that’s no reason for complacency. “It stands to reason that if this process continues indefinitely, at some point the machines will become autonomous and the worker will no longer add value.”As Ford notes, moving farmers or cotton pickers from the fields to working as salespersons at J.C. Penney’s or Sears hardly compares with today’s challenges in moving much more qualified persons–computer engineers, teachers, bankers, even lawyers into challenging positions. The problem is not exporting American production and jobs overseas, but right here at home: automation. At some point there will come a “tipping point at which job losses from automation begin to overwhelm any positive impact on employment from lower prices and increased consumer demand.”He list thirty traditional jobs–cashiers to waiters and waitresses, tax-preparers and bookkeepers–all of which will be threatened by automation. These categories make up 40% of American jobs, yet only one is “new” since 1930–McDonald’s fast-food business model. Curiously, the safest jobs are probably gardener, housekeeper and plumber. Current job-holders would do well to take a look. “Fact is,” Ford writes, ” that the vast majority of our workers continue to be employed in traditional jobs.” This is true even in high tech industries “To suggest that technology is going to somehow create completely new job categories capable of absorbing millions of workers displaced from traditional jobs is fantasy.” “The fact is the bar which technology needs to hurdle in order to displace many of us in the workplace is much lower than we really imagine.”It is not shouting “wolf” to describe the impact of all this on the economy, society and government as virtually–and using the word with deliberation– incomprehensible. Where are the unemployed to earn enough to put bread on the table and pay the house mortgage–let alone pay for health insurance? Moreover, with workers earning no paychecks where are the federal and state governments going to find the revenues to finance services people demand, from police and fire services to education, constructing roads and supporting an enormously expensive military establishment. And where are jobless workers going to find the money to become consumers and purchase the goods and services offered by automated manufacturers.Economists, financiers, academicians, politicians familiar with the issue differ enormously in their proposals on how to deal with the oncoming crisis. One obvious impediment is ideological prejudices, for example , put bluntly a Republican or Democratic approach to government issues, beginning with size and authority, and leading almost immediately into the realm of public welfare. There will be no avoiding these issues: Faultless workers made jobless by automation will have to be cared for somehow, regardless of politics. This will give true meaning to the much-maligned term, “welfare state.”Ford, a 25-year veteran Silicon Valley engineer and entrepreneur, doesn’t shy from sharing his conclusions that the major concentration must be on tax policy, coupled with extensive federal and state government involvement. He’s up front (though hardly alone) in arguing that the necessary changes will require a major transformation in what we’ve come to accept as the capitalist model. In certainly his most controversial conclusion, Ford asserts, “In the long run, if advanced machine automation permanently disenfranchises a significant faction of the work force, we will have no choice except to make some significant changes to our economic system so that the free market can continue to function.”Ford finds possible relief in fundamental changes to the tax structure. Recognizing that huge unemployment will dramatically reduce payroll tax revenues, he proposes dropping it in favor of a “gross margin tax” on business. This would calculate revenue less cost of goods sold. He argues such a system could raise the necessary revenues as the current payroll tax while distributing the burden more fairly among industries. As they currently do, businesses would pay two taxes–the gross margin tax instead of the payroll tax, plus a business tax as they now do. Business taxes (plus capital gains and higher rates for the wealthy) would rise, but this would be balanced off by dropping the payroll tax. Clearly Ford’s concept will be but one of many as debate sharpens.Ford’s analysis is far too complex and nuanced to be properly described in a review of this length. To his credit, he recognizes all the critics and their complaints–all of which are being aggressively presented. He earns his keep if only for sounding the alarm. “What happens,” he asks, “when technology reaches the point where most human labor is no longer essential?” “There is really no way to envision how the private sector can solve this problem.”Regardless of how one feels about big government–or little–there can be no doubt that federal and state involvement is indispensable–for the survival of the capitalist system and the nation as we know it. Martin Ford and others like him are speaking out. Cassandra is speaking, and in the judgmen of a wide array of experts she speaks the truth. To ignore her will be to put this nation through the most convulsive experience since the Great Depression. In fact, far worse.

⭐Someday, we will need to understand and deal with the fact that human labor will become increasing superfluous in the functioning of the global economy. The Creedance Clearwater Revival song “Someday Never Comes” counters the notion that understanding or grasping reality somehow can be deferred rather than by confronting the signs and signals of that inevitable future evident in the present. The seeds and roots of a radically different form of economy have been germinating and growing in humanity’s inexorable drive to leverage and exploit increasingly advanced technology.Martin Ford’s primary thesis in his brave and thought-provoking work “The Lights in the Tunnel” confronts us with the prospect of the disruptive impact of rapidly advancing technology which will eventually obviate the market-based economic system. In a market economy, the product market/factor market cycle flows goods and services from firms to workers’ households in exchange for workers’ labor at those same firms. Ford challenges the “conventional wisdom of economists” that product markets will continue to expand, that technology will continuously drive down prices, and he presents a solid case for the advent of an economy characterized by systemic unemployment (some signs of which are already apparent in the economy of the early 21st century). Off-shoring and automation will continue, but at some “tipping point,” technology and machines will become sophisticated enough that the need for human labor will diminish – rapidly and with severe consequences for our market economy and the principles upon which it is founded.While Ford presents a compelling case for his thesis, his valiant attempt at offering potential solutions finds itself on less solid foundations as a consequence of appeal to somewhat idealistic assumptions and questionable premises. Massive changes in the current tax structure including progressive wage deductions and consumption taxes seem reasonable to consider but some of the proposed redistribution schemes may be counterproductive. The notion of representative government is attacked in the section “Defeating the Lobbyists” where Ford suggests that Congress delegate its Constitutional authority to legislate tax policy to “a board of highly skilled professionals” that are “removed from the political process” (147). So we are to remove responsibility from our elected, accountable (by the electoral process) representatives and hand over decision-making for restructuring the economy to a small cadre of “we-know-what’s-best-for-you” elites. The justification for this change is that we Americans, as a rule, do not “…have the time, energy or attention span to take an active interest in the intricate and mundane details of the legislative process” (ibid). Unless lobbyist influence is removed, there will be “dramatically reduced opportunities for the type of behind the scenes bargaining and compromise that was once an integral part of the political process” (ibid)! Brings to mind the “behind the scenes bargaining and compromise” that led to passage of the problematic healthcare reforms and the equally problematic hidden machinations and lack of transparency in non-legislative decision-making whereby billions of taxpayer dollars were mysteriously distributed as part of the Troubled Asset Recovery Program (TARP). Missing in action in the latter are identification of the beneficiaries, the benefits, and accountability to the people. Ford seems to advocate as well a Federal Reserve with no oversight and an abridgement of first amendment rights (148) that would curtail freedom of expression by lobbyists and special interest groups.Implied in the latter half of the book in which Ford focuses on solutions, is a strongly Keynesian program of government intervention to steer and, eventually radically reconstitute, the free market system in order to preserve the mass market which is so crucial to continuing increases in prosperity. Some of these proposals ring hollow given the dubious record of the federal government in constructively steering the economy. Ford implies that the private sector cannot reshape itself and evolve as technology essentially eliminates the bulk of labor-intensive industry. Instead, “preservation of robust market demand…[must] become a core function of government” (161). A massive scheme of income redistribution coupled with “absolute firewalls” around government safety net funds is proposed. The notion of “absolute firewall” is anathema to situations where one group is responsible for managing someone else’s assets: nothing is sacred; there are no `lock boxes.’ Government policies will “provide unequal income but equal opportunity” (169). But isn’t this the definition of the consequence of free markets? Isn’t a “highly-regulated, market-oriented” system an oxymoron?Ford points out the problematic issues of externalities which concerns benefits or costs from marketplace actions that do not accrue to those who create the benefits or costs, for example, the destruction of a public good like clean air by industries that reap the benefits of production but do not pay the cost in terms of damage to the environment. However, Ford seems to reflexively appeal to government `solutions’ to manage externalities. He advocates that government get in the business of journalism (176-77), set up a “National Incentives Board” (again “staffed by professionals”) to presumably engineer appropriate social and commercial behavior by “…adjust[ing] incentives…in much the same way that the Federal Reserve controls interest rates” (178). Ford mentions the crucial issue of “moral hazard” and the myriad problems involved in transitioning to an economy that is less, perhaps much less, based in labor-intensive production, but does not reconcile proposed solutions with the disruptive impact on `normal’ competitive dynamics among organizations and the `natural’ and ultimately constructive process of Schumpeterian creative destruction.Ford briefly mentions the “international view” (183-185), but underestimates the challenges of the international system whose structure, and inherent propensities for conflict, I believe will persist for generations to come. The global economy and world political system are far from the state of homogeneity implied or assumed in Ford’s arguments. This is not to say that some of the scenarios outlined in the book will not come to pass, just that the transition to alternative market modes is made more complex by persistence of the international system structure that has evolved over the last several hundred years and in which our societies are deeply entrenched. Ford posits, let’s assume correctly, that relaxing constraints on production reduces the role of resources, labor, and technology, leaving consumer demand as the sole persistent feature of a market economy. The section “The Evolution toward Consumption” offers a brief but interesting discussion of the implications of the idea that “an individual’s consumption might someday be valued above his or her contribution to production” (206) launching questions in the inquisitive mind about the validity and implications of post-materialist (Inglhart) or post-scarcity theses. Will consumption patterns shift significantly from material goods to the intangible, i.e., to virtual experiences, artificially-generated physical or cognitive sensations; to increased epistemic appetites (seeking knowledge for knowledge’s sake), to art, leisure, or spiritual activities less based on consumption of material goods and services? How will consumers’ tastes and preferences change in the far future when we are healthier, have (perhaps much) greater longevity, and have hopefully conquered the challenges of subsistence living experienced by so many of the world’s less fortunate?While it is easy to take pot shots at any work that engages substantive economic, social, and political issues, my critique is not intended to diminish the power of Ford’s work in broaching the important issue of the global economy in a world increasingly dominated by automation and eventually (in my view) by strong artificial intelligence (AI) in the sense that Ray Kurzweil outlines in his book “The Singularity is Near.” Ford’s is a bold work and well worth the time to read and study. Ford offers astute observations that serve as a springboard for conversation and consideration of the impact of technology advances on the marketplace of the future.

⭐After a paragraph that explains how radiologists take thirteen years to qualify post school, the author glibly points out that computers can do image recognition.He continually points out that once everything is changed by automation that the market of buyers for mid price goods will shrink, without commenting whether those same mid price goods might be low priced goods.Beyond a cursory high school understanding of the American revolution and the fact that people are better off than they used be, he is blind to any historical comparisons to the “imminent revolutionary change”.I want my money back and my three hours. The author should come around my house and do some, yet be automated, weeding in my garden.Please note, I first left this review two years ago. Since then the book has been renamed as volume 1 and all similar reviews have been removed.

⭐The Lights in the Tunnel is a unique book that rationally considers the question of human utility in the age of automation, robotics and artificial intelligence. This thoughtful book steers well away from unhelpful sci-fi imagery, and concentrates on the very real economic consequences of a world where the vast majority of human labour is simply no longer required.

⭐Well argued

⭐Martin Ford zeigt mit outsmart Marx sehr gute Loesungsansaetze um das Problem technischer Fortschritt vs Geld verdienen in den Griff zu kriegen.In einer vollautomatisierten Welt wird der Produktionsfaktor Mensch nun mal ueberfluessig. Ergo muss sich die Gesellschaft anstatt Gehaelter zu zahlen etwas neues ausdenken. Hier schlaegt der Autor staatliche Umverteilung mit Hilfe von Steuern vor. In Dtl wuerde das in etwa der Idee des bedingunglosem Grundeinkommen am naechsten kommen.Der Autor gibt sehr gut das exponentielle Wachstum technischer Innovation wieder. Schade ist nur, dass die damit einhergehende Betrachtung des exponentiellem Bevoelkerungswachstums fehlt.Trotzdem 5 Sterne fuer dieses wegweisende BuchWährend unter den beteiligten Wissenschaftlern, Technikern und vielen Unternehmern die technische Entwicklung der sogenannten digitalen Revolution und ihre unmittelbaren Auswirkungen auf die Arbeits- und Lebenswelt weitgehend unstrittig sind, gibt es fast keine profunden Analysen der gesamtgesellschaftlichen Auswirkungen dieser Entwicklung. Besonders Wirtschafts- und Sozialwissenschaftler haben offensichtlich das riesige gesellschaftliche Problem der digitalen Revolution noch nicht erkannt. Hier leistet Martin Ford mit seinem Buch einen beachtenswerten Diskussionbeitrag, in dem er realistische Möglichkeiten aufzeigt, wie die unerhörte Produktivitätssteigerung durch die allumfassende Automatisierung zum Nutzen der Gesellschaft und jedes Einzelnen genutzt werden kann. Er zeigt aber auch überzeugend auf, dass die Marktwirtschaft und mithin die Demokratie zum Untergang verurteilt sind, wenn politisch nicht strukturell regulierend eingegriffen wird. Ein höchst interessantes Buch, das allen Politikern und Managern zur Pflichtlektüre gemacht werden müsste!

⭐

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