This isn’t the Industrial Revolution.
How many jobs do robots – whether mechanical robots or software – destroy? Do these destroyed jobs get replaced by the Great American Economy with better jobs? That’s the big discussion these days.
The answers have been soothing. Economists cite the Industrial Revolution. At the time, most humans replaced by machines found better paid, more productive, less back-breaking jobs. Productivity soared, and society overall, after some big dislocations, came out ahead. The same principle applies today, the soothsayers coo.
But this isn’t the Industrial Revolution. These days, robots and algorithms are everywhere, replacing not just manufacturing jobs but all kinds jobs in air-conditioned offices that paid big salaries and fat bonuses.
Just today, BlackRock announced a plan to consolidate $30 billion of their actively managed mutual fund activities with funds that are managed by algorithms and quantitative models. As these software robots take over, “53 stock pickers are expected to step down from their funds. Dozens more are expected to leave the firm,” as the New York Times put it.