Ned Ludd was a weaver in England at the dawn of the Industrial Age. Early in the 1810s, he led bands of followers called Luddites, who would smash the new looms that were putting hand weavers out of work. Ever since, those who have resisted new technological changes have been known as Luddites.
We know, of course, that Ludd failed. The Industrial Revolution rapidly changed the world. It is true that many of the changes brought about by this revolution were not so good and many are yet to be understood, but it’s also undeniable that our standard of living is far higher today than it was in 1810.
Fast forward a century. In 1910 in America, 1 in 10 workers worked on farms. During the next few decades, the automobile revolutionized almost everything, including farms. Today, fewer than 1 in 1,000 Americans works on a farm.
What these dramatic advancements in technology did was drastically increase worker productivity. As an example, today’s farmer produces much higher crop yields than his 1910 counterpart but with almost no human help.
So instead of spending massive human capital on feeding ourselves, humanity has been released to fly so much higher, literally and figuratively.
Yes, all this has had huge, tragic costs. The slaughter of 60 million people in WWII was possible because of mechanized warfare—industrialization at its worst. Massive amounts of pollution, displaced populations, the atomic bomb, and so much more were wreaked upon us as a result of these advances. But all the while, productivity increased and standards of living rose.
Fifty years ago, the idea that we would all have personal computers far more powerful than the computers that used to fill a room was unimaginable. Science fiction. But today we live in that sci-fi future.
In the last few months, we have seen the accelerated rollout of a startling new technology: artificial intelligence. AI is making dramatic leaps seemingly every other day. AI is so powerful that it not only generates technological wonders, but also a lot of fear.
People involved in creating this new technology are now sounding alarms. They worry that the future will be some form of the dystopia envisioned in such movies as The Matrix, The Terminator, and AI. They know far more about this technology than I do, so it is with a little humility that I beg to differ.
I ask myself, why would they be any more correct than Ned Ludd and all of his intellectual descendants?
At the dawn of the automobile age, people asked how it was possible to have an economy based on selling cars. Before then, the world was based on food production. Agriculture was king, and dethroning that king was unthinkable. And yet today, we live in the largest economy the world has ever known, and at least two-thirds of it is services. Not only is it not based on food production, it’s not even based on industrial production.
In the 1990s, at the dawn of the information revolution, I asked myself if it was possible to have an economy based on selling information. Well, a new company that completely dedicated itself to the idea of an information economy is now worth over $1 trillion. It’s called Alphabet, the parent company of Google.
The underlying theme of all of these transitions has been that each one has made humans more productive. AI is potentially a giant leap in that same direction, and it’s just in time.
For decades, birthrates in the industrialized world have been falling. In a couple more decades, it is forecasted that the population of the whole world will be in decline.
This is happening at the same time that humans are living longer. What we see in Japan and other nations is an aging population with less and less ability to care for the elderly. That’s a frightening vision of the future.
Today in the United States, there are 1.8 job openings for every unemployed person. This is another way of saying we have a worker shortage. We are surviving the aging of the population and the worker shortage through innovation. But innovation and disruption are usually created by young minds. Steve Jobs, Sergey Brin, Mark Zuckerberg, and Bill Gates all founded their companies at very young ages. Old people didn’t found Apple, Google, Facebook and Microsoft.
As the population declines, so does the population of college-educated young minds. But what if we had a way to dramatically improve the productivity of innovative young minds?
The hammer is an extension of the arm.
The wheel is an extension of the leg.
AI is an extension of the mind.
It’s the next logical revolution, and it’s just in time to help us deal with the world’s aging population and the potential dwindling of college-educated young minds.
I think Mr. Ludd’s intellectual descendants are going to be wrong again.
Hal Masover is a Chartered Retirement Planning Counselor and a registered representative. His firm, Investment Insights, LLC is at 508 N 2nd Street, Suite 203, Fairfield, IA 52556. Securities offered through, Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Investment Insights, Inc & Cambridge are not affiliated. Comments and questions can be sent to firstname.lastname@example.org These are the opinions of Hal Masover and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Past performance is no guarantee of future results.
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