The Autonomous Revolution: Reclaiming the Future We've Sold to Machines

The Autonomous Revolution

OTHER BOOKS BY THE AUTHORS

The Virtual Corporation

(HarperCollins, 978-0877306570)

The Autonomous Revolution

Reclaiming the Future We’ve Sold to Machines

BY William H. Davidow

AND Michael S. Malone

The Autonomous Revolution

Copyright © 2020 by William Davidow and Michael S. Malone

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed Attention: Permissions Coordinator, at the address below.

Ordering information for print editions

Quantity sales. Special discounts are available on quantity purchases by corporations, associations, and others. For details, contact the Special Sales Department at the Berrett-Koehler address above.

Individual sales. Berrett-Koehler publications are available through most bookstores. They can also be ordered directly from Berrett-Koehler: Tel: (800) 929-2929; Fax: (802) 864-7626; www.bkconnection.com

Orders for college textbook/course adoption use. Please contact Berrett-Koehler: Tel: (800) 929-2929; Fax: (802) 864-7626.

Distributed to the U.S. trade and internationally by Penguin Random House Publisher Services.

Berrett-Koehler and the BK logo are registered trademarks of Berrett-Koehler Publishers, Inc.

First Edition

Hardcover print edition ISBN 978-1-5230-8761-7

PDF e-book ISBN 978-1-5230-8762-4

IDPF e-book ISBN 978-1-5230-8763-1

Digital audio ISBN 978-1-5230-8764-8

2019-1

Produced by Wilsted & Taylor Publishing Services; Copy editor: Nancy Evans, Wilsted & Taylor; Text designer: Michael Starkman, Wilsted & Taylor; Jacket designer: Alvaro Villanueva, Bookish Design

If we are to be judged

by the wonderful things we create,

I am a great man because my wife, Sonja,

and I have created a loving, happy, and

accomplished family with excellent values

whose members have gone on

to create more wonderful things.

This book is dedicated to them.

William Davidow

For my two sons,

who will see both sides of history.

And four wonderful women—

my wife Carol, sister Edie,

Leslie Lopez, and the late Linda DiNucci—

for getting me through the tough patch.

Michael Malone

Contents

Foreword by David M. Kennedy

INTRODUCTION   Digital Leviathan

CHAPTER ONE     The Autonomous Revolution

A Third Social Revolution

CHAPTER TWO    A Brief History of Social Phase Changes

Why This Time Things Are Different

CHAPTER THREE  Substitutional Equivalences

The Drivers of Societal Phase Change

CHAPTER FOUR    Productivity without Prosperity

The Emerging Era of Non-Monetizable Productivity

CHAPTER FIVE     Commercial Transformation

Rewriting Business and the Economy

CHAPTER SIX       The Death of the Good Job

The Nature of Work in the Autonomous Revolution

CHAPTER SEVEN  Liberty and Privacy

Escaping the Algorithmic Prison

CHAPTER EIGHT  Within the Chimera

Living in a Virtual World

CHAPTER NINE    The Body Politic

Government in the Autonomous Revolution

CHAPTER TEN      Sacred Values

Novi Coeptus

Notes

Acknowledgments

Index

About the Authors

Foreword

David M. Kennedy

TO STUDY THE HISTORY OF HUMAN LIFE and human societies is to study change. If there were no change, our understanding of any given moment in time would yield the key to understanding all moments in time. History as a method of inquiry would then resemble science, whose central quest is to elucidate the constants of the physical world that constitute the laws of nature. History, like science, would then have predictive value—although making predictions about humanity’s future in a world without change would be a decidedly no-sweat matter of same ol’, same ol’, hardly requiring powerful analytical chops.

But history knows no such laws, and historians no such sinecure. The objects of historical analysis, by their very nature, are in a state of ceaseless flux. Historians have long found this characteristic of their subject matter both fascinating and frustrating.

More than 2,500 years ago, the pre-Socratic philosopher Heraclitus (a melancholic man living in the then-Persian city of Ephesus, whose figure in the foreground of Raphael’s famous Vatican fresco, The School of Athens, is customarily thought to be modeled on Michelangelo) insisted that remorseless change was the very essence of the universe, confounding all efforts fully and finally to comprehend it. No man, he summarily said, ever steps into the same river twice. That’s certainly the pithiest and probably the profoundest statement ever made about the mystery of time.

Since the dawn of the Industrial Revolution more than two centuries ago, many observers have asserted that the river of time has been palpably accelerating its flow rate, posing ever-greater challenges to our capacities for comprehension—not to mention our ability to peer into the future. The great American historian Henry Adams memorably inscribed that thought into the American canon in his 1918 autobiography, The Education of Henry Adams. Few if any students of history then or later have brought to their labors more impressive analytic gifts than Adams’s. Yet, standing in the Gallery of Machines at Paris’s Great Exposition in 1900, contemplating the enormous physical and social transformations unleashed by modern industrial technologies, even Adams was gobsmacked. He found himself, he reflected, with his historical neck broken by the sudden irruption of forces totally new.¹

William Davidow and Michael Malone now take their place in the venerable tradition of such students of change as Heraclitus and Henry Adams—though their historical necks remain unbroken as they focus their formidable explanatory acumen on the myriad changes that are today transforming the terms of life for billions of people in every corner of planet Earth. Notably, they have migrated a familiar scientific term—phase change—into the domain of historical analysis, with intriguing effect.

Even casual students of the physical world will recognize that phase change describes transformations in form without changes in chemical composition. Water’s presence in different states—liquid, solid, and gaseous—is a well-known example. So, too, Davidow and Malone argue, homo sapiens does now and will continue to inhabit societies with governments, schools, churches, markets, media, and an array of other institutions. But while human nature may remain a constant, the forms of each of those creations that have served humanity’s needs for individual aspiration and collective existence, as well as the patterns of their interaction and interdependence, are transmogrifying at an astonishing and arguably unprecedented rate.

The sources, drivers, vectors—and challenges—of those many alterations in form are the subjects of this timely and incisive book. Its central argument is that we are living through a massively consequential phase change in which the cumulative impacts of several structural transformations—technological, political, economic, behavioral, and even attitudinal—are maturing and converging into a tsunami of unexampled challenges and opportunities. We are on the cusp of an era that will bring new ways of doing business, new ways of working, new ways of governing, communicating, recreating, and new ways of living. All will demand new rules, new norms, new structures and infrastructures, new tools, and new thinking.

In a work studded with arresting insights, few are more unsettling than the following, offered in the context of the authors’ discussion of artificial intelligence, and the Autonomous Revolution that is utterly upending the world of work, and therefore education and even human memory:

The Autonomous Revolution will embed functional intelligence in autonomous machines. In practice, this means that the systematic development of human knowledge through education and work experience will have less value than it did in the past. Humans may continue to expand their knowledge and skills by accessing databases on the Internet, interfacing directly with the IoT (Internet of Things), or eventually having devices implanted in their bodies that will enhance their physical and mental abilities. But the real repositories of practical knowledge will shift to autonomous devices, which will learn much more quickly than people can. In situation after situation, automatons will substitute for humans.

That sobering perspective recalls a story, perhaps apocryphal but nonetheless instructional, about a conversation sometime in the 1950s between Henry Ford II, the CEO of Ford Motor Company, and Walter Reuther, the head of the United Automobile Workers union. Gesturing at an array of early-generation robots working on the assembly-line floor, Ford smugly declared that not one of those machines would ever go on strike, nor would they ever pay dues to Reuther’s union. Maybe so, Reuther allegedly replied, but not one of those machines will ever buy an automobile, either.

Reuther’s riposte anticipates Davidow and Malone’s depiction of a future in which hyper-disruptive innovations such as artificial intelligence and distributed 3-D printing will have solved the ancient problem of how to make things, even while raising an urgent new problem of who will buy those things, and what they will offer for them in exchange. This is but one example of the countless visions of the future that readers will encounter in The Autonomous Revolution.

———

While historians have long been preoccupied with change, they have been especially so since the eighteenth-century Enlightenment—not surprisingly, since they have lived in an environment where time itself seems to have been dramatically sped up by the engines of the great revolutions—political and industrial—with which the eighteenth century came to a climax. But many, probably most, of those historians (Henry Adams conspicuously excepted) have also often made an unexamined elision between the observation that change has occurred and the judgment that improvement has resulted. The conception of time most common among modern historians has been teleological, informed by a sense of advancement toward a future all but guaranteed to be both materially and morally superior to the past. That’s the considerably weighty meaning infused into the idea of progress that so many Americans have long found so congenial, so natural, in fact.

That kind of congenital optimism pervaded the Western project for more than two centuries, nowhere more so than in America. The conception of history as progress, in short, has simply been part of a larger and ubiquitous cultural attitude that has many components: belief in the power of reason to secure and even amplify the beneficent influence of science and technology; confidence in the logic of democracy to pacify relations among citizens and among nations; an expectation that the march of time will lead to upgraded standards of living, increased human dominion over nature, even to mastery over the constraints of biology, including victory over disease and possibly even over the ultimate mysteries of birth and death.

Those comforting notions are less easily entertained today. Indeed, a countervailing narrative has taken root in our culture, exemplified by the popularity of science fiction. Writers like Ray Bradbury, Philip K. Dick, and Margaret Atwood, and filmmakers like Stanley Kubrick, James Cameron, and Ridley Scott almost invariably conjure a future where technology has gone berserk and life looks mighty scary and mightily morally objectionable compared to the placid present.

The Autonomous Revolution may at points read like science fiction, but its authors engage their subject not as fantasists but as historians. They write in the vein of another philosopher of history, G. F. W. Hegel. Writing in 1820, in the springtime of the Industrial Revolution, Hegel declared that the owl of Minerva takes flight only as the shades of night are gathering. In plain language, Hegel meant that even the wisest among us can only begin to comprehend the character of an era as it is fading away, giving way to another, which will remain inscrutable until it, too, cedes its place in history to a successor.

We are at such a passage now. For all our understanding of the dynamics that have characterized the last two centuries, we still peer at the future through a glass darkly—though the kind of informed understanding of the past, both distant and immediate, that The Autonomous Revolution offers can surely help us see a bit more clearly into the world that is aborning.

Heraclitus is also known as The Weeping Philosopher, because he apparently suffered from chronic melancholia. It’s permissible to believe, in turn, that his melancholia stemmed from his inability ever to fix time long enough to see the world as clearly as he wished.

Despite the frequently unnerving data that it presents, there’s no weeping but plenty of wisdom in The Autonomous Revolution. It’s a wisdom nurtured by a deeply considered sense of history. It indulges in neither the easy optimism of the school of progress nor the bleak pessimism of so much science fiction. It recognizes the inevitability of change, but resolutely refuses to roll over in its path. Above all, it summons all of us to recognize the shape and scale of the changes already gathering such impressive force. It urges us not to succumb to the future, but to shape it. One thing is certain, the authors conclude, if we choose to treat phase change as business as usual, we will become its victims.

The Autonomous Revolution

INTRODUCTION

DIGITAL LEVIATHAN

IT IS HARD NOT TO SENSE that something vast and unsettling is emerging from beneath modern life. Even here in Silicon Valley, where we have become accustomed to continuous change, this time it somehow seems different—a change so sweeping and complete as to be unlike anything we have ever before experienced.

But it isn’t just here that this change is becoming apparent; the harbingers are everywhere. Institutions upon which we have rested our faith, some of them for centuries, now seem to be deeply troubled, with no obvious remedy short of dissolution and replacement. Education, government, law, religion, marriage, work, the economy, science … all seem, in the two decades since the turn of the millennium, to have become increasingly dysfunctional and under siege. Indeed, when we were pondering the subtitle for this book we considered Why nothing seems to work anymore. We can’t help thinking that, even in those intervals when times are good, when the economy is up and unemployment down, that this is merely a brief respite, before the underlying reality reasserts itself.

One might argue that this is simply progress, that mature institutions are always becoming obsolete and being replaced. No doubt that is, at least, a part of what is happening. But you would have to look deeply into human history to find another era when almost every institution faces an existential challenge. It is almost beyond imagination.

That fact, in itself, may be why we feel this sense of disquiet. No one alive today has experienced such a widespread transformation.

But there have been times in history when civilizations have experienced widespread transformations. Authors experiencing them are typically bewildered at how times have changed, but show very little understanding of what has happened. Meanwhile, the authors of the next generation exhibit such a fundamentally different reality in their sense of time, reality, and their own selves that it is as if the entire natural world has been created anew. Roll forward another generation, and it is as if there has been a collective amnesia, and the writers and diarists have no insights into their grandparents’ lives, much less how they saw the world. Even the basic rules for how people live and interact seem to have been completely rewritten. In the end, sometimes the only clues to what happened can be found in literature and myth, in the rise of new religions, and deeply buried in unreliable statistical tables.

We speak all the time of social, cultural, and scientific revolutions. Our history books are organized around these pivot points—the Christian era, the Renaissance, the Enlightenment, the Age of Exploration, the electronics age—but as profoundly influential as they were in human history they don’t reach the level of transformation about which we are speaking—that is, of true points of inflection during which essentially everything changes, when humanity seems to have stepped through a doorway from one world to the next.

Pundits emerge at inflection points. They frequently propose simplistic solutions to complex problems or, because of their narrow focus, fail to understand the implications and impact of their technologies. Facebook is a case in point.

In reflecting on these predictions, we have often thought of the words of Nicholas Butler: An expert is one who knows more and more about less and less until he knows absolutely everything about nothing¹ and nothing about everything else (our addition). As we go forward to confront the challenges facing us, it is extremely important to listen to divergent opinions, pay attention to those who analyze the situation from different perspectives, and view with caution the pronouncements of those who know everything about technology and understand almost nothing about its social consequences.

As you will read in the following pages, we believe that in the surviving memory of humankind, this has happened only twice—and, tellingly, both transitions, especially the first, left us all but incapable of entering into the minds and the worldviews of those who lived before.

What we do know is that the historical inflections didn’t come as a bolt from the blue. There were clues beforehand: important changes (new inventions, cultural crises, natural disasters, and other events) that combined to set off a chain reaction that, figuratively, left nothing but debris of the old world.

A quarter of a century ago, the two of us saw a comparable set of events that portended a similar turning point—but at that time it was only in the business world and the potential impact was orders of magnitude smaller. What we saw was that information technology and computers were intersecting in such a way that they were transforming how enterprises would be organized, how they would manufacture goods and provide service, and how they would interact with their customers.

The result was our book The Virtual Corporation. Our title entered the language to describe the new horizontally organized, edgeless, adaptive companies that enlisted their customers in everything from product design to service … in other words, the very type of enterprises that define today’s economy.

We were right in our prediction—it was indeed a paradigm shift—but wrong in our calendar. We expected that virtual corporations would take a decade or more to become ubiquitous. But a hidden force was about to burst on the scene that would propel this revolution faster than we envisioned: the World Wide Web.

The genesis of this book was similar. Having been present at the birth of social networking, massive multiplayer games, autonomous vehicles, modern artificial intelligence, and all of the other defining new technologies of the twenty-first century, we have watched with growing dismay, even horror, at how many of these developments have morphed into increasingly malevolent threats to human privacy and liberty. Living in Silicon Valley, we watched firsthand, with growing trepidation, the effects of the modern networked, digital—virtual—world on its most passionate users. Like millions of other people, we found ourselves increasingly dismayed and frightened at how the world we once knew seemed to be going off the rails right before our eyes.

The difference was that we had been here before—albeit it in an infinitely smaller way—with the virtualization revolution of industry. And that experience propelled us into a conversation the like of which we hadn’t had in twenty-five years.

We had both read the many media articles and prognosticators’ proclamations that we were now passing through a third (or fourth) Industrial Revolution, but we knew that classification was inadequate—even dangerous, because it might convince the world to seek solutions in variations of the old rules when, in fact, all the rules were about to change. We pursued our research not just in tech or commerce, but in history, sociology, psychology, economics, and the arts—every place that was signaling impending radical change—looking for early clues to the nature of what was to come; all in the knowledge (as with the virtual revolution) that when the change did occur it would likely be shockingly, terrifyingly quick.

We also knew that these same technologies, when used properly, could take us one step closer to Utopia. They were creating a world of abundance, driving large unmeasured increases in human productivity, greatly improved products and services (many of which had been costly in the past but would be free in the future), more energy-efficient ways of living, and miraculous cures for disease. And we also knew that if our leaders confronted these challenges aggressively, as others had in the past, most of us would be beneficiaries rather than victims.

The result is this book. We make no claim to being able to characterize with any accuracy or detail what the future will look like on the other side of the pending historic inflection—by definition, no one can. But we have identified early indicators that will help us react quickly and more successfully to the transformation that lies ahead.

Inevitably, most of these indicators are warning signs; this book is filled with them. Why wouldn’t they be, when everything is about to turn upside down? Yet, if we are to thrive in this pending new world, we should be welcoming every warning we can get. If we don’t despair, facing reality can only make us better prepared.

Despite these warnings, and our analysis of the growing dysfunctionality of modern life in the pages that follow, we hope that the reader will come away from this book with a sense of optimism. We should never forget that human beings are extraordinary creatures—brave, endlessly creative, adaptive, and born survivors. Over the course of the last million years, we have gotten through much worse.

But the biggest reason to be optimistic is that, with the two epic sociocultural transformations humans have experienced in recorded history, each time we emerged on the other side with longer lives, superior health, more education, and greater overall wealth than we had ever known before. There is no reason to think that this time will be any different.

But first we have to get there, intact. History suggests that won’t be easy. We owe it to our descendants to get it right. We hope this book will start the conversation about strategies to do so.

CHAPTER ONE

THE AUTONOMOUS REVOLUTION

A Third Social Revolution

FOR THE THIRD TIME IN HISTORY, society is undergoing a social phase change. We are well on our way to creating the Autonomous Revolution.

Its two predecessors, the Agricultural and the Industrial Revolutions, have taught us what to expect. Our institutions will assume new forms and operate using different tools and according to new rules; our sense of time, space, and self will be irrevocably altered. Our memories of what came before the new epoch will be skewed, and the few revenants from the past that do survive it will have limited applicability in the future. But at least for a time, our gut instinct will be to continue to apply the old rules, values, and beliefs, in a losing battle with