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Title: Polanyi's Paradox and the Shape of Employment Growth
Citation Type: Working Paper
Publication Year: 2014
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Abstract: In 1966, the philosopher Michael Polanyi observed, We can know more than we can tell... The skill of a driver cannot be replaced by a thorough schooling in the theory of the motorcar; the knowledge I have of my own body differs altogether from the knowledge of its physiology. Polanyis observation largely predates the computer era, but the paradox he identifiedthat our tacit knowledge of how the world works often exceeds our explicit understandingforetells much of the history of computerization over the past five decades. This paper offers a conceptual and empirical overview of this evolution. I begin by sketching the historical thinking about machine displacement of human labor, and then consider the contemporary incarnation of this displacementlabor market polarization, meaning the simultaneous growth of high-education, high-wage and low-education, low-wages jobsa manifestation of Polanyis paradox. I discuss both the explanatory power of the polarization phenomenon and some key puzzles that confront it. I then reflect on how recent advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth. A key observation of the paper is that journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities. The challenges to substituting machines for workers in tasks requiring adaptability, common sense, and creativity remain immense. Contemporary computer science seeks to overcome Polanyis paradox by building machines that learn from human examples, thus inferring the rules that we tacitly apply but do not explicitly understand.
Url: http://www.nber.org/papers/w20485
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Authors: Autor, David
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Publication Number: 20485
Institution: National Bureau of Economic Research
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Publisher Location: Cambridge,MA
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other
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