EWOT Goggles #4

My weekly EWOT entry is about a story that Prof. Rizzo sent us earlier this morning about how "Driverless Car" had been recently navigating around Berlin's streets. Basically, a car built on computer chips and technology is in the works, and in 30-40 years, the article states, we should be able to drive our very own cars without actually having to drive it. We could have have the car pick us up by pressing a button on our iPod and just relax in the back seat as the car takes us where we want to go.

I read the entire article, found it interesting, and after reading the article, I began to reflect on what I just read to try to think of it in economic terms. Click here for the link to the article.

The first thing that came to mind was that these cars would be bad because that they would kill many jobs for people (taxi drivers, for example). But then, something that was discussed in one of my weekly recitations with Alex Ray a couple weeks ago popped into my head.

Driverless cars may cause some jobs to become extinct, but they would not
be bad for the job economy because they would create "job displacement."

I remember that in recitation, Alex taught us about how "The Luddites" protested and often destroyed the creation of new technologies during the 19th century (at the peak of the Industrial Revolution) because they worried that all of these new technologies would take away their jobs in the factory, as with more machines doing the work, less people would be needed to work to make the things the machines were now making.

In other words, the Luddites believed that technology took away their jobs. But as we learned in recitation, this couldn't be farther from the truth. When new technologies are created, there is what is called "job displacement"- while some jobs are lost, others are created because there needs to be people to make the technology.

Therefore, new technology is actually a good thing, despite what the Luddites believed. New technologies allow us to become more productive, while creating different jobs for people to work. Technology may cause jobs to be lost, but from the technology, just as many different ones are created. And new technology allows us to produce more things at a faster rate than ever before.

Anyway, in terms of the "driverless car" story, I thought about what having a car like this would do to the job economy- would it be bad or good for the job economy.

I think that at first glance, many people would say that having driverless cars would not be good for the job economy- it would take away taxi companies, as people could just use a remote control to have a car pick them up. No longer would people need a taxi driver for them to take them places.

Also, a side effect of having driverless cars is that many gas stations would probably struggle, because if there were driverless cars, people would really only have to buy 1-2 cars per household, as opposed to the commonly seen, 1 car per person in each household. The reason behind this is because if lets say I needed a ride to the gym one day and my mom needed to go to the mall, the car could drive us both there and pick us up at our conveniences. Basically, the driverless car would need to make less trips since it could drive itself.

These above ideas are exactly what I thought when I finished the story. But after taking a few moments to think economically, I reminded myself that I was entirely wrong because of the Luddite example from recitation.

To begin with, the driverless cars would improve peoples' lives in society drastically, as people could get work done and do other things while driving places instead of having to worry about driving/controlling the car. People would therefore save a lot of time by having driverless cars.

Having driverless cars, just as was taught in recitation, would also create job displacement. Sure, maybe taxi drivers would become extinct. But there would still be car service companies that would be made because of these new cars. Companies would be created to have a lot of driverless cars that could be rented out to people who need a ride somewhere.

There would also be new jobs created in the form of having people build the new cars and constantly program/update the software in the cars. In cars today, there are not computer chips that control everything the car does. A lot of new jobs would be created so that people could make these new computer chips to control the car. Not to mention, all technology has to be updated at one point or another, so jobs would also be created in the form of software updaters.

As far as gasoline goes, maybe less gas would be needed but other types of fuel would be needed as well because of these new cars.

While some gas stations could continue to be gas stations, others could turn into "battery stations". In cars today, cars sometimes die and need new batteries. Think about how often a battery will need to be changed in a car that is completely full of technology. More jobs would be created in that regard- people to make stronger batteries, and jobs needed to make replacement batteries for dead batteries.

While I have found economics to be a bit confusing at times this semester, I have noticed that I am starting to think more in economic terms- at least enough so to know that while some jobs will be hurt because of the creation of driverless cars, the new jobs that will be created from it, and the improvement in everyday life that the car will give us, will make for an equally-as-good, if not better, economy.