Art Cashin is worried about robots.
Cashin, a managing director at UBS and director of floor operations at the New York Stock Exchange, has been a stalwart on the NYSE floor for 50 years.
During his tenure at the NYSE, the stock exchange floor has morphed from a chaotic mess of orders written by hand and called in via phone while traders and clerks scurried frantically from post to post executing trades, into a largely symbolic representation of American financial ingenuity and a backdrop for CNBC telecasts.
Meanwhile, the bulk of actual stock trading happens between computers housed in electronic exchanges. The robots have come to Wall Street and they have won.
In his morning note on Tuesday, Cashin highlights the following passage from Bill Gross’ most recent investment commentary, which not only argues that robots will make many of our jobs obsolete but that as a replacement for work-related income we’ll be forced to institute a universal basic income (UBI) in order to help citizens make ends meet.
Cashin notes that Gross’ commentary has made the rounds among the investment luminaries he talks to like David Kotok and Barry Ritholtz, and has many concerned about the future of not just the financial industry, but the entire American and global workforce.
Here’s Gross (emphasis mine):
No one in 2016 is really addressing the future as we are likely to experience it, and while that future has significant structural headwinds influenced by too much debt and an ageing demographic, another heavy gust merits little attention on the political stump. I speak in this Outlook to information technology and the robotization of our future global economy. Virtually every industry in existence is likely to become less labour-intensive in future years as new technology is assimilated into existing business models.
Transportation is a visible example as computer driven vehicles soon will displace many truckers and bus/taxi drivers. Millions of jobs will be lost over the next 10-15 years. But medicine, manufacturing and even service intensive jobs are at risk. Investment managers too! Not only blue collar but now white collar professionals are being threatened by technological change.
Nobel Prize winning economist Michael Spence wrote in 2014 that “should the digital revolution continue…The structure of the modern economy and the role of work itself may need to be rethought.” The role of work? Sounds like code for fewer jobs to me.
And if so, as author Andy Stern writes in Raising the Floor, a policymaker — a future President or Prime Minister — must recognise that existing government policies have “built a whole social infrastructure based on the concept of a job, and that concept does not work anymore.”
And again, Cashin has seen this change on the floor first-hand. Technological change is real and the job losses that result are painful as well.
If we don’t work for a living in a future where robots are doing most of the jobs, at least in Gross’ world we would get paid just, well, to exist. The future of what work means is all a bit complicated and uncertain.
But Cashin, always the humble arbiter of the investment world’s conventional wisdom, concludes, “At any rate, this is a topic that is a growing concern to some very bright people.
“We all need to watch this carefully — very carefully.”