Self-driving cars (SDCs) will be an important test case for our country. I can’t think of a single time such moneyed business interests would be up against the livelihoods of so many working Americans. A lot of people will shout out “Wall Street!” but what Wall Street gets out of government hasn’t led to 20%+ of the United States being unemployed, yet. SDCs present that very real possibility which I explored in a previous post here. It would help to read it to understand why SDCs represent such a big test case but I’ll summarize below anyway.

In one corner you have the American worker, with one in seven jobs being related to the transportation industry that SDCs look to turn on its head.

In the other corner you have the industries themselves who see bigger profits in their future with SDCs.

Who will the politicians back?

The answer to that will show us who wields the real power in American politics; moneyed business interests or the voters.

Why Self-Driving Cars are a Good Test Case

As a quick recap, SDCs, if allowed by the government, will drastically upset our economy for good and bad. The good is that we’ll no longer be wasting hundreds of billions of dollars repairing damaged vehicles from human error, or spending money on repairing human bodies from those same accidents, or seeing productivity drop because of people missing time due to those injuries. Moreover we’d see hundreds of billions of dollars in savings from not wasting time and fuel sitting in traffic as SDCs will greatly reduce congestion.

The bad is that the transportation industry and the industries that rely on it are enormous. One out of every seven jobs in the US is transportation related. We’re talking about bus drivers, taxi drivers, truck drivers, for sure. But we’re also talking about the car companies, the delivery companies, vehicle insurance companies, road workers, car mechanics, and car parts manufacturers to name just a few. And then there’s people you wouldn’t think of at first glance, like the police who pull in billions across the country from parking tickets which go in part to fund municipalities and courts which also creates jobs.

Why would all those industries want to switch to SDCs? The human is the weakest link in these companies’ business model. Humans are the ones getting into accidents, getting pulled over by police. Humans are the ones that can only drive for so long before they have to eat, sleep, or use the restroom. Humans are the ones with sky high accident rates and tens of thousands of fatalities a year. Every accident is lost money to these companies. The ability to have a fleet of SDCs that never needs to sleep, never gets distracted, never speeds, and has a near zero rate of accidents is mouth-watering to them. For every person that loses a job, the industry they work for stands to gain economically from their loss.

Unlike previous technological revolutions it is unlikely that SDCs will usher in new jobs to replace the ones being lost which means the bottom line for American workers is that we can expect at least 20% unemployment rates if fully autonomous SDCs come to fruition.

But you can see here that both sides absolutely have legitimate arguments. If SDCs prove safer than human drivers, why shouldn’t businesses be allowed to use them? And just look at the money to be saved, the lives to be saved from death and injury. There’s even an environmental argument! But workers have a good argument too. Namely, you can’t put 20% of American workers out of jobs and expect a well-functioning society. The last time we had numbers that high we called it the Great Depression. Both sides will lobby hard with money and with threats of voting against the politician if he doesn’t act in their interest.

Politicians Have Four Options

1. Back SDCs exactly the way industry will want, without human oversight.
2. Obstruct SDCs exactly the way workers will want. Kill it outright or limit it to such a degree it doesn’t make any big impact on the American economy.
3. Compromise. Force companies to have humans in every vehicle “just in case” even though humans are the most dangerous part of driving. Most likely these jobs would be compensated far worse than the current jobs but at least those jobs would be there and the companies will make some money. Or maybe limit the industries that can have SDCs so it’s impact doesn’t destroy the entire American economy.
4. Punt. Congress could just say it’s not their job to decide such things. You hear this all the time with politicians looking for the national spotlight. They get asked a controversial question and they say “I think the states should decide.” After that, it will be up to local governments to pass judgment on SDCs and they will have to choose between options 1–3.

There is a “fifth option” of just taking the massive economic gains made and distributing them to the people who had to lose their jobs to make it possible, but that is so far out of the realm of possibility I won’t bother to go into it. It would be “feasible” in terms of the logistics, just not politically. We’re talking about hundreds of billions of dollars saved per year and that’s not even counting the profits to be raked in by businesses. That’s just the saved costs of accidents, and fuel and time wasted sitting in traffic.

It Won’t Be #1

Despite what many people believe, lobbyists don’t control American politics, voters do. I lay out what I think to be a persuasive case, here. Basically, lobbyists donate very strategically. The coal lobby targets politicians who have constituents in coal country. The sugar lobby does the same. The steel lobby does the same. All lobbying groups look for politicians whose constituents have jobs in that industry. It’s a very carrot and stick approach. “Here’s some money to help our industry. And if you don’t help our industry all those voters in your district will lose their jobs and we’re going to make sure they know who cost them their jobs come election time.” You can add in the fact that real disposable personal income tracks election results better than campaign spending to see that what most people really care about when they vote is their own personal bottom line. Politicians know this. They won’t do things that upset the livelihoods of their constituents.

Industries will try very hard for what they want and they’ll spend a lot of money, but unless those industries somehow convince the voters to vote against their own jobs and can show the politicians that they won’t be kicked out of office for backing SDCs, they won’t get what they want.

For me, that already shows that voters hold the true power in American politics, even if we tend to wield it in uneducated and unthoughtful ways.

It Won’t Be #2

SDCs just represent too big an opportunity for industries. And although they would cripple the job market, there’s not much other basis to obstruct their coming. The American economy is a market economy and it generally operates on the idea that as long as things are safe and don’t present societal harm, they should be allowed. Look at the things we regulate. We test pharmaceuticals for safety issues before allowing them to market but if they’re safe we allow them to be sold. We regulate tobacco and alcohol but to the extent that we allow them for sale to those that are of age with few restrictions. We know the societal cost of cigarettes and tobacco. They cost hundreds of billions in productivity and health care costs.

The cost of excessive alcohol consumption in the United States reached $223.5 billion in 2006.

Smoking-related illness in the United States costs more than $300 billion each year

-Center for Disease Control

We allow them anyway because we value that sort of economic freedom, even when it costs our country over half a trillion dollars per year in wasted spending. We didn’t ban cars because they would put workers who depended on horses out of jobs. We didn’t ban computers because they could do the work of 10 people. We didn’t ban automation in factories because they could do the work of 100 people.

It Will Probably Be #3

Under the guise of safety, Congress could mandate that all SDCs require human oversight at all times. I’m not sure this will actually improve safety but it would certainly cut down on the number of jobs lost. I believe this is at best a temporary solution, though Congress has shown they love doing that. Just look at the debt ceiling fights over the past few years where they kick the can down the road but not much else. Eventually people will wonder why the taxi they hired has a guy sitting behind the wheel using his smartphone and not driving. After a decade or two of SDCs proving how utterly superior they are to human drivers and proving that human overseers are wholly unnecessary, we’ll most likely see a shift away from them.

It Probably Won’t Be #4

I’d rank the chances of #4 to be way higher than #1, but this issue is simply too big for Congress to ignore. Unlike issues like abortion or gay marriage which many politicians are more than happy to say is a state’s rights issue, this is one that will impact a fifth or more of the country’s working population. The question of SDCs is worth over half a trillion. It is an economic question which is always more urgent for the people than any social question. The demand will be too strong from both sides for Congress to act and so they likely will.

Keep This In Mind

As you watch the debate unfold surrounding SDCs, keep in mind those competing incentives that we’ve gone over. Listen to politicians talk about needing to protect American jobs, or the pull of innovation and the hundreds of billions to be saved in lives and money. Remember that politicians like having money but that they like having money so they can win elections. When push comes to shove between votes and money the almost always go for the votes. If you think about politics in terms of incentives, every action makes sense.