• Self-Driving Cars II — How They’ll Change Everything

This is Part II of a two-part article on the long-run timeline and impact of that "disruptive innovation" known as "self-driving cars." If you haven’t read the first part yet, now would probably be a pretty good time. Otherwise, a lot of this isn’t going to make much sense.

Robot cars have been a long dream coming. In the last article, I went over the timeline from 80 years back, when they were first envisioned, to about 55 years from now. That’s a good bit further than most experts have gone as far as establishing timelines; and this article will go a lot further than any have gone in every other way. All the way to our own dream — our own Futurama.

In the last article, comparing self-driving cars to an asteroid crashing into the Earth probably came off as a wee bit hyperbolic. Fair enough — I’ll stipulate that. It’s not as though faster cars and new highways in and of themselves represent a turning point in human history. Nothing especially disruptive about that. But that’s barely the tip of the iceberg; there’s a whole world of consequences, good and bad, sure to follow within our lifetimes. Hard to believe now, but these robots could end up undoing everything about our future as we thought we knew it.

Mostly, by undoing our cultural past — all the way back to the Industrial Revolution.

How’s that for "disruptive?"

Read on to find out what the robots have in store for us, and where our economic future ends with them in charge.

Where it Started

To understand why things are going to change, it might be helpful to look back and see why things are the way they are. Prepare yourself for a brief history of the Industrial Revolution. Yes, it’s kind of boring — but it’s really, really important.

Yes, it's kind of boring -- but it's really, really important.

Some people would argue that the Industrial Revolution started about 1760, when a new generation of blast furnaces using coke (instead of coal) allowed for the mass production of high-quality, low-priced iron. But most would say it really began when James Watt perfected his steam engine in 1778; trains and steam ships came a few years later, allowing for mass transportation of iron ore for more machines and longer rail lines.

This demand sparked an era of intense and brutal colonization; half of the countries in Africa have borders literally drawn by Europeans around iron ore deposits. But these newfangled transportation machines also needed fuel — which itself became a world-changing industry.

Coal would rule as an energy source for the next hundred years or so; entire empires were built on the stuff. During this era, coal-rich England, Northern France and the Northern (Union) half of the United States became the Saudi Arabias of their day.

Toward the end of the 19th century, Karl Benz patented a new type of internal combustion engine that ran on a cheap, highly volatile heating oil byproduct known as gasoline. Prior to Benz’s invention, gasoline was seen as a useless industrial byproduct; so useless and hazardous, oil tycoon J.D. Rockefeller originally took to dumping it in ditches along railroad lines.

But Benz’s engine burned Rockefeller’s useless industrial byproduct by the gallon, and oil very quickly came to replace coal as the world’s No.1 commodity. Over time, the industries of the world would grow up around either building machines or supplying them with fuel.

These concepts, first outlined by economist Adam Smith in "The Wealth of Nations" (1776), were ultimately accepted as dogma by Industrial Age economists.

So did an economic system known as "free-market capitalism," as well as corporate conglomerates, globalization, monopolies, and supply-side economics — aka "Reaganomics." Aka "The practice of giving rich people more money in the hopes some of it will trickle back to poor people." These concepts, first outlined by economist Adam Smith in "The Wealth of Nations" (1776), were ultimately accepted as dogma by Industrial Age economists, and are largely treated as such today. Not just our economic policies, but the very tools that we use to judge their success (like unemployment rate, gross national product, and the stock market), ultimately derive from Adam Smith’s Industrial Age economic principles.

So, great...but what’s the point?

Just this: That our entire capitalist consumer economy, our whole society, is built on Industrial Age concepts of constant expansion — constant demand for consumer machines, the materials to build them and the fuel to power them. What if, one day, all of that just kind of...stopped? What if (as Rand Paul and Alan Greenspan matron Ayn Rand once said) "the motor of the world stopped turning?"


Sweet, sweet anarchy.

Johnny Cabs and Disappearing Cars

Back in the first article, we talked all about what the highways of the future would look like: "Super swarms" of cars moving at high speeds, in bumper-to-bumper "platoons" whose movements were controlled by computers. What we didn’t get into was the single most noticeable thing about the super-highways of Futurama...

How empty they’ll be.

The single most noticeable thing about the super-highways of Futurama: how empty they'll be.

It might not seem like a particularly big deal at first glance — it might even seem like kind of a cutesy party trick. It might just seem like a slightly more convenient way to pick the kids up from soccer practice, like you read in the first article. But the fact that autonomous vehicles can get around without a driver completely changes how we’ll use them. If we use them at all.

Consider this as a fer’instance: How many people do you know who own two or more cars? Or, more accurately, how many households can you think of where there are two or more cars? Why do they own them? Usually, it’s because at least one (nowadays more often both) of the adults in the house have to get to work.

The other car is for the second person, who either needs it to do household stuff and run the kids around, get to work themselves, or both. There might even be a third in the house, if the couple is old enough to have a teenage kid, or if it’s a roommate situation.

Now, rethink how this would play out with an autonomous car. Say the kids need to be at school by 7 a.m., one person needs to be at work by 8 a.m. and the other at 9 a.m., on the other side of town. The kids need to be picked up at 2:30 p.m., the first person gets off at 4 p.m. and the second an hour later. Normally, this would require at least two cars, a pretty significant rush in the morning, and a friend with her own car to bring the kids home in the afternoon.

A single autonomous car could replace all of them.

However, a single autonomous car could replace all of them. It could be programmed to take the kids to school, and then return home on its own. The first person could drive it to work, and the second could wait for the car to come back so they could take it to work. At 2 p.m., the car could start itself up, drive to the school, and take the kids home all by itself. Then, it drives itself to its 4 p.m. and 5 p.m. pickups.

In this scenario, the autonomous car has completely eliminated the need for a second car, and the requirement to have a friend pick the kids up after school. And eliminating the requirement for friends is always a worthwhile goal.

And so, ultimately, may be the requirement for owning a car at all.

You probably remember that movie Total Recall. No, the good one, with Arnold Schwarzenegger. Remember "Johnny Cab," the robot-driven taxi? Here’s a refresher, just in case you missed 1990.

Seemed like a pretty good idea at the time, right?

Actually, that’s exactly the idea behind the ride-sharing programs we can expect to see in the near future — minus the creepy robot mannequin, hopefully.

The core of such programs probably will be a "Johnny Cab" sort of situation.

Industry experts predict that private vehicle ownership is going to drop like a rock almost the moment autonomous cars become legal, safe and reliable — about 2525 to 2030 by most reckonings. The core of such programs probably will be a Johnny Cab sort of situation, with robotic taxis minutes away and on-call 24/7 with the push of a smart-phone app button.

That’s assuming we have phones by then, and not chips implanted in our heads. You think I kid about that: Between current cellphone implant modules, voice recognition and Google Glass eyepieces, we’re very nearly there now. It’s only a matter of time before people start wirelessly connecting to the Matrix with communications implants.

Every one "shared" vehicle will replace nine "traditional" automobiles.

Anyway: Apart from on-call Johnny Cabs that can be programmed ahead of time to show up at the bar at 3 a.m. to take you and your staggering friends home, we’ll most likely see somewhat longer-term ride rentals. Perhaps by the day, week or month; though those longer-term rentals we be rare.

Most of the time, if you contract a car for the day, it’ll take off at 2 a.m. to go ferry some drunks home from O’Malleys, then go back to its hub for recharging and hosing out. A new car will show up to fetch you in the morning.

But no matter what system or combination of systems we ultimately wind up adopting, the highways of the future will be a lot emptier than those of today. How much so? Barclays, a major global financial services provider who’s in the business of predicting financial trends, put a few numbers on it.

According to a recent report deliciously titled "Disruptive Mobility," Barclays expects total vehicle ownership will drop by at least 50 percent over the next 35 years.

Eventually (by 2060 or so) Barclays predicts that every one "shared" vehicle will replace nine "traditional" automobiles. That’s an almost 90 percent drop in private vehicle ownership; and odds are very good you’ll live to see it happen if you’re under 40 years old.

And if all keeps going at the rate it is now, you’ll live to see a lot more than that.

The Oil Industry

In short? It’s doomed. Doomed. Dooooooomed!

Even without autonomous driving technology, electric cars would have in and of themselves eventually destroyed the oil industry. I went into that at length in the Electric Cars article.

But combined with at least a 50 percent drop in vehicle ownership by 2050, and 90 percent drop in cars on the road, gasoline (in the United States, at least) will soon be worth about as much as it was back when Rockefeller was dumping it into ditches. We’ll still be able to sell it to less developed countries for a while, which will almost certainly help to soften the economic blow to our industry. But eventually, supply will far exceed demand, and gasoline will end up near worthless as a fuel.

Didn’t see that one coming in the 1970s, did we?

Didn't see that one coming in the 1970s, did we?

But what of diesel? As of right now, this country and many others still use obscene amounts of diesel for cargo transportation. But tractor-trailers will be among the first vehicles to go electric as soon as the technology is proven, and somebody develops the good sense to standardize replaceable battery packs (a-hem). They’ll probably be a bit slower in adopting full autonomous control, for safety and legal reasons; but that will happen sooner or later as well.

Don’t be surprised if "truck driver" is an extinct profession by 2035. Speaking as a former trucker: Even I’m not about to pull a John Henry against machines that get five times the fuel economy, never make mistakes, drive with perfect safety records, don’t require $50,000 a year (plus medical insurance) to work, and never have to stop, sleep or pee. They’re like frickin’ Terminators — which, if you’re counting, is the second Schwarzenegger reference so far.

But the oil industry? Suffice it to say that it may not plummet to rock bottom right away, owing to foreign-market sales of fuel. But when the oil industry goes, it won’t be back. Three.

Clean Energy and the Environment

Simply on the basis that most if not all road vehicles will be electric in the next 20 years, we’re going to have to seriously step up our electricity production to power them. Ironically, coal will probably come back for a while — but once Millennials start moving into political power, expect to see massive government incentives and loans for clean energy, and hefty carbon taxes on fossil fuels like coal.

The Department of Energy's loan program for clean energy initiatives was one of the most successful and profitable investments in U.S. history.

Unlike certain political groups and demographics I don’t care to mention, Millennials are well aware of the fact that the Department of Energy’s massive 2009 loan program for clean energy initiatives was one of the most successful and profitable investments in U.S. history.

Even with Solyndra’s $535 million default, the $32 billion clean energy loan program broke even in 2014, and is expected to make another $6 billion in interest payments over the next 20 years. This, for a program that was fully expected to lose at least $10 billion when it was enacted. That means the DoE’s clean energy loan program carries the single highest profit margins of any investment in American history.

And you can bet, the Millennials and younger kids who will make up about 45 percent of autonomous car buyers are just itching to kick clean energy investment into high gear. You know why? Because free energy is better than cheap energy, and we’re a practical people.

With the oldest Millennials (now the single largest generational group in the U.S.) going for 35 years old, expect to see major ballot initiatives along those lines in the next five to 10 years. Particularly if Elon Musk has anything to say about it — and he does.

All of this obviously bodes well for the environment, which is good, because we live in it. And the news is potentially a lot better than anyone could have hoped for 20 years ago.

A 90 percent reduction in carbon from the U.S. alone would almost be enough to stop climate change in its tracks.

With massive drop in both the number of vehicles on the road, the predominance of electrics and the certain investment in clean energy, we stand a very real chance of not just stopping but potentially reversing global warming in as little as the next 75 years. A lot of that depends on how quickly other countries follow our lead; but a 90 percent reduction in carbon from the U.S. alone would almost be enough to stop climate change in its tracks.

There are ancillary benefits, too. Fewer cars built means fewer resources that have to be mined, blasted or drilled out of the ground. It means less deadly fumes from nickel processing plants, less energy expended melting down iron, less energy used in transport and shipping. The effect in terms of conservation and efficiency is almost exponential.

Everything is looking pretty rosy so far.

So far.

Industry and Jobs

Of course, you knew this was coming. This whole thing is going to decimate the automotive industry as we know it today, along with every industrial sector it’s connected to. Barclays estimates that over the next 35 years, about 60 percent of our remaining automotive production jobs will simply vaporize.

This whole thing is going to decimate the automotive industry as we know it today.

Specifically, given our current economic policies and trade agreements, Barclays estimates a 67 percent drop in domestic production for GM, and 50 percent for Ford. Other manufacturers here and abroad are in that same ballpark. By about 2070, expect automotive production to have dwindled to near nothing — perhaps 10 percent of today’s production.

That’s likely going to prove true for most industries connected to auto manufacturing as well, including: banking and finance, insurance, heavy ore mining, metal stamping and refining, industrial chemical manufacturing (including paint), the tire and rubber industries, sub-assemby and component manufacture, automotive recycling, scrap metal, transport (international shipping, rail and trucks), dealership and service personnel, car washes, used car lots and pretty much every other industry you care to name.

Expect to see insurance companies and finance institutions especially start dying off in droves. Not that anyone will be sorry to see them go, but insurance vultures are going to have a hard time profiting from death and misery when it turns out computer-controlled cars never crash.

But those starving vultures won’t hurt us any; Americans spend more than $630 billion a year on fatal and non-fatal car accidents. At 2015 levels, that amount of money would cover our entire education and healthcare budgets combined. It is, in fact, about one-sixth of our total federal budget for this year — wasted on nothing but car crashes.

About one-sixth of our total federal budget for 2015 has been wasted on nothing but car crashes.

Getting rid of those would make for one hell of a tax break.

Also, people wouldn’t die. Which is good.

What’s may not be so good is the unavoidable reality of a massive drop in gross national and gross domestic products. Given the amount that mining, financing and auto manufacturing alone contribute, a 30 to 40 percent drop isn’t out of the realm of possibility.

Expect many large banks to go out of business, and the stock market to slow to a trickle compared to what it is today. Also, if adjusted unemployment doesn’t hit 35 percent by 2040, I’ll eat whatever dog I have by then.

Wow. Just be a little flippant about it, why don’t I? It’s not like I’m describing what sounds like another Great Depression or anything, right?

Maybe. But maybe not.

A Turning Point

(You should know before you read this part: I’m actually working on a book on economics. That said, I’m going to try not to get too far into it, aside from saying what needs to be said for these purposes. If anyone wants to talk about this stuff further, feel free to hit me up in the comments section.)
Editor’s note: Um, about that: well... (sigh), ok.

Think back to that boring section on the Industrial Revolution — specifically this:

"Not just our economic policies, but the very tools that we use to judge their success (like unemployment rate, gross national product, and the stock market) ultimately derive from Adam Smith’s Industrial Age economic principles."

Ayn Rand would lament that the "motor of the world" had stopped.

It’s true that an Industrial Age economist would likely see these as dire straits indeed. He would stand aghast in horror at this affront to capitalism, and Ayn Rand would lament that the "motor of the world" had stopped. And you’d be right to feel that way, too, if you were starting from Industrial Age assumptions like these:

1) An endlessly expanding economy is ideal.

2) Zero percent unemployment is ideal.

3) GDP and GNP are indicators of the well-being of a nation’s people.

4) The health of an economy is measured by how much money goes through it.

5) The wealth of a nation is relative to the wealth of others.

If those are your standards, if those are the tools you use to judge, then yes — the nation of the future is going to be pretty awful. However, if you prefer a smaller and smarter economy to a bigger and dumber one, you might instead start with these:

1) It’s more efficient to conserve than it is to create, to maintain than it is to consume.

2) A 50 percent employment rate is just fine, if those who are employed make twice as much money. A 100 percent rate is only ideal if you want a slave labor force working for pennies. A 50 percent employment rate (with double salary) might be more ideal if you care about things like, I dunno, families.

3) GNP and GDP are only relevant to the population when it’s the population who holds the assets. When 1 percent of the population owns 60 percent of a nation’s wealth (as is the case today), and 99 percent of any increase in GNP goes to the 1 percent (as is also the case), then those numbers cease to mean anything to the population.

4) The health of an economy is measured in its sustainability and ability to provide, not the amount of money that goes through it.

5) That regulating trade and protecting your own economy is preferable to letting all of your money go to China.

[A 50 percent employment rate (with double salary) might be more ideal if you care about things like families.]

We're going to have to get smaller and smarter, instead of ever bigger and dumber.

So, what’s the point here?

Point is, the Industrial Revolution is over. And if it’s not, it will be soon. Seems to me, from everything evident, humanity’s great experiment with winner-take-all economics, and "work sets you free" ethics are coming to a close whether we want them to or not.

Not to sound too Marxist about it (because I’m not), but one way or the other, capitalism as we’ve known it for 200 years is about to come to a close.

Not in the sense that there won’t be money or trade or anything — just in the sense that we’re going to have to get smaller and smarter, instead of ever bigger and dumber. Also, in the sense that Ayn Rand is a bloated, talentless pseudointellectual. There. I said it.

Welcome to anarchy.

The Revolution is Dead — Long Live the Revolution

True, that ending was probably a little heavy for an article on self-driving cars. But I started out promising you a turning point in human history, a change in every facet of our thoughts and lives; can’t say I didn’t deliver something suitably epic.

It’s true: the self-driving car might seem like a fairly small thing in the grand scheme of life on Earth. A trivial gadget, almost. It’s easy to overlook as a novelty. But the first words of the first line in the first article sum this technology better than anything else.

Disruptive. Innovation.

We really are approaching a turning point in human history. The end of a long era that will not, I suspect, be fondly remembered. In a way, we’re going back to where we started — to an era before railroad tycoons and oil barons.

We really are approaching a turning point in human history. The end of a long era that will not, I suspect, be fondly remembered.

Before mega-corporations and bottomless consumerism. When people were happy to live life; to love and make love, instead of die to make money.

It’ll be a cleaner world. A quieter and greener world, where the weather does what it should, and we’ve got the time to go out and enjoy it. It’ll be a place where families can be families again — where life, not greed, is good.

We’ll finally have the Futurama our grandparents envisioned for us, even if we ourselves become grandparents first.

Not bad for a robot car.

Not bad at all.

Richard Rowe
Richard Rowe
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