craschworks

some guy wrote:

It started when I read Marshall Brain's Robotic Nation. (I have mixed feelings about Brain himself — he is full of fascinating ideas but sometimes demonstrates a tenuous grasp of economics.) After much speculating, he concludes,

“…The arrival of humanoid robots should be a cause for celebration. With the robots doing most of the work, it should be possible for everyone to go on perpetual vacation. Instead, robots will displace millions of employees, leaving them unable to find work and therefore destitute. I believe that it is time to start rethinking our economy and understanding how we will allow people to live their lives in a robotic nation…”

I thought hard about this and ran the idea by some of my friends.

“Technology,” they told me, “has always made some jobs obsolete. And new (and better) jobs have always sprung up to replace them. Quit your worrying.” To me, this argument carries the same intellectual heft as the idea that “the stock market always goes up in the long term.” I accept its truth as historical fact, but I see no reason to accept it as inexorable truth. Indeed, I think this question (the technology/jobs one) is fantastically important.

Every day the earth rotates about its axis, and another dawn begins. I accept this truth as historical fact, but I see no reason to accept it as inexorable truth. After all, what if the earth stopped rotating tomorrow? Think of the impact it would have!

Likewise, despite the invention of fire, wheel, printing press, cotton gin, steam engine, electricity and the myriad other inventions designed to replace human labor, humans have always seemed to find some other line of work.

Inexorable? We can't say.

However, if replacing human labor with machine labor “…left employees unable to find work and therefore destitute…” shouldn't we have seen at least some of that effect this century, when the thresher (among other inventions) drove the percentage of the workforce occupied by farming jobs from 45% to 2% of the population?

Yet that's not what we see. The costs of goods, in terms of the number of hours required to
acquire them have almost all dropped(4). Okay, you might say, so the goods are cheaper, but can anybody buy them? Yes. Real GDP/worker has almost quintupled. (4)

But is this an inexorable pattern? We just don't know.

Though I know how I would bet.

To be sure, I expect there to be some temporary displacements in some fields, just as telephone operators and buggy drives had to adjust. Maybe auto workers and fast food clerks will have to retrain for some other line of work. I'm a Hayekian, so I can't predict exactly how the human labor market will respond to the rise of the machines. But I can offer some food for thought:

* Brain's analysis assumes that humans will remain static in their capabilities. However, paper, telephones, calculators, computers have expanded the brain's capabilities, and we're just beginning to see the beginning of human brain augmentation. Eventually, I expect that humans who want to keep up with robots in the marketplace will be augmented to such an extent that the line between human and machine will become so blurred as to be non-existent.

* Are the Amish destitute? They've voluntarily cut themselves off from most technological
advances this century. I've done no deep analysis of the issue, but they seem to be thriving
(1), despite not taking advantage of modern technology.

* Robots will make jobs requiring a “personal touch” more economical. For example, who would've predicted the growth of the nail salon (2)industry? Until robots reach human level equivalence, humans will be better masseuse artists, butlers, actors, writers, artists, aerobics instructors, etc.

* Who does Brain think is going to buy the goods at RoboMcDonald's? Where does he expect wealthy people to put their money? It's not like Warren Buffet has a big vault filled with cash he swims in every morning. It's invested in companies like Nebraska Furniture Mart, See's Candy, Coca-Cola, Geico, and the Washington Post–all of which have to sell to somebody. If most people are put out of work by machines, who's going to buy all that Coke, furniture, and insurance? Something doesn't compute.

Of course, dire warnings about the collapse of capitalism are almost always followed by a proposal for some coercive government solution. Brain's no exception–in his latest essay, he argues for massive wealth re-distribution program (3) funded by punitive taxation.

Now, I could go on at length about the flaws I perceive in that proposal. But before I do, I'd like to see more evidence that the economic world is going to stop spinning in the first place.

1. http://graze-l.witt.ac.nz/pipermail/graze-l/2000-June/020136.html
2. http://reason.com/9710/ed.vp.shtml
3. http://marshallbrain.com/robotic-freedom.htm
4. http://econ161.berkeley.edu/TCEH/Slouch_wealth2.html