[A2k] Martin Wolf in the FT: Enslave the robots and free the poor

Thiru Balasubramaniam thiru at keionline.org
Wed Feb 12 01:42:41 PST 2014


<SNIP>

Fourth, we will need to redistribute income and wealth. Such redistribution
could take the form of a basic income for every adult, together with
funding of education and training at any stage in a person's life. In this
way, the potential for a more enjoyable life might become a reality. The
revenue could come from taxes on bads (pollution, for example) or on rents
(including land and, above all, intellectual property). Property rights are
a social creation. The idea that a small minority should overwhelming
benefit from new technologies should be reconsidered. It would be possible,
for example, for the state to obtain an automatic share in the income from
the intellectual property it protects.

--

http://www.ft.com/cms/s/0/dfe218d6-9038-11e3-a776-00144feab7de.html#ixzz2t6APzDyg

February 11, 2014 7:18 pm
Enslave the robots and free the poor

By Martin Wolf
The prospect of far better lives depends on how the gains are produced and
distributed


In 1955, Walter
Reuther<http://quoteinvestigator.com/2011/11/16/robots-buy-cars/>,
head of the US car workers' union, told of a visit to a new automatically
operated Ford plant. Pointing to all the robots, his host asked: "How are
you going to collect union dues from those guys?" Mr Reuther replied: "And
how are you going to get them to buy Fords?" Automation is not new. Neither
is the debate about its effects. How far, then, does what Erik Brynjolfsson
and Andrew McAfee call *The Second Machine Age* alter the questions or the
answers?

I laid out the core
argument<http://www.ft.com/cms/s/0/e1046e2e-8aae-11e3-9465-00144feab7de.html?siteedition=uk#>
last
week. I noted that the rise of information technology coincides with
increasing income inequality. Lawrence
Mishel<http://www.epi.org/blog/robots-coming-blame-wage-job-problems/>
of
the Washington-based Economic Policy Institute challenges the notion that
the former has been the principal cause of the latter. Mr Mishel notes:
"Rising executive pay and the expansion of, and better pay in, the
financial sector can account for two-thirds of increased incomes at the
top." Changing social norms, the rise of stock-based remuneration and the
extraordinary expansion of the financial sector also contributed. While it
was a factor, technology has not determined economic outcomes.

Yet technology could become far more important. Professor Brynjolfsson and
Mr McAfee also argue that it will make us more prosperous; and it will
shift the distribution of opportunities among workers and between workers
and owners of capital.

The economic impacts of new technologies are many and complex. They
include: new services, such as Facebook; disintermediation of old systems
of distribution via iTunes or Amazon; new products, such as smartphones;
and new machines, such as robots. The latter awaken fears that intelligent
machines will render a vast number of people redundant. A recent
paper<http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf>
 by Carl Frey and Michael
Osborne<http://blogs.ft.com/off-message/2014/02/10/is-your-job-safe-in-the-second-machine-age/>
of
Oxford university concludes that 47 per cent of US jobs are at high risk
from automation. In the 19th century, they argue, machines replaced
artisans and benefited unskilled labour. In the 20th century, computers
replaced middle-income jobs, creating a polarised labour market. Over the
next decades, however, "most workers in transport and logistics
occupations, together with the bulk of office and administrative support
workers, and labour in production occupations, are likely to be substituted
by computer capital". Moreover, "computerisation will mainly substitute for
low-skill and low-wage jobs in the near future. By contrast, high-skill and
high-wage occupations are the least susceptible to computer capital." This,
then, would exacerbate inequality.
Jeffrey Sachs of Columbia university and Laurence
Kotlikoff<http://www.nber.org/papers/w18629> of
Boston university even argue that the rise in productivity might make
future generations worse off in aggregate. The replacement of workers by
robots could shift income from the former to the robots' owners, most of
whom will be retired and are assumed to save less than the young. This
would lower investment in human capital because the young could no longer
afford to pay for it; and in machines because savings in this economy would
fall.

The argument that a rise in potential productivity would make us
permanently worse off is ingenious. More plausible, to me at least, are
other possibilities: there could be a large adjustment shock as workers are
laid off; the market wages of unskilled people might fall far below a
socially acceptable minimum; and, combined with other new technologies,
robots might make the distribution of income far more unequal than it is
already.

So what should be done?

First, the new technologies will bring good and bad. We can shape the good
and manage the bad.

Second, education is not a magic wand. One reason is that we do not know
what skills will be demanded three decades hence. Also, if Mr Frey and Prof
Osborne are right, so many low- to middle-skilled jobs are at risk that it
may already be too late for anybody much over 18 and many children.
Finally, even if the demand for creative, entrepreneurial and high-level
knowledge services were to grow on the required scale, which is highly
unlikely, turning us all into the happy few is surely a fantasy.

Third, we must reconsider leisure. For a long time the wealthiest lived a
life of leisure at the expense of the toiling masses. The rise of
intelligent machines makes it possible for many more people to live such
lives without exploiting others. Today's triumphant puritanism finds such
idleness abhorrent. Well, then, let people enjoy themselves busily. What
else is the true goal of the vast increases in prosperity we have created?

Fourth, we will need to redistribute income and wealth. Such redistribution
could take the form of a basic income for every adult, together with
funding of education and training at any stage in a person's life. In this
way, the potential for a more enjoyable life might become a reality. The
revenue could come from taxes on bads (pollution, for example) or on rents
(including land and, above all, intellectual property). Property rights are
a social creation. The idea that a small minority should overwhelming
benefit from new technologies should be reconsidered. It would be possible,
for example, for the state to obtain an automatic share in the income from
the intellectual property it protects.

Finally, if labour shedding does accelerate, it will be essential to ensure
that demand expands in tandem with the rise in potential supply. If we
succeed, many of the worries over a lack of jobs will fade away. Given the
failure to achieve this in the past seven years, that may well not happen.
But we could do better if we wanted to.

The rise of intelligent machines is a moment in history. It will change
many things, including our economy. But their potential is clear: they will
make it possible for human beings to live far better lives. Whether they
end up doing so depends on how the gains are produced and distributed. It
is possible that the ultimate result will be a tiny minority of huge
winners and a vast number of losers. But such an outcome would be a choice
not a destiny. A form of techno-feudalism is unnecessary. Above all,
technology itself does not dictate the outcomes. Economic and political
institutions do. If the ones we have do not give the results we want, we
must change them.
martin.wolf at ft.com



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