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Hammer time

from David Ruccio

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Millions of workers have been displaced by robots. Or, if they have managed to keep their jobs, they’re being deskilled and transformed into appendages of automated machines. We also know that millions more workers and their jobs are threatened by much-anticipated future waves of robotics and other forms of automation.

But mainstream economists don’t want us to touch those robots. Just ask Larry Summers.

Summers is particularly incensed by Bill Gates’s suggestion that we begin taxing robots. So, he trots out all the usual arguments, hoping that at least one of them will stick. It’s hard to distinguish between robots and other forms of automation. Robots and other forms of automation produce better goods and services. And, of course, automation enhances productivity and leads to more wealth. So, we shouldn’t do anything to shrink the size of the economic pie.  

This last point has long been standard in international trade theory. Indeed, it is common to point out that opening a country up to international trade is just like giving it access to a technology for transforming one good into another. The argument, then, is that since one surely would not regard such a technical change as bad, neither is trade, and so protectionism is bad. Mr Gates’ robot tax risks essentially being protectionism against progress.

Progress, indeed.

What mainstream economists like Summers fail to understand is that not touching the robots—or international trade—means keeping things just as they are. It means keeping the decisions about jobs, just like the patterns of international trade, in the hands of a small group of employers. They’re the ones who, under current circumstances, appropriate the surplus and decide where and how jobs will be created—and, of course, where they will be destroyed. Which, as I explained last year, is exactly how international trade takes place.

And because employers, now and as Summers would like to see the world, are the ones who are allowed to retain a monopoly over jobs and trade, they also decide how the economic pie is distributed and redistributed. Tinkering around the edges—with the usual liberal shibboleths about the need for “education and retraining”—doesn’t fundamentally alter the fact that workers remain subject to decisions about technology and trade in which they have no say. Workers are thus forced to have the freedom to adjust, with more or less government assistance, to decisions taken by their employers.

And to sit back and admire, but not touch, the growth in productivity.*

 

*And that’s pretty much what Brad DeLong also recommends in making, for the umpteenth time, the argument that today, the world’s population is, on average, many times richer than it was during the long preceding age—because both average wealth and consumer choice have increased. Delong, like Summers, doesn’t want us to touch the “innovations that have fundamentally transformed human civilization.”

  1. March 10, 2017 at 4:09 am

    I like the idea of tampering with “where and how jobs will be created—and, of course, where they will be destroyed.” If people argue for taxing robots or providing a guaranteed income, then why not argue for where and why jobs exist.

  2. March 10, 2017 at 6:49 am

    The time has come to regard humans as shareholders in the activity of human enterprise, rather than as workers. And each shareholder is entitled to a dividend based on the overall success of the enterprise. Also known as Social Credit.

  3. patrick newman
    March 10, 2017 at 9:35 am

    There is a limit to the application of robots and automation expressed by the famous retort to the auto boss who said he could do away with workers and union members – but who will buy your cars! Automation/robots cannot be sustained indefinitely without a mechanism to keep refreshing purchasing power of consumers. Now the mechanism appears to be growing debt but something like UBI, negative tax, reduced working week is unavoidable if stable democracy is to continue. At the moment policies seem to be going in the opposite direction!

  4. J Ruivo
    March 10, 2017 at 12:51 pm

    What are you suggesting exactly?

    • originalsandwichman
      March 10, 2017 at 4:59 pm

      Exactly!

  5. originalsandwichman
    March 10, 2017 at 5:22 pm

    Where is Dean Baker when you need him? On this same blog Dean has argued that robots can’t be taking jobs because productivity growth is down. I have argued against Dean’s reliance on aggregate productivity statistics, which are too methodologically unsound to tell us anything definite about the effects of any one factor on employment.

    But this is a discussion that needs to take place.

    My position is unconventional. Trade imbalances, robotization and growing inequality are the symptoms, not the cause. The problem is the failure of the “working classes” (and their institutional and intellectual “advisers”) to effectively counter the excesses of profit-seeking capital by enforcing demands for progressive work time reduction. Time is the medium in which workers’ effort are sold to employers. Everything else is peripheral.

    Unions in North America first came to treat the reduction of working time as a fringe benefit. Then they abandoned it because it didn’t contribute to “growth” and growth was the Democratic Party’s universal panacea. One must either choose between the pursuit of growth and checking the excesses of capital or be ambivalent, equivocal and ineffectual.

  6. March 13, 2017 at 3:45 am

    What is or ought to be the purpose of economic arrangements? What is it they’re intended to accomplish? To increase productivity? To increase profits for private companies? To provide the things people need to live a good and proud life? To help politicians win elections? To build sustainable societies? To prove humans can master nature? To give jobs to economists? To out-compete my neighbors? To give jobs to citizens? We seem to be confused about what economics is and what it’s supposed to accomplish. These confusions need to first be acknowledged and then worked through. If we can. Which seems increasingly more difficult today.

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