If a robot steals your job, there’s no need to worry. Just buy a robot of your own and pimp it out. So argues Noah Smith in an astute Atlantic article on the promises and challenges of our technological future (h/t Tyler Cowen). Smith points out that innovations in robotic technology will make our economy more productive and prosperous, but he also considers the worry that all that prosperity would go to owners and capitalists over increasingly irrelevant human workers:
For most of modern history, two-thirds of the income of most rich nations has gone to pay salaries and wages for people who work, while one-third has gone to pay dividends, capital gains, interest, rent, etc. to the people who own capital. This two-thirds/one-third division was so stable that people began to believe it would last forever. But in the past ten years, something has changed. Labor’s share of income has steadily declined, falling by several percentage points since 2000. It now sits at around 60% or lower. The fall of labor income, and the rise of capital income, has contributed to America’s growing inequality.Now, humans will never be completely replaced, like horses were. Horses have no property rights or reproductive rights, nor the intelligence to enter into contracts. There will always be something for humans to do for money. But it is quite possible that workers’ share of what society produces will continue to go down and down, as our economy becomes more and more capital-intensive. . . . In the academic literature, the theory goes by the name of “capital-biased technological change.”
The standard blue model solution to this challenge would be to amp up the welfare state, pouring more and more money into government programs that redistribute income from capital to (now unemployed) labor. But Smith thinks there are better ways. First, in such a world, robots themselves will be cheap. Ordinary people can buy these productive tools for themselves and use them to earn income and build businesses. In a world where everyone can own robots, many more people can enter the capital class and use their robots to create startups and small businesses.We were particularly pleased to see Smith’s focus on small business. Like him, we think that small businesses, empowered by cheap data and information processing, can make a big difference in the job and income prospects for rising generations in the age of the ‘bot. Robots will make the price of basic goods fall and free up labor currently tied up in manufacturing and offices, allowing more people to work as small scale service providers, meeting the needs of friends and neighbors and enabling them to navigate what is going to be a very rich, complex and sometimes confusing world of information, services and options. A central task for the U.S. in the coming years is to create a regulatory and economic environment that facilitates the growth of small businesses and to shift our educational system from preparing kids to work in large organizations to developing their entrepreneurial talents.Read the whole thing, and learn to stop worrying and love the robots. Our new overlords mean well.