Hiding Economics Behind Machines?

RobotYour car was assembled more by machines than by people, we’d bet. Restaurants are replacing waiters with the Internet and with little boxes on their tables; the boxes take orders and payments. New machines make hundreds of burgers per hour to order and also take payment. Surgical robots are in use, automatic pilots control drone aircraft and submersibles. Self-driving cars are on the road for testing. With this Rise of the Machines , various prophets are predicting chaotic idleness for humanity, replaced by its own machinery. Others are predicting an earthly nirvana as we all play while enjoying a universal living allowancea handed out to all with no work required.

As so often, few are facing reality, which is so much less fun to write of and which annoys so many. Let’s ask a few questions of our prophets:

First, why are machines replacing people? Aren’t such machines expensive? In short, expensive machines are replacing people only because people have elected politicians who have supported raising the cost of human labor to the point it justifies the machines. If God is not mocked, neither is Economics. The rise of the cost of human labor is capped by the affordability of the machines that will replace the people. (Econ. 101!)  But just now, too few are desperate enough to accept large scale income reductions needed to undercut the machines. Nor have the politicians yet admitted any of this. That is coming.

There is a second question, too: The machines that replace human labor consume a lot of financial and physical resources. That removes those resources from any alternative uses, some of which may be preferable to use replacing human labor. That may help compensate for lower incomes needed to make those additional resources available. Or not, damfino.

As for the ‘universal living allowance’ so admired by some, the Swiss voted on it, not long ago. You may know that the Swiss are among the planet’s top bankers and are usually thought a hard-headed, financially realistic folk. They voted down the proffered free lunch; they couldn’t see where the money would be coming from. Something for nothing doesn’t compute in Switzerland; for that, you need Harvard or the New York Times, seems to us.

If expensive machines are doing all the work, who is paying for them? Ex workers have little money, right? Who is buying the production of the machines? Some want the government to print and hand out the money but then who will give real goods for play money? If the government insists, that just creates a black market. (Visit Venezuela!)

The real problem remains: Politics has forced the price of human labor above its real market value, so other sources are being found. China and India industrialized in response to this; the same process has occurred there. So now, robots are appearing in Chinese factories. Even the Communists can’t hold off economic truth for long. Ask a Soviet, if you can find one.

Now, its America and the European Union learning the lesson. Their piles of unrepaid debt will reduce their populations to the lower living standards that may adjust to competing with the machines. And the losses imposed by the disposition of all that debt (visit Greece anytime soon) will ‘reset’ human worker expectations to a more realistic level while the man/machine economy is being worked out.

The process ought to make the currently advertised one-way trip to Mars more attractive than it seems to be at present? In the long run though, we recall when a skilled laborer supported a family on his income alone while his wife raised the kids. They lived decently, too. So we know that is possible … until the next triumph of the feminists, anyway.  Lots of fun coming …

Rise of the Machines

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About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much)
This entry was posted in Economics, Government, Politics and tagged , , . Bookmark the permalink.

3 Responses to Hiding Economics Behind Machines?

  1. 1- Why are machines replacing people?
    Because neoliberalism needs ever decreasing costs of productions to survive and increased productivity to maintain profits in a globalized world. Humans have the need to earn some decent income so there is a limit to how much their income can be lowered. Machines require an initial investment but their average cost per hour decreases over time instead of remaining constant like wages would do. Additionally, humans are limited to how many hours they can work, machines are not.
    2- Unskilled labor “supported” a family while women stayed home. Partially correct and skewed conclusion. Unskilled labor was well paid while US exports were strong because Europe was recovering from total destruction from WWI. Right about the 1970’s when exports slowed down, unskilled work began migrating overseas to cheaper markets. Additionally, unskilled labor “supported” a family because women’s work was demanded from them and UNPAID. Domestic work is to this day not considered as real work, although is one of the toughest jobs in the world. If unskilled workers would have had to pay their wives for all the work they did, then unskilled work could not effectively support any family structure. For as long as domestic work is unpaid, any system can support it and women are relegated to being almost property of the husband, completely dependent on sustenance from a man. Domestic unpaid work is essential for the system to exist, if none stayed home for free, then the second individual could not go out to work. IN this case, women got the short end of the stick for a very long time. Not my kind of my idea of the ideal world may I add…

    • Jack Curtis says:

      If you will forgive me, I thought to write “a skilled laborer” rather than an unskilled one.. I have no idea how “un” arrived in the discussion!

      Seems to me, post WWII US exports were a mix of profitable goods and huge amounts of capital, loans and as French economist Thomas Piketty recently said, loan forgiveness. (Marshall Plan, et al). As Henry Ford typified, you may make all that you wish but you need paying customers to dispose of it.

      The mostly extinct ‘housewife’ is interesting economically, at least to me. She provides services children need; a responsibility taken on with motherhood. Should those be unwanted, don’t become a mother, right? She provides services too that family folk would provide themselves, if they lived alone. In return for those, the housewife is provided her living, needs and as possible, wants. She is therefore, paid for her services in the economic sense. And where there is community property law, she is paid more than that. (As some spectacular divorces among the ‘celebrities’ make clear … ).

      I can’t help noting though, that whatever the arrangement, our species has seldom remained happy with it for very long, once options became available. We are comic creatures!

      • Unskilled labor came to the conversation because it is my understanding that skilled labor has to do mostly with a higher level education. Back when women were stay home moms, most labor was unskilled, like factory work. The notion of what motherhood represents is different in every society and species. Staying home with the kids is not necessary a ‘natural’ behavior , but a societal expectation. Looking at different cultures, especially ones with high rates of female single parents, females form groups where they take turns to care for each others children to allow the others to go to work. As such, staying home is not an ascribed characteristic of motherhood, but an expectation of certain societies. If the role of mothers were naturally to ‘stay home’ and be taken care of, in the absence of a ‘male provider’ women would naturally perish, given that their biological condition would prevent them from earning a living, or separating from her off spring.
        I do have to agree that we are never happy with any arrangement 🙂

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