Labor-Saving Devices … When It’s YOUR Labor

RobotsRobots will replace millions of workers in the next few years. Not only factory labor but burger flippers, sales clerks, librarians and even computer programmers. Because machines are cheaper and more reliable.

We have seen manufacturing leave the United States for cheaper places; now those cheaper places will see the same phenomenon as those workers too will be replaced by machines. It is universal. And it is for all that we can see, an end to the middle class, first in the U.S. and Europe, then in China and India and the rest. The middle class has become uneconomic.

People will still be needed to supply and tend the machines. Not many people, though. So questions appear: Where will enough customers to pay for the machines’ output be found? How will those customers have earned their money? What skills and knowledge will be needed and valuable enough to pay for? Who will be paying and from where will they derive their incomes? What will be taught in public schools? What will be the need for public schools with knowledge available on the Internet?

Shortly, Switzerland will vote whether or not to pay every citizen $2,500 a month whether or not they work. Children are to receive a lesser amount. Half is to come from taxes and half from reductions in existing social programs.  Noting that the social programs are funded by taxes, we wonder how that will be funded as machines take over. To us, it smacks of draining a patient’s blood to give him a transfusion.

Those who understand economics will realize that machines are expensive and are replacing people only because political forces have increased the cost of human labor enough to justify the machines. Thus one might predict that the machines will impoverish the people until they are willing to work cheaper than the cost of the machines rather than starve. That’s why economics is called the “dismal science.” But it will take time to reach such an accommodation. A miserable time for many, perhaps. By that time, there might be fewer of us around. That would help increase the value of whatever work people will be able to do.

If you consider for a moment, it’s just a repeat of the current cycle. Europe and America monopolized technology and mass production. That supported high prices that could provide high labor earnings. Then, entrepreneurs competed by using cheaper foreign labor and, undercutting the high cost producers. The exported capital and knowhow in the hands of overseas producers set them up to compete. The resulting world market replaced the Western monopoly, forcing it to lower its prices. Ironically, the entire cycle was a result of Western entrepreneurship. Economics plays no favorites.

Now the poorer ‘developing economies’ are rising and the ‘rich’ economies are dealing with impoverishment. Eventually, they will meet in the middle. Or not, depending upon political factors.

For now, the issue is, how will everyone, rich or poor, deal with what resembles a mass of surplus labor? Will we find something for them to do, something that will have sufficient economic value? We have no idea. If the past is any guide, the answer lies under our noses, we simply don’t see it. If there is an answer …

About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much) Couple of degrees in government, a few medals in figure skating; just reading and suspicion for economics ...
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