Politics, Economics,Labor … and Robots

cartoon-robot-labor-dayRobots  will produce a class of obsolete humans?  There is a simple answer: Certainly. So long as robots are cheaper than people.

Unions joined with politicians – i.e, corruption – pushed the price of labor above its market value. Politics is about power, not about markets. But while politics may ignore markets, markets do not ignore politics. When U.S. labor rose above the world price, the world sucked U.S. capital to places with cheaper labor to compete. Chinese steel became a significant market supplier. The U,S. lost markets.

But the U.s. politicians were prisoners of an ever escalating wage as they bid against each other for votes. Until now, a $15 hr. minimum is the goal while far too much production has shifted overseas. The U.S. and Europe, we hear, are now service economies. Who ever became wealthy swapping services? And what will the masses do to live as robots replace them at McDonald’s?

Some are forecasting a future of idle folk dependent upon government largesse. Where said government will obtain the wherewithal goes unstated. Beyond that question, perhaps some economics are ignored as well. Consider:

Robots are not cheap to produce nor to operate. People on the other hand, are cheap to hire and can be cheap to operate when government law and regulation do not impose high costs onto them. If this were not so, no one would be today, demanding the open borders that flood the U.S. with cheap labor, right?

But we note that said imported cheap labor is still costly compared to its price where it comes from; were that not so, it wouldn’t leave home, would it? So the real function of importing foreign labor is to reduce the cost of native labor by competing on its home ground.  When the U.S. and European labor price has fallen to match the rest of the world, U.S. and European capital will be able to stay at home and compete as it cannot now do.Those running the U.S. and Europe prefer that; labor unions and workers do not. So Democrats especially must indulge in much double talk.

Of course, no politician can say that in public. But it is what they are doing and is the reason that the middle class is vanishing. And it is the historic norm, too. Economics over time is a great political leveler on the larger scale. For the personal scale, not so much.

So yes, the robots will replace the people for a while because people cost too much. A new generation of people, tired of trying to live on government gruel, will price themselves cheaper than the machines, obsoleting them in their turn. And living lower on the hog to do so. With luck, the march of technology will help human productivity to to produce enough more new wealth that the average living standard will be decent. Or not …

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 ...
This entry was posted in Ecomomics, Goverrnment, Politics, Uncategorized and tagged , , , , . Bookmark the permalink.

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