Monday, August 8, 2016

"The Robot Problem"

I had a discussion yesterday with a so-called supporter of the free market.

This "free market supporter"  said that there will have to be a role for government in the jobs sector in the future because of the coming robotic age which will mean the loss of massive amounts of jobs.

I hit him with the usual stuff that, until we end up back in the Garden of Eden. there will always be desires that need to be met and therefore jobs. I said to him that to suggest that somehow there will be vast numbers of unemployed for long periods means that he does not believe in supply and demand economics.

He said, the  number of robots replacing jobs would come too fast for the market to handle.

I told him the same concern existed after World War II, but not only wasn't there any problem but the economy went into a major boom.

Here's Cecil Bohanon on that period:
The standard thinking of the day was that the United States would sink into a deep depression at the war’s end. Paul Samuelson, a future Nobel Prize winner, wrote in 1943 that upon cessation of hostilities and demobilization “some ten million men will be thrown on the labor market.” He warned that unless wartime controls were extended there would be “the greatest period of unemployment and industrial dislocation which any economy has ever faced.” Another future Nobel laureate, Gunnar Myrdal, predicted that postwar economic turmoil would be so severe that it would generate an “epidemic of violence.”
Markets clear. They did after the war.

But he still wasn't buying it. He warned ominously that not only would low wage jobs be replaced by robots but high skilled jobs, including that of doctors. Robots will be doing all the medical diagnoses he "warned."

So I finally asked him, "Well, so your model is that productivity is going to explode to unheard levels at exponential rates and this is going to cause starvation?"

Bottom line: There is no robot problem. To the degree that robots can replace human labor, it increases productivity and makes more products available for all of us.



  1. I recently saw someone comment that Mises' economics was a kind of motte and bailey argument; empiricists can't wrap their heads around his insights. Predictions are useless because markets clear, often in unforeseeable ways. How many stupid predictions do we have to sit through until Mises gets his due?

    1. "How many stupid predictions do we have to sit through until Mises gets his due?"

      Shall I answer your question with a useless prediction?

    2. Mises is gonna get so much due.

  2. --- there will have to be a role for government in the jobs sector in the future because of the coming robotic age which will mean the loss of massive amounts of jobs. ---

    I am pretty sure your friend was very upset about all those ironsmith jobs lost after people stopped using horses for transportation.

    Or maybe he didn't because he's an idiot.

    1. All those child coal miners lost their jobs with mechanization too. The lumberjacks lost their jobs too. Most of the farmers lost their jobs for the same reason. Yet somehow quality of life is better now than at any time in human history.

  3. So which is it? Is there a shortage of primary care doctors or will the robots make their jobs obsolete anyway? The fact of the matter is if robots and AI can lessen their load, it will mean they are less overloaded and more able to make important human decisions. Engineers are far more productive with modelling and cad programs than without. Materials are far more advanced with robots than without, both of which make the cars of today far superior to the cars of the seventies in almost every way.

    1. The CAD programs and such do not make an engineer more productive IMO. The engineer becomes less productive being burdened with things engineers typically passed off to draftsmen in ages past. The software makes the product development process as a whole less costly because paying an engineer at his rate to do this work in addition to the more advanced tasks is cheaper than hiring a draftsman. The productivity hit to the engineer is simply the less costly option.

      This of course is something many professionals face these days because the overhead costs (usually government imposed) of another employee are more expensive than condensing tasks to higher skilled employee. If government interference was removed businesses would be more efficient with two people paid rates appropriate for their tasks.

      This is something the high minimum wage folks never consider. The higher paid employees are capable of doing the lower paid employees' jobs so the employers simply roll the job duties upwards eliminating the lower paid position. If they are kind (rarely) they might bump up the pay of their higher level employees for the extra work, but it's still less than what hiring a separate person costs.

  4. There is no robot problem. There is a government problem.
    Mature products require fewer and fewer humans. New products require lots of humans. Government is used to stop new products from coming into being for the benefit of those who make mature products. So we get robots instead of things for humans to do.

  5. In the future, each person will have at least one planet and will stress and worry about acquiring more planets and perhaps an entire solar system if they are in the lucky 1%.