Is there a case for a basic income guarantee – Part 4 – robot edition

This is Part 4 in the mini-series discussing the relative merits of the basic income guarantee proposal and the Job Guarantee proposal. It is the ‘robot edition’. The march of the robots is the latest pretext that basic income proponents (including the IMF now) use to justify their policy advocacy. There is some truth in the claims that the so-called ‘second machine age’, marked by the arrival of robots, is not only gathering speed, but is different from the first period of machine development with respect to its capacity to wipe out human involvement in production. But the claims are somewhat over the top. Further the claims that these trends are inevitable are in denial of the basic capacities of the state to legislate in the common interest. While the innovations in technology will free labour from repetitive and boring work and improve productivity in those tasks, there is no inevitability that robots will develop outside the legislative framework administered by the state and overrun humanity (even if the predictions of robot autonomy are at all realistic). We will surely need to develop a coherent adjustment framework to allow these transitions to occur equitably and where they are not possible (due to limits on worker capacity) alternative visions of productive work are developed?
Further, the Job Guarantee is a better vehicle for handling these type of transitions and creating new forms of productive work. Adopting a basic income guarantee in this context just amounts to surrender.

What about robots?

As time has passed, basic income proponents have moved from a concern about unemployment driven by the fluctuations in the economic cycle to trend issues relating to the collapse of employment in general.

They use the increase in robots in production processes is another pretext for advocating the introduction of a basic income guarantee. Even the IMF is now buying into this line of argument.

The IMF Magazine Finance and Development – recently published an article (September 2016) – Robots, Growth and Inequality which argued that the so-called “second machine age” or:

The robot revolution could have profound negative implications for equality (Berg et al., 2016: 10).

[Reference: Berg, A., Buffie, E.F. and Zanna, L-F. (2016) ‘Robots, Growth, and Inequality’, Finance and Development, 53(3), 10-13. LINK .]

Berg et al. (2016: 11) contrast the “technological optimists” who believe that “technological advances raise productivity and thus output per person … the overall effect is a higher standard of living”, with the “more pessimistic, narrative … [which] … pays more attention to the losers”.

The pessimists focus on the decline of low skill jobs as a result of the computer age and the increased income inequality that they believe has resulted from this impact.

The conventional economic argument that the IMF deploys is based on a competitive labour market framework where the introduction of robots, which are perfect or near-perfect substitutes for labour, effectively increases the supply of ‘labour’ and suppresses wages.

They recognise that they “assume away unemployment” (p.11) in their analysis, and so the labour market adjustment is in terms of price (wages) only.

But then who will buy the increased output as capital (robots and traditional capital) becomes more productive and “there is more and more output to be shared among actual people”? (Berg et al., 2016: 11).

The IMF’s answer is that with wages falling, “the owners of capital do” as human “labor becomes a smaller and smaller part of the economy” (p.11)

If robots do not become perfect substitutes then a role remains for “humans’ special talents” which “become increasingly valuable and productive as they combine with this gradually accumulating traditional and robot capital.”

The message for unskilled workers remains the same. Their skills – routinised and repetitive tasks – are the ones that are likely to be perfect or near enough substitutes for robots.

The loss of jobs for these workers drives their wages down relative to skilled workers. So not only is the wage share overall falling (because capital is more productive than overall labour) – that is, income inequality rises, but also wage inequality
rises because of the increase in the wage differential between skilled and unskilled workers.

So the question that is raised by this hypothetical dreaming is what is the best way to ensure there is “sufficient aggregate demand when buying power is increasingly concentrated”? (Berg et al., 2016: 13).

How can society ensure that in the face of lower wages workers will retain an “ability to pay for health care and education and invest in their children”? (Berg et al., 2016: 13).

The IMF solution:

1. Tax the rising income on capital – that is redistribute the “income from capital”.

2. The redistribution would come via the introduction of a basic income guarantee.

The IMFs intervention into the debate, which no doubt will elevate the basic income proposal a few notches among mainstream economists, provides no new insights at all.

It is the same argument that has been used for centuries that predicts technology will create an employment void for workers.

The robot argument goes, more or less like this. Yes, there has been constant changes in technology which has impacted on types of employment on offer for hundreds of years and the C19th Luddites were wrong.

Even though machines have substituted for labour, sometimes at a rapid pace over the last few centuries of capitalist production, history tells us that there is also strong “complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labour” (Autor, 2014: 5).

[Reference: Autor, D. (2015a) ‘Why Are There Still So Many Jobs? The History and Future of Workplace Automation’, Journal of Economic Perspectives, 29(3), 3-30.]

As Harold Bowen (1966: 9) noted:

The basic fact is that technology eliminates jobs, not work.

[Reference: Bowen, H.R. (1966) , Washington, US Government Printing Office.]

But the assertion of the modern-Luddites is that the so-called ‘second machine age’ marked by the arrival of robots, which is currently gathering speed, is different from the first period of machine development.

The claim is that in this ‘second machine age’, the capacity of robots to replace humans in work is unlike anything we have previously seen and exceeds the ability of humans to envisage and create new jobs that will sustain those displaced by robots.

We should be circumspect in using the term “This Time is Different” given it has marked the intervention by Reinhardt and Rogoff into the GFC debate with their suspicious spreadsheet analysis that has failed to predict anything of importance in the real world.

The “This Time is Different” syndrome is a convenient vehicle to distance one from previous predictive failures and to claim a renewed (and undeserved) credibility in the contemporary debate.

David Autor, Frank Levy and Richard Murnane argued in their 2003 study that the observed polarisation of high and low-paying jobs in the US labour market was the result of a decline in middle-level jobs as a result of routinisation.

[Reference: Autor, D.H., Levy, F. and Murnane, R.J. (2003) ‘The Skill Content of Recent Technological Change: An Empirical Exploration’, Quarterly Journal of Economics, CXVIII, 1279-1333.]

That insight motivated academic researchers Maarten Goos and Alan Manning to study the same phenomenon in the UK labour market. They argued in their paper – Lousy and Lovely Jobs: the Rising Polarization of Work in Britain
– that “workers in the middling jobs used to do routine tasks, while workers in lousy and lovely jobs do non-routine tasks” (Goos and Manning, 2007: 124).

Goos and Manning (2007: 131) show that:

… between the 1970s and late 1990s we have seen rapid employment growth in lovely jobs (mainly in professional and managerial occupations in finance and business services), some growth in lousy jobs (mainly in low-paying service occupations) and a decline in the numbers of middling jobs (mainly clerical jobs and skilled manual jobs in manufacturing).

[Reference: Goos, M. and Manning, A. (2007) ‘Lousy and Lovely Jobs: The Rising Polarization of Work in Britain’, The Review of Economics and Statistics, 89(1), 118-133. LINK to longer 2003 Working Paper.]

[Note to Bill: Check page numbers].

A 2013 study by Oxford University researchers – The Future of Employment – focused on estimating “the probability of computerisation for 702 detailed occupations” in the US labour market (Frey and Osborne, 2013: 3).

[Reference: Frey, C.B. and Osborne, M.A. (2013) ‘The Future of Employment: How Susceptible are Jobs to Computerisation?’, Working Paper, Oxford Martin Programme on Technology and Employment, September. LINK.]

The term “computerisation” refers to “job automation by means of computer-controlled equipment” (p.3). They argued that “with more sophisticated technologies” (p.4) meant that “computerisation is no longer confined to routine manufacturing tasks” (p.4) and that (p.4):

… manual tasks in transport and logistics may soon be automated.

This would spell trouble for many workers in the low-paid (“lousy”) jobs.

Further across the 2×2 matrix of job characteristics (rows: routine versus non-routine; columns: manual versus cognitive), Frey and Osborne (2013: 17) find that “computerisation is now spreading to domains commonly defined as non-routine”. The non-routine tasks were previously considered to be “not sufficiently well understood to be specified in computer code” (p.17).

These developments are impacting on both the manual and the cognitive non-routine tasks.

There study finds that (p.41):

47 percent of total us employment is in the high risk category, meaning that associated occupations are potentially automatable over some unspecified number of years, perhaps a decade or two.

The authors note that the possibility that some jobs can be “substituted by computer capital” (p.45) doesn’t mean they will be.

In particular, they note that “regulatory concerns and political activism may slow down the process of computerisation” (p.46). In other words, the state, responding to our concerns, has the capacity to prevent this process.

The example they use are ‘driverless cars’ and the government’s capacity to limit their access to roads. We will come back to that issue a bit later.

This theme was further elaborated on by MIT researchers Erik Brynjolfsson and Andrew McAfee in their New York Times Op ed (December 11, 2012) – Jobs, Productivity and the Great Decoupling.

They point to the divergence between labour productivity and employment growth in many advanced nations that began in the mid-1980s as evidence that robots are taking over.

Real wages growth has become flat and has also diverged from labour productivity growth. It used to be said that one of the stylised facts of capitalism was that real wages grew in proportion with productivity growth.

They term the divergence between productivity growth and employment and wages growth – the “Great Decoupling” – and argue that a major cause has been the “changing nature of technological progress”.

Their hypothesis is simple:

As digital devices like computers and robots get more capable … they can do more of the work that people used to do. Digital labor, in short, substitutes for human labor. This happens first with more routine tasks, which is a big part of the reason why less-educated workers have seen their wages fall the most as we moved deeper into the computer age.

The next stage of the decoupling will accelerate as computerisation becomes cheaper than even the cheapest human labour and “technologies … become more powerful”.

They concur with the ‘Lousy and Lovely Jobs’ scenario where future jobs will involve:

People who tell computers what to do, and people who are told by computers what to do.

The challenge is in their eyes to design “a healthy society” that can manage the transition of a “technology-fueled economy that’s ever-more productive, but that just might not need a great deal of human labor.”

Economists like Jeffrey Sachs, who seems to like ‘shock doctrines’, claims that (Sachs and Kotlikoff, 2012: 2) wonder if the “Luddites are now getting it right”, especially for “unskilled labor whose wages are no longer keeping up with the average”.

Sachs predicts that “Brainier machines … pose a threat to tomorrow’s workers, whether skilled or unskilled”. (p.4).

They suggest that (p.2):

What if machines are getting so smart, thanks to their microprocessor brains, that they no longer need unskilled labor to operate? Evidence of this is everywhere. Smart machines now collect our highway tolls, check us out at stores, take our blood pressure, massage our backs, give us directions, answer our phones, print our documents, transmit our messages, rock our babies, read our books, turn on our lights, shine our shoes, guard our homes, fly our planes, write our wills, teach our children, kill our enemies, and the list goes on.

[Reference: Sachs, J, and Kotlikoff, L. (2012) ‘Smart Machines and Long-Term Misery’, Working Paper 18629, National Bureau of Economic Research. LINK.]

Sachs last venture in ‘shock doctrines’ proved to be (predictably) a disastrous misadventure for Russia, although he claimed after he resigned from his advisory post in 1994 that he didn’t “even get a bit role” and that his “influence was essentially zero” (Sachs, 2000: 39). He laid blame at the US government and the IMF for rejecting his calls “to provide vital aid and debt relief” to Russia.

[Reference: Sachs, J. (2000) ‘Russia’s Tumultuous Decade: An insider remembers’, The Washington Monthly, March 2000, 37-39.]

We argue that it is highly likely that his societal shock predictions in the current setting will not prove to be anything much at all.

US academic David Autor, who is a leading authority on the issue of automation and employment recently concluded that while “(c)hanges in technology do alter the types of jobs available and what those jobs pay” (Autor, 2014: 5), the polarisation in wage movements where the “gains went disproportionately to those at the top and at the bottom of the income and skill distribution” (p.5) is “unlikely to continue very far into the foreseeable future” (p.5).

[Reference: Autor, D. (2015a) ‘Why Are There Still So Many Jobs? The History and Future of Workplace Automation’, Journal of Economic Perspectives, 29(3), 3-30.]

Autor (2014: 11) noted that many jobs which are characterised by “precise, well-understood procedures” can be “codified in computer software and performed by machines”.

But he coined the term the ‘Polanyi Paradox’ to refer to what he thinks is the “bounded” capacity for “this kind of substitution” (p.11) (see also Autor, 2015).

He considers the substitution to be finite (p.11):

… because there are many tasks that people understand tacitly and accomplish effortlessly but for which neither computer programmers nor anyone else can enunciate the explicit ‘rules’ or procedures.

[Reference: Autor, D. (2015) ‘Polanyi’s Paradox and the Shape of Employment Growth’, Federal Reserve Bank of St. Louis: Economic Policy Proceedings: Re-Evaluating Labor Market Dynamics, 129-77.]

In his 1966 book – The Tacit Dimension – US economist turned philospher Michael Polanyi wrote (Polanyi, 1966: 4) that:

I shall reconsider human knowledge by starting from the fact that we can know more than we can tell (emphasis in original)

[Reference: Polanyi, M. (1966) The Tacit Dimension, New York, Doubleday and Company, Inc.]

Accordingly, he conjectured that much of human knowledge is ‘tacit’ in nature and that the rules that allow us to ‘know’ things “cannot be put into words” (p.4). In a sense, we don’t know why we know things.

Much of our knowledge is the product of culture and tradition which is infused into our sub-conscious but acts to filter reality in particular ways that we are not immediately aware of. This is the tacit dimension.

Polanyi’s thesis, if correct, has significant ramifications for the claims that robots will take over the labour market.

Autor (2014: 11) says that “(f)ollowing Polanyi’s observation, the tasks that have proved most vexing to automate are those demanding flexibility, judgment, and common sense-skills that we understand only tacitly.”

Accordingly, he considers the implications about the use of robots goes beyond a discussion of the extent of substitution of machine for labour.

He argues (2014: 22) “that jobs are made up of many tasks and while automation and computerization can substitute for some of them, understanding the interaction between technology and employment requires thinking about more than just substitution”.

In other words, there are tasks that rely on our tacit knowledge which constrains the capacity of robots to replace humans in the workplace.

Those who argue that the ‘second machine age’ is somehow different must also demonstrate that the new wave of technologies have been able to over the ‘Polanyi constraint’.

Autor (2014) presents evidence that rejects this assertion although he also suggests that overcoming the ‘tacit dimension’ will represent the forefront of “engineering and computer science” endeavour (p.23).

The overall point is that we must assume that robots will replace humans in a number of areas, which then requires the displaced individuals transit into alternative skills and jobs.

So a progressive state needs a framework to make those transitions – something like the Just Transition Framework, first developed by the Canadian Union Movement in the late 1990s to deal with climate change. We return to a discussion of that framework later.

But to think that all jobs will be replaced is unfounded.

Autor (2014: 27) says:

I expect that a significant stratum of middle-skill jobs combining specific vocational skills with foundational middle-skills levels of literacy, numeracy, adaptability, problem solving, and common sense will persist in coming decades.

Why? He believes that (p.27):

… many of the tasks currently bundled into these jobs cannot readily be unbundled – with machines performing the middle-skill tasks and workers performing only a low-skill residual – without a substantial drop in quality.

The state has a central responsibility in this regard.

Where possible workers should be prepared through the education and training structures to work in these “middle-skill jobs”. If the state assumes that responsibility then transitions will be made and the employment crisis will be a figment.

Where it is not possible for workers to elevate their skills (for whatever reason) then alternative ‘low-skill’ jobs that are not as susceptible to substitution by robots need to be created.

It is here that the Job Guarantee becomes a central feature of the progressive transition.

The automation debate is typically constructed within a known vector of job types. The basic income proponents adopt this simplistic vision of the future.

Accordingly, the basic income proponents claim that as automation will wipe out a number of elements in this vector (the low-skill elements mostly), the only way to allow the affected individuals access to the distribution system (in a society becoming increasingly wealthy overall because of the productivity gains) is to introduce an income guarantee.

But suppose the vector of jobs is redefined by changing our concept of productive work. What we define as productive work is really only limited by our imagination, which relates back to our earlier discussion of the ‘gainful worker’ approach that has dominated the debate since the C19th.

In that sense, while the Job Guarantee plays an immediate and essential role in providing access to the distributional system without jettisoning the human need for work and accords with current societal goals which value contribution, it also provides a progressive (if not radical) framework for re-envisaging the concept of productive work.

We take up that discussion later.

Further, those who advocate an inevitable, technologically-driven decoupling between what is happening in the production side of the economy and what is happening in the labour market and the distribution system, overlook key points.

While there is a tendency in the literature to assume that this divergence was technologically driven and, in some sense, inevitable and unavoidable, an alternative narrative is more plausible.

One could argue that the introduction of mass assembly lines, which made workers much more productive compared to previous production methods, would have spawned the same income capture by the top-end-of-town as we now witness, had not society formed a strong sense of collective will and forced the state through the political process to ensure more equitable sharing of the income gains from the higher productivity.

Surely, if society acquiesced to the new technologies in the Post World War II period, the distributional consequences would not be all that different to what we have observed since the mid-1980s (see Ormerod, 1994 who makes the same argument).

[Reference: Ormerod, P. (1994) The Death of Economics, Faber, London.]

The clue is that the divergence between employment and real wages growth on the one hand, and, labour productivity growth on the other hand, has been a defining characteristic of the neo-liberal era, where capital strategically invested resources to break down the sense of societal collective and co-opted the state to attack trade unions and maintain persistently high levels of labour underutilisation, which have made it difficult for workers to pursue and receive real wages growth in line with labour productivity growth.

It has less to do with the technological shifts and a lot to do with the sense of compliance and acquiescence that workers have assumed in this hostile neo-liberal era.

This leads to the next observation.

From one perspective, the robots-will-rule-the-world assertions avoid the question of the human agency involved. Of course, robots are becoming increasingly agile and will probably be able to replace a large number of jobs that rely on routinised and predictable action.

That trend has been on-going since the capitalists worked out better ways of securing the surplus production.

But just as children were banned from the workplace in advanced nations as an act of social policy, the state has the capacity to determine how the technology that is developed is deployed.

We produce highly technological motor vehicles that can be driven at exotic speeds but we force them to obey limits that are well within their overall capacity. Why? Because we empower the state to protect our common interests.

If robots and computers threaten our very survival then it is somewhat far-fetched to expect that we will allow the state to be totally compliant and allow robots to take over and drive out humans from the workplace.

There will always be options and alternatives and it is the role of the state to create a legal framework which advances the interests of the citizens in general.

While the innovations in technology will free labour from repetitive and boring work and improve productivity in those tasks, there is no inevitability that robots will develop outside the legislative framework administered by the state and overrun humanity (even if the predictions of robot autonomy are at all realistic).

The more apposite question is what will happen to unskilled workers who are unable, even with training assistance, to make the transition from machine operator to machine maintainer or designer?

The answer is to develop a coherent adjustment framework to allow these transitions to occur equitably and where they are not possible (due to limits on worker capacity) alternative visions of productive work are developed?

We will need to envisage new jobs which are currently outside of what we consider, as a society, to be productive activities.

We will introduce what we call a Just Transition Framework, which has to become a central aspect of a progressive future.

This framework allows the benefits of technology to be enjoyed by all even if specific cohorts of workers have to change careers mid-stream.

We will argue that the basic income response to the challenge of robots is a denial of the prospects that a ‘Just Transition’ can provide.

Conversely, we will argue that a Job Guarantee becomes an integral aspect of a ‘Just Transition’ and provides a variety of productive options for individuals confronted with the need to change jobs and retrain as robots and other technologies impact on their work prospects.


In Part 5 (the concluding part of this mini-series) I will consider the concept of Just Transition, coercion, and more.

The text will ultimately be edited down to form a chapter in Part 3 of our new book (due out later this year) on the way in which the progressive debate has fallen prey of neo-liberal constructs.

The series so far

This is a further part of a series I am writing as background to my next book on globalisation and the capacities of the nation-state. More instalments will come as the research process unfolds.

The series so far:

1. Friday lay day – The Stability Pact didn’t mean much anyway, did it?

2. European Left face a Dystopia of their own making

3. The Eurozone Groupthink and Denial continues …

4. Mitterrand’s turn to austerity was an ideological choice not an inevitability

5. The origins of the ‘leftist’ failure to oppose austerity

6. The European Project is dead

7. The Italian left should hang their heads in shame

8. On the trail of inflation and the fears of the same ….

9. Globalisation and currency arrangements

10. The co-option of government by transnational organisations

11. The Modigliani controversy – the break with Keynesian thinking

12. The capacity of the state and the open economy – Part 1

13. Is exchange rate depreciation inflationary?

14. Balance of payments constraints

15. Ultimately, real resource availability constrains prosperity

16. The impossibility theorem that beguiles the Left.

17. The British Monetarist infestation.

18. The Monetarism Trap snares the second Wilson Labour Government.

19. The Heath government was not Monetarist – that was left to the Labour Party.

20. Britain and the 1970s oil shocks – the failure of Monetarism.

21. The right-wing counter attack – 1971.

22. British trade unions in the early 1970s.

23. Distributional conflict and inflation – Britain in the early 1970s.

24. Rising urban inequality and segregation and the role of the state.

25. The British Labour Party path to Monetarism.

26. Britain approaches the 1976 currency crisis.

27. The 1976 currency crisis.

28. The Left confuses globalisation with neo-liberalism and gets lost.

29. The metamorphosis of the IMF as a neo-liberal attack dog.

30. The Wall Street-US Treasury Complex.

31. The Bacon-Eltis intervention – Britain 1976.

32. British Left reject fiscal strategy – speculation mounts, March 1976.

33. The US government view of the 1976 sterling crisis.

34. Iceland proves the nation state is alive and well.

35. The British Cabinet divides over the IMF negotiations in 1976.

36. The conspiracy to bring British Labour to heel 1976.

37. The 1976 British austerity shift – a triumph of perception over reality.

38. The British Left is usurped and IMF austerity begins 1976.

39. Why capital controls should be part of a progressive policy.

40. Brexit signals that a new policy paradigm is required including re-nationalisation.

41. Towards a progressive concept of efficiency – Part 1.

42. Towards a progressive concept of efficiency – Part 2.

43. The case for re-nationalisation – Part 2.

44. Brainbelts – only a part of a progressive future.

45. Reforming the international institutional framework – Part 1.

46. Reforming the international institutional framework – Part 2.

47. Reducing income inequality.

48. The struggle to establish a coherent progressive position continues.

49. Work is important for human well-being.

50. Is there a case for a basic income guarantee – Part 1.

51. Is there a case for a basic income guarantee – Part 2.

52. Is there a case for a basic income guarantee – Part 3.

53. Is there a case for a basic income guarantee – Part 4 – robot edition.

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due later in 2016.

That is enough for today!

(c) Copyright 2016 William Mitchell. All Rights Reserved.

This Post Has 26 Comments

  1. “Robots will eliminate the need for work”: so reduce the retirement age and pay the state pension earlier.

    “It will lift children out of poverty”:so increase the automatic child benefit payments.

    “It will give money to carers and others doing unwaged work”: why is work unwaged? Pay them the living wage for their work rather than a stipend that is by definition insufficient to live on.

    For every excuse there is a better solution available.

    But I suspect we’ve dealt with all the excuses now and we’re getting to the real reason UBI is so popular with its “mostly white, mostly male, elite-educated, politically connected left-winger” supporters. Certainly it’d be great for me. The income boost would (along with other things) probably be enough to allow me to stop working. I quite like the idea of having all those minions running around working for me while I live the aristocratic life.

  2. We should be thinking The Matrix rather than Terminator in this discussion.

    VR + autonomous logistics = no physical need for human to human value exchange

  3. Bill Neil

    i afraid that the neoliberals will have new consensus about the so called BIG and will dismiss JG thats my biggest fear to be honest.

  4. bill

    also i have a question what do you think about giving JG for people which is going through requalification?

  5. Bill,

    ‘The IMF’s answer is that with wages falling, “the owners of capital do” as human “labor becomes a smaller and smaller part of the economy” (p.11)’

    More commas are needed in this sentence, one after ‘that’ and one after ‘do”‘. I would also place this sentence directly after the preceding one rather than separate them by a paragraph, as they are quite closely linked and this will ease understanding. At least it would for me after consulting the source.

  6. The US Bureau of Labour Statistics reckons that around 50% of all jobs currently require some degree of technological skill, by which they primarily mean computer knowledge, and that this will increase to about 77% in the next 10 years. While the “77%” figure may be an instance of pseudo-precision, the increase is probably real, barring some sort of global catastrophe. Familiarity with computers is expected in jobs that have nothing to do directly with computing, as it is felt that the employee will be better able to communicate with those dealing with IT issues.

    It doesn’t follow from this that robots will “take over”. Can you imagine having a robot that cleans your house, including vacuuming the carpet, only to have the robot hacked by a nasty neighbor who commands your robot to shred your carpet? Of course, the neighbor or a colleague or friend of same will have to have serious computer skills. In such futuristic scenarios, this is not an unreasonable assumption, however realistic it may or may not be.

  7. “i afraid that the neoliberals will have new consensus about the so called BIG”

    You may be right. The trick for the last twenty or thirty years has been to get individuals to borrow money and spend it to enrich the banking class. Now that has run out of steam they are trying to persuade the government to do the borrowing (notionally – as in the counterparty of excess savings) and give the money to people. It’s the last roll of the dice for the creditor utopia.

  8. Dear Bill

    Suppose that in Ruritania the active labor force consists of 10 million people, who work on average 2000 hours per year and produce 500 billion. Hourly productivity is then 25. Twenty years down the road, the active labor force has shrunk to 5 million, who also work on average 2000 hours per year and produce 600 billion. Hourly productivity is now 60. If the idea that robots are going to make a lot of people unemployable is correct, then something like the above must happen. We should then be seeing very rapid increases in hourly productivity. That has not happened so far. In no developed country has productivity growth been rapid since 1990.

    Regards. James

  9. Bill, the reference for Autor: 2014 is missing. I was interested in following it up. The first instance of this reference is followed by Autor: 2015a.

  10. Bill, somewhere in all this is a risk, similar in my opinion, to the ‘contagion’ risk most recently displayed by intertwined international finance in the GFC. Most recently, someone hacked the Yahoo accounts which number in the many millions. And our digitized national financial system would not be immune from such manipulations, correct? For every computer code that makes a machine work well, there is another code that makes it not work at all, or worse, work malevolently. If there is going to be new jobs created in all this, I fear it will be people employed just to make the systems secure, and if broken into, resilient to quick repair. Big, big risks here, in my opinion. Who has the skills to quantify the risks?

  11. Robots plus AI will be able to perform nearly any physical or mental labour we want them to, skilled or unskilled, the technology is just about there now. It’s really not off in the future any longer, we just haven’t been exposed to the cutting edge stuff in our daily lives much except for the AI which can beat the best chess or jeopardy players at their game. The only competition for this tech today is cheaper offshore labour which has been facilitated by the internet and that too will come to end as technology prices fall.

    What makes us different from a robot or an AI is human perception and the way our bodies function; attributes only humans possess, although the concept of bio machines is being bandied about in tech circles as well (think human clones wired with embedded electronics).

    A musician friend with a background in computer science told me several years ago that the lack of perception itself needn’t be too concerning to AI specialists seeking to automate musical creative intelligence either, since enough feedback data exists on our music preferences for programs to exist able to predict to a high degree whether a piece of new music will be loved or hated by most humans. Couple the evolutionary trial and error type computer aided design programs with the above…

    Of course the same can be extended to other arts as well, and in some cases it already is.

    The only needs technology can’t eventually supply are the things we choose to do ourselves for our own pleasure, and that choice is whats missing in our present economy; taken away from us by the lack of control over our own lives by our antique political economy which has fostered a lack of interest in pursuing our own creative endeavour by flooding our senses with copies of the creative effort of others in the form of material goods and recorded media etc..

    If we can wrestle our technology from Smeagle, which really belongs to everyone anyway, and socialise it, because it is all just the product of the collective labour efforts of our past to begin with, Then we become free to choose were and when we use it.

    There, fresh life to the meaning of utility.

  12. “(c)hanges in technology do alter the types of jobs available and what those jobs pay” (Autor, 2014: 5): this reference is wrong. It should be 2015 on why there are still so many jobs. The paper dealing with why there are so many jobs is referenced, as it probably will be in the book, as 2015a.

  13. Everything that needs to be done is already being done.

    I know this because this is what economists tell me.

  14. Balance of Trade

    Aren’t we missing out on a key MMT perspective on this issue? It seems like robotics could make US factories more cost-competitive with foreign production. So it would actually be foreign companies/workers who would lose market share — since there are relatively few US workers making widgets presently.

    For every increment of automation we achieve, surely this balance of trade issue would have more impact on the economy (moving production back to the US by a few percentage points) than would the rather minor number of industrial workers displaced domestically. (And actually we might need more robot repairmen for those returning factories.)

    It seems like the robots could actually improve our balance of trade, at the likely expense of greater global inequality.

  15. “Those who argue that the ‘second machine age’ is somehow different must also demonstrate that the new wave of technologies have been able to over the ‘Polanyi constraint'”

    well they cant, because in most developed countries , people sit behind a desk moving bits of paper and binary data around.

    and no robot is going to want to do that 😉

    which also begs the question , why a human being would want to do this as well.

    and that’s the point, its not just about machines replacing more and more mental and physical tasks that humans do, but its about humans re engineering the bureaucratic architecture that’s going to lead to less work for humans, over their life spans.

    and if genetics ends up creating humans that can live without disease till they are 200 , I can guarantee there is going to be lot of thumb twiddling going on, if we don’t re define the concept of what is considered a valuable work life, and the monetary framework doesn’t adjust to this new reality.

    software and alogorithems make us do things we might not necessarily want to do , not just the machines, but slowly and surely because of our inbuilt laziness which I like to call human utility. we will grow to resent this, but we will exact our revenge by re defining ourselves , and not the things we create.

    so nice try, but I don’t think the job guarantee argument stacks up in the long run, and we will have to pay people to meditate in their ivory towers 😉

  16. Bill,
    As robots (or more correctly “algorithms”) replace human labour, human aspiration will look to more sophisticated wants and desires, many of which can only be provided by human labour. This is what happened after the agricultural revolutions and the various industrial revolutions.

    Also, much of the technology has been on the demand side, not the supply side. Smart phones have made us very good consumers, but have not helped our productivity one iota, in my opinion.

    Kind Regards

    P.S.: When a driverless car runs over someone, who is liable – The passenger or the programmer?

  17. Bill,
    Further to my above comment, I predict that the more robots take over our lives, the more we will crave the things only other humans can provide. We have evolved as social animals afterall, and we cannot overcome what we have evolved to be.

    Kind Regards

  18. “If robots and computers threaten our very survival then it is somewhat far-fetched to expect that we will allow the state to be totally compliant and allow robots to take over and drive out humans from the workplace.”

    Isn’t this similar in magnitude to what state sanctioned neo liberal economic positions and a deregulated financial industry have already achieved? What’s is it about robotics that would make the state side with the people?

    If we all became owners of sufficiently advanced technology we could perhaps just start ignoring the state and it’s crazy dictates, and provide for our own needs without employment. Were it not for the ol ball and chain money represents that is.

  19. let us start from premises we normally agree with. Unemployment is not voluntary.
    It is a result of not enough aggregate demand.
    Robots or not we can have full voluntary employment .
    The rise of work done by machines does however further undermine the premise which Bill
    argued his assertion for the inflationary bias of welfare spending (BIG) over income
    spending .He stated that paid work added to general social wealth (which it does not always)
    and BIG did not whilst ignoring all the unpaid labour past ,present and done by machines which
    do clearly add general social wealth. Neils first comment suggests that increasing machine work
    could lead to a lower retirement age eg more BIG for old people .(good for me I am 55).
    The point is in the fiscal context of adequate aggregate demand for full voluntary employment
    which source of increased spending would be more likely to raise prices welfare or income which
    inturn raises firms costs?
    Whilst I am sceptical of macroeconomic stability frameworks and do not claim any magic bullet
    properties for a universal citizens dividend as a part of a progressive tax policies there would of course
    be a discussion of what level of BIG and when to raise it .I have no crystal ball but it does seem likely that more and more of societal wealth will be generated by machines and BIG could rise and working
    hours fall as a response. Another macroeconomic case for raising BIG once established would be
    a price shock like the OIL cartel managed in the 70’s which led to a wage price inflationary spiral ,
    wage restraint may have been more successful if income could have raised by another mechanism.
    For me a universal citizens dividend is all about a progressive tax regime and a means to
    mitigate some of the fundamental and inevitable conflicts of the capitalist system .The fact
    that wages are both costs and income for employers and that wages are in conflict with profits.
    The fact that machine labour may well make those conflicts more acute in the future is an
    added advantage for the introduction of a universal citizens dividend alongside increased government
    employment and stimulus to attain adequate aggregate demand to provide full employment and
    yes a training or work guarantee at a minimum wage for those still not finding work.

  20. “provide for our own needs without employment”

    neo-feudalism then? How are you going to do that from the top of a one bedroom flat in Greater Tokyo?

    More individualism isn’t the answer. More collective action is the answer – taking back *our* government from the moneyed class.

  21. “Robots or not we can have full voluntary employment”

    And how do you deal with the free riders that destroy the commons?

    Here’s the other viewpoint.

    Universal income starts of with an act of theft. Not only do you get the output of other in the form of food and shelter you have no hand in producing, but you also keep any output you make during the day.

    Under a Job Guarantee any output you make during the day is contributed to the social pool for the good of everybody – “service to others is the rent you pay for your room here on earth”.

    The freedom income guarantee people want is the freedom to steal from the social pool. Unsurprisingly after a while other people in society notice that and put a stop to it. As they do with any other form of theft.

  22. Not only do you get the output of other in the form of food and shelter you have no hand in producing, but you also keep any output you make during the day.

    Those are the privileges of private ownership.

  23. neo-feudalism then? How are you going to do that from the top of a one bedroom flat in Greater Tokyo?

    More individualism isn’t the answer. More collective action is the answer – taking back *our* government from the moneyed class.

    I was thinking along more the left libertarian ideas, perhaps anarcho syndicalism as Chomsky proposes.

  24. NEil “How do you deal with the free riders that destroy the commons”
    Now it is you who have fallen from neo liberal assertions.
    You must believe unemployment is voluntary that welfare increases unemployment
    and people in countries with more welfare have lower desire to work .Well show me
    the data.
    UNiversal citizens dividends is for working people.It can replace tax credits as well as
    Unemployment benefit ,disability benefit etc. It can be a part of raising aggregate demand to
    Deliver full voluntary employment.People are social , they want to contribute the more
    soceity supports them the more they will support soceity.
    There is a problem currently with unemployment benefits ,where loss of benefits mean a
    real high rate tax for people taking low paid or part time work would be mitigated by a
    universal citizens dividend.
    Your notion that welfare amounts to theft is very offensive. To old people ,disabled,ill,
    people in receipt of child benefits.This is putting individuals at odds with soceity. I mean what
    has a premature baby ever contributed to have so many resources put at its service.

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