Who gets paid for all the robots?

This is the fifth installment of a series of posts on lessons we progressives should take on the election. The overview is here.

As I mentioned in the original post, though there were many factors that led to the Democrats not retaining the White House in 2017, one major factor was losing the Rust Belt. The Democrats have not found a solution to the problem of union manufacturing jobs disappearing, and candidate Trump flipped the Republican script and went anti-free trade.  Somebody was listening to the working class, and it wasn’t the Democrats, and that was possibly the deciding factor.  Ignoring this constituency and trying to placate blue-collar factory workers with training grants was insulting, most importantly because it simply doesn’t work.  They believe that NAFTA and free trade let foreigners steal their jobs.

Of course, the jobs didn’t go to Mexico or China, and it wasn’t free trade that created the problems. Protectionism might create a small uptick in manufacturing jobs for a short period, but it will cost more across the economy.

What created the problem is all these dang robots.  With such luminaries as Stephen Hawking and Elon Musk  (and many others) calling for a Universal Basic Income to deal with the existential threat to capitalism caused by robots taking low-end jobs, and President Obama correctly attributing this problem to the robots, we should take note.

To be clear, virtually every job is at risk, to some degree.  Self-driving vehicles call into question taxi and Uber drivers, UPS and FedEx drivers, big-rig drivers, you name it.  Robots with scanners can pick apples at the perfect time. We hardly need realtors and other direct sales people anymore.  But it doesn’t stop there.  Prognosticators of all types are being supplanted by complex algorithms, from Wall Street to diagnostic physicians.  Teachers and professors are much less necessary in the world of Khan Academic and Open Courseware.

And portions of most jobs are at risk. Maybe not all your responsibilities can be removed.  Maybe it’s just 5-10%, but that turns into 5-10% of the jobs going away.

And they aren’t coming back.  They really aren’t.  Some other jobs may, like human-computer interaction jobs, or supervisor jobs, or that sort of thing.  But more work is being replaced by computers than is being created, and that trend hardly seems likely to change without a drastic revamping of our economy. (Yes, I know there were drastic economic shifts in the past, such as the Industrial Revolution, and that many technologies have disrupted many industries. But, IMHO, this is a difference in kind, and it will be absolutely disruptive to our current economic structures.)

There are two fundamental, related questions: Who gets paid for the robots, and how do we transition to a new economy?

Right now, those that have the capital to create or purchase the robots make the vast majority of the money because they are “responsible” for the increasing amount of productivity from those robots.  This creates a widening gap between the haves and have-nots, and there is no reason to imagine it will stop.  If we continue for much longer without changes, we will have a large portion of unemployed lower socioeconomic voters and a small group with more and more of the money and the capital. The American dream’s notion of a good work ethic leading to stability and plenty is already a half-step away from reality.

I don’t know what the answer is. Maybe those guys are right and we need a Basic Income. Maybe we need a robot tax. Maybe we need to put together a Manhattan Project devoted to capitalizing on the growing amount of human resources that will be increasingly available. Maybe the computers will come up with something for us humans to do.

I do know this:  If Democrats keep ignoring this problem, they deserve to lose.  This is especially true when all the current occupant has to offer are ideas that go against his own base and are economic non-starters.

Thoughts?