5 comments in reply to "The Robots Are Coming! Or Not…"

  1. Dave says:

    Very good post. I’ve never seen anyone address my assertion that the temporary rise in productivity from the late 90s through the 2000s was due to a large-scale move of our manufacturing base to China rather than the increasing use of robots. Jared and Dean elude to this abstractly through the trade deficit, which is correct in my view, but just a bit too abstract to give the full picture.

    What is the difference between robots and cheap, foreign labor? They’re the same from the accounting standpoint. Both increase the accounting measure of domestic productivity. However, one of these adds to the trade deficit and the other doesn’t.

    I think there needs to be a major divergence in how traditional trade practices are measured vs. how the direct trade of labor is measured (globalization), because it will give a clearer picture of the long-term effects of that labor on the macro economy.

    • Perplexed says:

      Well said. This is the point I have been trying to make about the political impacts of the Clayton Act restrictions on “labor.” Essentially it allows a “divide and conquer” strategy as suppliers of labor (workers) don’t see the advantages of acting in concert as a political coalition and throwing those who support these destructive trade policies out of office. As all of the costs of an output gap are born entirely by the politically powerless unemployed, and those employed see only “market weakness” but no real costs to them, they don’t see the impacts of these trade policies as being as destructive as they are and its not an important issue for them. If the costs of an output gap were spread across all suppliers of labor, those suppliers (everyone who works for wages) would be able to pool their risks of being unemployed AND be a political force that would be impossible for elected officials to ignore. Political actors that undermined U.S. workers by supporting these trade policies would be quickly shown the door and the problem would solve itself.

  2. Perplexed says:

    -“Say you were Thomas Jefferson’s chief economist and you’d just somehow seen a report from the year 2013 showing that 1.5 percent of the workforce was in agriculture, as opposed to the 90 percent in your day. You ran to the president with news of this crisis, telling him we’ve got to start preparing for mass unemployment.”

    Ah, the good old days, when there were people around like Jefferson who would have though the notion that the Country was “running out” of “fixed amount” of work to do in zero-sum economy to be quite a preposterous one. The notion that people could “run out” of work to do before all of the work that a society could possibly accomplish would take many years of economic propaganda to be deemed a logical proposition. How far we’ve come since those “primitive” times!

    -“…when he suggested this thought experiment:…”

    I’d like to suggest a different thought experiment for the next time the two of you get together:
    Suppose you considered that when this reduction to 1.5% from 90% of the workforce occurred, that instead of agricultural prices rapidly declining and thereby benefiting all users of agricultural products and increasing all of their disposable incomes to spend on other products, that the “owners” of the patents on the machines were able capture almost all of the productivity gains by optimizing their monopoly profits and very little, if any, of those productivity increases made it through in the form of price reductions to the 87.5% of the workforce to spend on other things. How would that have affected the tracking of those two lines on the graph? How would that have effected the GINI coefficients for wealth and income? How were those that governed the Country through such a dramatic and potentially catastrophic change able to manage it in the favor of “We the People” instead of “We the Plutocrats”? What did they know that we lost sight of? Could it possibly have anything to do with their understanding that capitalism and monopolies were paradoxical? How did we come to “unknow” this? How did economists as a group end up on the wrong side of this argument and end up “digging in their heels” to support such a preposterous notion?

    -“along with a large and destructive increase in financial “innovation” that fueled a housing bubble from which we’re still recovering… And again, exploding synthetic derivatives and a housing glut are not what the technologists have in mind when they analyze how robotics and artificial intelligence are improving the economy.”

    Economists and (politicians that might possibly have any concern over their “place in history”) should really keep in mind that Historians pretty much “live for” uncovering these attempts by contemporaries to “write the history” of their times. The process often takes many years, or many decades, as the biases give way to the historian’s focus on accurately recording what occurred during the time. It will likely come to light at some point in the future that the real problem with the “synthetic derivatives” was that the underlying assets of those derivatives were the product of a massive counterfeit fraud, a fraud that those in the government who had taken an oath to uphold the laws chose to ignore to the benefit of the perpetrators and at a tremendous cost to millions of citizens. It may not matter to them more than the current benefits do, but eventually all will likely get their “rightful place” in history. We know considerably more now about Jefferson than most of his contemporaries did. There’s a pretty good chance that our children, grandchildren or great grandchildren will understand the reality of what actually occurred, regardless of attempts to re-write the history as historians know is always the starting point of their research into what really happened. Too bad that reality never seems to matter to contemporaries, its does happen from time to time, but its pretty rare when it does.

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