A Jobless Future?

Ezra Klein worries about the perils of robotics to the labor market:

Soon enough, according to Bill Gates, we’ll all have personal robots. The precise implications of a transition to an economy largely run by hyperpowered, anthropomorphic machines is, obviously, unclear. It’s pretty safe to assume you’ll see a lot of occupational displacement, and at a point, you’ll see more than can be effectively made up. Was Marx right, but we had to wait for robots? Maybe. Workers of the world unite, you have nothing to lose but your usefulness!

This gets economics completely backwards. The purpose of an economy is to produce wealth, not jobs. Jobs are the unpleasant tasks we have to perform to get the wealth. If we can get wealth without jobs, that’s an unambiguous improvement. Only decades of demagoguery about “creating jobs” makes it possible for people to get that so backwards.

The more wealth there is in the world, the easier it will be for you to get some of it. Robots would only accelerate the accumulation of wealth, thereby increasing the amount of money a worker is likely to be able to get for a given unit of his labor. True, his wages might shrink relative to the overall economy, but he’ll only get more productive as technology improves, so in absolute terms his wages will only go up.

But what if the robots are better than the people at absolutely everything? Here, we have to bring in the concept of comparative advantage. Even if robots are better in absolute terms at everything, humans will always have a comparative advantage at something. The classic example here is a lawyer and his secretary. The lawyer might be better than the secretary at absolutely everything. Yet the secretary is still useful, because the lawyer might be 100 times as good as the secretary at practicing law, but only twice as good at making photocopies. Therefore, it still makes sense to hire the secretary to make photocopies so the lawyer can devote his energies to practicing law.

SHARE: 4 comments