Dr Doom's doom-loop
Nouriel Roubini tells us that one of the big problems hurtling down the pike at us is that the robots are going to steal all the jobs. This is not, in fact, a problem:
Continuing on this path, though, is also bad. Crikey, Eeyore. His chapter on AI is rather by-the-numbers, but it does the job. His first point — that the machines are coming for your jobs, and being educated and middle class is no escape — seems undeniable. His second point is that this “may cause capitalism to eventually self-destruct”. Although not in a good way, if you’re into that sort of thing. He cites a perhaps apocryphal exchange between Henry Ford and the union boss Walter Reuther. “Ford asked Reuther how robots will pay union dues,” he writes. “Reuther replied, how will Ford get them to buy his cars?”
In other words, AI and automation turn capitalism into a vampire parody of itself, preventing the majority from being rich enough even to make the rich richer. The only plausible solutions involve massive amounts of taxation at the top, but that will be a fight. And even then, we will have to figure out how to keep the vast bulk of humanity doing nothing worthwhile, for ever, without going mad or getting depressed. “If we squabble long enough,” he writes, “computers may get to decide how to divide the economic pie. By then, let’s hope they have empathy.”
There is that William Nordhaus paper doing the actual maths here which shows that if this does happen then real wages rise by 200% a year. Not, we think, a grand problem.
It’s also possible to approach this in a more classical manner. Using, say, Adam Smith and Karl Marx - both considered classical economists. From Smith we gain the insight that the purpose of all production is consumption. Or, to consider that, it’s consumption that is the aim, production merely the means of gaining it.
OK, so the robots make everything. They take all the jobs. So what?
We out here, we non-capitalists who don’t own the robots, what about us? Well, either we gain access to the production of the robots - we get to consume it - or we don’t. If we don’t then we still have to produce all of the things that we non-capitalists do get to consume. Because we’re not gaining access to the robot production and therefore can’t consume, therefore we must produce in order to consume. Nothing has changed that is. Or, the alternative, we do get to consume that robot output. In which case what’s the problem? Production happens, consumption does, there’s no problem, is there?
That is, if the robots don’t take all the jobs then the world is as it is right now, if they do take all the jobs - all of them - then it’s not a problem. So, it’s not a problem, is it?
We can add Marx into this mix. His actual prediction - no, not what generations of acolytes and groupuscules have misunderstood - is that true communism will be possible once capitalism has become so productively efficient that it has abolished economic scarcity. That is, when the machines are making everything without having to worry about human labour, that’s what allows us to be a farmer, hunter and philosopher all in the same day. Because it doesn’t actually matter how we spend our time nor the efficiency with which we do so because everything we desire is being made by said machines.
That true communism being dependent upon the robots coming to take all our jobs.
By the way, the reason that Marx and Smith agree here is that the economics that Marx got right he lifted from Smith - another proof that all of economics is either footnotes to Smith or wrong.
If the robots solve economic scarcity then none of us need jobs. If the robots don’t solve economic scarcity then we’ve all still got jobs. There is no problem here.