People do not lose competitiveness with robots: machines will allow people to work less and enjoy life more. Unemployment is not at all a problem if to share the benefits, that will produce machines, equitably, says British Economist, Professor of political economy at the University of Warwick and a member of the British House of Lords Robert Skidelsky, quoted by the “Russian planet” newspaper.
As far back as in 19 century British Economist David Ricardo wrote: If the machine, which rental is 3 pounds an hour, is making as many shirts as the worker who “costs” 5 pounds, then the employer will replace workers with machines and reduce the wages of those who remained, and in the end even they will be redundant. Machines are cheaper than the cheapest labor force, which means they will replace people.
“In fact the workers who are ignored in their industry will move to the less paid work, for example, in the service sector: they become waiters, drivers, nannies, gardeners, says Skidelsky. – People who have lost jobs in one sector of the economy, will find it in the other. The owner of the factory saved money on mechanization of processes, will invest it in the manufacture of new products, and additional demand on them will arise due to low prices of already existing products. According to the Luddites machines would have destroyed jobs, though in reality the machines have destroyed their jobs and created new ones.
Skidelsky gives examples of optimistic and pessimistic view of robotization. An example of optimism is the article of Andrew Macafee and Erik Brunjolfson in the Financial Times about the innovations that were brought by the industrial revolution, such as electricity and the internal combustion engine, created a demand for a different type of labor. Thus there was a need in workers who “use their heads along with their hands and backs, instead of hands and backs”. Entrepreneurs created new industries, which need educated workers. Qualified professionals, in turn, can pretend to higher wages, that is, everyone wins.
This optimism is also shared by the American economist Milton Friedman: he believes that human desires are endless, therefore the opportunities for creating new industries and accordingly jobs are endless as well. Like Friedman, Skidelsky is sure: machines will destroy existing jobs, but in substitution of them new ones will be established, and this will continue again and again.
There is a pessimistic point of view of “rise of machines”. The American economist Larry Summers believes that innovation does not always create more jobs, and there is no guarantee that in the future there will be work for all, especially with a decent salary. These concerns are confirmed by statistics, says Skidelsky: in 2014 47% of jobs in the U.S. have already been under threat of being cut down due to automation.
New technologies displace people primarily from the positions which require monotonous work, for instance, administrators, office workers, low ranked employees of hotels and restaurants, production line workers. “Last year I was in China at the factory, which produces frozen dumplings. About 50 people worked on the production line. According to the manager, two years ago there used to be 2.5 thousand,” says Skidelsky
What will the rest of 2.45 thousand people live on without work? The economist believes that they do not lose in the new situation, if you look at it wider. “50 people produce the same number of frozen dumplings that 2.5 thousand produced before, but they will not be able to eat all these dumplings. And the people whose work was not needed due to the automation, will be able to get the same amount of meat (or their equivalent value), how much they received while working. Machines can do work of humans, but they do not eat dumplings. They don’t need a house, and any clothes. They can work 24 hours a day, they only need a bit of energy – they are very cheap. People will be able to work much less, without losing income,” concludes Skidelsky.
According to him, the main thing is proper distribution of wealth. Now in the West the book by the French economist Thomas Piketty “Capital in the XXI century” is very popular. He writes that now the level of social inequality in the world is higher than it was before the First World War: only a small group of people gains from rising productivity. Whereas moral limitations of our needs have disappeared, complains Skidelsky, and instead of increasing their income, more and more people are getting into debts. Hence, we need to think about the redistribution of wealth and the limitation of our needs, concludes the economist.
For example, countries possessing natural resources can distribute the income from mining among all their citizens, and then the “oil curse” may become “oil blessing,” said Skidelsky. He believes that if people use robots, distribute production revenue fairly and reasonably limit needs, then the ancient dream of mankind can become a reality: “Less work, more leisure, fewer ads, fewer gadgets and more attention to the things that make life really worth living. It is a utopia, but it can happen.”