Robot World?

Reader Tom R. brought up a most problematic issue recently: what to do about increasing robotization, the next wave of which could well eliminate millions of jobs worldwide. He works in agricultural economics, frequently in the developing world, and wrote of processing plants with hardly any workers and even soon transport systems with virtually no workers, everything being automated.

There are a number of implications to think about. The more things are automated the more jobs will be shed. This will continue the trend toward greater "worker productivity," which actually means more work done per labor hour, in this case because fewer hours will be worked, at least by humans. This process has the obvious benefit of saving on production costs, and so goods might cost less.

But on the other hand it will likely also contribute to a reduction in wages earned. At what point do so many people lose hours or their jobs to robotization that employment figures and disposable income fall in a society as a whole? That could jeopardize an entire economy's standard of living, and I think that is what Tom is referring to.

This trend has been taken into account in Europe, where weekly work hours have been cut to 35 in developed countries and vacation days have multiplied. Germany, France and others made the choice in favor of serving quality of life goals instead of cutting incomes. If the same amount of work can be accomplished with fewer hours, an economy one can either be choose to work fewer hours, pay less per hour or cut jobs in some way. The European solution was to send the efficiency benefit to workers rather than shareholders. In the long run it is probably the best choice for society as a whole too, since broadly falling incomes have to impact the consumer sector sooner or later.

But a further problem will arise when we consider the competitive international effects. It is easy, perhaps, for a group of prosperous European Union member states to decide they will run their industrial sectors at less than full efficiency in the service of labor. The temptation for third world countries to take full advantage of these efficiencies, of course, may prove far harder to resist. With already low wage rates, the establishment of the most modern robotic operations there combined with a similarly automated transportation system to send the goods to first-world customers (ships and or planes without the need of crew, for instance) could completely undercut the European wage and hour regime.

The result could be a wage/hour race to the bottom, with first-world wages being driven down to third world levels or massive unemployment figures appearing in the advanced countries. The inexorable logic of economic competition may indeed harm first-world wages while it raises them in developing countries. Perhaps some agreement on global standards will eventually be reached concerning hours and wages, but I would not expect it any time soon, not while big money stands to be made by producing in low-wage regions.

The first-world's only realistic long range coping strategy is to stay ahead educationally in order to dominate the thinking jobs, yet even that must eventually come to an end. Looking a couple of centuries ahead it is easy to envision a planetary system where essential production requires so little human input that income and hours spent working may become detached terms that have virtually nothing to do with each other for most people.

At that point the service and creative economy will be the real economy and the nuts and bolts of such things as the provision of food, clothing and shelter could well become simply the background scenery of a vastly transformed world civilization.