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Enslaving Our Robot Overlords

The FT's Martin Wolf might want to watch a robot doesn't steal his column...
IT CAN BE so much fun to point out others' faults...and give them helpful advice, writes Bill Bonner in his Diary of a Rogue Economist.
Imagine you are in a restaurant. You see a fat man ordering a chocolate fondant dessert. Go over and offer to eat it for him.
Or imagine you are in church. You have heard that Mr. Montaigne is fooling around with Mrs. Mordant. It is practically your civic duty to say something to them both. Or imagine that your wife has gotten distracted and has burned the broccoli. Surely, it will do her good to remind her to pay attention when she is cooking you dinner.
On a personal level, this sort of helpful comment is not always appreciated. On a public level, it's much easier.
Remember from last week David Brooks was concerned that people were not moving house often enough. He had a solution too: Give them moving vouchers.
Brooks' colleague at the New York Times Tom Friedman is a great source for this kind of helpful thinking, too. In one of his editorials for the newspaper he determined that people weren't driving enough electric vehicles.
Solution? Give them free parking!
In another classic, he suggested setting up a " National Commission on Doing Things Right". We don't recall what particular things he thought the nation was doing wrong at the time, but we are sure that had the Bush administration taken his advice more seriously, the mistakes would have been corrected years ago.
And now, in the Financial Times, Martin Wolf calls attention to the failure of working class people everywhere: They can't compete with robots, he says.
"Enslave the robots and free the poor," he proposes.
What's Wolf got against robots?
He must see them as mechanical scabs. They don't go on strike. They don't talk back to you. They make fewer mistakes. They don't get drunk on the job. They work holidays. And they can be programmed to be polite as well as competent.
Hey, any robot who wants our job can have it. No need to enslave the poor thing. Just let him compete for it fairly. We will gladly yield to any machine that can do it better. It would be nice if one would take Wolf's job, too.
But where we see an opportunity, Wolf sees a problem. Forty-seven percent of jobs are threatened by automation, he says. Then what will happen to the wages?
You have to look no further than slavery to find out. Slaves – human or robotic – are a form of capital. After the cost of maintenance, the profits from their work go to their owners.
Wolf does not mention it, but the robots should say a prayer to central bankers. By reducing interest rates, they also reduce the cost of capital.
At zero rate of interest, for example, the real cost of a robot is zero. And if that robot can replace an average, marginally competent employee with a bad attitude, the employer makes a profit of $42,000 (or whatever he would have paid the human)...not counting health insurance and the parking place.
The lower the cost of capital, the more robots take their place in the labor force...and the more labor costs drop.
And now, instead of slaving all day in a noisy factory, the former assembly-line worker could be at the library, studying ancient Aramaic or perfecting a non-polluting air-burning motor in his basement.
But wait. Wolf reckons there could be:
"...a large adjustment shock as workers are laid off; the market wages of unskilled people might fall far below a socially acceptable minimum; and combined with other new technologies, robots might make the distribution of income far more unequal than it is already."
The specter of unequal incomes is so alarming Wolf doesn't wait for the robot invasion. He wants us to be ready for them. He gives us five things that we should do...or at least think about.
First, we need to "shape" the good new robots...and manage the bad ones, whatever that means.
Second, education is "not a magic wand." We never thought it was. And in any case, you can probably teach a robot faster and cheaper than you can teach a 10-year-old.
Third, we have to "let people enjoy themselves busily." Again, we have no idea what he is talking about. People don't need Wolf's permission to enjoy themselves, busily or lazily.
Fourth (uh oh) "we will need to redistribute income and wealth." Now Wolf comes to the point: He wants to control where the money goes. Maybe "the state [should] obtain an automatic share of the profits from the intellectual property it protects," he says.
Fifth, let's not forget the need to "ensure that demand expands in tandem with the rise in potential output."
Remember all that stuff you learned about how an economy works? About how supply and demand regulate themselves? When supplies are short...prices rise...and producers get busy. When prices fall, producers slack off.
Well, forget it. Wolf thinks supply and demand should be controlled. So they both go up at the same pace.
Perhaps a future column will explain how that will work.

New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

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