Andrew Yang: The robots are coming – to take your jobs and destroy the economy
By David Richman
Recently Andrew Yang has joined the now bustling Democratic Primaries, and he has a number of interesting ideas about the economy. Especially robots. Fearmongering about robots taking over the world has been rampant ever since 1984, with the release of The Terminator. They're coming to take our jobs! Our livelihoods! And worst of all, these lost jobs are going to destroy our economy throwing the population into poverty while corporations get rich off of their new Artificially Intelligent friends. Yet, can this all be true? Are robots really bad for the economy? No, in fact, I would argue they are beneficial for society as a whole, especially in an economic sense.
Take self-driving trucks, for example, a policy my friend Andrew is specifically concerned with. His motives may be diverse, but he does make a few solid points here. Self-driving trucks, which are becoming a reality, as with robotics in general, dramatically increase efficiency. A trucker who owns a self-driving truck could, in theory, work 24/7. He could take over whenever conditions are particularly taxing, whether that be the weather, parking in the dock, or heavy traffic, but when it is a quiet, say late at night on I-80 toward Chicago, the driver could tuck in. All the while the truck is continually moving. Andrew estimates this will number to be around $168 billion dollars in efficiency gains, which he plans to tax, while simultaneously subsidizing the truckers hurt by the innovation. Here is where I disagree, with Andrew. Taxing innovation, and subsidizing stagnation is just bad economics, it is unlikely to encourage advancement in either the trucking industry or the economy.
Let me propose a counter argument, what if instead of ruining the economy, what if we jump all the old school drivers over, by subsidizing the self-driving trucks. This will encourage the purchase of self-driving trucks by inevitably lowering the price. A lower price will, in turn, increase the rate of innovation and evolution in the trucking industry because more people want to buy cheaper trucks, all the while and decreasing the amount of time and the number of people who will be laid off. Everyone, except taxpayers, benefits. Indeed you need some money to help this move, I know it may hurt your prestige but tax those who don’t switch over. Yes, taxing is the other option, you know, but tax is the thing you want to decrease, not the thing you want to increase. That is just good economics. Though perhaps, in my friend's defense, the best economics is not always the best politics. You don’t need to subsidize, or tax anyone, but please, do me a favor, don’t get in the way of innovation. Can you do that for me, Andrew?
Andrew Yang plays some other strong robotic ideas. Not solely trucks, but through playing with trucks, we see in the future of every industry adopting their AI friends does not doom our economy, but increases productivity. With the increase in productivity, comes an increase in economic growth.
This is all great, but what about all those unfortunate souls who must inevitably lose their jobs to robots. Andrew has a few things to say on this issue, “The focus of our economy should be to maximize human welfare.” Okay, that is pretty clear, though simultaneously normative. He is for humans, against robot corporations, which are apparently sucking “trillions” of dollars out of the American pocket. The only problem is this, robots increase the standard of living. If all prices drop (due to technological development, increasing supply) the buying power of every American’s dollar increases. If you can buy more stuff, your standard of living, in general, increases. Take clothing, for example. Back in the time of the Bible, every stitch had to be stitched with a bone needle, every cloth had to be woven by hand, every string had to be spun (without a wheel mind you), from wool shorn from sheep with a knife. All of this human labor made clothing incredibly expensive, incredibly valuable. The soldiers throwing lots for the cloths of Jesus was significant because of the value of a piece of clothing. Yes, indeed cloaks are mentioned multiple times as a person's most, and occasionally only, precious possession. However as you might have noticed, people aren't throwing lots for clothing anymore. This is because the production process began to evolve: the next step was cloth being made with looms, which then were powered by watermills (the power loom), then sewing machines came along, and more advanced looms. Up until the present, we when we are literally fabricating fibers. In the first century, your cloak was your most valuable personal possession, today we Americans have many shirts in our drawers. Back then (adjusted for inflation and demand) a shirt would perhaps cost many days of labour, today you can walk into Walmart and buy a T-shirt for $5. Industrialization, innovation, has lowered the price of a shirt more than a thousand fold.
It is awe-inspiring how far we have come, but why stop there? A successful capitalist society naturally increases the standard of living. Naturally encouraging advancement. Look, people are going to lose jobs, and sure I feel sorry for them. Losing a job is a significant emotional event, but it is inevitable; progress must go on. Furthermore, as I would like to underline, robots making all jobs more efficient at a lower cost, at least in theory, will make all prices drop! So perhaps you don’t have that job anymore, but now you could actually make a living as an artist.* Regardless of the actual future, please, Andrew, do me a favor, don’t tax innovation!
*Yes I know you already can, it just isn’t very easy.
This is David Richman’s first contribution to Enter Stage Right © 2019 David Richman