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December 17, 2016


Professor Sheila Kennedy in her blog today discusses the changes wrought by automation and more changes to come and wonders where we are headed as a society when human labor has been largely displaced by robotics and other forms of automation, asking for commentary. As my followers know, I have blogged on this situation sure to arise on several occasions, but I cranked out one more thumbnail look at this developing socioeconomic situation again today where human labor is not matched to production of goods and services either nationally or internationally along with speculation of how we are going to handle such a resulting mismatch. My response, slightly edited, follows.

I have blogged on the issue(s) Sheila has raised today more than once in the past but not with an emphasis on the inevitable change in mode of production. Rather I raised the question of just how we are going to distribute the income from automated production to humans who have no jobs because there aren’t any, of the question of how to take another look at the Protestant ethic of “no work, no eat” view of human worth and ancillary issues, all of which when combined pose an enormous socioeconomic problem and which no one (to my knowledge) has offered a plan for distribution of the economy’s income that works for all of us.

Thus if most nearly all humans are unemployed and have no wherewithal, what does that do to aggregate demand in the marketplace? Are the owners of robotic production entitled to keep all profits (if any, considering the cratering of demand) to themselves or must they share such profits not out of the goodness of their capitalistic hearts but as a means of stoking demand and keeping a restless and worried and idle society  together and out of the streets?  In short, how do we fairly distribute the income and wealth of an automated economy with the humans who are doing nothing to produce such income and wealth?

I wrote earlier that if there are those who think welfare is bad these days, just wait for the day when we either have massive “welfare” or a massive dying off of the population due to malnutrition, disease, and probably rioting and civil commotion as desperate humans scramble for food and other resources necessary for survival. I also wrote that the problem would be international in scope, citing the early reminder of such a spread of automated production of goods and services from an article I read where a Chinese industrialist has already said that he was automating a factory in China due to the “high costs of labor” – and that’s in a supposedly low labor cost venue.

I would expect such moves to be the norm elsewhere in our globalized economy as we move along (which would end the “cheap labor” advantage in trade treaties and the old law of comparative advantage as well as many other old and cherished classical economic laws and long-held views), and finally, I wrote earlier that the problem of matching human labor with production of goods and services in this new world of automated production will be exacerbated by the increase in the human population itself (which would add to the non-productive pool of unemployed humans).

Our politicians should be working on how to handle the upcoming crisis I have described above (and which we know is coming) rather than continually brawling about petty matters such as trade (which will soon be a moot issue absent the cheap labor component), bringing jobs back from overseas (when most of our jobs did not go overseas but evaporated with automation) and other issues soon to be non-issues that will have no place in tomorrow’s world.

So what’s the answer? I, Gerald E. Stinson, the know-it-all, don’t have a clue, but someone somewhere may have, perhaps a denizen of a think tank that can at least temporarily come off its propaganda bent and work on the most pressing issue of our time, i.e., how to fashion an economy that works for all in the new era above described.      GERALD       E




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