Robots Won't Kill Capitalism, They'll Rev It Up

RCM ^ | 10/26/2017 | Allan Golombek

[SeekAndFind]

Yanis Varoufakis resigned as finance minister of Greece after only six months on the job, following what he described as his own “complete failure” to negotiate a resolution of his country’s debts. A little over two years later, he has restored sufficient confidence in his views to predict the end of capitalism.

Varoufakis told an audience at University College London a few days ago that large technology corporations and artificial intelligence will cause capitalism to undermine itself, with technology eliminating more jobs than it creates. As an example, he cited Google, the search engine giant that after less than 20 years in business employs over 60,000 people, up more than 10 percent from 2015.

The growth of Google’s workforce seems to undermine the notion that technology is actually eliminating more jobs than it creates. What we are seeing is not so much job reduction as job churn. As new technologies eliminate jobs, they create opportunities for new ones to be created. When automation eliminates jobs, it brings down costs and thus prices. By increasing the real wages of consumers, it frees up cash to be spent on other goods and services – creating new jobs, often in new industries. Rather than go idle, labor is employed to provide goods and services consumers never had access to before.

New technologies often create entire new categories of jobs. Without computers, there would be no computer programmers. For that matter, without modern plumbing, there would be no plumbers. Has this process of job churn ground to a halt? It certainly doesn’t seem so. A Deloitte study found that new technologies eliminated 800,000 low-skilled jobs in the United Kingdom. But they also led to the creation of 3.5 million new jobs – jobs that paid on average nearly $13,000 more per year

[marron]

Its called “automation”.

Freeing up people doesn’t put them out of work, if its a free economy. More people thinking up more ideas means a more vibrant economy. The key elements are freedom and entrepreneurs.

[samtheman]

Why shouldn’t we take the word of a Greek communist bureaucratic slug when he tells us why capitalism must fail?

[lee martell]

Varofakis seems to contradict himself in the second paragraph. Will the result be more or less jobs available?
I’m seeing lots of job loses in the retail sector.
Not seeing much to replace these jobs just yet. Not at the same standard of living.
I’m glad I only have about 25 years left to worry about such things.

[Mr. K]

Imagine 4 day work weeks

Being able to do things every single weekend to relax, start a new business, build additions on your house, etc etc etc

Robotics will provide many jobs building robots, and make manufacturing and farming so cheap you can live like a king on minimum wage.

[ctdonath2]

Fears of massive job loss have been heralded since the start of the Industrial Revolution.
Instead, we have far more leisure and incredibly cheap access to basic & luxury goods. 40 hour work weeks are the norm, in remarkably clean & safe environments. Our poor are _fat_. Vast homes filled with any manner of goods are the norm.
Replace most current jobs with robots? new jobs will open, new opportunities arise, new goods & services become the norm, and the cost of living will plummet.

[BeauBo]

Robots replace labor with capital. You buy a robot with capital investment instead of paying an employee.

This is the same essential tradeoff that powered the industrial revolution. It will just extend further into many more types of tasks.

The industrial revolution raised the human standard of living dramatically across the board. People will have more, better, faster and cheaper.

[dp0622]

GREAT post.

I was told 23 years ago by some bitter guy who was about 50, now my age, to forget going to school to learn microsoft suite and typing.

I was attending a 3 month intensive course from 4k grant by the govt, and i was driving a cab at the time. The other guy was a cabbie too.

He said “dont bother. You can talk into computers now so they dont need typists and soon computers will do all the work on their own”

3 months later i got a job in an office. 6 months later i was sent as a temp to a graphics dept by accident, but they liked me and trained me :)

Investment bank graphics depts treated me very well in many ways.

The guy was a lazy, depressed slovenly bum.

There’s ALWAYS an excuse to give up. This was his. He was previously a programmer.

BTW, only FOUR people on staten island showed up to sign up for the 4k in courses!!!

I’d guess the govt made several hundreds of thousands in taxes off of me with that 4k investment. As compared to a 120k social studies college degree :)

[BfloGuy]

I’m seeing lots of job loses in the retail sector. Not seeing much to replace these jobs just yet. Not at the same standard of living.

There's some evidence that job losses in retail stores due to online shopping are already being matched by gains in distribution centers. Now, it's true that the gains won't all be in the same towns where the stores have closed, so there will be hardship.

But as long as government regulations and tax policy don't discourage hiring, history would tell us that automation will be a net plus. It frees up capital that results in new production.