February 02, 2017

When will the competitiveness of your robots be more important to your real economy than that of your human workers?

Sir, if worker productivity had remained as 1950 levels, how many humans workers would have been needed in the world to deliver the 2016 manufacturing production, compared to those 43m who, according to Martin Wolf, were worldwide employed in 1950? I have no idea but definitely many times more than those 145m Wolf indicates as currently employed in 2016. “Tough talk on trade will not bring jobs back” February 1.

Set in this perspective “The main explanation for the longterm decline in the share of manufacturing employment in the US (and other high-income economies)” is not so much what Wolf states “the rise in employment elsewhere”, but the increased productivity of which Wolf also writes.

So, what do we want, the higher productivity that generates “sustained improvement in living standards”, or some lower productivity that could generate more jobs for humans?

Wolf, like most of us, perhaps with exception of those who might still dream of some 60s’ hippie-solutions, rightly prefers the first; and therefore his concern with that in the “US manufacturing employment rose a little… as a result… of productivity’s recent stagnation: in manufacturing, output per hour rose only 1 per cent between the first quarters of 2012 and 2016.”

The crudest implication of this is: do we need humans more capable to work or better robots? That question naturally leads to: will the competitiveness of the robots they possess, define the strength of future human groupings?

Sir, for me these are much more fundamental questions than that of: how can we save jobs for [our] manufacturer workers from being taken away by [their] workers?

In 2012 I wrote an Op-Ed titled “We need decent and worthy unemployments”. Perhaps within the application of a Universal Basic Income scheme, lies part of the solution to the enormous societal challenges automation causes.

But, no matter what we do, let us get rid of those dangerous distortions of the allocation of bank credit, because, whatever the future needs, how on earth are you suppose to give it to the future, if one is not willing for banks to take risks. Again, as a minimum minimorum, we must save ourselves from regulators so dumb they assign a 20% risk weight to that so dangerous to the bank system as the AAA rated, while hitting the innocuous below BB- rated, with a 150% risk weight.

Sir, I want my grandchildren to be able to develop themselves the most they can, as humans. That will require them being surrounded by content and happily unemployed humans, as well as possessing savagely efficient (and obedient) robots.

PS. The absence of statistical information on how much robots and other automation have substituted for human salaries and jobs, is baffling, especially in these data days. No wonder we might be in sore need of some artificial intelligence assistance, like from for instance IBM’s Watson.