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The number of robots is increasing 5 times faster than humans

  • Everything is falling into place for robots' coming of age:

  • Technology: Big data and machine learning have armed robots with the ability to solve complex problems in real time. Sophisticated sensors are allowing robots to work safely alongside humans. Economies of scale are making robots affordable for even small businesses, and soon for the home.

  • Protectionism: Trade tensions are pressuring companies vulnerable to disruption in the global supply chain to keep production at home and to use automation to stay competitive.

  • COVID: Social distancing rules have boosted the demand for robots to deliver contact free services ranging from hospitals to restaurants.

  • Robots are getting smarter and cheaper. Moreover, they don’t go on vacation, seldom get sick, and don't go on strike. My guess is that the age of robots will preserve two features of the age of globalization that it will replace: low inflation but high income inequality.

  • We shouldn’t - and can't - stop progress, but what can we do is to ensure an orderly transition that gives people mostly likely to be affected some time to adjust. Researchers at MIT and Boston University have some sensible suggestions. They find that in the US, heavy taxation of labor and conversely, low taxes on capital encourage firms to automate more tasks and use less labor than is socially optimal. They recommend lowering labor tax and introducing an automation tax.

  • There are practical issues with implementing these ideas but they are a good starting point for a serious national debate.

  • While we figure out how best to maximize the economic benefits of automation while minimizing its social costs, we need to recognize that some policies will do more harm than good. For example, raising the minimum wage or expanding unemployment insurance benefits will raise labor costs and accelerate the displacement of human beings by robots in the work place. We should be careful to not inadvertently hurt those who will be most in the need of help.

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