Here’s a letter to the Washington Post:
Robert Samuelson wisely counsels against fear of robots (“Why robots won’t steal all our jobs,” July 12). But he stumbles a bit when he writes that this fear would be justified if the cost-savings made possible by robots “were saved and not spent.”
Even if all firms that adopt robotic techniques toss all of the extra monetary profits they earn into incinerators, economic growth will still occur and increased unemployment will still be avoided (at least as long as the price system continues to operate with reasonable freedom). The reason is that these innovations release real resources, including labor, to be used in other productive activities – activities that become profitable only because of this increased availability of resources. Entrepreneurs, ever intent on seizing profitable opportunities, hire and buy these newly available resources to expand existing businesses and to create new ones. Think of all the new industries made possible when motorized tractors, chemical fertilizers and insecticides, improved food-packaging, and other labor-saving innovations released all but a tiny fraction of the workforce from agriculture.
Labor-saving techniques promote economic growth not so much because they increase monetary profits that are then spent but, instead, because they release real resources that are then used to create and expand productive activities that would otherwise be too costly.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
And again I ask: If human-like robots are sure to create a permanent rise in unemployment, why haven’t those most human-like of substitutes for current human workers – namely, other humans (whose numbers have skyrocketed over the past two centuries) – created a permanent rise in unemployment?
