[samgheb]

I read both free market economists and I also try to keep up with thinking in socio-biology. The problem is that both sides don’t read the other so at times I’m left wondering what the right answer. I remember reading in Charles Murray’s Bell Curve and he explains that the pattern in the 20th century has been that IQ is more and more related to high income and that this trend will continue. Among some in the socio-biology they tend towards the fallacy of automation but they also argue that low IQ people will be the ones left out of the job market.

I quote here one of these blogs:

“The standard response of conservative-libertarian economist types when they hear warnings about robots putting people out of work is that technology has never put people out of work in the past, people always find new jobs to do.

Their problem is that they deny the truth of HBD*. They think that everyone can become an economics professor or do other high-level creative and self-actualizing work. They don’t understand that intelligence is genetic and that most people are not born with genes that would enable them to become an economics professor.

The coming robot revolution will make the labor of people below a certain IQ totally worthless. This is an event never before experienced by humanity.”
http://lionoftheblogosphere.wordpress.com/2014/02/06/robots-and-hbd-denialism/

I think he is correct that economists assume equal ability but does this mean the free market won’t produce jobs for those in the bottom left of the bell curve?

*HBD=Human Bio Diversity

[jmherbener]

I don’t think there is a consensus assumption among economists about the old nurture-nature debate. And the issue of whether or not robot production could create mass unemployment does not depend on which side you take in that debate. To get that conclusion, one must make dubious assumptions about the specificity of labor and the creativity of the human mind.

First, labor is relatively non-specific, Compared to capital goods and natural resources, labor does not lose much of its productivity if shifted into tasks from areas in which it is better suited. Of course, an assembly-line worker put out of a job by further capitalization of an auto factory won’t shift into academia as an economics professor. But there are many other tasks into which his labor can be shifted.

Moreover, if demand for their use in one line of production declines, workers can still be “employed” even without shifting into a different line of production as long as their prices are free to decline. This process even occurs for capital goods, which are relatively more specific than labor. Once demand for a capital good declines and its price falls, then investors will not invest to reproduce it. In similar fashion, if labor is in a shrinking line of production, it can still be employed in the same line as long as its wage is free to decline. The number of employable persons depends on wages. And, then, overtime people would shift their training away from areas being taken over by robots and into others areas.

Second, as long as robot production does not eliminate scarcity, everyone who wants to work can find employment in the market economy at some wage. Entrepreneurs will discover new tasks for human labor over time. Smarter persons create job opportunities for duller persons. It is precisely the incentive of the monetary profit to be earned by creating new productive activities for others that directs entrepreneurial effort into such endeavors.

Moreover, even if nominal wages are low in these newly-created employment areas, real wages are rising all around in society because of robot production.

Finally, if robot production eliminates scarcity altogether, then no one needs to work. Everyone could spend 24-hours a day in leisure activities and still have all their consumptive ends met.

[miljacic]

Samgheb, I’d think that a question here (besides all that prof. Herbener already wrote more abstractly) is – can robots replace all human interactions? Would you marry a robot? Would robot’s smile move you the same way as human’s? Can you have a robot for a friend? Can robot perform a song or entertain you like a human can? Can you talk to a robot and feel better afterwards like you can with a person, even a stranger?

For example, it is known among street musicians that the more a performance touches the performer himself, the more performer enjoys his own playing, the more money he gets from passers-by, on a daily basis. People here respond to something decisively non-robotic.

If robots can not replace all human-to-human interactions, there will be an economy and a market on what remains unfulfilled by robots. This includes all IQ levels, high, average and low, since people do not interact only within +-1 IQ point around themselves. Think of a simple old lady selling flowers on a town square… she does not need high IQ yet her charm cannot be replaced by a robot.

The robots would, in theory, simply replace the tasks where human-to-human interaction is not necessary, and free people from having to waste time on them, and concentrate on tasks where human interaction is irreplaceable, and so more money will pour into such tasks.

But before all this, who will direct the robots to what tasks?? If people suddenly change their minds as to what they need/want, all the robots automatically become a bunch of scrap metal. One cannot say that only a very few smart people will be needed to operate all the robots since this again amounts to centrally planned economy and big time Socialism… and from here on it’s all Mises and the boys.

But before even all this, what about the fundamental issue of change? Life is way beyond human control (and desire) in constant change, and “economy” also means constant responding to unexpected change. When there is no change, robots can take over a lot. When change happens, people are again called to notice the change, react to it, and eventually teach the robots. In doing so, people need people since each person of whatever IQ is useful in noticing and informing others and reacting to change. But when are these unexpected changes actually happening? All the time on all the levels, in general. So people of all IQs are very beneficial all the time.

Robots will always and always be just the means people use to interact better among themselves. They are not fundamentally different from shovels.

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