Fred Reed asks one of the most important questions of tomorrow’s post-economics society:
The first crucial question of coming decades: Who is going to buy the stuff pouring from robotic factories?
The current notion is that when a yoyo factory automates and lays off most of its workers, they will find other well-paid jobs and continue to buy yoyos. But as well-paid jobs everywhere go automated, where will the money come from to buy yoyos? Today participation in the work force is at all- time lows and we have a large and growing number of young who, unable to find good jobs, live with their parents. They are not buying houses or renting apartments. (They may, given the intellectual level of today’s young, be buying yoyos.)
Enthusiasts of the free market say that I do not understand economics, that there will always be work for people who want to work. But there isn’t. There won’t be. There is less all the time. Again, look at the falling participation in the work force, the growing numbers in part-time badly paid jobs. Short of governmentally imposed minimums, wages are determined by the market, meaning that if a robot works for a dollar an hour, a human will have to work for ninety-five cents an hour to compete , or find a job a robot can’t do–and these get scarcer.
From a businessman’s point of view, robots are superb employees. They don’t strike, demand raises, call in sick, get disgruntled and do a sloppy job, or require benefits. Building factories that are robotic from the gitgo means not having to lay workers off, which is politically easier than firing existing workers. Using robots obviates the Chinese advantage in wages, especially if America can make better robots–good for companies, but not for workers in either country. That is, production may return to the US, but jobs will not. In countries with declining populations, having robots do the work may reduce the attractiveness of importing uncivilizable bomb-chucking morons from the bush world.
A second crucial question: What will we do with people who have nothing to do? This has been a hidden problem for a long time, solved to date by child-labor laws, compulsory attendance in high school, the growth of universities as holding tanks, welfare populations, and vast bureaucracies of people who pretend to be employed. Few of these do anything productive, but are supported and kept off the job market by the rest of us. But there are limits to the capacity of Starbuck’s to soak up college graduates. (The economic fate of America may depend on our consumption of overpriced coffee.)
As time goes on and fewer and fewer people can find work, and particularly the less intelligent, something will have to give. We won’t see it coming. We never see anything coming. Businessmen will observe productivity going up and labor costs going down. What could be wrong with that? Businessmen do not concern themselves with social questions. Methinks, however, that social questions are about to concern themselves with businessmen.
As standards of living decrease, unrest will come.
My father and I first began discussing this back in 1985. I remember it well, as we were driving to his office together after I’d helped him take one of the family cars into the car dealership for servicing.
“I employ over 100 people,” he said. “And how many of them actually do anything? How many of them sit in an office looking at paper? That’s what they do. That’s what I do. But except for a few people like the guy at the dealership who will fix the car, no one is really doing anything.”
And that was at a company that had been named to the Inc 500 for the second straight year.
The Information Society was supposed to replace the Industrial Society, and we all know how well that has worked. Very, very well for some, not so well for most. People didn’t find alternative employment so much as they were provided make-work jobs and kept in school for four to eight more years.
Now the Robotic Society is replacing the Information Society and the ability to disguise both the lack of employment and the lack of need of employment is rapidly vanishing. The fundamental falsity of increasingly outdated economics models are also becoming apparent; no conventional model can survive the near-complete replacement of labor with capital.