The short- and long-term substitution and complementarity of tools and human labor and the extent which smart tools/robots/artificial intelligence will constitute a new regime are fascinating topics. In short there’s a hopeful view that says humans will be made vastly richer by AI, humans will find not-yet-imagined and more fulfilling jobs or other activities, and (crucially but usually unstated) our systems of coordination (state, market, etc.) will at least muddle through to glorious futures, and there’s a fearful view that says humans will become superfluous and (barely more articulated than for the hopeful view) our systems of coordination will fail or be perverted, leading to various disasters and dystopias.
Following is a recording of a staged version of this discussion that has occurred many times in recent years and will occur many, many times more over the next years from various perspectives (in this case, two pro-market economists):
I’m posting this video due to two brief mentions of intellectual property, both by Tyler Cowen (taking the fearful view), stating owners of IP are getting very rich. Cowen could have expanded on this point but didn’t, perhaps because Cowen takes the hopeful view regarding the distribution of benefits from innovation. Alex Tabarrok (taking the hopeful view) could have taken up the point constructively by noting that IP reform is needed (Tabarrok seems to be a mild reformer) to ensure good outcomes, but didn’t, perhaps because the hopeful view on AI just ignores social systems.
In theory, as robots replace humans the price of robot-produced goods should drop in a way that on net compensates for the loss of jobs. Otherwise, robots would not, on net, be more profitable to operate than humans. That’s the theory in a perfect market where there are no artificial monopolies. Of course if the ownership of the robots is limited by patent to a small number of people, those people will reap the majority of the net gains, and inequality will rise.
Imagine this thought experiment: Suppose there was an ultimate machine that produced all the goods and services needed by the whole of humanity in one hour of labor a day by one person. The person that owned the machine would have a kind of God-King status, and would perhaps have one employee who was extremely well compensated (the machine operator). Everyone else would end up becoming servants and entertainers for the God-King and the machine operator. Now, on the pittance made by juggling for their entertainment, they would make more than enough to purchase all of the necessities of life at the vastly reduced price enabled by the machine, so everyone would be better off in absolute terms. But it would be much more unequal. It would be a society with extreme differences in status between the top and the bottom of the social hierarchy.
Now imagine that one day the patent on the machine expires. Suddenly (presuming that there are enough people left capable of doing so) a thousand other companies start producing ultimate machines, and in a couple of years everyone has their own personal ultimate machine in their kitchen or basement. No more social hierarchy, or much less of one.
The point of this exercise is that there’s a dramatic difference between a society where a small group of people own all the robot technology, which is enabled by patent law, and one where robot technology is radically decentralized.
It’s easy to dismiss an extreme thought experiment (and several replies do), but Meade at least focuses on the crucial (as opposed to merely fascinating) topic.
Whether we are now living in a dystopia or glorious world resulting from the argricultural and industrial transitions is also a fascinating topic. I think it’s debated far too little, even in policy-focused discussions. But policy debate rightly focuses mostly on parameters that can be changed, however otherwise degenerate most debate is. There may have been no open parameters for the agricultural transition (it happened very slowly, pre-science and many other tools). The industrial transition had some seemingly open parameters (how government and economy were controlled) which still constitute the fundamentals of policy debate and were and still often are “settled” in massively negative sum fashion. It seems to me that to obtain a good future, policy discourse needs to devote massively more attention to a (not entirely new of course!) an incredibly salient and changeable open parameter that has the potential for increasing each of freedom, equality, and security – treating knowledge as a commons rather than as property.