So requests one MR reader. Will he settle for the economics of robots?
Start with Robin Hanson’s paper. Robin argues that robots will become close substitutes for unskilled human labor. That requires the wage rate to fall to the cost of robot production. Capitalists become extremely wealthy but laborers might die off or at least go hungry. Someday a robot might be as cheap as a laptop is today.
But will this happen? Since the Industrial Revolution, there have been numerous predictions of falling real wages due to the advent of machines. But across any thirty-year time horizon (some would say fifteen-year, but not I) real wages have risen and in the long run they have skyrocketed. The marginal return to capital has not gone up much if at all.
Even if we have really, really good robots (I still think Deckard was a replicant), they won’t substitute for all forms of unskilled labor. Maybe they can drive a car, but will they fluff your pillow? The remaining poor will fill jobs robots cannot handle, own small bits of capital, or live off of charity and transfers. Don’t forget, we are talking about a ridiculously wealthy and scientifically advanced world. A small capital investment might carry you through the rest of your life. Plus if robots will be so good, can’t they help the rest of us learn some skills or acquire some capital?
We will see a "cost disease" for services which cannot be handed over to robots, but so what? Low productivity sectors may take up an increasing share of the economy in real terms, but again this is most of all a symptom of plenty.
The robots also have to compete against technologically augmented humans, whom I suspect will be the real force of the future. Complex biology is hard to master, so let nature handle that and just purchase the mechanical add-ons, no?
So I don’t worry about the special features of robot economies. It is simply fears of Malthusian overpopulation but with metal rather than flesh. The difference is that there is a more obvious profit incentive to produce lots of robots, since they can be owned for profit. But modern technology would have pushed up wages even if we had not seen the falling birthrates as of late.
In Battlestar Galactica they call robots "toasters." In their world that may be a morally dubious judgment, but they seem to have the economics just about right. Now if we let robots vote, or if they have torrid affairs with top DOD research scientists who hold the secret computer codes to our planet’s defenses, that is another matter…
Here is my previous post on robot economies.