Rise of the Robots: A Bad Argument for a Bigger Welfare State

By Jay W. Richards

Thursday, June 21, 2018

A group of scientists and activists wrote the president to warn him of an automated future that will give rise to “a separate nation of the poor, the unskilled, the jobless.” To blunt the coming mass unemployment, they proposed a universal basic income.

The group, called the Ad Hoc Committee on the Triple Revolution, wrote that letter in March 1964, to President Lyndon Johnson. Their prophecy was way off, but it had its desired effect. Johnson promptly launched his “War on Poverty,” which jumpstarted the growth of federal, means-tested welfare programs.

We now have 80 such programs. Instead of ridding the country of poverty, these programs create cycles of dependency and despair.

Alas, we haven’t learned the lesson. The old argument is new again, now that robots, automation, and artificial intelligence seem poised to upend our economy. Officially smart people are once again predicting job losses for perhaps half of all workers. “The future of work run by robots,” explains one story about a recent IMF report on the topic, “appears to be a dystopian march to rising inequality, falling wages, and higher unemployment.” Scads of books warn of “The Rise of the Robots,” including one with that title by Martin Ford. Over and over, they announce the death of capitalism and then propose government policies to battle the job famine. The most popular policy? You guessed it: a universal basic income (UBI).

Let’s ignore the fact that we have no money to pay for such a scheme. The most likely effect of a UBI would be to spread the perverse incentives of the welfare state from a poor underclass to most of the population.

And why believe the dire warnings? If technology led to permanent unemployment for the masses, history would be one long, dismal story of expanding joblessness. Obviously, it’s not. In fact, and paradoxically, without the technological progress that leads to job loss, the global economy could not sustain the billions of jobs and human beings it now does.

Economic progress is mostly about finding ways to do more with less, to get more output from less input. The purpose of production isn’t to create jobs; it’s to create value in the form of goods or services for customers. Tractors replace oxen, ATMs replace bank tellers, forklifts replace a dozen burly men, trucks replace horses, and backhoes and excavators replace shovels and spades. Why? Because these provide more output with less input.

The upside is obvious. Technology makes our work more fruitful. And contrary to the predictions of Karl Marx, Friedrich Engels, and their acolytes, workers using the new tools fetch a higher wage than they could get without it. This also lowers the cost of the good in question and so boosts the purchasing power of everyone, including the poor. And as purchasing power and standards of living rise, new kinds of jobs emerge to answer the rising demand for new goods and services, new jobs that often are based on the new technologies.

Now, none of these perks erases the cost. As I argue in The Human Advantage, there is a coming disruption. The shift could be more abrupt than the Industrial Revolution, when one form of life replaced another for almost all Americans. Around 95 percent of the population got by on farming at the time of the founding of the United States, just as most people had for thousands of years before. Today, the American population is ten times larger. Farmers produce far more food with far less labor, which brings the cost of food down for everyone. Instead of mass poverty and joblessness, most people now do something other than farm, and they have a much higher standard of living as a result. Roughly 1 percent of the U.S. population now works on farms. Most of the jobs of the other 99 percent didn’t even exist in 1776.

The coming shift will be abrupt for millions of Americans, since it will happen over the course of years rather than centuries. Half of today’s jobs may disappear in the next few decades. Still, given what we know of history and economics, we should expect the future to offer far better prospects than we can now imagine.

A universal basic income is a bad idea because it would pay people not to work. If we’re going to push federal programs, why not craft policies that encourage new businesses? Why not look for ways to support training and work rather than non-work? Why, instead, do we get mostly dispiriting forecasts and bad policy advice? I suspect it’s not really about helping American workers. It’s just the latest in a long line of bad but useful arguments to expand government control over our lives and the economy. Our parents should not have fallen for it in the 1960s. And we should not fall for it in 2018.