An Introduction to the Basic Economics Effects of Robots on Society

Who’s to say that at some distant moment there might be an assembly line producing
a gentle product in the form of a grandmother – whose stock in trade is love.
From “I Sing the Body Electric, Twilight Zone”, Series 3, Episode 35, 1960
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It seems that most people I talk to seriously underestimate the rise of the robots in the near future, even with the recent announcements by several car makers about cars that can essentially drive themselves, but don’t probably due mainly to legal reasons, and product immaturity. With robots that can make cars, serve people, pick and pack products, and even play the violin better than someone who has practices for years, we are on the verge of a new revolution. In fact, Foxconn, the largest manufacturing company in the world is in process of replacing 1,000,000 jobs with robots, probably in part due to costs-savings, and partly because they won’t riot (probably). 1,000,000 jobs replaced almost overnight; now that is news.

Didn’t People Complain About Robots Taking Jobs Over 100 Years Ago?

Yes, the “luddites” feared automation and factories, believing it would put everyone out of a job. Of course, that was not true at all. What happened is everything got a lot cheaper over time, and why wheat farming labor is <1% of what it used to take.

But up until recent times, machines or robots have been ultra-specialized. They could screw on a cap, or paste a label. A series of specialized machines could pack a million widgets a day. An economist might say that it’s more productive, and we now have more wealth to show for it, and other benefits which I will discuss in a bit. That is true. We are now at a point which those that operate the factory will soon be replaced. Humanoid robots are quite advanced, and a single robot already has enough skills to play soccer or serve food. It’s this generalization, and ability to adapt to a variety of environments, which is what makes them so powerful. Whereas, in current farming, you have tractors that farm large fields, and people that pick delicate/difficult crops, with robots, you can have one that does all of the above. And if a human can do a manual task, the robot will do it better and cheaper, with a lot less complaining.

Won’t Robots Be Too Expensive to Buy?

A robot like Honda’s Asimo costs around $1,000,000, while on the other extreme, a basic, get-me-a-drink or walk-your-dog robot can be bought for around $3,000. When we bought our first computer in around 1980, we spent about $7,500 in today’s dollars. Considering you can buy a small laptop for $150 today, that’s a 50x drop in price. I suspect the demand for robots will be much higher than it was for laptops, simply because of the huge, real time savings they will provide everyone, not just geeks (although they will adopt them sooner on average I imagine). I’m sure there’s many families that would buy a robot for the price of a car, especially if you can get them financed like one. Price won’t be a big issue for long.

What Types of Job Displacement Might Occur?

Short Term Displacement: Manual labor jobs will be the first to go, not only for untrained positions, but also highly specialized ones like brain surgery and filling prescriptions, because robots do it better and cheaper; followed by increasingly complex, and intellectual focused work. What about creativity? Here’s a robot that dances.

Long Term Displacement: In the end, no one seems to know what work will be if at all. I discuss the risks elsewhere, but in short there are 4 scenarios I imagine are most likely:

  1. Jobs will be increasingly fake or contrived: such a show the govt requires Oregon gas station attendants to pump gas. It’s about securing jobs, or creating jobs that require little effort (already a process in motion).
  2. Jobs will be purely social and entertainment driven: E.g. video game societies, worlds, and competitions would generate regular income, not unlike YouTube personalities make money today entertaining.
  3. Most work will end: Companies and other systems will be taxed and the cost of living may drop (in real terms) much more than today. E.g. Your robot could grow and process food for free. Universal Basic Income is an idea that tech people are already experimenting with.
  4. People will reject the robots/AI altogether, and we will return to some older period of time.

Displacement of Work Ethic: With a robot to wash dishes and clean your house, what will your kids do? Watch TV all day, play video games, and surf the internet? Will they be motivated to learn if AI does all the thinking, and if jobs are mainly run by robot labor?

What Social Effects Might Arise Due to the Growth of Robots?

Most tech guys are too techy to give much consideration to the social-psychological consequences of machines, but that’s where I come in.

Emotional Bond Displacement: Sadly, one of the primary reasons robots are being developed is for care of people. It seems that having a robot, instead of a TV, babysitting kids is a good idea. Goodbye expensive daycare! Anyone who doesn’t see this logical cost savings simply does not get it.

Robots are likely to contribute to the growing loneliness, both in the fact that they can care for people that society doesn’t want to, and because they can replace the need for the rest of us to depend on others for anything. Isn’t that the perfect world, where you don’t have to depend on anyone for anything? Or is that hell, because suddenly, you realize you don’t need the world, and the world doesn’t need you.

Even simulated care or love will be programmed into robots. While fairly primitive at the moment, robotic pets are an increasingly common replacement for real pets in Japan, and why should human relationships be any different? Talk about having a perfect partner, without the drama, and with a lot less costs. Robot babies are also far easier to deal with.

I am not the only one sounding the alarm on this. Researchers from the University of Sheffield are concerned about various aspects of using robots as nannies, and most of all I would say the emotional bonding aspect. “Children can also form relationships with humanoid robots. Tanaka et al. (2007) placed a “state-of-the-art” social robot (QRIO) in a day care centre for 5 months. They report that children between 10 and 24 months bonded with the robot in a way that was significantly greater than their bonding with a teddy bear. ” Perhaps the single largest risk to humanity is a substitution for humanity by robots and AI.

Many modern philosophers have wondered if life is some sort of giant computer simulation, where the conscious is somehow projected into a material substrate via a supercomputer. I think a more interesting question at the moment is: are we, with technology, going to turn life into a simulation of the real thing?

General Social Breakdown:  This is the highest risk in my opinion and under way. All traditional aspects of what it meant to be human are on the decline such as one-to-one, in-person communication; intimacy rates; decreasing number of children; less work; less effort to survive; less trust in all institutions and among neighbors, and yet the world just keeps marching forward… Anyways, my plan is to have my family and I stay as human as long as humanly possible.

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