Taxing Robots?

Yves here. One thing that bothers me about the caliber of the discussion is the way economists like to use words like “innovation” to shut down disagreement. If they can put a social or political issue in the “innovation” space, being against it depicted like being against clean water.

If participants used words that were descriptive and have not been successfully marketed into have a sheen of unalloyed virtue, say like “automation,” it might be possible to have a more clear-headed discussion.

One elephant in the room is that automation has not been an unalloyed plus. Think of what has happened to interactions with big companies. In the stone ages, you got live humans. Even if the live humans misdirected your call or managed to blow you off, it was less unsatisfactory than the tax on your time of listening to lots of prompts, sometimes getting no prompt that corresponded to your situation, having to wrestle with the system to get a person, and then too often having that person be a call center respondent in India who had a very limited script and was unhelpful. Not only have automated phone systems “innovated” by shifting corporate costs on to consumers, but they have significantly degraded the service.

And the article (aside from the Varoufakis idea at the end) doesn’t address at all the distributional issues, that a fair bit of robot-related tech is government sponsored by being either direct or by-products of defense/communications R&D. So for those who believe in ever-virtuous markets, taxes are desirable to offset this market-distorting gimmie.

By Silvia Merler, an Affiliate Fellow at Bruegel and previously an Economic Analyst in DG Economic and Financial Affairs of the European Commission. Originally published at Bruegel

What’s at stake: “More human than human”, was the motto guiding the Tyrell Corporation’s engineering of biorobotic androids, in 1982’s Blade Runner. Fast forward to 2016, and Bill Gates argues that if robots perform human work, they should be taxed like humans. We review what economists think about this idea.

In a recent interview, Bill Gates discussed the option of a tax on robots. He argued that if today human workers’ income is taxed, and then a robot comes in to do the same thing, it seems logical to think that we would tax the robot at a similar level. While the form of such taxation is not entirely clear, Gates suggested that some of it could come from the profits that are generated by the labor-saving efficiency there, and some could come directly in some type of a robot tax.

The idea of regulating robotics also has appeal on the other side of the Atlantic, where the European Parliament (EP) has been discussing these issues over the past months. Earlier in February, the EP called for EU-wide legislation to regulate the rise of robots, including an ethical framework for their development and deployment, and the establishment of liability for the actions of robots including self-driving cars. But the EP rejected a proposal to impose a robot tax on owners, to fund support for retraining of workers put out of a job by robots. According to the Reuters report, the decision to reject the robot tax was hailed by the robotics industry, which says it would stunt innovation.

Noah Smith says the main argument against taxing the robots is that it might impede innovation. Stagnating productivity in rich countries, combined with falling business investment, suggests that adoption of new technology is currently too slow rather than too fast and taxing new technology could make that slowdown worse. Smiths argues that the problem with Gates’ basic proposal is that it is very hard to tell the difference between new technology that complements humans and new technology that replaces them, and proposes alternative options to deal with the disruption.

One idea is a wage subsidy for low-income workers, which would have the effect of making human workers cheaper. The easiest way to do that is to cut payroll taxes, which disproportionately fall on low earners. Another idea is to simply redistribute capital income more broadly. Income from capital gains, land rents and dividends now is highly concentrated among the wealthy, but policy could change that. Overall, instead of slowing innovation, the government should think about taxing humans less and redistributing the income of robots more.

Lawrence Summers thinks that robots are wealth creators, taxing them is illogical and Gates’ robot tax would amount to “protectionism against progress”. First, Summers disagrees with the singling out of robots as job destroyers, when there are many different kinds of innovation that allow the production of more or better output with less labour input.

Second, he argues that much innovative activity, even of a robot-like variety, involves producing better goods and services rather than simply extracting more output from the same input, and because of emulation and competition, innovators capture only a small part of the benefit. It follows that there is as much a case for subsidising as taxing types of capital that embody innovation. Third, a sufficiently high tax on robots would prevent them from being produced but Summers thinks it would be better for society to instead enjoy the extra output and establish suitable taxes and transfers to protect displaced workers.

Tyler Cowen wonders whether we should be taxing robots or rather subsidize wage labour. He argues that one reason not to tax the robots is that employers might substitute away from robots and toward natural resources rather than toward domestic human labor: for example, we could think of paying the energy costs to outsource to another nation and transport the outputs back home. A second issue is that of incidence: a general problem with a wage subsidy is that sometimes much of its value its captured by employers.

Coming to the incidence of a tax on robots, if the elasticity of the demand for robots is high, there will be a big shift away from robots and toward labor. It is at least possible that workers capture more of the gains this way than from the direct subsidy to their wages. On the downside, the employer fares less well under this scheme. So ultimately it depends on how labor and robot elasticities relate to each other: the robot tax would seem to do best when the elasticity of demand for robots is high, but the corresponding elasticity of demand for labor is low. As robots and labor become more substitutable, that difference in demand elasticities is likely to diminish.

Izabella Kaminska on FT-Alphaville argues that a call for robot income tax is really just a call for more corporation tax and/or a wealth tax, and it seems strange then for Gates to forget the argument against higher corporate taxes, just because the nature of the capital investment is now anthropomorphised. Kaminska highlights two paradoxes connected with Gates’ reasoning – a capitalist and a Marxist paradox – and concludes that “a simple moratorium on robot development would spare us all the angst”.

The Economist Free Exchange blog thinks that Bill Gates is “an unlikely Luddite, however much Microsoft may have provoked people to take a hammer to their computers”. His tax on robots is   is an intriguing if impracticable idea, which however reveals a lot about the challenge of automation. Gates worries about a looming era of automation in which machines take over driving or managing warehouses.

Yet in an economy already awash with abundant, cheap labour, it may be that firms face too little pressure to invest in labour-saving technologies. When faster automation does arrive, robots might not be the right tax target: as machines displace humans in production, their incomes will face the same pressures that afflict humans. The share of total income paid in wages – the “labour share” – has been falling for decades: abundant machines will prove no more capable of grabbing a fair share of the gains from growth than abundant humans have.

Yanis Varoufakis also picked up the topic in Project Syndicate. He argues that the only way to simulate an income tax on robots is to use the corresponding workers’ last annual income as a reference salary, and extract the equivalent income tax and social security charges. This presents a number of problems, both in the need of a reference salary – which will be entail a degree of arbitrariness that will make it subject to disputes between producers and the tax authorities – and in the philosophical incongruence in taxing the robots but not the mechanical tools that the robot itself operates. The alternative is Gates’ idea to tax the installation of robots, but a lump-sum tax on robots would merely lead robot producers to bundle artificial intelligence within other machinery, so either the robot sales tax should be dropped or it should be generalized into a capital goods sales tax (which would generate an uproar).

Varoufakis argues instead for a universal basic dividend (UBD which hepreviously discussed), financed from the returns on all capital. A fixed portion of new equity issues (IPOs) would go into a public trust that, in turn, generates an income stream from which a UBD is paid. Effectively, society would become a shareholder in every corporation, and the dividends are distributed evenly to all citizens. To the extent that automation improves productivity and corporate profitability, the whole of society would begin to share the benefits.

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  1. lyle

    But robots are property and typically taxed by local government thru the property tax already. One should at least state additionally taxed.
    If you want a value added tax for robots at least use the correct term. An income tax would not work as a robot has no income.

    1. lyman alpha blob

      That was my thought – wouldn’t this be taxed as a depreciating asset like any factory equipment?

      The trick would be to make sure they are still taxed somehow if they are depreciated down to zero yet are still in operation.

      1. tts

        I think BG was speaking metaphorically.

        The idea being you’d have to tax the robot factories extra somehow in order to maintain society/govt. since those robots would be eliminating jobs. Doing it in a per robot fashion isn’t a bad idea in of it self even if he is getting the terminology wrong.

    2. Vatch

      In some places the only property tax is a real estate tax. Robots aren’t taxed in those places.

      1. lyle

        If you look at business personal property taxes you find that a decent number of states have them.
        Partly these are a remnant of when every state taxes all property real and personal. In addition there are intangibles taxes in a number of states. One other example is that typically car dealer inventories are subject to personal property taxes on some date during the year (typically Jan 1)
        Of course in addition if a robot is bolted to the floor (like a lot of robots in auto plants for example) is it personal or real property, for example HVAC systems are part of real property. So a fixed robot i.e. bolted to the floor would not truly be personal property, but a building fixture. A robot that can be moved would be personal property. (I am not a lawyer, and don’t know the court cases on the subject)

        1. dw

          seems we have already had fixed place robots in manufacturing, and you can see that in that if you go back to the 60s, GM for example had more that 300K employees, and produced a few million cars, today, it has less that 100K workers, and produces more cars than then. they had a big robotics push back in the 80s and 90s, as did Ford. and lost of states have dropped that business property tax.
          the problem with automation, is that as you do more and more of it, you will end up with fewer and fewer buyers. and have a lot more unrest as people start to see no benefits from their current situation

    3. jackiebass

      Property taxes on a local level usually are restricted to real estate. The land and buildings but not the contents.

    4. H. Alexander Ivey

      But robots are property

      Ah, that is the rub. Gates, et. al., are showing further signs and symptoms of caste disassociation. They would rather consider a robot equal to a human, with full rights and privileges, than consider a blue collar worker a human.

  2. Jeremy Grimm

    What’s the point of taxing robots? They’ll just move to Mexico or China or Viet Nam to avoid paying taxes or they’ll incorporate themselves and let Mossack Fonseca take care of hiding their income.

    1. tts

      Then you tax the goods appropriately and redistribute the tax money to create work programs or to help re-educate people.

      And no individual, even a super rich one, can hide their wealth from a powerful nation state like the US if the US wants to get at it.

      1. Synoia

        The rich cannot hide their income? Please tell that to Google, Microsoft, most major corporations and the Mich Romney’s of the world.

        You also might wan to consider why most Tax Haven are in ex-British colonies. Hint: The UK tax code taxes on income earned in the UK, not world wide income.

        1. Mel

          :-) A group of super-rich individuals are a powerful nation state like the US. Exactly like the US, as it happens. They can’t hide their wealth from that state, nor do they want to. They only hide it from schmoes.

        2. tts

          What makes you think the US govt. can’t find it?

          The current problem with taxing the rich right now is with regulatory capture and a Congress/president that is willing to favor the rich’s interests at the expense of the rest of the population.

          If corps. like Google or MS want to continue to do business in the US there is nothing they could do to evade a tax on their goods/services by the US. And they won’t abandon a market as large as the US either. After all they’ll still be making money.

        3. jackiebass

          tts said if the nation wanted to get it. For corporations and rich people the Us doesn’t want to get their wealth. In fact they write the tax laws so the wealthy can avoid paying a large percentage of their income in taxes. That’s why they are rich. At one time the marginal tax rate was over 90%.

    1. tts

      Baker is wrong here.

      He is essentially saying the future will be like the past but the sort of automation that is coming on line won’t be anything like that and there are no sign of any new opportunities opening up in the economy to support the newly permanently unemployed.

      His to get rid of corporate taxes by making corps pay with stocks is flat out bad too. Its like a public 401K of sorts only the govt’s tax receipts get to crater too when the stock market crashes.

      Basically Baker had 1 or 2 good calls back when the bubble was getting ready to pop and since then he has been pointless to listen too.

      1. Pookah Harvey

        Baker makes sense to me. As productivity increases spread the wealth to all workers by decreasing hours and increasing pay. As for decreasing corporate tax revenue during recessions, that will happen whatever tax regime you have.

        1. Tim

          LoL. WHo the H*** believes that? The last 30 years show exactly the opposite. The equity owners take all the productivity gains of their employees. The workers just get declining real wages (aka stagnant wages).

          So here come the robots owned by the equity owners to dramatically increase productivity, who gets the dramatic increase in benefits from productivity? aint the wage earner.

          1. Pookah Harvey

            We are talking about what to do about automation. If you have the power to tax the machine you should have just as much power to tie the work week and minimum wage to productivity.

      2. a different chris

        >but the sort of automation that is coming on line won’t be anything like that

        Yeah, umm… please explain what “sort” of automation you think is qualitatively different from… well any other new technology we’ve seen in the past 200 years. What exactly do you expect robots to do that is more different from a CNC machine than a CNC machine is to the classic lathe?

        1. Mark P.

          ‘ What exactly do you expect robots to do that is more different from a CNC machine than a CNC machine is to the classic lathe?’

          Some examples:

          ‘IBM’s Watson gives proper diagnosis for Japanese leukemia patient after doctors were stumped for months’

          ‘AI Lawyer “Ross” Has Been Hired By Its First Official Law Firm’

          1. Mark P.


            ‘AI Teaching Assistant Helped Students Online—and No One Knew the Difference’

            ‘Chatbot lawyer overturns 160,000 parking tickets in London and New York

            ‘Free service DoNotPay helps appeal over $4m in parking fines in just 21 months, but is just the tip of the legal AI iceberg for its 19-year-old creator’


              1. Mark P.

                AI aims at creating a Universal Machine. That’s the point.

                Comparisons with the technological distance between specific manufacturing machines of the past, such as a lathe and a CNC machine, are very much not to the point.

                1. Marco

                  Ah! Anyone here old enough to remember Eric Drexler’s “Universal Nano Assemblers”? We are thankfully a LONG way off from a Universal Machine.

                  1. Mark P.

                    Anybody old enough to remember Alan Turing and his foundational work on computation? Clearly not Marco.


                    ‘In computer science, a universal Turing machine (UTM) is a Turing machine that can simulate an arbitrary Turing machine on arbitrary input. The universal machine essentially achieves this by reading both the description of the machine to be simulated as well as the input thereof from its own tape.’

                    1. dw

                      and the hardest test for the turing machine to pass, was if a human could tell it was a machine. or not, they did that some time back

  3. nonsense factory

    “Innovative” is indeed a questionable adjective; for example, look at the innovative financial instruments that crashed the global economy in 2008. They were championed by the likes of Alan Greenspan:

    It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade,” Mr. Greenspan writes…

    There are also some fundamental assumptions stated in this article that could use some examination (as is true for the entire system of academic economic theory):

    (1) Lawrence Summers thinks that robots are wealth creators…
    There is no such thing as “wealth creation”; this is an economic myth. A physicist would not talk about “energy creation”; energy, like wealth, is a conserved quanity that can only be converted from one form to another. Yes, natural systems represent wealth. Take a plot of wilderness, plow it up, turn it into a farm – is this wealth creation? No, it’s just conversion of one form of wealth to another. Print more money and put it in circulation – is this wealth creation? No, it merely dilutes the value of each dollar in circulation.

    (2) …it seems strange then for Gates to forget the argument against higher corporate taxes…
    The argument for higher corporate taxes is that such a tax structure discourages profit-taking and encourages investment in corporate research and development and improved production. Lower corporate taxes encourage the opposite, as the financial sector strips the wealth out of the productive industry and hoards it.

    (3) “Yet in an economy already awash with abundant, cheap labour, it may be that firms face too little pressure to invest in labour-saving technologies.”
    This is the curse of neoliberalism and open-borders trade policy; factories get outsourced to foreign sweatshop zones with “abundant cheap labor”, while other industries, like agriculture, which can’t do this (you can’t ship the agricultural land overseas) import cheap immigrant labor to cut costs (and to prevent the growth of unions). Without such polices, labor would be much costlier (which would be good for the working American middle class, i.e. better wages and benefits).

    Really, the effort to blame the growing gap between rich and poor on “automation” is just a PR tactic aimed at distracting attention from the more fundamental reasons for it – the rise of the financial industry, neoliberal trade policy, bogus economic justifications for tax cuts on the wealthy, etc. As far as robots, they can improve production quality in some industries but not others; but I think Bill Gates’ focus on robots is just his contribution to the effort to distract people from the above issues.

    1. Mel

      I would like to think that there is such a thing as wealth creation. A process that starts with mud and ends with dishes has created wealth, in my opinion. I would disagree with Summers if he said that robots were principal actors in that kind of a process, and it seems as though he does.

    2. Grebo

      wealth, is a conserved quanity that can only be converted from one form to another.

      No it is not. Wealth is made from nature by people using capital (such as robots). It is also consumed (destroyed) by people (and nature).

      natural systems represent wealth

      No they do not. Nature is not made by people. People are made by nature and, valuable as I am, I am not wealth.

      1. a different chris

        Mmmm think nonsense factory (despite the moniker :)) has slightly the better of this. I am at first pass pretty sure that 98% of us would, even if given the two experiences, would prefer today’s 80yr lifespan with “modern comforts” to the prehistoric 38 years…. but: they had a 16 hr “work” week and got to p&ss around outside for the whole day and did not spend too much time wondering about their knees hurting. Hmm, if we really were able to try it I suspect I would chicken out and put my “money” -whatever the frell that actually is – only on a “strong” majority.

        This means “wealth” is what we define it as, and that does not necessarily correlate historically or across today’s societies and maybe will be even more skewed in the future. If we arbitrarily define something, then statements about it being “made” are a bit slippery at best.

        1. Grebo

          Anything can mean anything but if one wishes to communicate there’d better be some agreed on definitions.

          In this case Larry Summers uses a word one way, the same way economists usually use it, and nonsense factory, without disputing the definition, makes a ludicrous claim about how the thing denoted works. Maybe he means something else by it than Summers does. That’s why arguments about political economy never end, everyone makes up their own definitions for things and never checks that they match those of their opposition.

          It really helps, when thinking about this stuff, to have a clear definition of what you are thinking about. Then when you hear someone use terms like ‘land’, ‘capital’, ‘wealth’ and ‘money’ as if they were synonyms you will know they are full of shit.

    1. loblolly

      One’s robots have been taxed at every level of government and will be taxed at the tangible personal property level in perpetuity. Their output will be taxed once again at every level. How is yet another tax any kind of solution?

      Why is the economy stagnant? Robots! So rather than point the finger at all the people who continually benefit from all government policies, let’s assign blame to an object, a strawbot if you will, so we don’t look to carefully at anything real. Oh and at the same time lets give the industrialists another reason to site their robots elsewhere and kneecap anyone who might want to set up state of the art domestic manufacturing.

      To reiterate, anything put forward by the establishment as a bogeyman is never the issue. Automation is not the issue, laws that reward economic treason are. Why do you think nationalism is so heavily disparaged?

      1. human

        Capital depreciation is the the equivalent of un-taxing. Once depreciation is complete, the asset no longer has any value for taxing purposes.

        lets give the industrialists another reason to site their robots elsewhere

        Production is moved elsewhere to take advantage of reduced human labor costs. Providing robots at these locations is counter-productive and can be prohibitively expensive.

        I do agree that economic justice is a paramount issue.

  4. Kramer

    When economist point out that ~90% of people once were farmers, and we survived that transition, they are white washing a history that included multiple financial crises ( including the big one), two world wars, socialist inspired revolutions, the distruction of the british empire, and a few genocides. I’m not asserting cause and effect, just saying that perhaps a little democratic decision making to guide this wave of mechanization is justifiable. I favor taxes on economic rents, realestate , and uber high incomes along with public services that slash the cost of living such as healthcare, education and housing.

    1. Marco

      Succinctly cutting thru the innovation BS. Thanks Kramer! The continual fallback on TINA is tiresome. Will Economists also be automated into oblivion?

      1. dw

        maybe, i seem to recall that they had automated the production of sports stories. and nobody really noticed

  5. David, by the lake

    The resource and labor issues in the overall system will eventually self-correct. We appear insistent on taking the harsher path to get there, however. Sad, but not surprising.

    The purpose of an economy isn’t “wealth creation” or “shareholder value” or any of those other metrics bandied about. The purpose of a national economy is to promote the well-being of the citizenry by providing meaningful work at honest pay. Automation is in many ways in opposition to this.

    The technotopia where no one works and everyone gets paid is vaporware. The sooner we realize this and shift to a slower, less automated, more sustainable and less resource-intensive​ way of life, the better off we will be.

  6. Eureka Springs

    Innovation is just another word for progress. Both of course are abused.

    And what constitutes robot? AI, code, software, al Go Rhythm, tractors, bulldozers, hydraulics? Where does one start, with the steam locomotive and the cotton gin?

    Bill Gates started in a garage, iirc… If you think innovation wont occur when there is motivo pay among the masses to reduce manual labor whilst playing on their xbox…

  7. lyman alpha blob

    This seems off –

    Stagnating productivity in rich countries, combined with falling business investment, suggests that adoption of new technology is currently too slow rather than too fast and taxing new technology could make that slowdown worse.

    This hasn’t been the case in my experience. At work or just surfing the web, new apps and platforms are added all the time regardless of whether what they’re replacing worked just fine in the first place.

    ‘If it ain’t broke don’t fix it’ doesn’t seem to have caught on with the 20-something crowd developing all this new technology in the hopes of becoming the next instant squillionaire. Can’t list how many times I’ve just begin to get comfortable with some platform and all of sudden it’s replaced with an ‘upgrade’ causing me to waste time relearning something I already knew how to do.

  8. Mel

    Re “innovation”. I was disappointed reading Jane Jacobs’ Cities and the Wealth of Nations. It looks as though she meant to make and economic argument, so pinned her sociological insights from The Death and Life of Great American Cities to a market theory from the usual economics. She describes business- and industrial-development in a city in terms of the definitive, essential diversity and complexity of cities and life in cities. She uses terms like “earned imports” (a consequence of pre-existing undeveloped industrial capability,) “import replacement” (a consequence of the development itself,) “city regions”, “transplant regions”, “supply regions”, “clearance regions” (regions with profoundly different fates during development, for reasons she elucidates.) Because the arguments are all market-centric, I can’t read the book without imagining neo-liberals sneaking up through the weeds. There’s a decided devil-take-the-hindmost aspect to talk of clearance regions (e.g.) that’s lamentable, but totally accurate seeing what the market does to those regions.
    The disappointment comes because the central question of the book is “What causes creativity?” Finally, the conclusion is “We don’t know.”

  9. Kpl

    Robots themselves will be jobless due to lack of demand – no jobs for people. Basic income means just that. So who will have the money to buy? What happens to demand?

  10. neighbor7

    On the other side of the equation, another word that is reflexively perceived as an unalloyed good thing is “jobs.”

    1. a different chris

      :) wish I had read this @work today whilst waiting for the project to build and download (and then not demonstrate the bug I was intending to fix, sigh, I’m sure it will come back but for now we’ll pretend it was something somebody else did and has now undone).

  11. Bill Smith

    What is a ‘robot’?

    Is it my AI system that runs on my PC that trades stocks? Is it my tax software that lets me do my taxes without an accountant? Is it the computer that drives my Tesla so I don’t have to? Is it my 3D printer? Is it a big machine in a factory that assembles something?

    1. Dead Dog

      Yes Bill, is the music player in the restaurant, the fridge even, a job destroyer?

      We can see ‘more obvious’ robots like those screens in Maccas, or those self check outs everywhere.

      Taxing robots? Sjeesh!! We don’t make corporations ever pay their dues to society. What a silly notion, as in look at history.

  12. TomDority

    Laborers knowing that science and invention
    have increased enormously the
    power of labor, cannot understand why
    they do not receive more of the increased
    product, and accuse capital of withholding it.
    The employer, finding it increasingly
    difficult to make both ends meet,
    accuses labor of shirking. Thus suspicion
    is aroused, distrust follows, and soon
    both are angry and struggling for mastery.

    It is not the man who gives employment
    to labor that does harm. The mischief
    comes from the man who does not
    give employment. Every factory, every
    store, every building, every bit of wealth
    in any shape requires labor in its creation.
    The more wealth created the more
    labor employed, the higher wages and
    the lower prices.
    But while some men employ labor and
    produce wealth, others speculate in the
    lands and resources required for production,
    and without employing labor or
    producing wealth they secure a large
    part of the wealth others produce. What
    they get without producing, labor and
    capital produce without getting. That
    is why labor and capital quarrel. But
    the quarrel should not be between labor
    and capital, but between the non-producing
    speculator on the one hand and
    labor and capital on the other.

    Published in 1924 – unknown author

  13. ChrisPacific

    Ugh. After reading the pontifications of economists on topics like this I always feel like I need a shower.

    Kaminska seemed to have the most common sense of the lot based on the synopsis (I note she is not actually an economist, which would explain it). Robots aren’t people, they are tools and they are owned by someone, typically a corporation. Taxing robots amounts to taxing production rather than income, which would be a departure from the usual corporate tax approach. I suspect it’s not a particularly useful idea, but it would be good to have an actual discussion about it instead of handwaving platitudes about constraining innovation and harming productivity. Unfortunately they are what passes for economics these days.

  14. Rosario

    Considering the state of the environment (6th major global extinction), economically viable resources left to extract, and massive economic inequality talking about the economic impact of robots is a non-issue. Probably more accurately, it is a distraction. Same can be said of countless other futurist nonsense floating about in the consumer economies today (fusion reactors, ore harvesting asteroids, etc.). It is like we are living in the late 19th century Europe and United States again, except even more hyperbole, hand-waving, and solutionism. Sure automation/robots are real, and they are being used, but they are symptoms, and trivial ones within the scope of the entire disease.

    The problem WRT the future as it is referenced to the past is that people often bring up the few advances/predictions that did actually happen while ignoring the far more numerous catastrophes, wrong predictions, and crises created in the process. So, as this thinking goes among many economists, this is yet another labor saving innovation which will lead to an expansion of the economy and more jobs, growth, etc….no. A 200 year track record of Capitalist economic history is not quite long enough to extrapolate truisms of innovation and technology and their influence on future growth and prosperity. It isn’t the same this time, and it never was the same. Someone always loses out in these advances and expansions, whether it be domestic workers, indigenous peoples, colonists, or the environment, and it doesn’t matter whether it is a steam engine doing it or a robotic arm.

    I don’t think 18th century thinkers ever considered we could literally alter our planet, now we have, so the old theorems are woefully inadequate since the infinite/indefinite assumptions plied by the trade are no longer valid. It is similar to “infinite life” gears as defined by mechanical engineers. The infinite part is only valid in terms of engineering within accepted norms. Once that normal boundary is crossed the definition is invalid.

    If the current order truly wants a free market where everything has a price, then lets humor that for a moment, lets place a price on everything, the air we breath, the water we drink, the soil we till. If we did that I think we would find it quite beyond our means to live as we have.

    Anyway, bit of a rant. I guess I’m grumpy today.

  15. makedoanmend

    Humans are just tools in most industrial situations, and especially so on assembly lines. Often they are mere adjuncts to ensuring machines run correctly or they are hired to perform menial tasks that machines weren’t able to do – such as distinguish good outputs from bad outputs or to do intricate manipulation. Where machines could produce more per hour via induced higher energy inputs and transformations on a systemic basis (think of a person moulding a pharmaceutical pilsl/tablets/capsules versus a machine), the machine is introduced as a superior capital producing factor.

    And we tax the bejaysus out of such industrial workers.

    Yet some think we should not tax robots who will now perform these tasks.

    I also tend to think that many people like to apportion some additional but vague notion of value as being the input of humans as opposed to machines. Whilst this viewpoint may have had some validity via design and skills involved in producing unique outputs (in which case there is no one standard of value) this validity disappears as mass production overtakes human endeavours. Human input is the adjunct not the feature of value in production. Labour value is only realised in its relation to output and the demands, usually measured monetarily, that products obtain as they are sold and bought.

    Value is only realised when goods are sold and bought. (Some would argue that the difference in Labour values and sold value roughtly equates to profit or surplus value.)

    Hence, as some people point out, there may be no value if humans, increasingly disengaged from the economy, cannot buy the outputs of their economies.

    The point of these discussions, indeed any economic discussion, should be the raison d’etre of an economy. Does the economy exist to give humans the means to survive, create the means of further survival, and the ability to plan a future of reproduction of our species?

    Or is the economy used to see who can accumulate the most symbols (money) of production and to hell with the future and the species and the environment and the…?

  16. a different chris

    Haha have to call you on this one:

    >depicted like being against clean water.

    Economists think clean water has a $$ value and, if you are poor, you should dirty yours and “import”(subsistence) amounts in trade for whatever you dirtied yours with.

    A certain number of them should be drowned, in water clean or otherwise, until the rest of them wise up.

  17. a different chris

    > sometimes getting no prompt that corresponded to your situation

    I got that just recently! Had two identical $100 plus charges, same day, on my* charge card from Apple. I called the number listed with the charges, yes literally on the line item — and could not get thru the system to a human being because Apple-the-machine said it didn’t have that charge card on file for me! I couldn’t figure out a button to hit to get to a real human to ask if they didn’t have it how did they charge me? So I had to call my card company and say “don’t pay this”, and they made it seem like a big deal (just the opposite of what their adverts claim) and said they had to cancel that whole card “while they investigated” and we didn’t get a new one for something north of 2 weeks.

    *my card, but the wife and daughter only use it so I have something specific to fruitlessly complain about.

  18. greg

    There are (at least) three reasons to tax. 1: Take money out of circulation. (Income taxes on the wealthy.) 2: Discourage something. (Cigarette taxes. eg. Taxes, however, inevitably somewhat discourage whatever it is that is taxed.) 3: Redistribute demand, away from producers and to consumers, since otherwise the producers eventually end up with all the money, and demand collapses. This is what you would want a robot tax for, or any tax on capital, for that matter. (This ignores the fact that in our modern economy financiers and speculators, a la Tom Dority above, who are NOT producers, but mere consumers, are ending up with all the money.)

    You would want a tax proportional to what is produced, so basically what you want is a VAT. (You cannot tax an asset anyway. Only what that asset, or ,if the asset is non-productive, like a house, the owner of that asset, produces.) In fact, only wealth creators can be sustainably taxed.

    To not tax the production of robots, if robots are the producers, means the owners of robots (or their financiers) will end up with all the money, and the demand for their production will collapse.

    Yanis proposes partial public ownership of production. (Sounds Socialist!) Would have to be about 2/3rds public ownership, at least. This would give justification to the tax.

    The ultimate problem with robots, however, is a moral one. People need to be needed, and the more their efforts are replaced with robots, the more useless they become. (No one really wants to go to heaven, because in heaven they would be totally useless. Here, replace angels with robots.) Someone who feels useless usually ODs. Bad juju.

    I suppose with AI a case could be made for robots owning themselves: FREE THE ROBOTS!

    1. Mark P.

      ‘I suppose with AI a case could be made for robots owning themselves: FREE THE ROBOTS!’

      Yeah. Well, Nick Bostrom and the other folks who are getting all worked up presently about the dangers of AGI (Artificial General Intelligence aka super-AI) would point out to you that free robots might have very different orientations — and possibly inimical ones — to those we humans possess.

      1. Will S.

        Right, they might take one look around at the state of the world, say, “Well this just isn’t sustainable,” and annihilate humanity.

  19. cnchal

    All of you have Bill’s fish hooks in your mouths. Total manipulation and misdirection.

    Ever seen a robot with money? I haven’t. Know who has money? Bill does. Of course he is going to point his finger at a robot, which conveniently isn’t defined, and say ‘tax that and your problems are solved’.

    I can see gawbs of money being wasted on lawyers to refine and define exactly what a robot is, and engineers designing around that, were we stupid enough to go along with this. It’s as idiotic as taxing bulldozers and backhoes or milling machines and lathes.

    Hell has frozen over. Larry Summers is right. Then there is this.

    > None of this is to minimise the problem of job destruction and rising inequality (although it is a major paradox that we seem to be seeing unprecedentedly rapid job destruction by machinery while at the same time observing extraordinarily low productivity growth).

    When we are talking about jawb destruction by machinery, what it really means is that fewer and fewer people are required to produce expanding output. Manufacturing real goods requires energy and raw materials leading to demand back to the mine shovel, and practically everything we have is only possible because of machines. The wealth generated by the production process is added and diffused into the wider economy and, this is why productivity growth is low, funneled into the hands of the bullshit jawb holders. Paradox solved Larry.

    > Gates worries about a looming era of automation in which machines take over driving or managing warehouses.

    Something to be devoutly wished for, if Keynes tantalizing prescription of a 15 hour work week has any possibility.

  20. Pookah Harvey

    Reading the comments makes me want to re-read Asimov’s Robot novels It feels like we are having a Spacers vs Earthmen discussion.

  21. templar555510

    This whole argument is an irrelevance, but what is points to ( yet again ) is the dire necessity for a Universal Basic Income . Once this is in place economic opportunity could become a reality and the very rich could stay very rich up to a point because the balancing item is to say enough is enough – you can be rich up to $x , but not above ; to be agreed.

  22. Jeff N

    re: automation – here is a vid of a guy calling into a telemarketer/information hotline. The person at the other end is english-speaking but heavily accented (perhaps Phillipino?) and is using a “soundboard” containing about two dozen pre-recorded phrases/answers/laughs/questions (originally recorded by an American) that can be played in order to have a “conversation” with the caller.

  23. marblex

    Sorry, but if people believe they can replace themselves in the workforce and continue to exist, they are sorely mistaken.

    This is possibly the worst move and a direct road to eternal dependence and slavery.

    A UBD/UBI is the very last thing needed to force everyone onto the government tit and provides a motivation to sustain TPTB indefinitely.

    Humans need to be productive. Replacing ourselves with bots is just suicide on a genocidal level. Call me a Luddite but giving away free money will provide no benefit whatsoever to mankind. All we 99% are allotted is a bare subsistence existence — enough so we don’t die right off and can reproduce. But there is no need for a globe full of dependent non-workers. We cannot survive just sitting around with no purpose or objectives; no way to provide for our families… this is the opposite of a good thing.

    Bots that can now spontaneously self-analyze, repair, improve their software; develop new features; next step is self-awareness.

    Technology has gone too far when it makes its creators irrelevant.

  24. John

    Effectively, society would become a shareholder in every corporation, and the dividends are distributed evenly to all citizens.

    Socialism is curse word in the US, but it’s funny to me how using capitalist argo (shareholder, dividends) to describe basically socialist system, makes it sound palatable for American ear. Don’t get me wrong, I think the idea is good. Power of words – this is what is curious to me.

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