WCEG — The Equitablog
Exploring the impact of automation and new technologies on the future of U.S. workers and their families
Kathryn Zickuhr, labor market policy analyst at the Washington Center for Equitable Growth
An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Friday, December 17, 2021
Exploring the impact of automation and new technologies on the future of U.S. workers and their families — Kathryn Zickuhr
Employers are only concerned with the economic, socializing the externality involved. Thus, these innovations appear to constitute a mixed bag that will have social and therefore political implications, in addition to economic, likely leading to labor unrest unless creative solutions are found and implemented successfully at scale.
WCEG — The Equitablog
Exploring the impact of automation and new technologies on the future of U.S. workers and their families
WCEG — The Equitablog
Exploring the impact of automation and new technologies on the future of U.S. workers and their families
From the article:
ReplyDelete...but Acemoglu and Restrepo’s analysis suggests that in recent decades, the labor-saving shifts from automation are no longer offset by new task creation or other impacts that increase demand for labor elsewhere. In addition, and in contrast to previous eras of technological change, they find that this accelerating shift to automation has not been accompanied by a similarly large rise in productivity.
This was stated better in an article about the two authors in a post by Marginal Revolution University (MRU), a site run by economic professors Tyler Cowen and Alex Tabbarrok:
Beware the Mediocre Robots!
It’s often thought that what we have to fear from automation and AI is super-robots. Acemoglu and Restrepo make the useful point that what we actually should fear is mediocre robots, robots only slightly better than humans. Think about robots replacing labor in various tasks. A super-robot replaces labor but has an immense productivity advantage which generates wealth and increases the demand for labor elsewhere. A mediocre-robot replaces the same labor but doesn’t have a huge productivity advantage. As a result, the mediocre robot is the true jobs killer because it replaces labor without greatly increasing wealth. Think about automated phone systems or chat bots.
In an empirical breakdown, Acemoglu and Restrepo suggest that what has happened in the 1990s and especially since 2000 is mediocre-robots. As a result, there has been a net decline in labor demand with no big wealth increase. Thus, Acemoglu is more negative than many economists on automation, at least as it has occurred recently.
More generally, Acemoglu and Restrepo create a new type of production function and use that to reformulate how we think about production and how we measure what is happening in the economy with automation and AI. This is one of the most important new pieces on automation and the economy.
I've quoted the whole post, but here is the source anyway in case someone wants to read the comments:
Beware the Mediocre Robots!
Correction: Tabarrok, not Tabbarrok.
ReplyDeleteThey all fail to recognize that even mediocre robots replacing humans increases the opportunity for leisure. A currency sovereign is in a position to fund that leisure with guaranteed income and an employer of last report program to complement it. This turns a negative externality (unemployment) into positive one (increased leisure). Increased leisure is increased freedom not merely negatively in the sense of not needing to work but also in the positive sense of having freedom to choose funded by welfare payments. This also avoids the problem of unsold goods as a result of unemployment, which is a factor in economic contraction. The same amount of goods are produced with less labor and the funding is provided to purchase them.
ReplyDeleteBTW, I would not expect any of the above economists to figure this out.
Tom, Covid is making that textbook MMT pov look at best naive…
ReplyDeleteMatt, Covid is an exogenous shock. No one has a handle on it and it is uncertain how long it will last.
ReplyDeleteThis is not the only exogenous shock we are facing. War is one, and climate change is another.
There is no way for economics to deal with these conditions for the simple reason that this involves a complex adaptive system in which many factors are operative simultaneously and influence each other.
Economists are just guessing now, and trying to put out one fire or several fires is likely to result in unintentional consequences.
Too many unknown unknowns.
Healthcare system is breaking down:
ReplyDeletehttps://twitter.com/i_deficit_moron/status/1471909116431978497?s=21
We need PEOPLE…
Time for a supply side renaissance?
ReplyDelete