My title is “Capitalism in the age of robots” and my aim is to consider the possible long-term impact of rapid technological progress – and in particular of work automation and artificial intelligence. And I will sometimes use the word “robots” as shorthand for any sort of machine – any combination of hardware and software – that can perform any sort of work, rather than specifically meaning something which looks like a human, with legs, arms and a smiley face.
I will argue that the rapid, unstoppable, and limitless progress of automation potential will have profound implications for the nature of and need for work, and for the distribution of income and wealth. But also profound implications for the very meaning of some concepts and measures which play a fundamental role in economic analysis – in particular productivity growth and GDP per capita. At the limit indeed, one can question whether the very concept of “an economy” or of “economics” – if defined as the study of production and consumption choices amid conditions of inherent scarcity – have any meaning in a world where, eventually, all human work activities can be automated.
And while the world of near total automation which I describe is still many years away – at least 50 and maybe 100– I will argue that gradual progress towards that future state is already having and will increasingly have, profound, paradoxical and potentially harmful, as well as potentially beneficial, consequences. In particular I will suggest that:
• The faster the underlying pace of technological advance, the lower the measured productivity growth rate will be
• Automation threatens income from activities essential to human welfare – but not income gained from zero-sum competition
• The more rapidly information and communication technology progresses, the more that wealth and income derive from inherently physical and subjective assets, such as land, brands, or beauty.
• In already rich developed countries increasing productivity growth should not be a major long term public policy priority
• Better skills cannot solve the problem of rising inequality : but excellent education must enable people to live fulfilled lives as engaged citizens, and is needed to prevent a radical decline in social mobility…..