Technology as a Threat , And an Old Threat.

A familiar refrain has been raised a thousand times, from the dawn of the Industrial Revolution until now: more technology will throw workers out of their jobs, machines will do everything, and the common man will be left jobless with no way to provide for himself. Of course, this notion has been refuted a thousand times by economists, from Bastiat to Mises and Rothbard, even today where Tom Woods and Jason Stapleton have addressed the concern. (Their podcast episodes where they deal with this are linked here for Tom and here for Jason.)

Usually, I am critical of the economists who espouse errors, but here I have no problem with what anyone has said. I have read columns from Sowell on this, and he has it right as well.  My criticism here is for those who raise the complaint.

One of the best objections to this complaint thus far has come from the Jason Stapleton Facebook group, where a member asked about artificial intelligence rather than merely machines and technology. This is a much more challenging concept that deserves further consideration.

If for the sake of the argument we can set aside the morally repugnant nature of slavery, we might ask ourselves what was the impact of slavery on the “free” labor market in the Antebellum South?

Slaves were as close as we have gotten to artificial intelligence, and yet they had real intelligence. Importantly, slavery negatively affected the labor market for free laborers. This was the primary reason why Lincoln opposed the expansion of slavery into the western states, and not because he had a soft spot in his heart for the oppressed and downtrodden. Rather, Lincoln realized that where there were slaves it was much more difficult for free whites, who can vote, to find jobs.

So if I were sympathetic to argument, I would point to this as proof that it is possible for technology and AI to displace workers almost entirely. If it happened in the South, where slaves displaced free laborers, then why could it not happen again with technology? Slaves reproduced more slaves, and if AI reproduced more AI wouldn’t we be in the same position but even worse? If not what is the difference?

The key difference is costs. The slave costs less per labor hour than the free man, though the output was less. Mises famously argued in Human Action that slavery was inefficient and that the producer who used free labor would have higher profit margins than the producer who relied on slave labor. (chapter 9 of Human Action)

Really, it is all about costs. What is the cost of employing a machine versus a worker? The machine is at a disadvantage here. While it takes X dollars to purchase and maintain a machine, the human has the ability to compete and to cut his price (i.e. the cost of hiring him), barring any interference by the State. So where a fast food restaurant may consider installing kiosks to take orders from customers, men can respond to that by simply working for a little less (or in the real world just be contented with the wages they are getting for the work they are doing.)

Technology and AI are implemented to make existing labor more productive, and inadvertently make labor less intensive, and more valuable. Just consider the man digging a sewer line with a backhoe in 3o minutes compared to 2 men digging it out with shovels and spending all day at it. If there were enough men willing to work for $1.00 an hour, the backhoe would not have been bought and would not be in use. It is at least to some degree the workers who determine what new technologies come into the market. The fact that there are not enough men willing to dig with picks and shovels for $1.00 an hour suggests that no one will be long out of work with the introduction of the backhoe.

If it ever gets so easy to produce machines that can produce machines, and do everything for us, then the cost of these machines will necessarily not be very expensive at all, and perhaps each of us would have a dozen bots that we are able to employ to provide us with all our wants and needs. If not they would be restricted only to the industries with the highest return per input. In either case, it is something that really makes me think, but does not make me worry that much at all.

Even if it were a real threat, it is a real threat of the same sort as the Sun burning out and leaving us in the dark. It will happen millions of years from now, and either something else will get us in the meantime, or we will figure out a work around between now and then. I am much more concerned about government interference in our ability to provide for ourselves and their constant proclivity to make war.

Leave a Reply

Your email address will not be published. Required fields are marked *