Feb 08

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The Technology-Inequality Feedback

Dietz VollrathDietz Vollrath wrote a good article on his The Growth Economics Blog, Techno-Neutrality. It counters the argument that robots are going to make us all lose our jobs. He makes four strong points: (1) The economy is more creative than we can imagine; (2) Robots change prices as well as wages; (3) Who is going to buy what the robots produce?; and (4) Wealth concentration would be a problem with or without robots. And I agree: by standard economic analysis, we shouldn’t have anything to worry about. In general, automation has been a great thing for humans. Yet I’m still concerned. Let me explain that.

My fear is not that one person is going to end up with all the robots and the rest of us will starve to death. But it is quite possible that we could end up with something like a banana republic. In this scenario, the society would have a small rich elite, a small middle class to serve their more advanced needs (Building and repairing robots?) and a huge under class. This is also, more or less, a feudal system. And I understand that feudalism was dictated by law. But “property rights” are a form of law. The more money that the rich have, the more they can corner the market in robots and natural resources.

I really am not certain how realistic this scenario is. I don’t give it a great deal of thought because we have a very long way to go to get to that point. But it is certainly true that over the last century, technology has been used to increase inequality. And part of this is just our intellectual property laws. It is shocking that as the speed of society has gotten faster — so that movies that were made ten years ago are now called “old” — has an ever increasing copyright length. A film made today will still be under copyright protection when a baby born today is long dead. But this, I fear strikes right at the heart of the problem of robots and inequality.

With each new innovation comes far greater financial rewards. So Disney is willing to spend millions of dollars every few years to lobby Congress to yet again increase the length of copyright to save Mickey Mouse from the indignity of being free to everyone. Imagine if Common Sense were still under copyright. Outrageous? I doubt it. The only reason it isn’t is because the modern corporation didn’t exist to profit off it at that time. If it had, I’m sure that the United States government would have been convinced by now to create perpetual copyright. It doesn’t make sense for a human to care about that sort of thing, but corporations don’t die.

So the question is really how robots will cause the economic system to be distorted. I understand that in a truly “free market,” it wouldn’t be possible for a few people to control all the robots. I also understand that there is no such thing as a “free market” and that there never has been. So what have we seen the last four decades? Productivity gains — due to one extent or another to robots — have all gone to the owners of capital. Thus it isn’t surprising that people are worried.

In 1790, copyright length was 28 years. By 1831, it was 42. By 1909, it was 56. By 1976, it was 75. By 1998, it was 95. Notice something there? I don’t just mean that it is increasing. I mean that the rate that it is going up is increasing. It is getting worse at a faster rate. And this is just what we would expect when the rich have both increasing power and motivation to keep any innovations to themselves.

I do agree that it isn’t technology itself that is the problem. But we are on a four decade long path where technology has only been used to enrich the already rich. And the longer this goes on, the harder it becomes for technology to do what the economics claims it should do and what history has show that it has done. I hope that Dietz Vollrath is right in his first point, “The economy is more creative than we can imagine.” In my life, that hasn’t been the case. American economics is more ossified than a petrified forest.

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  1. JMF

    David Graeber, whom I like more than anyone I’ve recommended his books to likes (too radical, I guess) had a good take on robot economics here:


    Basically, we don’t have robots doing all our dirty work and freeing us for leisure because humans doing the dirty work is far cheaper. Could we have robots sewing shoes? Sure. We don’t, sweatshops are cheaper. We have robots that replace assembly-line car workers because those workers had good-paying union jobs.

    It’s odd that the visionary sci-fi writers who imagined a robot-labor future didn’t correctly imagine how robots would be used. But they weren’t political, much, except for Wells (our side) and Heinlein (other side.)

    1. Frank Moraes

      I’ll read that article later. Yes, I think the problem with robots is that they will be used as yet another tool to keep the poor down. But in a sense, they are our best chance for political change. The rich have a tendency to overuse their advantages. As Dietz Vollrath points out, “Who is going to buy their stuff?” But I really don’t think that the rich think about the long term. They will blithely run off a cliff trying to grab that last dollar bill.

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