Dietz 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.

Last month, Jenée Desmond-Harris and Estelle Caswell wrote a great article over at Vox, The Myth of Race, Debunked in 3 Minutes. The “3 minutes” is a reference to a video they put together that I’ve embedded below. This concept should not be surprising to readers of this site. Actually, it shouldn’t be surprising to anyone at this point. It’s just not a concept you can get hold of. It quickly falls apart in your hands. Even the idea of “African American” doesn’t make any sense because we all came from Africa.

There is, even more troubling, the fact that Africa is a really big place. We have seen this in discussions of the Ebola epidemic in Africa. Many people wanted to stop all flights from the continent as though Sierra Leone is the same as Kenya. (They are about 3,500 miles apart.) There is a strong sense that lumping all of Africa together is like dismissing the population as “those people” who just don’t matter.

Before there was the concept of race, we definitely had the idea of “peoples,” as in, “People of Haiti.” And that’s not to say that people weren’t just as bigoted then as they are now. As it was, people of one area often found no problem with enslaving the people of another. The United States posed a special problem for this kind of thinking, however. Michelle Alexander discusses this in her excellent book, The New Jim Crow. Early on, poor people had this annoying habit of binding together and rising up against their aristocratic oppressors. So the rich embraced this idea of the natural order of things whereby “blacks” were slaves. This allowed poor “whites” to feel superior, even in the squalor of their conditions. And this is an idea that continues to work to keep poor people down — fighting each other rather than their true oppressors.

Something I didn’t know about, however, has to do with sickle-cell anemia. This is a supposedly race-specific disease. In fact, you can still find bigots using it to justify the inferiority of blacks. But it turns out that sickle-cell anemia is simply an evolutionary response to having recent ancestors who lived in areas with Malaria. That includes Africa, but also southern Europe, Persian Gulf, and India. I don’t think that most people would think of Indians and Angolans as the same race.

All of this means that race isn’t real as in a scientific thing. But that doesn’t mean that race isn’t a real social construct. I don’t think there is much that is more fundamental to our society than racism. As a result, we can’t not talk about “African Americans” and “Latinos.” Because those constructs are real. But they don’t speak to any fact about a given individual; they just speak to our racism and how we aggregate individuals. And as a result, we need to continue to talk about it. The conservative notion is ridiculous that it is talking about these distinctions that is the real cause of racism.

As I know only too well in myself, my racist tendencies are not manifested in articles like this one. Rather they are manifested in subconscious reactions to people who don’t look like me or don’t have names like mine or any number of other things. These are the things that create the arbitrary categories that we call races. And on top of that has been built a political, social, and economic structure that physically renders these prejudices. The Vox article sums it up:

So we continue to talk about race, because social constructs matter. And not talking about them doesn’t make them go away; it just hides them so they can fester — allowing people to believe (without thinking about it) that these constructs are based on something more than our individual and collective racism.

Late last year, I wrote to Dean Baker — the Pollyanna of economists — asking him about why Alan Greenspan didn’t change inflation thinking. I wrote, “Greenspan allowed inflation to get below 4%, yet there was no accelerating inflation. So why do I continue to hear that 5.5% unemployment is the NAIRU? Am I missing something?” Baker wrote back, “That history is conveniently ignored.” Indeed it is.

For those of you reasonable people who don’t follow this stuff, NAIRU stands for “Non-Accelerating Inflation Rate of Unemployment.” It is supposedly the rate of unemployment below which inflation will start to rise. It’s actually a nasty little concept. Beneath it is the idea that low inflation creates a workers’ market. And because of this, workers can demand higher wages and this in turn causes prices to rise — hence inflation.

I doubt this is even true. After four decades during which all economic growth has gone to the people at the very top of the economy, higher wages will not necessarily lead to higher prices. In fact, the pure economics of it indicates that it should simply cause a more equitable distribution of incomes. Basically: owners should make less and workers should make more. If you are skeptical of this, read my article, What Sets Prices? The idea that increased costs lead to higher prices is just wrong.

Right now, everywhere I turn, I hear that the NAIRU is between 5.0% and 5.5%. This is a problem, because the standard unemployment rate is 5.6%, and it may well be lower by the time this article gets published. So this has lots of people screaming for the Federal Reserve to increase interest rates to head off inflation. But the yearly inflation rate for last year was 1.66% — well below the Fed’s already too low 2% inflation target. And there is absolutely no trend. (Actually, there is a downward trend — but it isn’t significant.)

In the late 1990s, Alan Greenspan let unemployment get low. People warned him when it got to 5% but he let it go. And the inflation rate got down to 4.2% without any hint of inflation. He went further, but as it continued down to a low point of 3.8%, the inflation rate did go up a tad. The inflation rate maxed out at 3.7%. Bear in mind that this is not a bad rate. In general, I think the Fed’s inflation target ought to be in the 3.0% to 3.5% range. But it is now the consensus of really, really rich people that the Fed’s target should be 2%. Regardless, Greenspan managed to have inflation below 2% with unemployment around 4.3%.

Note the madness of this. The power elite claim that we must maintain a high unemployment rate with low worker bargaining power so that the rich don’t have to face even the risk of inflation. This is the kind of “conventional wisdom” that you get when you live in an oligarchy and not a democracy.

Recently, Paul Krugman wrote a good article on this subject, but from an entirely different perspective, Tough Fedding. In it, he suggested that the whole NAIRU may not be valid in the current environment of a Fed absolutely determined to keep inflation at 2% or less. And his calculations indicate that we shouldn’t even begin to worry about inflation until unemployment gets below 5%. He concluded the article by noting the options:

I see it from the workers’ standpoint, of course. It may be a little hard for Krugman to see what’s going on because he no longer lives in this world. But it is very simple: the people at the Fed are far more concerned about even the smallest threat to their rich friends than they are about the wholesale destruction of workers’ lives. And that’s why they do things that make Krugman scratch his head.

In the Dean Baker quote above, he was being being sarcastic. The people who want to puts the brakes on our small economic recovery haven’t forgotten the lessons of the late 1990s. And they don’t disagree with Krugman’s simple model. They just don’t care.