We have all seen predictions over the last few years about increasing automation and efficiency in our economy, that robots are going to take over and destroy huge numbers of jobs.
But this is really an old story that is being way overblown. From the earliest times man has consistently sought to reduce the input of labor, capital and energy for everything from transportation to building homes. In other words, more efficiency and automation. For instance:
*Travelers once moved by walking and by horses, and by cart and stagecoach and sailing vessels. And then by steam ships and trains. And then cars. And then airplanes and jetliners. Fantastic, with each new system more efficient than the former.
*Homes once were built with expensive nails made one-by-one by hand. Now nails are produced by the trillions in automated factories, and installed using pneumatic hammers, with one single pop needed instead of multiple time-consuming whacks with a hammer. Wonderful.
Efficiency is a good thing. It helps more people to move farther faster, to have nicer homes, and to have good and bountiful food which we get with our mechanized agricultural economy that uses very few workers compared to 200 years ago.
Efficiency has always been a key element in helping economies to grow and prosper. National economies, companies and individual have suffered when they did not become efficient. But Democrats and socialists are now warning that efficiency and automation are bad things that are killing jobs. This is typical socialist thinking, to make good things sound bad.
Yet after thousands of years of increasing efficiency and automation we have 150 million Americans employed in the work force and could have many more employed with the right policies.
Thus we can see with our own eyes that the two ideas – automation and strong economies – are not mutually exclusive, but that they are mutually inclusive, and thus we can surmise that the dire predictions about the robotized future are being vastly exaggerated.
Still we see predictions that robots and automation will eventually replace tens of millions of workers and will be so efficient that they will create most of the wealth. And thus Americans won’t have to work, and won’t have jobs anyway. Then we see these opportunists on the political left like mega-billionaire Mark Zuckerberg calling for a “guaranteed income” or “universal income” for people who are put out of work by machines.
This piggybacks on the decades-old refrain from the left that we need a guaranteed income and is just another scam that is also known as “socialism” or “communism”. And it does not work. We all have seen with our own eyes that free market capitalism, where people are allowed to produce their own wealth using whatever means they can including automation, also produces the most prosperous, innovative and happiest people. And that the best way to naturally guarantee income is to allow the economy to expand.
As an example, the American economy today produces twice as much wealth per unit of energy consumed as it did in the 1950s. That is real efficiency. It has not harmed us; it has helped us. How could it possibly be harmful to use less energy to make more goods and services?
But somehow socialists imply that this efficiency is a bad idea, and Zuckerberg is on the warpath. Money.CNN.com reports:
“We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas,” Zuckerberg said at his Harvard commencement address.
It’s a concept that’s getting a lot of attention, especially in Silicon Valley. A country that has universal basic income guarantees every person a set minimum income regardless of criteria — age, wealth, job status, hometown, family size, etc.
That means everyone gets a paycheck, whether they have a job or not.
However, the countries actually experimenting with the concept, Canada and Finland, aren’t embracing the universal nature of it. So far, they’re only giving guaranteed income to residents who were either recently on unemployment benefits or are low income.
Proponents say the aim is to give workers greater financial security as concerns rise about machines taking away jobs. It’s also intended to alleviate income inequality.
Critics say the idea has good intentions but it doesn’t solve bigger problems related to abysmal wage growth in recent decades. They also say it challenges the notion that you need to work to earn money.
Indeed this “universal income” is a bad idea for three big reasons:
*it would make people lazy. They would expect to be supported;
*it would be administered by the government, which leads to corruption; and
*it would be very costly and create enormous government debt.
This is why communist nations, where people are allegedly ‘taken care of’ by their government with ideas like a universal income, always sound great but end up poor and miserable.
We can certainly make policies to assure that people don’t starve, which we already have done. But we really need policies that create jobs in the first place so that people don’t need to rely on government or a “universal income”. Yet the Democrats who want a guaranteed income policy are the same people who are doing everything possible to thwart natural job creation.
Our economy has been strangled for decades by forces emanating from the Democrat left – high business taxes, high income taxes, high sales taxes, over-regulation, relentless lawsuits against the private sector, special taxes on ‘the rich’, massive ‘green’ obstruction and regulations, daily media assaults on businesses and corporations, high national debt, obstruction of the energy supply leading to higher prices, outrageous union wage demands, and corrupt bureaucracies.
For example the movement toward a $15 minimum wage already is killing jobs and closing restaurants even though it has not even reached $15 yet. This is going to accelerate if this idea is not rolled back. The Wendy’s hamburger chain has responded to $15 by throwing thousands of its employees out of work or not hiring them. Wendy’s has purchased computerized ordering kiosks to eliminate increasingly expensive human order takers. As predicted.
In short, it is not automation that is killing these jobs and leading to a demand for a guaranteed income; it is outrageous wage demands that are killing jobs unnecessarily and leading to automation.
There also are robots being introduced that cook hamburgers and make french fries and do myriad other tasks. Their use is going to expand if wage demands become more unsustainable. And this is not just in the restaurant business. It is economy-wide.
A $15 minimum means that the government is deciding through legislation what wages private companies should pay workers. This will never work. Even George Washington warned against it. Employers should decide what to pay.
In other words, a $15 minimum wage doesn’t do much for people who are out of work. Or to put it another way workers are better off employed at $10 an hour ($20,000 per year income) than unemployed at $15 an hour ($0 per year income).
We know that a free market economy will always find a balance between automation and employment, as it has done naturally for thousands of years.
It also shows that the economy gets thrown out of balance when the government gets too involved. And then demagogues like Zuckerberg make opportunistic demands for a guaranteed income.
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