More Robots, Fewer Jobs: capital vs. labor in production
Glad to see they&#x27;re framing as a capital&#x2F;labor question, because there are additional important considerations about robots replacing labor, in addition to increased productivity:<p>1. Robots are capital, and therefore investment, while labor is a pure expense. Capital will generate income that can be reinvested back into more capital etc, generating more wealth for the owner, and they can sell those robots later to turn that investment liquid.<p>But labor is purely an expense, and the money that a manufacturer pays to employees is wealth that they&#x27;ve transferred elsewhere, it doesn&#x27;t compound, and it can&#x27;t be owned and controlled like capital can.<p>2. In terms of taxation, governments in Europe and US tend to: 1. Tax labor relatively heavily (income taxes), 2. Tax capital gains relatively lightly, and 3. Do <i>not</i> tax capital ownership as such. So it&#x27;s rational for capital owners to try to replace labor with capital if it can perform the same tasks - with tragic effects for labor.<p>Following Piketty, it seems to make sense to introduce a small but nonzero tax on the ownership of capital (not just on capital gains at the time of a sale) to offset these changes.