Paradise is no longer what it once was. Elon Musk and many other high priests of the digital age are now assuring us that thanks to artificial intelligence (AI) and clever robots, all conceivable goods and services will soon be available in abundance and without human effort, meaning that paradisiacal conditions will prevail. But this paradise could possibly have hellish side effects: there is supposedly a threat of mass unemployment, not least in the middle class of well-trained employees, the associated impoverishment of broader sections of society and, as a result, the collapse of welfare states. Somehow we imagined paradise differently.
I think such fears are understandable, but far too pessimistic. Every new technology in the last 200 years has triggered such fears, and each time they have proven to be largely unfounded. Because when old jobs disappear, new ones always arise. Instead of farriers, there are app developers today, and if AIs make these unnecessary at some point, there will be other jobs that we can’t even think of today. Television hasn’t made radio obsolete, digital books haven’t replaced printed ones, and cash is holding up pretty well despite digital payment methods. Innovations expand rather than directly replace. It’s always been that way, and there’s no reason why it shouldn’t stay that way in the future.
One can, of course, object that this time the disruptions will be so strong and brutal that unemployment will rise sharply, at least temporarily, and could thus lead to the impoverishment of a large number of people. I also think that is unlikely, for a reason that is rarely discussed publicly. Robots and AI will be used where they can produce more cheaply than humans. Anything else wouldn’t make sense. Therefore, the mass use of these machines will mean that products can be manufactured cheaper, sometimes much cheaper, than today. For example, if inexpensive robots cut asparagus 24/7, the asparagus will be available at a lower price.
That means, if you think it through: the new technologies will mean that people may temporarily have less work and therefore less income – but they will still be able to consume enough thanks to falling prices. A kind of robot deflation is therefore quite likely. In the best case scenario, this means working less, but not being able to afford less because of the cheaper prices – that’s not really a tragic fate.
It is important that the state ensures that competition between companies is as strong as possible. What must be prevented is that companies do not pass on the exploding productivity to consumers in the form of falling prices, but rather absorb it themselves. Only competition can help; it will be the most effective weapon against possible negative consequences of the automation of work.
“In the best case scenario, this means working less, but not being able to afford less because of the cheaper prices.”
What would be completely wrong, however, is what left-wing economists in particular and recently also the SPÖ are propagating today, namely new taxes on the work of robots and artificial intelligences, also trivializingly called “value creation levy”. This would only lead to countries with such taxes losing competitiveness and ultimately jeopardizing the financing of the welfare state. An apparently paradoxical phenomenon can already be observed today: countries with a particularly large number of robots in industry, such as China, South Korea or Taiwan, record particularly low unemployment rates.
So it probably won’t be a paradise that we will enter thanks to the blessings of technical progress – but it will be liberation from the work that people rightly find to be toil. And that’s not nothing.
About the author: Christian Ortner is a columnist and author in Vienna.
