June 3, 2014


Prepare yourselves for the robot economy revolution : We are at the beginning of a tidal wave of new economic innovation and growth that will change the way we think about the economy forever (John Aziz, 6/02/14, The Week)

The economist Thomas Malthus famously predicted famine due to a multiplying population that would have only a static amount of farmland. He was wrong, because he did not foresee the technologies of mechanized agriculture that allowed crop yields to rise hugely and feed the growing population. Similarly, those who predict stagnant growth today due to falling population growth are overlooking the changing technological dynamics of our time.

While the human population may level off, we are swiftly moving toward a world where humans are not the only productive agents. We're moving into the age of the robots -- with robots taking over many roles in the manufacturing industry (illustrated beautifully by this chart showing falling manufacturing employment and rising manufacturing output) as well as moving into fields including food servers, bank tellers, telephone operators, receptionists, mail carriers, travel agents, typists, telemarketers, and stock market traders. While human beings may be constrained in their productivity by their own time and energy, assisted by robots, the economy can produce more without any additional people.

Unlike traditional workers, robots don't need feeding, clothing, or sheltering. They don't need to be paid for their work. They simply need to be programmed (something which can itself be increasingly automated) and powered by electricity. And while electricity is a constraint in the age of fossil fuels (where fuels have to be pumped out of the ground), in the age of renewable energy -- the cost of which has fallen to such an extent that even Big Oil admits it will be the dominant form of energy on Earth by the end of the century -- electricity becomes far less of a constraint. Need more energy to power more robots? Have your robots assemble more solar panels or wind turbines.

The technology I'm talking about isn't some far-off fantasy. In Malthus' day, the agricultural advances which derailed his predictions occurred mostly after he had made his predictions. Today, robots are cleaning up nuclear accidents, cleaning up oil spills, playing the trumpet, performing surgery on humans, killing al Qaeda operatives in Yemen, driving around California, coordinating to design and build complex structures, and (yes) building more robots. This is the beginning of a tidal wave of new economic innovation and growth that will change the way we think about the economy forever, just as the agricultural revolution that proved Malthus' predictions wrong did.
Posted by at June 3, 2014 7:24 PM
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