Sunday, 25 January 2015

Will robots destabilize society?

Whenever leading British clerics make remarks of a political/economic nature they are often chastised by politicians, particularly of the right, for not sticking to theology, the implication being that they are ignoramuses on non-religious matters. The latest example is the Archbishop of Canterbury, Justin Welby's remarks to an audience on New York's Wall Street, warning that the rise of robots and gene therapy could allow a tiny elite of the super rich to amass more power while almost everyone else grows poorer. But as a former City of London oil executive Justin Welby could hardly be described as an ignoramus on economic issues and would probably shame many politicians on that score, whose profession is often seen as far below a theologian's calling.

To some extent, the Archbishop's fears have already been realized. In real terms American incomes for the vast majority have declined while the top 10% saw a real income rise in recent years, and such disparity is worsening as a tiny majority now control much of America's wealth, a shift helped by legal but morally repugnant tax avoidance schemes whose architects' great wealth give them disproportionately great power to influence tax changes in their favour at the expense of the lower and middle income groups.

There are two key economic aspects to Justin Welby's claim: the rise of inequality of incomes and its implied threat to society and the second, perhaps more serious threat, arising from societal upheavals caused by automation and gene therapy which could reinforce the economic divide. But are his views on robots wrong, reflecting Luddite thinking? It is a difficult one to call but it is clearly a potentially destabilizing issue that will need very sensitive handling to prevent unwholesome consequences in the near future.

Inequality does, of course, matter, at least potentially because in democratic societies, in particular, great wealth brings great power and history shows that such power is often exercised against the public's best interests. But there is one key difference when comparing politics in democratic societies today against those of the past. Properly advised and motivated, electorates can curb the trend towards closet plutocracy, though arguably they have not shown much puissance in that respect so far. So that suggests the greater threat ostensibly is automation, but is there some woolly thinking here?

There is no doubt that futurologists from Thomas Malthus onwards often get it wrong because while their analyses of  problems were seemingly correct the assumptions on which they based their analyses were flawed, which is often why economists' forecasts are wrong. There can be no argument, however, that more repetitive, unskilled jobs will be taken by robots as their price tags slump and they become smarter and more versatile.

A good example of robot cheapening is the mobile Baxter robot endowed with assembly task abilities and costing only $25,000, about one tenth of a typical welding and paint-spraying robot. Even in low wage economies like China the lure of low-cost robots is irresistible. Apple supplier Foxconn, for example, has plans for investing in one million robots in China. As robot prices continue to fall demand will rise and it will by no means be confined to manufacturing tasks. For over 30 years, for example, supply chain functions like storage have seen steady inroads from automation, including both horizontal and vertical load movements, palletising and high speed sortation conveyors. Sometimes, however, the progress seemed a pace too fast, as in Britain 35 years ago when the Japanese forklift manufacturer, Komatsu, trialed a wire-guided driverless forklift that could handle horizontal movements and stacking tasks within racking aisles at what was then Britain's biggest brewer operating over 1,000 forklifts. Labour union alarm and pressure ensured that the revolutionary trucks were dropped. Today there is less union power and so employers will be more likely to embrace robotics.

A controlled, responsible move towards more automation should be desirable but there is a need to maintain a watching brief. New industries will arise to take up the slack in unemployment that may arise through more automation, provided the workforce is adequately educated  to take on the challenges. That is a big aspiration, and unfortunately societal breakdown in family values (one parent families, etc) stymies its realization.  

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