Robots! Not content with milking our cows and displacing our boyfriends and girlfriends, now they're exploding our labor markets. At the blog Modeled Behavior, Karl Smith asks and answers the question: assuming an infinite supply of robots as smart as humans, what effect would they have on our economy?
"In general equilibrium all profits accrue to the irreproducible factors of production," writes Smith. "If human intelligent robots mean that labor is reproducible then natural resources become the only irreproducible factor ... The real price of land in the robot future will skyrocket as the earth becomes populated by trillions upon trillions of human intelligent robot workers and the return to labor will fall to the marginal cost of producing a new robot."
They'll drive down our wages! Humans will be replaced! We stand by all the bad things we've ever said about robots!
"The real price of natural resources will skyrocket," Smith continues. "Your house, for example, might still be worth 250K dollars but within a few years the cost of deconstructing your existing house and building a new house from the parts might be 500 dollars and could be done by several thousand robots in an afternoon. As you can see in a world of such cheap service the actual cost of materials becomes a huge consideration ... This is why everyone who owns something besides their own labor power would likely become very rich, very fast in the robot future."
Hmm. Wait. We'll all become rich? We take back some of the bad things we've ever said about robots!
"In some ways the robot future would seem more natural," Smith adds. "It is a constant source of confusion to people that human time is vastly more valuable than natural resources." He explains rather thoughtfully:
People resist vehemently the fact that it is wasteful to build a careful quality-constructed thing once rather than to pop out thousands of cheap copies and then throw them away once they break. Our intuition places a really high value of materials and a comparably low value on human time. This is why recycling seems obviously efficient to most people but is profitable for no one but the homeless and then only after government subsidies.
The robot future would bring the world more into line with intuition. The price of human time would fall, the real price of materials would skyrocket and recycling in one form or another would be hugely profitable and indeed probably the basis for much if not most of the economy.
Robots will turn us all into recyclers? We hate recycling! They keep changing the rules about bottle caps and pizza boxes! We re-assert all the previously rescinded bad things we've ever said about robots!
(It's worth pointing out, too--for any political folk out there--the point made in Karl Smith's actual headline: robots will depress wages. Immigrants, on the other hand, won't.)