Good read. Fully agree on the first two fallacies, and hence with your conclusions re the impact of robots. However, I disagree with the tenets of your third point. It ignores that we face serious collective action problems („tragedy of the commons“) and externalities when it comes to environmental resource use. So, we cannot rely on markets and rising prices to just fix the problem. Also, climate change isn’t even about a finite resource „running out“, so that rising prices could trigger substitution, but about certain environmental mechanisms irreversibly tipping over (e.g. Gulf Stream). I feel here the discussion „finite or not“ slightly misses the point. Hence, I’m less optimistic when it comes to the climate and environment and would argue that we need immediate and drastic government intervention.
To challenge the limits to growth don't you need to explain away the ecological/biodiversity trends - i.e. move outside the economic lens to a much wider view?
Not necessarily. Economics can contemplate the proper pricing of externalities, and indeed some economists have been arguing for that for decades. The political will, to make markets function that way, has long been mostly bought off. Can that be changed? Has the point of no return on that been passed? These are not rhetorical questions.
It seem like economists will never get rid of what they consider "fallacies," and can probably be dropped in the bucket with the rest of their most problematic base assumptions.
You dismiss all these losers to innovation -- oh, very "sad" indeed -- but then say we will all be "better off in the long run." Will we? I'm more prone to see it as in the long run we will all be dead. So it's OK to sacrifice these sad sacks you mentioned because supposedly their children, or children's children, will be better off?
Why is it you get to decide this? And how can you say we will all be "better off"from such an innovation as robotics? Who will be better off? Are most people "better off" because of innovations since the 70's, for instance, where I can just as easily read elsewhere in you work that the living standards of the non-rich have been declining in this time period, and (because the rich have been capturing all of the increases in productivity and keeping it for themselves), and this how this growing inequality is a problem, and you might even consider yourself an expert on the topic.
You don't see you are contradicting yourself? Deciding it is OK to sacrifice the losers of history does not contradict your views on the problems of inequality? That is simply rubbish. Some "fallacy" you've sketched out there, Milanovic.
Human needs are not finite. This is partly a semantic issue - the definition of "need." Perhaps if we spoke of "wants" instead, you would recognize that BM's comment is true.
Ten years ago I couldn't have got - and didn't know it would (or perhaps even then did) exist - classical radio over the internet.
Now that it does, readily, exist I am listening to a classical broadcast from France while typing this comment. I love this capability, and bought a stereo receiver that has the wifi utility built in.
There are many wants like this, and as BM postulates there will surely be many new ones we have not yet foreseen.
In my grandparents generation, radio broadcasts were at first non-existent, and then later something they consumed every single day.
I believe that the fear of workers being replaced by robots does not come from the "unknown", but rather of losing income and your living base in a individualistic, market driven system, namely capitalism. If the means of production were collectively owned, and the the satisfaction of needs fairly distributed, then workers would not fear automation.
Is climate change/global warming another lump fallacy? Or should we expect human ingenuity to once again save the day as prices send the right signals to markets? Or maybe for this one the time horizon for the solutions are just a bit too long? We may not run out of resources but might we run out of a world we can live in?
Agreed that the relevant time lines might not have a positive outcome.
I fluctuate on this. On the one hand, there have even recently been some dramatic developments in nuclear fusion research - with some experiments producing more power than was input, and tokamak plasmas that are far more stable than previous iterations. We would not run out of hydrogen isotopes for production of fusion energy for a Very long time. This technology could, in theory, replace almost all fossil fuel consumption. (I know that this has been hypothesized for quite a time - decades - but there are real breakthroughs occurring in our time. E.g., https://www.bbc.com/news/science-environment-60312633 )
On the other hand, parts of the world are moving toward high daily temperatures that exceed the ability of humans to survive them.
There is alarmism and then there is realism. So far, it seems that the controllers of large business entities know the risks of extreme climate change, but they are taking the fossil fuel profits anyway. These controllers are mostly older men, so maybe they think: 'in the long run - what long run, we won't be around for that.' Candidly, I don't know what those people think about their ethical responsibilities.
The increased use of robotics may not offset the effects of demographic decline, but it should make the workforce more productive. Moving workers from lower- to higher-value-added work is what ultimately increases living standards.
Thanks, I agree we have nothing to fear from robots. As best I can make out, the fear from robots seem to be a Western phenomenon, whereas China (and her people) seem to embrace automation in all respects. It seems odd because I would have thought that a labour-intensive economy like China's would have more to fear from automation than a capital intensive economy like the US. Yet, "robot phobia" seems to be a Western phenomenon, while China is rushing head long to automate its factories, and even vehicles.
This "paradox" (if I can use that term) is perhaps explained by a greater optimism of the Chinese people for the future, and the higher regard that the Chinese leadership has for science and technology as the key to a better life.
That said, my impression is that most (all?) countries and peoples in Asia seem to share this optimism and high regard for science, technology & automation. (I think the same is true for Japan, Korea, but I am not sure.) So, it's not something that is unique to China.
Good read. Fully agree on the first two fallacies, and hence with your conclusions re the impact of robots. However, I disagree with the tenets of your third point. It ignores that we face serious collective action problems („tragedy of the commons“) and externalities when it comes to environmental resource use. So, we cannot rely on markets and rising prices to just fix the problem. Also, climate change isn’t even about a finite resource „running out“, so that rising prices could trigger substitution, but about certain environmental mechanisms irreversibly tipping over (e.g. Gulf Stream). I feel here the discussion „finite or not“ slightly misses the point. Hence, I’m less optimistic when it comes to the climate and environment and would argue that we need immediate and drastic government intervention.
Simon & Ehrlich wager
To challenge the limits to growth don't you need to explain away the ecological/biodiversity trends - i.e. move outside the economic lens to a much wider view?
Not necessarily. Economics can contemplate the proper pricing of externalities, and indeed some economists have been arguing for that for decades. The political will, to make markets function that way, has long been mostly bought off. Can that be changed? Has the point of no return on that been passed? These are not rhetorical questions.
It seem like economists will never get rid of what they consider "fallacies," and can probably be dropped in the bucket with the rest of their most problematic base assumptions.
You dismiss all these losers to innovation -- oh, very "sad" indeed -- but then say we will all be "better off in the long run." Will we? I'm more prone to see it as in the long run we will all be dead. So it's OK to sacrifice these sad sacks you mentioned because supposedly their children, or children's children, will be better off?
Why is it you get to decide this? And how can you say we will all be "better off"from such an innovation as robotics? Who will be better off? Are most people "better off" because of innovations since the 70's, for instance, where I can just as easily read elsewhere in you work that the living standards of the non-rich have been declining in this time period, and (because the rich have been capturing all of the increases in productivity and keeping it for themselves), and this how this growing inequality is a problem, and you might even consider yourself an expert on the topic.
You don't see you are contradicting yourself? Deciding it is OK to sacrifice the losers of history does not contradict your views on the problems of inequality? That is simply rubbish. Some "fallacy" you've sketched out there, Milanovic.
Human needs are finite - capitalism's needs are infinite. Your argumentation is based on infinite capitalism. Today we should know better.
Human needs are not finite. This is partly a semantic issue - the definition of "need." Perhaps if we spoke of "wants" instead, you would recognize that BM's comment is true.
Ten years ago I couldn't have got - and didn't know it would (or perhaps even then did) exist - classical radio over the internet.
Now that it does, readily, exist I am listening to a classical broadcast from France while typing this comment. I love this capability, and bought a stereo receiver that has the wifi utility built in.
There are many wants like this, and as BM postulates there will surely be many new ones we have not yet foreseen.
In my grandparents generation, radio broadcasts were at first non-existent, and then later something they consumed every single day.
Wants are not needs. Wants are socially constructed. Most wants are unneeded.Why else would we 'need' the marketing business?
I believe that the fear of workers being replaced by robots does not come from the "unknown", but rather of losing income and your living base in a individualistic, market driven system, namely capitalism. If the means of production were collectively owned, and the the satisfaction of needs fairly distributed, then workers would not fear automation.
Is climate change/global warming another lump fallacy? Or should we expect human ingenuity to once again save the day as prices send the right signals to markets? Or maybe for this one the time horizon for the solutions are just a bit too long? We may not run out of resources but might we run out of a world we can live in?
Agreed that the relevant time lines might not have a positive outcome.
I fluctuate on this. On the one hand, there have even recently been some dramatic developments in nuclear fusion research - with some experiments producing more power than was input, and tokamak plasmas that are far more stable than previous iterations. We would not run out of hydrogen isotopes for production of fusion energy for a Very long time. This technology could, in theory, replace almost all fossil fuel consumption. (I know that this has been hypothesized for quite a time - decades - but there are real breakthroughs occurring in our time. E.g., https://www.bbc.com/news/science-environment-60312633 )
On the other hand, parts of the world are moving toward high daily temperatures that exceed the ability of humans to survive them.
There is alarmism and then there is realism. So far, it seems that the controllers of large business entities know the risks of extreme climate change, but they are taking the fossil fuel profits anyway. These controllers are mostly older men, so maybe they think: 'in the long run - what long run, we won't be around for that.' Candidly, I don't know what those people think about their ethical responsibilities.
My take on robotics in China:
The increased use of robotics may not offset the effects of demographic decline, but it should make the workforce more productive. Moving workers from lower- to higher-value-added work is what ultimately increases living standards.
https://markkruger.substack.com/p/can-robots-help-mitigate-chinas-demographic
Thanks, I agree we have nothing to fear from robots. As best I can make out, the fear from robots seem to be a Western phenomenon, whereas China (and her people) seem to embrace automation in all respects. It seems odd because I would have thought that a labour-intensive economy like China's would have more to fear from automation than a capital intensive economy like the US. Yet, "robot phobia" seems to be a Western phenomenon, while China is rushing head long to automate its factories, and even vehicles.
This "paradox" (if I can use that term) is perhaps explained by a greater optimism of the Chinese people for the future, and the higher regard that the Chinese leadership has for science and technology as the key to a better life.
That said, my impression is that most (all?) countries and peoples in Asia seem to share this optimism and high regard for science, technology & automation. (I think the same is true for Japan, Korea, but I am not sure.) So, it's not something that is unique to China.