The robots are coming and are already here

Tesla Factory

The high tech factory Tesla factory is a revelation. Like most large automakers, the production process has been automated to a degree that would have been unfathomable a generation ago.

Discussion on the rise of robots has become increasingly common, with optimists declaring the expected productivity improvements and pessimists fretting about all the expected job losses. With robots now replacing humans even in what once considered the eternal wellspring of cheap labor(read China), the robot future is now surely upon us.

We are reminded that past waves of mechanization - think the Industrial  revolution - have led to net massive job creation. This may be true, but we by no means live in a world of full employment. In any case, there is reason to believe this time may be different: the demand for labor will be permanently decreased as robots begin to perform a wide range of tasks.

Decreased demand for labor need not be a bad thing per se. The labor force is expected to shrink in much of Europe and East Asia, so accelerated automation may in fact be a necessity as labor shortages begin to bite. On the other hand, the US, South East Asia and Africa should see continued growth in the size of the labor force. If anything, much of South East Asia and Africa has massive unemployment and underemployment(including a huge reserve army of “farmers” who would be more productive doing almost anything else). Thus continued decrease in the demand of labor, under the current global system, seems to spell bad news for much of the world’s poorest.

Its difficult to see how significant improvements in living standards will happen without the mass-employment effects that manufacturing has traditionally provided.

But that's the pessimistic take. Perhaps too pessimistic.