Blog

After Brexit, Robots

Published on October 20, 2016

robots

On June 24th I was asked by a technology magazine for my reaction to Brexit. I think I heard myself say that the solution to a lack of immigrant labour for seasonal activities such as fruit picking is… robots. I don’t think that there is a robot capable of such an activity at the moment but robots are going to do more and more, it’s inevitable. It’s so worrying that even capable business people have shared their fears with me:

  • Will they dislocate society by creating more unemployment?
  • Will they reduce economic activity – GDP – because robots don’t spend money as workers do?

Initially I think they will displace jobs. All machines displace human activity, that’s one reason why we create them. But they create new activities too. Imagine the delight at being the first train guards, 150 years ago. But it is beyond my imagination to see some jobs being done by robots:

  • Hairdressing is too intimate, almost a ritual intercourse between cutter and head owner;
  • Analysis of a company is always unsatisfactory, in my view, until you have reconciled the figures with your assessment of the managers;
  • And how could we ever live without handmade biscuits…

The removal of wages and their replacement by capital equipment is part of a trend that has been accelerating in the last 50 years – the concentration of wealth in the owners of capital rather than the providers of labour. Wealth attributable to labour has moved from 66% in the Fifties to less than 60% by the mid-2000s. This has been disguised by the reduction in poverty in the developing world and the consequent reduction in costs for consumer/workers in the West. But that boon is over and people can see it when they shop. I think that the degradation of jobs is at the heart of the Brexit vote and it’s an issue which will become more acute with the advent of artificial intelligences.

I don’t think that we can bury our heads in the sand any longer. We need to invest in re-training and that will need some tax revenue. Surveys show that the current tax regime never collects more than 40% of GDP and that’s why I subscribe to the view of Thomas Picketty that we should add a capital tax. I would exclude pension funds; and SMEs and houses up to a certain size because “the first million is always the hardest”. In my view taxing capital in this way and re-training workers strikes a balance between enabling wealth creation and re-distributing it – a new social contract perhaps?

Of course the reluctance of all of us to pay more tax is ever–present. But if it got the railways working smoothly, and removed wildcat strikes by taxi drivers et al, as well as creating new, desirable jobs then it might be accepted by resident capitalists. There is still the risk that a large non-resident corporation could claim that their robots are Irish and should be taxed at the rate it has agreed with that Government. But at least now we could revoke their Robo-visas and send them back.