Today's Editorial

11 April 2018

Artificial Intelligence and the future of work

Source: By Meghnad Desai: The Financial Express

There may be a debate in India as to whether enough jobs are being created or whether there is jobless growth. In the wider world, there is a big debate on the likely effects of artificial intelligence (AI) and robotics. There is a fear that robots will replace not just manual labour but a lot of brainwork as well. There are scenarios being painted where no human being may be needed for any paid work and robots will do everything.

Of course, a few people will be needed to produce robots and improve their quality. That would be the investment. The idea that automation will make human effort redundant, and it will create a problem of no work and too much leisure, was rife in the 1960s. Each wave of innovation leads to the fear that jobs will be destroyed. But so far while some jobs have been destroyedother jobs have been created. World has gone through phases where agriculture was the principal occupation. Then, we moved on to manufacturing. Now, a lot of the world is in a phase where services are the principal sector. Will AI and robotics be different?

With robots replacing human labour, capital will provide machines as well as labour. All output will belong to the capitalists. Robots neither eat nor drink nor sleep. So, labour costs are just those of repairs and replacement. Take an extreme case. If all income goes to profits, how do people carry on?

Many economists have come to the idea that some sort of universal income entitlement will have to be created. To finance this, the state will have to tax profits. The level of basic income will depend on the tax collection. Thus, if a tax rate of 50% were feasible, everyone can have half of per capita income as their entitlement (ignoring administrative costs of tax collection, bureaucracy, etc). Indeed, in general, the tax rate determines the fraction of per capita income which can be paid. But, will the capitalists agree? Why should they? Here is where Keynes (and even Marx) comes in. The capitalists need people to purchase their product to be able to realise profits.

The amount of income distributed as purchasing power will determine the revenue realised by the capitalists. So, we are on the horns of the circular flow dilemma. The capitalists have to give away money to get it back. They may want to give 80-90% away to get it back. Thus whatever the world is like under AI, it will provide for all. There are two positive elements to this extreme scenario. Notice, first, that this world has most incomes equal except for the capitalists who have all the profits. After tax, income will be substantially equal if 99% get just the basic income.

Secondly, women who do unpaid work in the household will get paid the same as those who used to do paid work. This is a simple fairy tale. It reassures that the world of no human work is not a world of poverty and starvation. But truth is that robots cannot do everything. You can programme a robot for all the foreseen and foreseeable contingencies. At present, robots are quite simple and can only handle simple contingencies. But, as the case of the driverless car recently showed, they may cause accidents and death when an unforeseen event (someone crossing in the dark at a place which is not a designated crossing) occurs.

But even supposing that the smartest machines are designed, there will always be radical uncertainty. As Keynes put it, you can calculate probabilities of all possible outcomes but that is risk. Uncertainty is when you cannot foresee the possibilities. One of the most uncertain phenomenons is human behaviour. For older people with dementia, you need a human helper who can cope with unexpected turns of behaviour. Indeed, in healthcare in general, you require human empathy and ability to communicate to be effective. There is an estimate that in the US, as much as 40% of workforce may be in healthcare in the near future. As people live longer, the demands for healthcare are going to rise.

This is also the case with most one-to-one activities such as tutoring. No robot can be your physical instructor or teacher. Indeed, if we are not doing boring manual work, we could be doing interesting one-to-one activities. This would extend to artistic and sports activities where coaching and mentoring cannot be done by even the best machines. Indeed, we may have many more people available for these sorts of work. The profits of the capitalists will still need to provide a large part of public revenue, but there will be employment for many people. So relax. AI and robotics will not wreck our lives—just change them.



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