Must-Read: Nick Bunker: Technological change and Future Labor Demand

Must-Read: As I say: labor is actually six dimensions: (1) backs, (2) fingers, (3) brains as routine cybernetic controls for mechanisms, (4) brains as routine cybernetic mechanisms for accounting operations, (5) smiles, and (6) creative ideas. (1) has been–slowly–becoming less valuable since the domestication of the horse. (2) has been–more rapidly–becoming less valuable since the start of the British Industrial Revolution. But diminished value in (1) and (2) has, so far, always, within a generation, been offset by greatly increased value in (3), (4), (5), and (6) as capital complements those other dimensions of labor. Now (3) is falling to the robots and (4) is falling to the ‘bots–leaving us with only (5) and (6). This is qualitatively different from previous episodes of technological change. Will it have different consequences for overall capital-labor complementarity? How can anyone know yet?

Nick Bunker: Technological change and Future Labor Demand: “How concerned should we humans be about the impact of future technological change on our economy and society?…

…A few more robots might be a good thing for the economy… insofar as more artificial intelligence would boost productivity…. Yet most of the concerns about the rise of the robots are… distributional…. Will they displace large swaths of workers? Maybe permanently?… Imagine an economy-wide version of robots on factory floors. Past experience with technological change, Furman argues, shows that new technologies don’t reduce demand for all labor, but rather shift the composition…. David Autor agrees… that commentators overstate the ability of robots to substitute for labor and forget how capital acts as a complement to labor…. Yet advances in artificial intelligence definitely change the kind of  skills that labor needs…. Deep technological change could reduce demand for, say, middle-skilled workers while boosting demand for less-skilled workers and more highly-skilled workers…