Monday, February 20, 2017

A Little Late and Maybe a Little Political

A little late, but I remembered! What I've decided to write about might be considered political, but I'm not sure. Really it's just going to be me calling a proposal I recently heard about from Bill Gates stupid.
This proposal is to apply a tax on the use of robots used for automation in businesses. According to him this tax should be collected by governments so that it can be directed to programs that would help the elderly and at-need youth. Sounds nice, right? Plenty of things sound nice that end up doing harm and are stupid.
Okay, so let's change the wording a little bit: The proposal is to artificially increase the cost of labor, for certain types of businesses (manufacturing would make greater use of robots than, say, software development). This would also artificially make human hires more competitive, at least until cheaper robots are made until the tax can be made, then the robots win and there is a heavy political battle to not increase the tax, as small companies operating near their margin would be pushed into the red. Increasing costs doesn't hit the big and wealthy, it hits the small and medium. (Decreasing costs artificially also hit the small and medium, once the market corrects, which is what happened in 2009, so that is not a solution.)
That's the problem with trying to artificially increase costs of a type of product, is that eventually someone will find a way to make the product cheaper, and then you're left trying to increase the cost more or even stifle innovation.
Also, a source of cheap labor, like robots, is not really a bad thing. Yes some people will lose jobs, others will move into other positions, managing the robots, even managing new factories. So not every human would be hurt by this. Additionally, some will be able to take advantage of the cheap labor to start their own businesses using it, and assuming they have friends who lost their job, they could be brought in to work as well. Increase the cost of the robot labor, and this cannot happen.
It's the whole, innovation drives innovation concept that has been proven throughout history, naturally combined with human tenacity and desire for pride in work. Stifling it with artificial cost increases is far from a good idea.
On top of that, the idea to just use the government-collected tax to fund anything is a poor idea because those people who have to collect the tax, pass it on to those who distribute it, and then those who do distribute it all need to take a cut out of it, because, you know, they're doing work and deserve a paycheck.
So far we're seeing larger businesses successfully weather the tax while smaller will likely struggle with it, innovation either be stifled or limit undercut the success of the tax, and bureaucrats getting paychecks out of what is meant for the targeted elderly and youth. Unless you are a bureaucrat, or a large business wanting small out of the way, where is the benefit to this idea?
Now, if you actually want to do something to help prevent people from losing their jobs because the robots offer cheaper labor, figure out how to reduce the cost of living, because then the human labor can be less expensive and more competitive. Just don't do it artificially by subsidizing the cost of living, reduce the artificial costs that already increase the cost of living. It is harder to do, but it is the 'rising tides raise all ships' solution.
I think that's enough blathering on for now. (By the way, I'm just a guy, far less wealthy, and economically insulated, than Bill Gates, like most everyone on the planet.)

No comments:

Post a Comment