robots and jobs

Tim Harford, the FT’s ‘undercover economist’ has written a superb column explaining why it makes no sense to tax ‘robots’. In part this is because robots do not exist, at least not yet. What threatens employment is automation of specific tasks, not whole jobs. Should we, then, tax automation, which drives increases in productivity? Mr Harford thinks that this is a bad idea, though he acknowledges “In a world of mass technological unemployment we are certainly going to need to tax something other than labour income alone”.

He illustrates his point brilliantly with the example of spreadsheets, an accounting process that a few decades ago was very labour-intensive.

Spreadsheets were once a literal thing: two-page spreads in a paper ledger. Fill them in, and make sure all the rows and columns add up. The output of several spreadsheets would then be the input for some larger, master spreadsheet. Making an alteration might require hours of work with a pencil, eraser, and desk calculator.

Once a computer programmer named Dan Bricklin came up with the idea of putting the piece of paper inside a computer, it is easy to see why digital spreadsheets caught on almost overnight.

But did the spreadsheet steal jobs? Yes and no. It certainly put a sudden end to a particular kind of task — the task of calculating, filling in, checking and correcting numbers on paper spreadsheets. National Public Radio’s Planet Money programme concluded that in the 35 years after Mr Bricklin’s VisiCalc was launched, the US lost 400,000 jobs for book-keepers and accounting clerks.

Meanwhile, 600,000 jobs appeared for other kinds of accountant. Accountancy had become cheaper and more powerful, so people demanded more of it. ….

So it is misleading of me to write of “robots” taking “jobs”. What actually happens is that specific tasks are automated …. The process can create jobs or destroy them, and will usually do both.

Tim Harford, “Define ‘robots’ before thinking about taxing them“, Financial Times, 7 July 2018 (gated paywall).

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