What shall we do when the robots take our jobs? Last week’s column discussed mass technological unemployment, and readers were quick to write in with variants on the same common sense suggestion: tax the robots.
“Give a robot a deemed income equivalent to the wage of the human it is replacing, with a default of the average income,” wrote one. A similar suggestion: “If one robot displaced five people earning a modest £20,000 each, then that robot could be said to have an economic value of £100,000 per annum.” Both correspondents proposed an income tax or similar levy on this robot-generated output.
I’m grateful for all constructive comments, but particularly grateful for these because I think they are wrong in a fascinating and instructive way. The fault is mine: I set a trap every time I talk about “robots” and “jobs”. That is not how automation happens.
Consider an idea dreamt up in 1978, released in October 1979, and so revolutionary that the journalist Steven Levy could write just five years later: “There are corporate executives, wholesalers, retailers, and small business owners who talk about their business lives in two time periods: before and after the electronic spreadsheet.”
Spreadsheet software redefined what it meant to be an accountant. 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.
What does a robot accountant look like? Not C-3PO with a pencil sharpener, that’s for sure. One might say that Microsoft Excel is a robot accounting clerk. A more plausible answer is that there is no such thing as a robot accountant. One day we may have androids sophisticated enough to do everything human accountants do now, but by then the very concept of an “accountant” will have changed beyond recognition.
So it is misleading of me to write of “robots” taking “jobs”. What actually happens is that specific tasks are automated, rather than the broad bundle of tasks that together constitute a human “job”. Automating tasks means reshaping jobs. The process can create jobs or destroy them, and will usually do both.
In their recent book, The Future of The Professions (UK) (US), Daniel and Richard Susskind offer numerous examples of the spreadsheet dynamic in action: algorithms that scan mammograms and spot trouble that humans miss; online tutorials that monitor students and alert teachers to where the child is struggling; “document assembly systems” that quiz clients and then draft legal contracts.
Another example. If I didn’t have the use of email, internet search and a mobile phone, I would need to employ someone as a personal assistant. But I have had these tools for a long time, so I have never had a secretary. Should I have to pay the never-employed secretary’s tax bill, because I own a smartphone?
White-collar anxiety about automation is new, but the problem is old. Mike Mulligan and His Steam Shovel (UK) (US) is a Depression-era children’s book about technological obsolescence. (It is wonderful.) The steam shovel’s name is Mary Anne; she “could dig as much in a day as a hundred men could dig in a week”. So is Mary Anne a “digging robot” who destroyed 500 jobs? Yes; no; maybe. After a while the question seems ridiculous. Nor would many sensible people argue that Mike Mulligan, Mary Anne’s owner, be liable for 500 tax bills.
As any tax wonk can tell you, whatever we choose to tax — land, capital, profits, value-added, imports, wealth, greenhouse gas emissions — inevitably turns out to be a more ambiguous concept than it might appear, especially since ambiguity is often tax efficient.
But the category of “robot” is particularly difficult to define, and therefore to tax. We cannot tax the androids who march into our workplaces, stand by while we clear our desks, then sit down to replace us: they do not exist and it is hard to see why they ever would.
In a world of mass technological unemployment we are certainly going to need to tax something other than labour income alone. There are several plausible candidates. “Robots” is not one of them.
Written for and first published in the Financial Times on 6 July 2018.
My book “Fifty Things That Made the Modern Economy” (UK) / “Fifty Inventions That Shaped The Modern Economy” (US) is out now (or very very soon) in paperback – feel free to order online or through your local bookshop.