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Christian Gibbons

The High Cost of Low Prices: How Automation Shapes Our Economy

A key demand of the dock workers is to prohibit the use of automation. 


From CNN:

 The strike that began early Tuesday is about two main issues: wages and automation. Around the ports, workers can be seen wearing signs that read “Robots don’t pay taxes” and “Automation hurts families.




They’re fighting a trend that port operators want to see accelerate: more cranes and driverless trucks shuttling goods from container ships, with fewer humans around demanding compensation.


I asked this question to Harvard Kennedy School grad students this spring:  Should public policy be involved in the question of automation?  Encourage it?  Discourage it?  Stay out of the issue? This question has existed since the Luddites attacked the automated textile looms of early 1800s England.  It leads us directly into the Capitalism’s Conundrum -  you can’t have low prices and high wages.  You can pick  low prices/low wages or high wages/high prices.  But you can’t have both.

 

The long-term history of free enterprise has been about replacing labor with machines. Our complex adaptive system (which wasn’t planned; it emerged from the interactions of individual agents) has a long history of reducing the price of things (you can get an HDTV for $49)—but at the expense of destroying jobs, decimating communities, and creating political unrest. 

 

I feel for the wandering Luddites traveling the countryside of England looking for work, but I am also glad that I don’t have to make my own textiles.  Somebody else is doing it at scale and producing massive amounts of product at minimal cost/price.

 

As a white-collar worker, I feel comfortable saying that the dockworkers sadly are trying to command the tides to stop  --  right up until AI automation replaces my job (estimates are that 40% of Americans will lose their jobs). 

 

All of this arises because the system creates commodity traps that float around the economy like black holes, sucking in jobs and throwing people out of work.

 

The antidote is innovation, which creates new jobs and wealth. Economic Gardening is about working with scaling companies that sell innovation to external markets. Everything else is just details. 


Christian Gibbons, Founder

P.O. Box 2583

Evergreen, CO 80437-2583

303.670.3599

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