Andrew Yang says this time really is different; robots and AI are going to destroy millions of good jobs and replace them with, well, mass unemployment. Paul Krugman, in response, argues that the evidence shows that productivity gains arising from technological change are actually slowing, and that the robot problem is overblown. Who’s right?
Krugman’s evidence is from the present and the recent past, while Yang is making predictions about the future. History suggests that Krugman is right, but the honest answer is that no one really knows. I wouldn’t want to make policy on such limited information.
What I will say is that it is becoming increasingly obvious that the glory days of the fifties and the sixties for the American economy for which both the right and the left yearn were based on a set of facts that can’t be duplicated in a very different world. The only way I can imagine America dominating the world economy the way we did in the golden age is with some sort of new product or service that creates millions of high paying jobs for Americans of average intelligence and education. Assuming, for purposes of argument, that such an innovation is possible, how long would our dominance last? Given the current mobility of capital and ideas and our inability to protect intellectual property outside of our borders, not very, and the cycle would begin all over again. That is not the precise problem that Yang has identified, but the two are related.
What, in turn, does that mean for our society? Even though Yang’s concerns about the impacts of technology may be misplaced, and the UBI might well not work, he has indirectly identified a very real issue that requires a solution. We need a more effective welfare state to protect the interests of millions of Americans who simply don’t have the ability to thrive in an increasingly knowledge-based, and perpetually changing, global economy.