Bill Gates and the Robot Tax

In the past few years, the world has been abuzz with talk about how a jobless dystopia is around the corner in which the rate at which robots displace jobs humans currently perform will be difficult to keep up with.  In many ways such scares are not new and are part of the fallacy of automation which has been around since at least the dawn of the Industrial Revolution. As with different times in history in which this scare was prevalent, many otherwise highly intelligent and assumably informed people have bought into this.  Among them is Bill Gates who in many ways became wealthy by displacing jobs and increasingly efficiency worldwide through the proliferation of the personal computer (think about how Microsoft Words has displaced hundreds of thousands, if not millions of typist and calligraphers around the world) for both personal and business use. As a solution to this, Bill Gates proposes a tax on robots because the tax revenue which robots will assumably deny governments in the future.

In previous post and in different forums, I have gone to lengths to talk about how mainstream economics does not have a capital theory and does not place emphasis on the role of capital accumulation in economic growth and development.  I have further discussed that throughout history, contrary to intuition, in the long run, many industries with successively increasing levels of automation tend to employ even more people in the long run (e.g. auto industry). Thus with the assumption that even more jobs will exist in the future due to automation and how they aid in expanding some industries, the argument of a declining tax base is logically moot.

Regardless of ones views are on tax policy and the effects of different levels of taxation, many tend to agree that the more a service or product is taxed, the less of the service or product will exist. Examples include sin taxes (e.g. alcohol and tobacco) while other historical examples include the window tax in England. Thus, with a robot tax, isn’t it safe to say fewer robots would exist and this would hamper industrial efficiency and production which would have ripple effects through the economy?

The current craze of a jobless dystopia being around the corner which is sweeping the world which has many assumably highly informed people buying into shows that many people who society look up to as icons are not perfect and no err in their judgement and opinions.  If history is to be our guide, the current craze will subside eventually and as years pass by we will realize that even though some industries might have been disrupted or died out, in the long run humanity will be better off and we will still have as many jobs around – if not more.