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Casey Mulligan: Robotic-Task Economics



The forces of supply and demand suggest that the machines of the future will continue to be significantly different from people.

Anthropomorphic robots are prominent in science fiction. Novels like Mary Shelley’s ‘Frankenstein,’ and films like ‘E.T.,’ ‘Star Wars’ and ‘The Terminator’ feature machines with one head, two eyes and many other features of humans. But those robots were created by authors to entertain audiences, and not by investors to produce some other kind of economic value.

At first glance, it would seem that the state of technological progress is all that limits the creation of machines closely resembling humans. Especially after the recent recession, people are concerned that technological progress is moving at a pace that will soon permit machines to put wide swaths of the human population out of work, and not just displace workers from one industry to another.

I disagree. Powerful economic forces will push the machines of the future to be different from people, and to complement workers rather than mimic what they do.

Machines are expensive to design and manufacture, and most of the people directing the creation of machines have an eye on the rate of return: the economic value of a finished machine as compared to the costs of creating it. The more profitable investments will, by definition, be in machines with a higher rate of return.

The earth is already occupied by quite a number of people, and a machine like Frankenstein or C-3PO might find itself with seven billion competitors.

Take my example last week of baby-sitter robots. A baby-sitting machine with a high rate of return might, as one commenter suggested, be one designed to help children during fires and other disasters. Or a machine to care for children at night. These are examples of child care tasks with less competition from people than the ordinary baby-sitting tasks.

Human help is, of course, not free, and economizing on the cost of a baby sitter or an automobile driver is a reward for creating a machine to do those tasks. But the amount of the reward is commensurate with the amount of wages that people earn in the task.

Machines that drive human workers into unemployment, rather than into another industry where the human workers will be productive, will serve only to drive down workers’ wages and thereby drive down the machine’s value. Machines that, instead, help people to be more productive will find it much harder to saturate their own market.

Rather than finding an intelligent and tireless robot in your office chair, expect the machines of the future to help workers, not harm them.



Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

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Posted: August 21, 2013 Wednesday 12:01 AM