The Great Factor Substitution
By Arnold Kling
Even as Foxconn, Apple’s iPhone manufacturer, continues to build new plants and hire thousands of additional workers to make smartphones, it plans to install more than a million robots within a few years to supplement its work force in China.
Pointer from Tyler Cowen.
Think about this. Robots are close to being competitive in China. Suppose that robots improve their productivity/cost performance at a Moore’s Law pace over the next decade. What happens to labor’s share of income?
To put it another way, suppose that for most people, the future is one of ZMP–zero marginal product? That is one scenario, which I doubted when I first heard Robin Hanson articulate it. Now it strikes me as plausible. Under that scenario, I am not sure that I would be as wildly pro-natalist as Bryan. From a material standpoint, supporting lots of ZMP individuals will be cheap. But the social tensions of that scenario might be a little troubling.