Bet on Robots: If They Win, You Do As Well

 

E-commerce company Amazon is in the news these days because it promises to open cashier-less stores. It may work. If so, what would it mean?

There are 3.5 million cashiers in the U.S. who earn an annual average of little more than $13,000. All those wages surpass Coca-Cola’s global earnings or the GDP of Melania Trump’s Slovenia.

But the market’s overall size is, of course, much bigger: it’s global wages’ total. This world labor income share is half the global GDP.

As there can be no bigger business than the global GDP, if Amazon Go succeeds, entrepreneurs and investors around the world will join the trade; nothing will stop them. Even if it doesn’t make sense.

Legend has it that Henry Ford and a trade union leader were walking around the automobile factory and as they passed by a new machine, Mr. Ford told him: “You’ll have problems to get this machine to pay the union membership fees.” The trade union leader responded: “And you’ll have problems to get this machine to buy a car from you.”

Indeed, a world without people working for wages is a world without mass consumption. In that world, buying robots or software to serve the public would be a waste of money. Hence, nobody would invest in replacing employees, right?

Of course not. Following the precept that many “seeing do not see, and hearing do not hear nor understand” here is another parable. One day, two friends were crossing an African savanna when a lion started pursuing them. Immediately both friends started to run in the opposite direction. But one of them, who was intelligent, told the other: “Friend, there’s no sense in running. Because we cannot run faster than a lion “. And the friend responded: “I don’t want to be faster than the lion; I just want to be faster than you.”

Then, the trend to substitute high salaries in developed countries for lower ones in developing countries, will join this tendency to substitute people earning wages for automated systems: software, artificial intelligence, robots. All this with the cooperation of consumers who would get what they want faster, cheaper and trendier.

But what will politicians do with this? Nothing for the moment, because they are busy with the press, elections and, besides, giving orders and finding out if they are being fulfilled. During a recent meeting between former UK Chancellor of the Exchequer George Osborne and historian Yuval Noah Harari organized by The Guardian, Harari asked him if people in the government were worried about the impact of artificial intelligence in the labor market. “Well, the truth is, far too little,” Osborne responded.

Then what can we and our children do? Encouraging our children to embark on scientific careers (science, technology, engineering, math) looks like a good idea. Scientists’ average income is almost double the average of non-scientists. In addition to it, the gap is growing, unemployment is half, and demand will double relative to non-scientists in the next few years.

We adults, if we have savings and salaries, we can bet like French mathematician Blas Pascal, who recommended believing in God because if He existed you would win, whereas if He did not exist, you would lose nothing. The current bet would be investing our savings in technological companies that sell systems to substitute people earning wages. If these companies are successful, we’ll become rich and we won’t care about losing our jobs. If they don’t succeed, we will not be rich, but will keep our employment.

What should an adult without savings do? I’ll answer this in a future article, if I am not replaced by an artificial intelligence software before.

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