Page - (000051) - in Disrupted Development and the Future of Inequality in the Age of Automation

4 TECHNOLOGICAL TRANSFORMATION 43 repetitive, dangerous, unhealthy tasks, and so improve both the quality of work and of products and come with public health benefits. Importantly, automation decreases the cost of production and should thus, in a com- petitive market, lead to lower prices which benefit all consumers. Not only this, but “automation, by reducing wages relative to the rental rate of capital, encourages the creation of new labor-intensive tasks and gen- erates a powerful self-correcting force towards stability” (Acemoglu & Restrepo, 2015, p. 41). Optimists tend to suggest skills development for the labor force to allow a synergetic relationship of human and nonhu- man work. This is in keeping with Goldin and Katz’ (2007) race between technology and skill supply itself drawing on the Tinbergen (1974, 1975) thesis. Further, they might advocate to reduce taxes on labor which would make labor relatively more competitive vis-à-vis robots. The pessimists’ camp, on the other hand, argues that “this time it’s different”: contemporary iterations of automation and digitization are viewed as being part of a larger “digital revolution” (Avent, 2017) which is bringing about technologies that are more powerful and ver- satile than earlier iterations of the Industrial Revolution, and which will wholly or partially replace human brains rather than just the human muscle replaced by earlier technologies. The digital revolution, it is argued, is creating an array of intelligent, adaptive, general-purpose technologies with hitherto unseen labor-saving potentials for a widen- ing group of tasks. This group of tasks increasingly includes complex, skill-intensive work and formerly hard-to-automate manual work like stitching. The relationship of human and nonhuman work is viewed as more and more substitutive rather than complementary. In this vein, an in-depth report of the Executive Office of the President of the United States (2016, p. 22) commissioned by Barack Obama warns that “the skills in which humans have maintained a comparative advantage are likely to erode over time as AI and new technologies become more sophisticated.” DeLong (2015) argues too that, just like horses once used to dominate economic production, human labor currently domi- nates it, but that “peak human” may have been reached. Pessimists argue that automation is putting a downward pressure on wages (reflected in stagnating real wages) and an upward pressure on the rate of profit from capital investment. The detachment of produc- tivity gains and wage growth observed since the 1970s in many OECD countries is brought forward as evidence. Automation, pessimists argue, may ultimately lead to job losses as technologies create fewer jobs than