Monday, November 07, 2016

Musk: Rise of Robotics Could Lead to Universal Basic Income

Elon Musk says that the rise of robotics/automation in the economy will lead to Universal Basic Income, since robots will take away most of the jobs people earn their wages from:

This might be an interesting idea, as far as India is concerned - because reforming our thorny, inefficient labour laws is a very daunting challenge politically. It's for this reason that Indian businesses are known to invest more in automation rather than upsizing their staff, due to the headaches caused by labour laws.

As advances in robotics take place, robotics/automation will be in an ever increasing position to replace low-skill labour, doing that work at even cheaper cost. India could potentially leverage this, by offering incentives to Indian businesses to invest in that automation to reap the cost benefits and productivity gains for greater market competitiveness, while simultaneously drawing tax revenue from them that could help subsidize a Universal Basic Income scheme for the unskilled poor. This could then help bypass the political challenges posed by labour law reform. Perhaps that's the most politically feasible approach in a country which has so many poor voters. And in the very long run, the rest of the world may be headed in that direction anyway.

As they say, if Mohammed can't come to the mountain, then make the mountain come to Mohammed.

If Indian economic planners want to attempt to create a "virtuous cycle", perhaps robotics/automation is a useful area to attempt this in.

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