[chroem]

And water is still wet. Really, it doesn't make sense for robots to not be a net drain on employment.

As a thought experiment, let's say that a company fires n workers because it is in the process of automating their jobs. Now, let's also assume n workers get hired, at the same wage as before, producing the automated systems which had previously replaced them. How can it be economically viable to automate, if instead of only paying your original n workers, you are now indirectly paying n employees producing the equipment you are buying, plus the capital costs of automation? Since we know that it is in fact more cost effective to automate, then the only remaining possibility is that there are either fewer workers producing the automation equipment or they are being paid less.

[pdonis]

No, there's another possibility: automation has increased productivity, so that the same n workers are now producing a lot more product, which can be sold for a lot more money, enough more to pay for the additional cost of automation, plus the increased wages/salaries of the workers (since they are now more highly skilled than they were before; they're robot maintainers and programmers instead of assembly line workers), and still leave increased profits.

In other words, the real benefit of automation is to raise everyone's standard of living by raising the average productivity of human workers.

[stretchwithme]

That is what has happened.

  https://www.youtube.com/watch?v=jbkSRLYSojo

[gumby]

Actually your thought experiment is incomplete, so your answer is not the only possible solution.

Let's say I have a shoe factory, and I install a robot that can, say, cut the shoe leather faster, more cheaply, and more reliably (less waste). Perhaps it can cut shapes a human couldn't, or couldn't cost effectively, so I can even sell new shoe designs. The guy who used to cut the leather and put in the shoelace eyelets can now just do eyelets. This might cut my costs such that I can drop my shoe price AND make a larger profit. The lower price means I sell more shoes and make more profits. So I not only keep the old leather-cutter, but in fact might bring on more people so that I could get even more profits.

This is a contrived example, in the style of The Wealth of Nations, but it could just as well be a more complex one. Computers replaced slide rules and draftsman, yet more people are involved these days in building planes (and more interesting ones) than were in the pre-computing days.

Yes this is not the only possible outcome -- some people will be automated away, can't find other employment and they will be screwed. Governments should provide some support for them, and some governments will (probably not the US, but that's another story). But it's not axiomatic that "robots == job loss" -- we're not talking some sort of asimov robot that would be a 1:1 replacement for a human!

[baddox]

This is obviously a very simplistic scenario, but I think it's no more simplistic than your scenario:

Sally works at an electronics factory for minimum wage. The factory fires her and replaces her with a robot. The factory then is able to sell some electronic components to Joe for a lower price while also increasing the factory's margin. Joe sells handmade artisanal pocket calculators. Now that some of his components are cheaper, Joe can afford to hire Sally to work as a phone salesperson, making slightly more than minimum wage. Sally makes more money, the factory makes more money, and Joe can expand his business and probably make more money.

[dusklight]

But it should be obvious there are a lot fewer salespeople needed than factory workers, and more importantly, robots don't buy things, so who is buying the artisanal pocket calculators and where are they getting their money?

[qbrass]

Sounds like some marketing jobs opened up.

[damncabbage]

Except Sally now suddenly has to retrain as a salesperson. And perhaps also try to beat out other people which already have sales experience to that sales job.

This takes effort and may be achievable with a lot of gumption, sure, but now consider the entire workforce that just got fired. Are they all going to be able to pull that off?

[sien]

That's pretty much The Lump of Labour Fallacy:

http://en.wikipedia.org/wiki/Lump_of_labour_fallacy

Your comment applies not just to robots but to any labour saving device or productivity increase. From the wikipedia page:

Historically, the gigantic increase in labour productivity induced by technological progress since the industrial revolution has resulted in the dominance of the scale effect, bringing about both a massive increase in real wages and a decrease in labour time. There is no reason to expect that this same process cannot be continued in the future.

[some_guy_there]

Arguments like these assume that the company is already operating at maximum capacity, and can produce no more profit. It is entirely possible that robotics can produce more profits than possible by humans alone, and a fraction of the newly generated extra profit can keep the workforce still employed in some other new task, like maintaining the robots. For example, it was unlikely that anyone could curate the web manually, but Google automated the entire process. Perhaps few people at Yahoo directories lost job, but there was overall gain in employment due to an algorithm (Pagerank).

[meowface]

Exactly. It would not make any sense for companies to automate anything if it did not end up reducing how much they're paying for employment.

[YokoZar]

This isn't strictly true -- an automation could come alongside a (substantial) productivity improvement, growing the firm to the point that it's total headcount still rises.

If there's consumer demand for more (and cheaper) versions of whatever product, then rather than a single company this form of automation can grow the industry as a whole too.

Inevitably, however, there will be industries that don't really need to grow. We'll just get what they make cheaper without buying much more of it. But then we'll have extra money (and extra people willing to work) -- figuring out new things for those people to do, possibly in wholly unrelated industries, is the very essence of why most of us still have jobs despite centuries of automation.

[randomdata]

Aside from the productivity argument, a big problem businesses face is finding capable and reliable people. If you can push that problem onto the companies building robots, it might not save you any money, but it reduces your own risk and that is still going to be worthwhile in many cases.

[MartinCron]

You can automate things to free humans up to do what only humans are good at.

[joe_the_user]

"Gee, yeah and I'm starting to think that prayer might not be enough to protect the health of those children in that factory I own in Bangladesh. I guess my fault is I'm just too honest and trusting."

[throwwit]

The most prescient comparison to be made is the increase in self checkout lanes; the human element is left to frantically supervise while the customer has all the social interaction equivalent to using a DVD player. The future should be bringing people closer together.

[zimpenfish]

If the social interaction equivalent of using a DVD player means I can get my shopping totalled and paid for in 2 minutes instead of 10, I'm all for it. Human checkout operators - whilst skilled - generally have much lower throughput (lower space density, one customer can back up many, etc.)