By Shubhra Agrawal
With tech giants like Facebook and Google shifting their focus to Artificial Intelligence, automation of tasks using robots is eventually going to be a certainty. It’s safe to say that the inclusion of robots in the production process will lead to an increase in both the efficiency and quality. But at what cost?
[su_pullquote]The introduction of robots-creating-products will also necessarily lead to a drop in employment rates across the globe.[/su_pullquote]
The introduction of robots-creating-products will also necessarily lead to a drop in employment rates across the globe. Research estimates that about half the jobs the world over are likely to be replaced by automated processes over the next quarter of a century. It is no wonder, then, that several influential figures like Elon Musk and Bill Gates have expressed their concerns about people’s welfare in an increasingly technologically dependent world.
In an interview with Quartz, Bill Gates (founder of Microsoft) suggested that robots could be taxed as a solution to the problem. Gates argued that since the market cannot handle a transition from people to robots independently, governments must step in to fill the gap.
Why tax robots?
Ever since automation was introduced as a possible alternative to human labour, there have been several debates surrounding the issue of securing the welfare of the people. One populist theory argues that a government-paid basic income to all citizens could be a solution to the problem and taxing robots could be one way of generating the necessary revenue for the government.
Taxing robots can be justified. Humans earning income by working in a factory are taxed; if a robot does the same task at a similar level, the robot can also be considered a subject of taxation.
The revenue generated by the robot tax could then be used to make the goods and services we need and allow for better healthcare for elderly people, smaller class sizes and student-teacher ratios in education, better research and attention to differently-abled children and so on: tasks, in other words, which require human empathy and understanding in unique ways.
Robots entering the workplace: met with taxes | Picture Courtesy: MotherboardFurther, such a tax would also act as a deterrent for companies ready to invest in productivity-boosting technology. This would slow down the process of innovation and ensure a smooth transition. It would allow people more time to look for jobs and develop the necessary skill sets needed for a new workplace.
Is the ‘robot tax’ a viable solution?
Taxing robots and by extension, technological innovations, in general, could have the adverse effect of discouraging innovation, a much-needed stimulus required to grow the economy in the long run. Some experts also argue that that kind of taxation could lead to companies increasing the prices of their robots, ultimately leading to an overall increase in market prices. This would add to the economic burden on what one can only assume would be a sizeable class of unemployed workers. Another problem with this theory is the subjectivity involved in defining robots. Which machines are to qualify as robots? What parameters would one use for taxing them and who would pay these taxes?
[su_pullquote]One major problem with taxing robots is that it could lead to an increase in prices.[/su_pullquote]
One major problem with taxing robots is that it could lead to an increase in prices. But this might not necessarily be true since market demand is likely to be lower because of a drop in income levels. A worker striving to make ends meet can probably live without a car but some money sure would be of great help to her/him. A tax would help ensure that wealth is not concentrated in the hands of robot manufacturing companies but equally distributed in society. From the point of view of macroeconomics, it would make sense to implement a tax for a period of time until people can undergo necessary training to develop skill sets needed for further employment.
Needless to say, technological advances bring along their own set of problems and we must collectively ensure that human values and welfare are not compromised at any point for the sake of progress and development.