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Robots Could Block Path out of Poverty

Walter Russell Mead

Over at Axios, MIT economist Daron Acemoglu explains how robots could block the usual path to industrialization for developing countries:

The traditional exit from poverty for poor countries — followed over the decades by Japan, Taiwan and South Korea, among others — is to be the cheap labor for rich nations. But the robotics revolution may be foreclosing that route to the middle class, MIT economist Daron Acemoglu tells Axios. […]

Speaking in his office, Acemoglu said that for seven decades, every fast-growing country has used export-focused manufacturing built on cheap labor to undercut foreign competition.

But, said Acemoglu: “If robotics makes labor uncompetitive in these lowest-skill and sometimes in the medium-skill occupations, this development path would be closed to the next group of developing countries and would make the further development of countries, such as China or Vietnam, also very difficult.”

In particular, this means that Africa may miss out on the benefits of industrialization if robots replace cheap human labor. That is not a terrible thing in and of itself—life in a textile sweatshop is hardly the acme of human existence—but it leaves the question open of how the hundreds of millions of Africans heading into the cities from the farms will be able to make a living once they get there.

It also could well mean that the Arab world will never escape from its current “oil or nothing” economic trap. And the economic shock waves caused by these effects will certainly come home to the U.S., quite apart from the disruptions robots will bring to our own manufacturing and service sectors.

The idea that technological progress brings peace and prosperity is one that Americans are instinctively inclined to believe, and in the very long run it could be true. But the bumps in the road can be ferocious: without the amazing invention of the cotton gin, after all, slavery would likely have died out peacefully in the United States.

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