Robots! Not content with milking our cows and displacing our boyfriends and girlfriends, now they're exploding our labor markets. At the blog Modeled Behavior, Karl Smith asks and answers the question: assuming an infinite supply of robots as smart as humans, what effect would they have on our economy?
"In general equilibrium all profits accrue to the irreproducible factors of production," writes Smith. "If human intelligent robots mean that labor is reproducible then natural resources become the only irreproducible factor ... The real price of land in the robot future will skyrocket as the earth becomes populated by trillions upon trillions of human intelligent robot workers and the return to labor will fall to the marginal cost of producing a new robot."
They'll drive down our wages! Humans will be replaced! We stand by all the bad things we've ever said about robots!
"The real price of natural resources will skyrocket," Smith continues. "Your house, for example, might still be worth 250K dollars but within a few years the cost of deconstructing your existing house and building a new house from the parts might be 500 dollars and could be done by several thousand robots in an afternoon. As you can see in a world of such cheap service the actual cost of materials becomes a huge consideration ... This is why everyone who owns something besides their own labor power would likely become very rich, very fast in the robot future."