“Workers of the world, buy robots!”
If Karl Marx were alive today, would this be the rallying cry he’d offer to workers whose jobs are threatened by the spread of automation in factories and offices? Maybe not. But it would still be sensible advice, according to a recent study by UniCredit SpA economist Harm Bandholz.
The report examines the impact robotics will have on economies and societies in the coming years, offering a somewhat surprising policy prescription: to mitigate the disruption wrought by technological progress, workers should increase ownership of the means of production — that is, the robots.
The picture the study paints is familiar: as more and more routine tasks get automated, many low- and middle-income jobs will be at risk while a minority of high-skilled people will reap the benefits of the pick-up in productivity via higher pay. This in turn will lead to an increase in inequality, with potentially devastating social effects.
The standard policy prescription here is to increase investment in education. But this alone won’t be enough to close the gap between the winners and losers of the automation revolution. Bandholz offers another response: “Spread the ownership of capital to ensure a more equitable distribution of robotic rents.”
Bandholz points out that, in the past, efforts to boost worker participation — like employee stock ownership plans popularized in the U.S. during the 1970s — have been successful. Almost 14 million workers owned shares in their own companies as of 2013. The fact that the number has continued to increase without further political incentives being added. suggests companies and not just employees have found them advantageous. The goal, in this case, wouldn’t be to put the workers in control of the robots, but to redistribute more fairly the added value they create.
“The main purpose of granting ownership rights to employees should be to cushion the impact of falling labor income by giving them access to capital income, rather than to make the allocation process of capital more efficient,” Bandholz says.