
The Robots Are Coming and Sweden Is Fine - prostoalex
https://www.nytimes.com/2017/12/27/business/the-robots-are-coming-and-sweden-is-fine.html?_r=0
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MollyR
The title should be "Fine for Now".

Maintaining Sweden’s social safety net also requires that the public continue
to pay tax rates approaching 60 percent for their current amount of
displacement.

If automation starts to displace a huge number of people, and there is no job
to transition, the social contract will break.

I'm really hoping we hit a star trek style utopia (especially in terms of
energy and food) before we get close to social contract breakage. I fear we
won't though, we already seeing severe signs of the social contract breaking
in the United States.

~~~
Dylan16807
> If automation starts to displace a huge number of people, and there is no
> job to transition, the social contract will break.

Break because of what?

If a job is stupendously productive because of automation, it can support
stupendously high taxes too.

~~~
MollyR
Only if the people pay, it sounded like the one of Swedish economists from the
article think there is a limit to what you can tax people before the social
contract breaks.

I'm assuming this applies to individuals and populations.

~~~
henrikschroder
In a post-labour society, labour is completely divorced from productivity, so
you have to tax productivity somehow to get the resources you need to take
care of your population.

So somehow, sometime, we have to stop relying on income-tax, and start relying
on some kind of productivity tax instead, and forge a new social contract
based on that.

Otherwise we end up in the situation you describe, an ever-decreasing sliver
of the population is taxed to support the masses. And even though their
productivity is multiplied enormously by technology, a lot of people will
still think it's unfair.

~~~
maxander
> So somehow, sometime, we have to stop relying on income-tax, and start
> relying on some kind of productivity tax instead, and forge a new social
> contract based on that.

I don't think that's actually true, absent tax evasion. Take the limiting case
of the "fewer people being more productive" scenario- someday only one person
in Sweden participates in economic work (who operates all the robots, or
whatever.) Since all economic production is hers, her salary is essentially
equivalent to Sweden's GDP. Tax her at whatever absurd rate Sweden would tax
such a person, and you can definitely pay for the social safety net.

(Actually, Sweden collects _much more_ in taxes in that scenario than in the
present day, since the entire salary base is being taxed at the highest
possible income bracket.)

This is perhaps counter-intuitive, and possibly irrelevant, because we're
accustomed to high earners not paying taxes like ordinary folk do. In the
above scenario, Sweden's sole worker would likely spend some effort trying to
hide her income in the Canary Islands. Whether productivity-concentration
harms social safety nets eventually comes down to the tax authorities' ability
to stop that kind of behaviour.

~~~
henrikschroder
Well, in reality the productivity gains usually go to the owners of the means
of production, not labour. So if Sweden only required one person to actually
perform labour, then that person would get paid a high salary, but the owners
of the company doing that work would get all the profit, and you would have to
tax them somehow. And _they_ would do all they could to evade taxes.

So to reach that limit example, you would have both productivity
concentration, and an enormous amount of capital concentration in the
background, screwing things up, making it harder to reason about the example.

I think Blockbuster vs. Netflix is a very good illustration of what happens
when productivity concentrates. With Blockbuster, you had 300k simple low-wage
jobs. But they were distributed across the country, so their collective income
taxes were also distributed into a lot of local economies, doing good locally.

Blockbuster went bankrupt, and Netflix took their place. So instead of 300k
distributed low-wage jobs, you now have 10k high-skill high-wage jobs, but
they're concentrated to LA and Silicon Valley. Those employees pay local taxes
there, and nowhere else. So from a national perspective, you now need to re-
distribute those taxes to the areas who lost tax revenue, somehow, without
pissing off the employees, and without pissing off Netflix, and without
pissing off the local government in SF and LA. Usually this is done through
federal aid/job aid programmes that take money from richer states and
distribute to poorer states, but that's an incredibly blunt instrument.

But if you were to tax productivity and if you were able to tax it locally
where it's consumed, this change from Blockbuster to Netflix wouldn't have
disrupted local economies. Because then it wouldn't matter how many employees
did the actual production, or where they were located, and that's good for the
places that productivity is concentrated away from.

(Unless, of course, you are of the position that fuck those guys for living in
the middle of nowhere, they should move to the cities like everyone else.)

Anyway, tying it all back to the original point, productivity concentration
necessitates some kind of new/stronger redistribution mechanism so the gains
are spread across the entire population. Previously, and still, when we have
income-tax and a high percentage of the population participating in the labour
force, that distribution happens automatically.

Maybe a productivity tax to make sure the country as a whole captures part of
the GDP, UBI to spread it equally across the population, and then local
consumption taxes to redistribute to local governments? I don't know.

------
Feniks
Difference between Northern Europe and the US: we minimised low wage work long
ago with automation. As a business you want to AVOID employing people at all
costs. The drive for efficiency and productivity is relentless.

As for manufacturing: yeah most of that already left for China/Asia in the 70s
and 80s. And what remains is already computerised and done by robots.

~~~
vadimberman
Does "automation" mean immigrants?

~~~
grzm
> _" Does "automation" mean immigrants?"_

> _" we minimised low wage work long ago with automation. As a business you
> want to AVOID employing people at all costs."_

~~~
vadimberman
Yeah, I read that. It's a nice theory, I am asking about the practice.

Given the abundance of low-skilled workforce, I have my doubts.

~~~
grzm
If that's the case, then your question as phrased is a little bit disingenuous
or flamebaity. Asking for measurements or evidence of how this was implemented
is legitimate, and something I, too, would be interested in learning;
insinuating that your parent was being euphemistic or misleading is another.
Please ask questions in good faith.

~~~
vadimberman
You could say that, or you could say that bragging about being better without
a solid proof is disingenuous or flamebaity. Not unreasonable, is it?

In this particular case, I've seen scores of advanced economies where the eloi
are clueless about the stinky and dirty morlocks breaking their backs to power
the paradise, and I believe a tiny bit of blindingly obvious sarcasm is not an
overreaction.

------
SapphireSun
[http://www.epi.org/publication/robots-or-automation-are-
not-...](http://www.epi.org/publication/robots-or-automation-are-not-the-
problem-too-little-worker-power-is/)

"Robots, or automation, are not the problem. Too little worker power is."

------
textor
Ironically, the article doesn't really discuss any legitimate reason as to why
Sweden is – or indeed will be – fine despite automation. It's all about what
Swedes expect and how much they trust their present society to hold. Also,
labor union propaganda, but that's tangential. So, the takeaway is that
Americans believe business to be cutthroat and competition to be effective at
weeding out the least optimized actors, whereas Swedes feel that employers
will take care of employees because this is a nice Sweden thing to do, or
something. Beliefs, expectations, feelings, self-affirmations. «Everything is
fine, we can provide everyone with jobs, we can even support a large and
growing number of uneducated refugees and help them get jobs, we just need to
innovate faster than anyone to be sure that our market share won't ever
diminish, it'll all work out in the end". Well. Guess it's pleasant to be so
positive. But how is any of this even relevant to the issue? The issue being,
mind you, automation-induced joblessness, not people's anxiety about it.

~~~
WhoBeI
If people aren't scared of automation there won't be any political pressure to
restrict automation. This will probably increase the adoptation rate so I'd
say it matters a lot in the discussion.

There __will __be problems because of automation and I think most Swedes
realize this. The safety nets that are in place provide a buffer, and possible
solutions, if you should loose your job because of it. I 'd say that's where
the optimistic attitude in this article comes from.

Sustaining those safety nets is indeed going to be hard if unemployment
increases. There probably won't be any "silver bullet" solution to the problem
either.

[edit] spelling

------
ddmma
Did some HMI before or troubleshooting offshore oil rigs in the North Sea, I
can confirm that it is also possible to remotly have fully drilling operations
from the shore.

This example is perfect for what a working symbiosis man / machine, not
tehnology is the problem but value of human labour costs and machine
investments. In Scandinavia this is not only fine but normal.

------
mnm1
What I get out of articles like this is that economic policy can easily fix
the loss of jobs due to automation, but we will likely never see such policy
in the US. In other words, job loss due to automation is a problem caused
almost exclusively by the political system in which automation happens, not
with the automation itself. Societies that make the right political decisions
to accommodate for automation, like Sweden, have an advantage over societies
that don't, like the US. Outside of jobs, this is obvious from comparing the
different societies' approaches to education, parenting, and other social
necessities, IMO.

~~~
TheAdamAndChe
This really depends on what you consider to be an advantage. The US already
has a massive advantage when it comes to industrial power and economic output.
For those in power, does anything else really matter to them?

~~~
mnm1
"For those in power, does anything else really matter to them?"

Probably not, but I'm concerned about society as a whole, not a few hundred or
thousand rich people. They'd be fine anywhere in the world. I'm talking about
advantages for regular people who want to make something of their lives and
don't have millions or billions in the bank. For these regular people,
industrial power and economic output doesn't mean shit when they can't get
health insurance, education, or jobs. Industrial power and economic output are
irrelevant when you're bankrupt because of medical bills which you can't pay
because you don't have a decent job since a bachelor's degree costs more than
a lot of houses and education below high school level is almost nonexistent.

------
whathaschanged
Sweden is 'fine' and yet has to raise the retirement age to cover all the
drain on their societal services?

[https://www.google.com/amp/s/www.thelocal.se/20171214/what-s...](https://www.google.com/amp/s/www.thelocal.se/20171214/what-
swedens-new-retirement-age-means-for-you/amp)

Please.

~~~
maxxxxx
With life expectation rising this seems a reasonable thing to do. How else do
you want to deal with this?

~~~
nradov
That's fine for people who work desk jobs. But manual laborers tend to
accumulate a variety of chronic injuries as they age. So increasing the
retirement age means more of them will be forced to go out on disability pay
instead of being able to retire with dignity.

~~~
maxxxxx
Disability doesn't have to violate your dignity. That's a US problem. You can
also give early retirement to people who can't work anymore. But in general
something has to be adjusted for people getting older. It's simple math.

~~~
textor
This is wrong. It's not needed because people are getting older, it's needed
because the increase in productivity is not enough to cover expenses for long-
lived retirees and other groups. If Sweden was 20% more productive, perhaps
they could afford to just have longer and happier retirements. And if it was,
say, 50% more productive, they could cut work week to 15 hours or decrease
retirement age. Alternatively, they could cut other expenses (for example,
stop bringing in more refugees) and still afford fixed retirement age. This
"simple math" is not inherently linked to longevity of the Swedish elderly,
it's the budget constraints that matter.

Edit: given that bringing up refugees invites downvoting, I want to clarify
that this may not be among the major causes of Sweden's decision to raise
retirement age (and is not the core idea of my message), but it's not
negligible either: according to this guy [http://voxeu.org/article/fiscal-
cost-refugees-europe](http://voxeu.org/article/fiscal-cost-refugees-europe) ,
current immigration policy costs Sweden 1,35% of annual GDP.

~~~
nradov
It's also important to distinguish between refugees versus other types of
immigrants. Many of the people who have entered Sweden recently from Africa
and the Middle East are just seeking a better life, and I sympathize with
their situation, but legally speaking they aren't refugees.

