Oh the irony. A man who has made a staggering fortune by selling technology that replaces peoples jobs (or at the very least allows businesses to do more work with less people) is calling for a tax on Robots that take peoples jobs:

Just because a worker isn’t technically “alive” doesn’t mean it can make money for nothing, according to Bill Gates.

In a recent interview with Quartz editor-in-chief Kevin Delaney, the billionaire philanthropist explained that robot labour should get taxed just like human labour — primarily as a way to maintain funding for society’s many social services.

“You can’t just give up that income tax,” Gates said.

…

Gates sees a robot tax as contributing to a portion of those programs whose workforces are in short supply. He points to the examples of teaching, elder care, and helping kids with special needs. With the proper training and fulfillment, people who lose their jobs to robots could fill those kinds of roles and have their salaries paid for by the tax.

At which point, Gates says, “you’re net ahead.”

Ugh. Where to begin? Let’s start where he finishes, with the idea that you’re ‘net ahead’ if you tax ‘robot labour’.

Actually no, you’re not, because (like taxing all labour) you’re not taxing the robots, or even the companies that use the robots… you’re taxing the people who buy the products or services being provided. So that money that Gates seems to think will magically appear if you tax robots has actually come straight out of the household budgets of the very people Gates wants that money to ‘help’.

There’s three key realities that need to be recognized by Bill:

Reality 1: Every dollar the government gives away is first taken from someone else. It doesn’t matter what name you give the tax, you can call it a sales tax, an income tax, an import duty, a corporate tax, or a ‘robot tax’, the money always comes from the same place: The pockets of the end-purchasers of the product or service being taxed.

Reality 2: We’ve heard this before. We called idiots like this ‘Luddites’. Time and again throughout history we’ve heard warnings that machines (starting with steam engines, and continuing non stop to the modern day of computerised robots) are going to put people out of work. And y’know what? The doom-sayers were right! Human labour has been massively displaced from many industries… but instead of life getting worse as predicted, we all got richer as a result! The truth is that robot labour makes us all richer. And it doesn’t ‘replace’ human productivity, only displace it. Humans will keep doing what they’ve always done, finding new and better ways to do things that other humans are willing to pay them for.

Take coal mining for example. What was once a massive employer of labour has now become a largely automated machine-based industry, with one machine operator able to mine tonnes of coal a day from the comfort of an air conditioned cab. As a result the cost of coal, and in the modern era the cost of electricity, is exceptionally low, allowing improved quality of life for all. Once again, we all go richer as a result of the machines replacing human labour.

Reality 3: We’ve tried this already. Not taxing ‘robots’ specifically, but certainly taxing products which are mined by robots. To stick with my coal example, the price of power has been rising recently in Victoria and most of the western world. Why? Because the cost of mining coal and using it to generate power has gone up? Certainly not. In fact, it’s because of a mix of tax-and-spend incentives to make people use more expensive renewable power.

And guess what… the end result is that families are spending more (as a percentage of their income) for power than they have in decades. People who are marginal financially are having to take extreme measures to reduce power usage simply because it’s been priced out of their reach… thanks to tax and spend policies.

And now that I think about it, hows the cheek of Bill Gates, opposing the automation of jobs, when the software he’s made his fortune on has driven efficiency in the office context… and efficiency is just another way of saying ‘doing more work with less labour’. So Gates is arguing that other people should be taxed for doing exactly what he’s made his fortune doing!

Bottom line: Automation, machines, computers, and robots, make living cheaper and everyone richer. Taxing machines is going to reduce the benefit, or even reverse it if the taxes are extreme enough.

So Bill, stick with making software. History proves that if a machine can replace a human and do a better job for less, then that’s better for everyone.

Luddites are best left in the past.

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