by Doug Casey, Casey Research:
Justin’s note: Today, we’re wrapping up our special holiday series of Doug Casey’s most popular interviews of the year.
This week, Doug shared his thoughts on a variety of today’s biggest topics, including the political correctness movement, why college is a waste of money, the coming financial crisis, and asset seizures.
Today, in our final installment, Doug and I talk about South Korea’s recent “robot tax”—its government’s way of encouraging companies to hire workers instead of robots. It’s a fascinating discussion I think you’ll enjoy…
Justin: Doug, what do you make of this robot tax? Should governments be discouraging companies from investing in innovation?
Doug: It’s incredibly stupid. I’m especially surprised to see the South Koreans be the ones to take the first step in this direction.
South Korea is one of the most technologically advanced countries in the world. It’s much more advanced on a per-capita basis than the United States or any place in Europe. Most of the countries in East Asia—most prominently Singapore, Hong Kong, Taiwan, Japan, South Korea, and most recently China—have been advancing at warp speed for decades. That’s partially because of their social ethos, but mainly because they’re very low-tax, low-regulation jurisdictions—like the US was during its golden age.
So, it’s very disturbing to see the South Koreans moving in this direction.
Justin: Why would they do this? And do you think other countries will follow suit?
Doug: Why indeed? The reasons offered have to do with preventing unemployment, heading off social unrest, and garnering more tax revenue. The real reasons however, in my view, are fear of the unknown and ignorance of economics.
There’s been a lot of talk about taxing robots. The meme is gaining traction with both the talking heads and the hoi polloi. Bill Gates is a big proponent, which further cements his status as being an idiot savant.
What he wants to do is to not just withdraw the tax benefits for investing in robotic technology, but actually tax robots the way that a human worker would be taxed.
The rationale behind this is that since robots could replace from 15 to 35% of all human jobs within the next ten years, something must be done to slow that trend. And generate tax revenue to put those newly unemployed people on welfare or whatnot.
These people want to slow down the rise of the robots. And taxes will certainly do that by discouraging businesses from investing in them. But what’s even worse, Gates wants to use the income from the tax on robots to increase welfare benefits for the unemployed. Which is especially stupid, because you get the things that you encourage. And when you pay people for not working, or you make it possible for them to not work, that’s exactly what they’re going to do.
So, it’s a very, very bad trend, promoted by Gates, and implemented by the South Koreans.
Justin: Should the government do anything to prevent robots from taking people’s jobs?
Doug: No, there’s absolutely nothing that the government should be doing about this.
What would have happened if government had decided to do something about the rise of the cotton gin during the first Industrial Revolution? Or mechanical weaving machines, which unemployed millions of “cottage industry” spinners and weavers working with primitive foot-powered looms in their shacks? The Bessemer furnace, the steam engine, the railroad, and a thousand other technologies in the first industrial revolution?
In those days, technophobes were known as Luddites; they wanted to destroy the new machines in order to save their unproductive jobs. If they’d succeeded, we’d all still be primitive benighted peasants.
Any government interference withdraws capital from productive areas of the economy, and redirects it to some politically favored parts of the economy. Robots and artificial intelligence (AI) are the friend of the average man; they catapult the average standard of living much higher.
Justin: So, you’re saying the government should just get out of the way?
Doug: The government should withdraw itself not just from robots and artificial intelligence (AI), but from the economy in general. The State is, by its nature, a coercive institution. And coercion of any type should be kept to a minimum in any society. That means the State should be limited to protecting you from domestic coercion with police. Foreign coercion with an army. And facilitating the adjudication of disputes with a court system. In today’s world, however, it does none of those things effectively—but tries to do everything else.
I find it most disturbing that even in today’s world, when much more is known about economics than ever, that people still look at government, which is a coercive force, as something that should involve itself in the economy. It’s very discouraging.
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