Abstract
This paper seeks to convince you that the best response to the coming dominance of AI robots in the world of work is to expand both employee ownership of firms and citizen ownership of business capital more broadly. Section 1 analyzes the likely effects of advances in AI robot technologies on the comparative advantage of machines versus humans in high-value-added work and the consequences for wages and salaries and income inequality. Section 2 argues that the best way to assure that living standards increase for all in the age of AI robots is through enhanced employee ownership and greater citizens’ stake in business capital, distributing capital income far more widely than today.
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Notes
- 1.
Guardian, Jan 11, 2017; Wired, Nov 28, 2017 Morningstar Dec 4, 2017; New York Times, Dec 11, 2017.
- 2.
International Federation of Robotics data shows 328,000 robots introduced in 2016 compared to 112,000 in 2006.
- 3.
- 4.
The article quotes one human expert declaring, “This algorithm could run cities, continents, universes.”
- 5.
If Elon Musk’s Neuralink company succeeds in developing brain implants that link our brains to computers, the choice will include some cyborg mixture as well (Wikipedia 2018b).
- 6.
In a production function F where labor (L) and robots (R) produce output, the elasticity of substitution is dln(L / R) / dln FL / FR, where ln is the natural log and Fi is the marginal product. Profit‐maximizer will hire workers so that FL / FR, = W / CR, where W is wage unit of time and CR is the cost of the robot per unit of time.
- 7.
These practices range from 100 % employee ownership via a trust fund, exemplified by the UK’s John Lewis; modest employee shares of equity paid by firm profits as per most US Employee Stock Ownership Plans; ownership in start‐ups, funded by workers receiving below market pay; partnerships; employee stock purchase plans; broad‐based stock options; and profit‐sharing and gain‐sharing, which give ownership of part of earnings or cost‐reductions but not of capital per se.
- 8.
- 9.
US ESOPs often have retirement plans that invest outside the firm in addition to their ESOP trust; many firms with a long‐term ownership plan also offer workers cash profit‐sharing in the short run. Employees with stock options or stock grants often cash them out quickly after they have met the usual required holding period. On the order of half of workers offered employee stock purchase plans forego the opportunity to buy shares in their firm.
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Freeman, R.B. (2018). Employee and Citizen Ownership of Business Capital in the Age of AI Robots. In: Beyer, H., Naumer, HJ. (eds) CSR und Mitarbeiterbeteiligung. Management-Reihe Corporate Social Responsibility. Springer Gabler, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-57600-7_10
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