Discussion: Automation, Efficiency, and Social Impact Analysis

This discussion post analyzes the multifaceted implications of automation, examining its economic benefits and potential social costs. The author engages with various viewpoints, highlighting the efficiency gains and increased productivity automation can bring, while also expressing concerns about its impact on vulnerable populations, wage inequality, and the need for government intervention and skill-building programs. The post emphasizes the importance of a balanced approach that considers both economic considerations and social externalities, advocating for a comprehensive understanding of automation's effects to ensure equitable outcomes and improved living standards for a wider population. The author reflects on the weekly discussions, emphasizing the complexity of technological changes and the need to integrate social aspects into decision-making processes, moving beyond purely economic rationales.

Reply to Manual Torres:
Manny quite insight post! I am in agreement with your views on automation with regards to it
being useful since the overall efficiency of resource usage is enhanced leading to higher
GDP. Also, there would be improvement in the living standards as we have already witnessed
with the technological revolution over the past decades. However, I am slightly concerned by
the premise that a new equilibrium would automatically develop. One assumption behind this
premise is that there is ample availability of online resources which can be used for skill
building. However, this resource exists today also but the unskilled people are not becoming
readily skilled using the online resources. At the present also, there is incentive for the
unskilled workers to become skilled as this would result in higher payment. But the transition
does not happen automatically as it is quite complex.
As a result, I believe that while embracing automation going forward is a natural choice but
at the same time, we need to be sensitive with regards to the impact it would have on the
vulnerable sections of the society. We have seen how technology led revolution has already
led to increasing wage inequality between the skilled and unskilled. The automation
revolution could worsen this and hence active management of the potential downside would
be required through invention of government. It would be required that the government
initiates appropriate skill building program while providing incentives to the unskilled for
participating in these.
Reply to Christina Coke:
Thank you Christina for sharing your insight! Your views look quite balanced considering
that you have highlighted the potential ills that could arise on account of automation. There is
no denying that automation would enhance the efficiency of usage of scarce resources and
thereby lead to greater surplus being created. This is amply validated from empirical
experience with regards to technology revolution. While there are concerns with regards to
the impact of automation on the vulnerable such as poor and unskilled, it is imperative that
before going ahead the same need to be discussed in some detail. This is imperative
considering that once the transformation to automation is undertaken, it would not be possible
to roll it back. Further, it would be naive to believe that in an automated society since there

would be high demand of skilled labour, hence the transformation from unskilled to skilled
labour would automatically take place.
It is likely that if this transformation is not thought about, then this could be turn out to be an
exorbitant cost for the fruits of automation. Further, the empirical evidence in terms
technology revolution clearly highlights that it has done little to resolve the social problems
which tend to continue in the developed and the developing world. Also, a check on the
negative externalities associated with automation with regards to social and health impact
would also need to be deliberated further. Only after elaborate discussions on tacking the
potential issues highlighted above should migration to automation on a larger scale be
actively pursued.
Reply to Jada Stinnie:
Jada I appreciate your views which offer an alternative view to others who have favoured
automation. While I do agree with some of the concerns that have been raised in your post,
but simultaneously I would like to divert your attention towards the gains which are not only
limited for the rich. An example of this is the reduction in work hours for the workers along
with improvement in salaries which has been enabled through technological revolution.
Before the technological revolution, the work hours were very long. However, usage of
technology tends to enhance the efficiency thereby requiring less input on the part of labour
to produce the same amount of output.
Additionally, technology revolution has played a key role in the rise of high paying skilled
jobs which have increased manifolds. Yes, this may have come at the cost of some unskilled
jobs, but the overall impact on employment and wages has been positive. Also, automation
could potentially allow individuals to invest their time and resources to more productive
intellectual pursuits instead of the manual pursuits. Further, on account of automation and
the associated economies of scale, it is likely that the production costs in the medium to long
term would witness a sizable decline which would auger well for the affordability of the
goods by the poor sections. As a result, while automation does have its perils, it is imperative
to frame a balanced view without ignoring the positives.

Learning Journal
I found the weekly discussion quite engaging. It was quite interesting to find that there was
quite widespread support for automation which was not surprising considering that it would
enable significant improvement in productivity. However, it was troubling to see that
majority of the students merely acknowledged the potential issues without giving them due
importance. The discussion enabled me to understand that the decision making with regards
to technological changes are not straight forward. These are quite complex owing to the
potential negative externalities that may be associated with these changes. As a result,
decisions cannot be only driven by economic considerations as other implications particular
social ought to be considering.
Relying on economics may lead to these issues being shifted to the background. This is not
surprising as economic theories are based on the rational choice model considering human
being as rational beings. It fails to consider the social aspects. The key learning during the
week therefore was to ensure that a balanced approach ought to be taken where economic
consideration should be predominant but with regards to significant decisions of irreversible
nature, it makes sense to include other aspects which may be vital. This is because the
objective of technological advancement is not limited to improving the efficiency but also
ensuring an improvement in the living standard over a wider population. Thereby, it is
pivotal to integrate the externalities (especially negative) in the pursuit of enhanced efficiency
in the usage of scarce resources.