In a new interview with Quartz, Microsoft founder Bill Gates makes a rather stunning argument—that robots who replace human workers should incur taxes equivalent to that worker’s income taxes.
“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed . . . If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”
Gates argues that these taxes, paid by a robot’s owners or makers, would be used to help fund labor force retraining.
Former factory workers, drivers, and cashiers would be transitioned to health services, education, or other fields where human workers will remain vital.
Gates even suggests the policy would intentionally “slow down the speed of that adoption [of automation] somewhat,” giving more time to manage the broader transition.
The idea of what amounts to a tax on efficiency would seem anathema to much conventional economic wisdom.
For decades, the dominant line on automation has been that displaced workers shift into more productive roles, in turn growing the total economy.
But that thesis has begun to show cracks—as Gates puts it, “people are saying that the arrival of that robot is a net loss,” demanding greater active engagement with job retraining and other programs that target impacted communities. (Though the effectiveness of job training programs is still somewhat debatable).
While Gates resolutely comes down in favor of government’s role in managing automation’s impacts, he offers two points that should be at least slightly compelling to free marketeers.
First, Gates says, the impact of robotics and artificial intelligence in the next 20 years will be a much more concentrated version of the steady, incremental displacement that was common throughout the 20th century.
The market alone won’t be able to deal with the speed of that transition—and, Gates further suggests, much of the potential for putting free labor to better use will be in the public sector.
Second, and probably even more importantly, Gates says automation won’t be allowed to thrive if the public resists it.
“It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm . . . And, you know, taxation is certainly a better way to handle it than just banning some elements of it.”
In other words, Gates believes that if automation doesn’t clearly benefit all members of society, it could generate some sort of neo-Luddite movement that would restrain technology much more severely than any tax.
If you don’t believe him, just look around. The widespread belief that globalization’s benefits were poorly or unfairly managed has led directly to a political resurgence for fans of walls and tariffs. The same dynamic could repeat itself if automation isn’t rolled out wisely.