Rise of the Robots: Technology and the Threat of a Jobless Future

by Martin Ford

Harvard professor N. Gregory Mankiw, for example, while serving as George W. Bush’s chairman of the White House Council of Economic Advisers, said in 2004 that offshoring is “the latest manifestation of the gains from trade that economists have talked about at least since Adam Smith.”47 Abundant evidence argues to the contrary. Trade in tangible goods creates a great many peripheral jobs in areas like shipping, distribution, and retail. There are also natural forces that tend to mitigate the impact of globalization to some degree; for example, a company that chooses to move a factory to China incurs both shipping costs and a significant delay before completed products reach consumer markets. Electronic offshoring, in contrast, is almost completely frictionless and subject to none of these penalties. Jobs are moved to low-wage locations instantly and at minimal cost. If peripheral jobs are created, it is much more likely to be in the country where the workers reside.