So, how do we operate a society in which a large share of the population is socially needy but economically redundant? There is only one answer. You tax the winners -- those with the still uniquely human skills, and those owning the capital and land -- to provide for the losers.
As far as I'm concerned, this is shitty analysis from an economist. First, I reject his claim that unskilled workers are going to be completely replaced by machines. There will always be a need for human beings to do things, even relatively unskilled things. However, I agree that human ditch diggers may very well go away in the near future in developed countries. But that's not really a bad thing, is it? Ditch digging is menial, back-breaking work.
However, what I most object to is the static analysis. Sure, it seems like Clark is using a more dynamic analysis because he is talking about future changes, but this is misleading. In actuality, he's assuming some time in the future where demand for unskilled labor is zero and analyzing statically.
It's as if all unskilled workers are instantaneously placed on an island where machines do all the menial work. This isn't what happens in real life. In reality, we have signals to get more skills, represented by higher wages for skilled labor. Furthermore, this change, while rapid, still takes place over time, not instantaneously. So, his assumed state is flawed.
Secondly, his prescription, taxing skilled workers, capital and land, and giving to unskilled workers makes far more sense in a static analysis where unskilled labor is trapped as unskilled labor. In a dynamic analysis it is counter-productive because it discourages unskilled labor from acquiring skills and skilled labor from producing more.
H/T
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