Robot Holocaust VIII--Wage-ing War

A paper called "Economic Growth Given Machine Intelligence" is thus abstracted:

A simple exogenous growth model gives conservative estimates of the economic implications of machine intelligence. Machines complement human labor when they become more productive at the jobs they perform, but machines also substitute for human labor by taking over human jobs. At first, expensive hardware and software does only the few jobs where computers have the strongest advantage over humans. Eventually, computers do most jobs. At first, complementary effects dominate, and human wages rise with computer productivity. But eventually substitution can dominate, making wages fall as fast as computer prices now do. An intelligence population explosion makes per-intelligence consumption fall this fast, while economic growth rates rise by an order of magnitude or more. These results are
robust to automating incrementally, and to distinguishing hardware, software, and human capital from other forms of capital.

In other words, the paper argues, robots will compete with unskilled human workers. Wait until they start marching in the streets! However, economist Tyler Cowan at Marginal Revolution disagrees:

Since the Industrial Revolution, there have been numerous predictions of falling real wages due to the advent of machines. But across any thirty-year time horizon (some would say fifteen-year, but not I) real wages have risen and in the long run they have skyrocketed. The marginal return to capital has not gone up much if at all.

Even if we have really, really good robots (I still think Deckard was a replicant), they won't substitute for all forms of unskilled labor. Maybe they can drive a car, but will they fluff your pillow? The remaining poor will fill jobs robots cannot handle, own small bits of capital, or live off of charity and transfers. Don't forget, we are talking about a ridiculously wealthy and scientifically advanced world. A small capital investment might carry you through the rest of your life. Plus if robots will be so good, can't they help the rest of us learn some skills or acquire some capital?

We will see a "cost disease" for services which cannot be handed over to robots, but so what? Low productivity sectors may take up an increasing share of the economy in real terms, but again this is most of all a symptom of plenty.

The robots also have to compete against technologically augmented humans, whom I suspect will be the real force of the future. Complex biology is hard to master, so let nature handle that and just purchase the mechanical add-ons, no?

So I don't worry about the special features of robot economies. It is simply fears of Malthusian overpopulation but with metal rather than flesh. The difference is that there is a more obvious profit incentive to produce lots of robots, since they can be owned for profit. But modern technology would have pushed up wages even if we had not seen the falling birthrates as of late.