 Hi, I'm James. And I'm Anthony. And this is Words and Numbers. So, and this week we're here to talk about Bill Gates and some abject foolishness that came out of his mouth not too long ago. That's right. Bill Gates gets on the news and says that, you know, we're replacing workers with robots, which is denying the government this income tax that workers used to earn. Therefore, we should impose an income tax on robots. All right. So let me get this straight. Technology is denying government revenues. Do I have this right? Yeah, I think that's the argument, believe it or not. That's a profoundly bad argument. But hey, as usual, let's take it on the merits. Right. So we're going to tax robots now. The income tax that the workers would have paid. We're going to tax robots because robots are, dare I say, disrupting the economy. Right. And the thing we need to remember here is this golden rule of anything you tax, you're going to get less of. So if you tax the robots, you're going to get less of them. So if we tax robots, we're going to get fewer robots. You'll get less of them. And that would actually be quite a terrible thing. That would be quite a bad thing. Because if you look back, really, robots or whatever we should probably call them, I sense robots isn't the right word. It calls to mind science fiction too readily. But some sort of automated device that does the work of human beings. I mean, if we say that. Right. Machines. Well, all of a sudden, yeah, a machine, all of a sudden now we're dealing with pretty familiar terrain. Because how is this any different from what Henry Ford gave us once upon a time? Or that anybody would have had experience with in a factory job? Or even in a manner of understanding it, the bull or that a farmer would attach a plow to, right? Right. These are labor saving devices which free up human beings to do other important things. Yeah. And this is the interesting thing that people focus on the fact that you get machines and machines put people out of work. And this is true. But it's not the whole truth. The whole truth is that machines make labor more productive. So, you know, today, for example, well, let's back up, looking at the 1700s where probably 80 to 90% of the American population was engaged in farming. Today, the American population is orders of magnitude more than it was in 1700s, and yet only about 1% of Americans farm. How can that possibly be? How can we feed this many people with, you know, one tenth or one hundredth the number of workers? It's automation. And speaking as a man who doesn't make his living farming, I say, thank God I can move on to other things that I'm good at. Right. And B, thank God we have lots of food in the house. Yeah, we have lots of food. We have, you know, heated homes. We have light. All of this because of automation. It puts people out of work initially. And what happens is those people eventually find some way to make a living because they're now more productive working alongside machines than they were working in place of machines. Right. And the great curiosity here is that it's Bill Gates who says these things out loud without a hint of irony in his voice when he does so, right? Because Bill Gates is responsible in no small part for much of the automation that has occurred over the past, what, 30, 40 years now. Oh, yeah. If any one human being has put lots of other human beings out of work, it's Bill Gates. Well, even worse than that, imagine what would have happened if 30 years ago the government said these computers are putting people out of work. We need to tax them. Bill Gates and Microsoft probably would have never evolved the way they have. He owes who he is and what he has to the fact that government did not 30 years ago employ this, this ridiculous policy that he's now advocating. Right. And it's counterfactual, so we'll never actually know. But there are a couple of things that we do absolutely know. Have the government sought to tax this burgeoning industry in the name of what? Fairness, I guess, ultimately, right? Everything is always framed in the language of fairness. If the government had in fact done this, it would have put the brakes on the most explosive growth period we've had in generations. Right. And in the end, would have cost more jobs than it ever would have saved. And you're looking at the computer revolution. And the same thing applies equally to the industrial revolution. Imagine when people invented trains and automobiles, if the government had turned around and said, you're putting people who maintain and raise horses out of business. Therefore, we're going to tax cars so that we can make up for the income that we're losing because the horse traders are out of jobs. Right. And the more you think it through, the more patently absurd the whole thing becomes. And I think it's pretty safe to say maybe Bill Gates should stick to things he understands. Yeah, this is the interesting thing that economists see, and I'm sure you've seen time and again, people who are successful in business mistake their understanding of business for an understanding of economics. The two are radically different things. Right. Case in point, one of the things that Bill Gates has completely missed is, if we're going to start taxing machines that are labor saving devices, look at all the stuff in your home. Look at your washing machine, your dryer, your dishwasher, your refrigerator, under Bill's rule, all those things should be taxed as well because they put people out of jobs. If you didn't have a dishwasher, you would either have to wash the dishes yourself or hire someone to do it. Same with your clothes, keeping your food cold, you'd have to hire someone to go down to the lake in the winter and cut ice and haul it back up. All those jobs have disappeared because of these labor saving devices. Right. I think we probably need to stop you right there, lest a politician watch this and get another bright idea. Right, right. So thanks for joining us this week on Words and Numbers. Be sure to click through on fee.org, take a read of everything else they've got on offer, and be sure to come back next week when we'll have something even more fascinating to talk about. See you next week, James. Catch you later.