A quick response to Paul Krugman
Ryan Avent

I agree with almost all of your statements but I do not see the decline in wages. Average hourly wages in the US have increased from $23.69/hr. in Oct 2012 to $26.59/hr. in Feb 2017. Not much above inflation but not a decline either.

The decision to automate is based primarily on the expected R.O.I. on the required investment (A) as compared to the R.O.I. on alternative investments (B). Labor costs are certainly a major factor in (A) but that can be outweighed by many factors in (B) such as interest rates or real estate appreciation.

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