It would incentivize the wrong things: All else being equal, you want to produce more with less labor and other inputs.

It’s a good thing farming needs an order of magnitude fewer farmers than a century ago.

> All else being equal, you want to produce more with less labor and other inputs

Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me.

More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.

Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity?

You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.

> All else being equal, you want to produce more with less labor and other inputs.

I'm not sure how to work with the "all else being equal" part. I suspect it's a way to get out of dealing with the truth of the situation, but feel free to expand on it.

But.. to the main point: "you want to produce more with less labor and other inputs" <- the owner of the business does, yes. But unemployment statistics and in general "labour" wants the opposite.

Let's take this to an extreme. Take all the business owners in the land and make them so efficient they only need employ themselves. "Productivity" remains the same, but now the bulk of the inhabitants of the land are unemployed, and can't buy the "products". So now the owners make no money and go bankrupt. And no-one has work. And there's no productivity.

I think what "you" really want (and by "you" I mean "we") is for business owners to make only the slightest margin of profit possible (after paying themselves) to keep their businesses running and to employ as many people as possible, who all get paid as close as possible to the owner; and for any left-over to be reinvested in new businesses with the same approach to paying staff. That way more people have a job, more people are "productive" and more people can buy the stuff made by the companies.

Sure, this is a ridiculous extreme, but it makes more sense to me than "you want to produce more with less labor and other inputs". I am curious though: is there an equally impractical and extreme story that works to bolster your argument, to help me see the pattern more clearly?

That's true to a certain degree, but there's a labor supply factor involved too. If companies are rewarded for employing more people it lowers the available supply of labor forcing companies to create a more enticing environment to attract that labor (prices, benefits, etc).

It compounds if the incentive is aimed at domestic labor.

> All else being equal, you want to produce more with less labor and other inputs.

So what incentive structure would you suggest? How do you prevent the concentration of wealth that results from a business raking in millions of dollars per employee?

> All else being equal, you want to produce more with less labor and other inputs.

And firms are already incentivised to increase productivity, including by offshoring jobs or replacing staff by robots, because that's their profit margin. And in this case we're not concerned with firms reducing costs in general, but firms substituting capital for labour. This was an improvement for agriculture, but it was an improvement because that labour found more productive things to do...

But if you're a government those decisions businesses make don't help unless the robots or Chinese factories are considerably more efficient at making stuff than domestic labour, because a business decision that at the margin spending a dollar less on domestic labour and 99 cents more on another production input is very slightly more efficient loses the government more in income tax receipts than it gains on anything else, and usually adds to their benefit bill. Also, people don't like their jobs being replaced. (And yet ironically, tax structures are often more favourable to companies increasing the capital input and decreasing the labour input...)

Obviously it's true that you can go too far and end up subsidising firms to keep on employees that aren't doing anything useful, but relatively minor tax breaks which mainly advantage low margin retail businesses don't do that, and they're not going to stop NVIDIA being NVIDIA either. But they might make the $45k outsourcing contract not look a substantially better deal than retaining the $50k employee.

But this is precisely how you get these large wealth gaps in society. Not like the 1% vs the bottom 50%, but the bottom 50% vs the top 30%.

That "high efficiency" is actually "less humans in the loop".

Compare something like money managing to car manufacturing. A team of money managers might clear $1B+ in revenue for a year with a team of 200. To clear $1B a yr selling cars, you need workers and supply chains that are tens of thousands of workers deep. It's the very inefficiency of manufacturing goods that makes it so attractive to workers.

This problem is inherent and intractable, but the natural order is to whither away the inefficient parts and only keep the most functional ones.

For those reading closely, this is also how you get a begrudged "coastal elite" and populist presidents like Trump (tariffs, anti-immigrants, state backed industry) elected. They want suffering for the offices of 200 people bringing in billions, and a return of the massive factories and supply chains with tens of thousands being the ones brining in billions.