Lukas Schlogl and Andy Sumner, Disrupted Development and the Future of Inequality in the Age of Automation.

Abstract

Disrupted Development and the Future of Inequality in the Age of Automation scrutinise the impact of automation in both the developed and developing countries. This emerging trend of automation has taken over the globe terming it as ‘robot reserve army’ affecting the economy with premature de-industrialisation. This book, unlike other books in the domain, notably by Girasa (2020), Goldfarb et. al., (2019), and Bernhardt and Thomason (2018), focuses on the most recent trend in mushroom growth of automation that result in national inequality, besides proposing the ways how to tackle this social strain in terms of public policy. The authors have introduced the book quoting a World Bank report (2016) that automation has contrived almost two-thirds of the developing countries' current labour force. Likewise, they have also quoted several international agencies global reports on employment prospects towards weakening the labour force. The majority of the reports focus on high-income growth countries, neglecting the developing countries whose progress remains understudied. The book sets in motion with contemporary economic development in the developing world, discussing the three economic theories: (neo-)Classical and neoSchumpeterian school. According to the first two (classical and neo-classical) schools; market equilibrium is determined through supply and demand where manufacturing sectors are portrayed as inconsequential. In contrast to this, neoSchumpeterian school of thought explains; how the market is self-regulating, where manufacturing sectors do matter. These thoughts, according to Rodrik (2016), could be the turning points for developing countries, provided technological capacity as of developed nations. Further, the book presents that the absorptive capacity of labour in poor countries is low that hinders the transfer of labour towards high productivity sectors. Likewise, excess natural resources’ export is also portrayed as negatively impacting the structural transformation, limiting the labour force. These issues, are found to be factors limiting the economic growth rate in the underdeveloped regions like, Latin America, studies like McMillan and Rodrick (2011).