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Peter Goodman had a very good NYT piece detailing how budget cutbacks are undermining the welfare state in the United Kingdom. However, at one point the piece warns that the UK’s experience could be a wider warning for a future where “robots [are] substituting for human labor.”

Actually, the UK’s problem has been just the opposite. It has had extremely low productivity growth. Since the Great Recession, productivity growth has averaged less than 1.0 percent annually according to the OECD. This weak growth can actually provide some basis for an argument for austerity (not much, if workers had more bargaining power and higher pay, the country might see more rapid productivity growth). If productivity growth had been more rapid, then the government could easily spend more money without any fears of inflation.