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Automation is a threat to many different jobs, and some have called for a ‘robot tax’ that could help offset some of the effects of the associated job losses. But this type of solution risks stifling innovation writes Assistant Professor Sanjith Gopalakrishnan in Canadian Manufacturing. Gopalakrishnan points to the Indian state of Kerala as a cautionary tale. It had one of the world’s first democratically elected communist governments, which implemented a system called nokku kooli. Literally translated as ‘wages for looking on’, nokku kooli paid worker unions when industrial equipment was used in place of human labour—even if no actual work was performed. The system proved to impede investment and was ultimately abolished in 2018. Tax automation could have similar long-term effects, Gopalakrishnan argues, but might also help some of the short-term pain associated with job losses.

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