Paul Krugman says that recent technical change has been capital-biased. That robot story sounds plausible to me too. But if so, why are real interest rates so low? (Yes I know there's a global recession on, but real interest rates were falling even before the recession). Maybe we are forgetting a third factor, land, and land rents are rising?
Suppose there were a new technology that caused both wages and interest rates to fall. Why wouldn't capitalists and workers say "Stuff that, let's go back to the old technology!"? Any individual firm, or group of firms, that went back to the old technology, while borrowing at the new low interest rates and paying the new low wages, would make super-normal profits. And all the other firms would eventually choose to, or have to, follow it back.
Unless there were a third factor, and the new technology paid higher rents to that third factor.
We used to think that that third factor was skilled labour, that knew how to work with the new "skill-biased" technology, was very productive at the margin, and so earned high rents. But if, as Paul says, the college premium has stopped rising, and so that third factor is not skilled labour, what is it?
Much longer ago, in the days of Malthus and Ricardo, we used to think that that third factor was land. Maybe it is again. Maybe some of those increasing "profits" are really increasing resource rents?
(I have found good data showing strongly rising rents on agricultural land in the UK, but I can't find a Canadian or US equivalent, only anecdotal evidence of rising rents. And there are more natural resources than agricultural land, of course. Rising land prices are consistent with my story, but don't really support it, because if real interest rates fall land prices will rise even if rents stay the same.)
Or maybe, if not land, it's some other fourth factor that is earning higher rents?
[PS. Historians of thought may recognise some very old questions here. Like how could Marx get both increasing immiserisation of the proletariat and a falling rate of profit? Unless land rents were rising, like In Ricardo. I can't remember if they ever solved that one.]