Labor vs. capital in the driver's seat

One of the keys to a successful middle class is finding a way to keep labor from becoming a simple commodity.  Technology can be a huge help in this regard, allowing an individual with a particular skill set to be far more productive than his neighbors in a particular field such that it makes more sense for them to pay him than do the job themselves.  It can also be highly disruptive, replacing human labor with physical capital and allowing a smaller number of people to sell the same services as a larger group.

For an example, consider two approaches to the problems of traffic safety:  The first, from the Wall Street Journal, touts technology, or "capital" in the classical economic sense.  London, on the other hand, incentivizes labour. 

As a professional roboticist, your pie maker understands the appeal of the capital-intensive self-driving car.  He also understands the tremendous costs and risks involved in bringing that technology to market.  If it goes well, then the potential payoff is huge, otherwise the effort and money invested has no value.  This is the central reason that US tax policy has big incentives for endeavors that can easily lose participants money, instead of wage-based contracts that are safer for the recipient. When the definition of "capital" stops involving machinery, this notion gets a little more complex, and Simon Johnson does a pretty good job of explaining how this system can go awry.

The alternative approach to congestion and safety is regulation, in this case explicit licensing of preferred drivers and penalties for the rest.  In a way, this approach threatens a society with the same problems that Gail the Actuary predicts will befall us due to rising oil prices: Steadily increasing cost of transportation results in a net decline in personal productivity.  Your pie maker can make more pies if he spends less time commuting, i.e. not waiting for a cab or stuck in traffic.  On the other hand, this kind of economic inefficiency results in greater employment at lower levels, curtailing roboticists (and their investors') earning potential in favor of higher velocity of money. 

One of the central questions before the body politic today is whether your pie maker's time is best spent effectively replacing cab drivers or working to make them incrementally safer and more efficient over time.  There are clearly arguments to be made on both sides, and it is not clear which is the truly "pro-pie" position.  The best your pie maker can say at this point is to examine your own interests, not begrudge others their own, and work to find acceptable compromise whenever possible.  Interests are much easier to discuss than "values."

Consider, for example, your pie maker's somewhat unique perspective.  He rides a bike to work and everywhere else he can, largely for health reasons that don't factor into the calculus above.  His commuting interests lean slightly towards the "labor" side as he relies heavily on some very good bike mechanics, and he would prefer there be many somewhat safer vehicles with steadily improving alert systems instead of a few self-driven cars.  His hope is that the desire to keep the marginal product of labor (i.e. per capita GDP) high as energy prices rise will drive enough public and private investment to keep him in biofuel.