Economics of the Future
the economics of the future are somewhat different -- Captain Picard
What happens when machines can produce almost everything we need? The trend is clear; there are fewer and fewer low-skill jobs that cannot be performed by a robot. Even the military is being replaced with robots and drones. So what does all of this mean?
The typical answer given by economists is that new jobs are created to maintain the machines. There is just one small problem with that answer: 100 people with shovels are replaced by a single backhoe, one backhoe operator, and a mechanic.
The other 98 ditch diggers need to find new work. Here’s the rub; any job that ditch-diggers are mentally capable of is being replaced by automation. Advancements in technology are driving the price of unskilled labor toward 0, but not everyone has the ability to do skilled labor. The level of skill required keeps rising and with it comes centralization of wealth in the hands of the mechanics. Eventually the mechanics are in danger as it becomes cheaper to let robots build a new car than to pay someone to fix an old one.
Cost of Living vs Value of Unskilled Labor
While the price of unskilled labor is falling, the cost of living is not. Libertarians believe that no one has the right to live at another expense. Everyone must add enough value to the economy to equal the amount of value they consume. So what happens when someone is unable to add enough value?
We already have this today with mentally challenged individuals. These people depend upon charity of loved ones to provide them with food, shelter, and clothing. What would happen if technology advanced to the point where someone of average intelligence finds that the value of their contribution to society is on par with today’s mentally challenged?
Why is unemployment so high? The government is certainly interfering by raising the cost of labor through minimum wage, regulations, and taxes while subsidizing the unemployed. This creates an environment where there are no jobs entrepreneurs can identify that can profitably employ the skills available. Removing restrictions would certainly create more jobs, but the jobs would be low paying jobs. Technology will eventually catch up and outcompete even these jobs.
Abundance
Advancements in technology allow us to produce more with less. All other things being equal the amount of stuff in the world per person is rising dramatically. As the population grows, the supply of unskilled labor is growing while the demand for unskilled labor is falling. Put these two things together and you have a recipe for concentration of inconceivable wealth and a multitude of people in need of handouts.
What should a Libertarian Do?
What would libertarians do if a magic wand was waived and suddenly 2/3 of the population was unfit for work? What if it costs more to feed these people than they are able to produce? What if the remaining 1/3 of the population had the means to provide the other 2/3 with a middle class standard of living?
At some point we face a real problem. As a society we like to pretend that everyone is “equal” and has “equal rights” just because they are human, but that is demonstrably not true. When half of the population depends upon handouts from the other half of the population something is wrong. Ending the government and welfare will not magically make this lower half of the population able to provide value to the economy in excess of what they consume.
Kill the Smart People
What would happen if we killed all of the smart people? All of a sudden a new market equilibrium would form. As the backhoes break down and technology slowly regresses because no one is smart enough to maintain it there would be more opportunities for lower skilled individuals to provide value to their fellow idiots. With everyone on an even playing field the middle class would grow even if they were all poorer on average. At least everyone would be supporting themselves.
What we learn from this is that the economies of scale afforded by capital concentration and intelligence cause the economic value of over half the population to fall toward 0. If people were businesses then the economy would shut them down.
We live in a world where a human life, regardless of ability, is considered priceless (unless you are a terrorist, unborn, or disagree with the government). At the very least it is politically incorrect to even suggest that one life is worth more than another. But the free market doesn’t care about politically correct answers.
Is there a Libertarian Solution?
Assuming you wanted to adhere to the non-aggression principle, the poor would only be able to survive on charity. Without meaningful work to do they would tend toward a life of inactivity and reproduction. These people would reproduce like pets that are not neutered. Their population will grow creating an increasing burden on an ever smaller percent of the population that remains competitive.
It is true that some fraction of the children would be born with the native capacity to produce enough value to care for themselves and others. This is where nature vs nurture debates comes to play. Someone who is able to provide for themselves but is raised in an environment of dependence may have no desire to provide for themselves.
Impact on Democracy and Libertarian Philosophy
The masses of people that are unable to care for themselves become an army of voters which are easily manipulated by sophisticated propaganda. These people have value for enslaving the middle and upper middle class to the elite. These masses of dependent people have the physical power to shut down the economy and extort at force what they need to survive.
Libertarian logic is either beyond their ability to understand or against their best interests. What good is libertarian theory to someone who realizes that they would die due to their inability to compete in the free market. Should they roll over and die just because it is the ‘morally right thing to do’?
I love all people and certainly do not advocate eugenics. I also love all dogs and cats but also recognize the problems we would face if we allowed them to breed without limit. So how can we design an economic system that works for everyone?
Can Steem be a Solution?
Steem creates a social currency that makes it possible for more people to be recognized for the value they bring to their peers. It enables the monetization of community contributions that have historically relied on donations and volunteer efforts. Even though there is reallocation of wealth in Steem, it is done through the non-violent means of issuing new currency by a democratic process. Perhaps the most significant difference from other democratic systems, it does not rely on centralized allocation of funds. Small groups of people have authority to issue small amounts of money without having to get approval from the whole body of voters. The larger the group, the more money they can issue to fund things valuable to them.
With any luck, Steem can enable an entirely new way for the bottom half of the population to earn an honest living without going on the dole. Steem is like discovering a new means of economically extracting gold from previously un-mineable mountains. It can help the economy extract new value from the masses of people with average intelligence.
I hope that there exists some non-violent means to organize our economy so that the vast majority of people can continue to produce enough value to support themselves. If we are unable to find a peaceful solution, then the only alternative is violence and no one wants that.
Hah that's the guys from Peep Show. I just found PS a few months back and love that show.
Genocide is as human as art or prayer. — John Gray
This is why I was so excited when I first heard about this concept. Projects like Steemit is revolutionizing the concept of labor. Many of the economics theories on labor, capital, and wage cannot apply in the future with mass technological unemployment and the way cryptocurrencies completely changing the way we view and understand the concept of money. Steemit is one of the first of many new platforms of the future where anyone can make a living online just by doing what they would otherwise normally do. We are living in exciting times.
Also, I've recently bought a book called Trekonomics: The Economics of Star Trek. It's pretty interesting.
Microlabor and microjobs are already a thing. AI has to be trained and only humans can train it. So even if all the smart work and hard work is eventually done by AI the AI would still need to know our preferences, our ideals, in the end we will merge with it in my opinion or we'll destroy it. We can't compete with AI and shouldn't even entertain the idea.
You've forgotten one factor - which is the cost of capital.
In order to make a robot you need to borrow the money, and make the thing. So it is only viable to replace a man with a robot if the cost of capital is so low that the Return on Investment from borrowing to make the machine is greater than you would get from hiring someone to do the job.
Why is unemployment so high right now? Because interest rates are so low that the cost of capital is practically free, so it is a no-brainer to replace your human staff with machines.
However if and when interest rates rise the calculation changes. Factor in that robots have a limited shelf life - you have to replace them every ten years, and if at that time interest rates are higher, then it might be worth hiring humans again.
In the last 200 years, interest rates have averaged about 4%. We're in a very unusual period. I know that some people believe that rates will stay low forever, but that's not how it works!
Where Steem comes in, is in the area of journalism and media. With ad-blocking on the rise and advertisers no longer willing to do expensive advertising campaigns, a model of media underpinned with a blockchain might be the answer. I can imagine Apple and McDonalds and other buying Steem Power to upvote any viral story that made their brands look good. I can see political parties doing the same, ditto pressure groups. Imagine the money that could be made at election time - in fact I think we should contact the Dems and GOP and ask them if they want to vote stuff up!
Steemit could be a new way of monetizing content - instead of the reader having to put up with ads, the advertiser simply purchases Steem Power and sets a bot to upvote any post that mentions their brand.
From the movie, Idiocracy.
Im starting an electrolyte business.
This problem was also discussed in this link that I posted:
The System Won’t Survive the Robots
https://steemit.com/philosophy/@onceuponatime/the-system-wont-survive-the-robots
I have thought about this often since I became involved with crypto. One perspective that I have come to is that organic farming as a skill and an activity that practically anyone could do is highly undervalued and underpaid. Intensive care of individual plants and small plots produces exquisite edibles that should command premium prices. If a member of the unskilled cannot come up with the initiative to undertake an activity such as intensive organic growing, and his relatives don't wish to support him/her in idleness, than they perhaps should not have been born in the first place. I mean, if you expect society to pay for the support of your children, than you have to expect that society has the say as to whether or not you are allowed to breed.
Yeah, great article :)
This kid is right on as well: https://steemit.com/economy/@psylains/smart-kids-take-on-the-so-called-unemployment-crisis
Well, I would say that he has some grasp of the "problem" but not much of a take on any "solution". And no one in any of these discussions seems to be taking any consideration of the importance of "status" in human relations.
POLITICS: n 1: social relations involving authority or power.
We swim in “politics” like fish swim in water; it’s everywhere, but we can’t see it!
In fact, telling primates (human or otherwise) that their reasoning architectures evolved in large part to solve problems of dominance is a little like telling fish that their gills evolved in large part to solve the problem of oxygen intake from water. — Denise Dellarosa Cummins
http://dieoff.org
If society becomes automated then robots can run society so why not give every family it's share of robots? I don't see why anyone has to lose here even if human labor is replaced by robots. It just means the cost of living can be brought down and people can be less dependent on other humans.
There is no data or evidence to suggest any of this is true. This is your hypothesis which no statistics back up. For example in developed nations where people are poor there isn't evidence that as the standard of living increases the rate of reproduction goes up. In fact it's the reverse where the higher the standard of living gets the lower the rate of reproduction.
The other myth is the idea that all meaningful work has to be working for food or for survival. The truth is the most meaningful work appears at least in history to be when people actually aren't concerned about survival. When people are at times of peace rather than war you get a Renaissance or an Enlightenment.
Finally, there will always be work for humans to do even if it only pays pennies and is microwork. AI has to be trained. AI has to evolve with humanity and that means the AI has to interact with humans, collect or buy data from humans, and in the end in my opinion humanity and that AI will merge. Cyborgization is the process of the merger between human intelligence and artificial intelligence into a unified IA (intelligence amplified) cyborg.
To understand more you should watch some videos from Hugo De Garis. I encourage all to watch his series of videos if you haven't.
No amount of education can change the fact that some people are born with IQ's of 85 and below and their jobs are being automated. Even "middle man" jobs like realtors and insurance will be automated. AI will eventually do website design, optimization and advertising...making my job obsolete.
Call me crazy but its does sound the beginning of the end...time to read Revelation or choose to become a borg eventually sometime in the future.
"Kill the Smart People"
Perfext shameless plug
And definitely burn the books :-)
There does not have to be "poor" or "rich". There just has to be free access to land and resources. Land which currently government owns can be distributed to everyone. The cost of living does not have to be high either. Labor does not have to be done by human beings. While some human labor might be more valuable than other kinds at certain times it doesn't mean we have a way to measure the value of a human life.
In addition there is no reason to believe people need charity. Do non-human animals require charity? No. They require habitat with access to all the resources necessary to provide for themselves. Humans would only need access to cheap renewable resources like electricity, the Internet, knowledge sources, water, air, and land. The problem is other humans or government claims ownership of the resources necessary for a human to depend on themselves which forces humans to depend on the rich, or the government, or big corporations.
The cost of maintaining society goes down as the cost of automation goes down. So you don't need as many smart people as automation becomes smarter than the smarter people due to AI. So even being smart is no long term security nor is being skilled. There is really no long term way for a human being to guarantee their utility to the economy once AI becomes smart.
The only thing humans can do at that point is be human and be valued for being human.