Marc Andreessen recently wrote a post titled “This is Probably a Good Time to Say That I Don’t Believe Robots Will Eat All the Jobs …" — like all of Marc’s posts it is full of good ideas and worth reading. I agree with many of the points including the benefits of technology driven deflation and being long on human creativity to find interesting things for us to do. There is, however, a critical distribution question that Marc mostly avoids but is at the crux of the transition.
Imagine 6 billion or 10 billion people doing nothing but arts and sciences, culture and exploring and learning. What a world that would be. The problem seems unlikely to be that we’ll get there too fast. The problem seems likely to be that we’ll get there too slow.
We could add other great activities to this list such as caring for each other, our communities and the environment. I too find that a desirable state of the world and I am optimistic that we can get there in the longrun.
The transition is difficult though because pretty much all of these activities are either not paid at all (eg making music, cleaning up the environment) or paid poorly (eg teaching, nursing, open source, basic research). Now we can use crowdfunding mechanisms such as Kickstarter, Patreon, Beacon, Experiment, etc to pay some people for some of these and over time that can and will grow significantly. Still the money has to come from someone. And that’s a meaningful limitation at a time of great and growing inequality with nearly half of Americans without any savings (or net in debt).
A higher minimum wage, as vigorously argued for in an interesting recent piece on Politico, can inject some short term liquidity into the economy and I am sympathetic to that but it is also a very blunt instrument and still doesn’t help with the many unpriced activities. The same goes for government mandated shorter working hours or longer vacations (although I am pretty sure that Google’s founders did not have a government mandate in mind).
Marc suggests that we “[c]reate and sustain a vigorous social safety net so that people are not stranded and unable to provide for their families.” Our present approach to that though has gotten us stuck with a large government sector and complicated entitlement programs.
This brings me once again to the idea of a guaranteed basic income. This is a potentially attractive alternative for a number of reasons:
First, it sets human creativity free to work on whatever comes to mind. For many people that could be making music or learning something new or doing research.
Second, it does not suppress the market mechanism. Innovative new products and services can continue to emerge. Much of that can be artisanal products or high touch services (not just new technology).
Third, it will allow crowdfunding to expand massively in scale and simultaneously permit much smaller federal, state and local government (they still have a role — I am not a libertarian and believe that market failures are real and some regulation and enforcement are needed, eg sewage, police).
Fourth, it will force us to more rapidly automate dangerous and unpleasant jobs. Many of these are currently held by people who would much rather engage in one of the activities from above.
Fifth, in a world of technological deflation, a basic income could be deflationary instead of inflationary. How? Because it could increase the amount of time that is volunteered.
I will write more about how such as system could be financed. In the meantime suffice it to say that one of the (relatively few) roles of government should be the collection of taxes from companies and individuals (like myself) who have already benefited from technological change.
PS One way to think about a basic income is as follows: it removes a currently binding constraint on time optimization for many individuals allowing them to escape a local minimum — that in turn lets the economy as a whole adjust much faster (and with far less pain).