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The second link is an interview I did with The Fiscal Times regarding the future of robotics and automation. In short, I think both high and low skill jobs are going to get hit. A great many knowlege-based jobs requiring college degrees will soon be succeptible to technologies like machine learning. Within many organizations, nearly everything that employees do is getting recorded (transactions, customer interactions, etc). That record may someday offer a rich historical data set for a machine learning algorithm to churn through and develop rules for automating the job in the future.

Ultimately, I think there will be no choice except to pursue more progressive taxation and redistribution. Without that, we will run into serious social and economic problems as rising unemployment and falling/stagnant wages result in diminshed consumer spending and a potential deflationary spiral. What do you think?
The robots have arrived and there’s no one to stop them from taking over hundreds and thousands of jobs, according to one author. Oh, and they might cause the entire economy to collapse.
Robert Stanley's profile photoWayne Radinsky's profile photoMartin Ford's profile photoJason Pratt's profile photo
Here's a recent Note I wrote on the subject of Moore's Law and its implications for Global Workplace Automation:

If only 10% of the world's 3.5 billion jobs get automated away by the year 2021, that's 350 million jobs, which is a larger amount of people that live in the United States today.

What's going to happen to them?

If you don't think that is possible, Google and the VIAC Team from Parma, Italy are both projecting, not predicting that fully Automated Driverless cars will be on the road, worldwide, by no later than the year 2025:

How many 10s of millions of jobs is that?

And this Note is one that goes into the idea that if in about a dozen years from now the average $1,000 dollar Desktop Computer is going to be roughly 30 times more powerful than $1K machines that we use today, then what's the point of even attending College from this point on going to be?

Love your work, nice to see you here.

"Ultimately, I think there will be no choice except to pursue more progressive taxation and redistribution." -- It looks to me like we are going in the opposite direction.
Right, that's the whole point of the Political March To Austerity that started happening with all the major Governments of the 1st World over the course of the last 9 Months.

Our TPTB are simply laying the Groundwork and building The Foundation of their coming 10 Year Plan.

What, you don't think that they have a 10 Year Plan?

Of course they do.

A very, very clear Plan.

One they are following to The Letter and here's what it is:
"Right now, we’re moving in the opposite direction, we’re talking about austerity, it looks like we’re going to destroy the few safety nets that we have for working people, and I honestly think it’s a disastrous move."
Hi Martin. Thought this was your best interview yet.

As are you, I'm interested in hearing more about potential solutions to this problem. (Seems ironic and unfortunate that technology freeing people from mandatory labor is such a serious threat.) Have you heard any solutions from more conservatively-minded people? I imagine "more progressive taxation and redistribution" is troubling to them. How about more widespread, or universal, ownership of capital ala Louis Kelso?

I suspect reconsideration of the work ethic may be the most important piece. Need to redefine what it means to "earn ones keep" in the next economy.
Actually, a guaranteed icome in some form has been embraced by free-market advocates in the past. Milton Friedman supported a negative income tax. I read somewhere that F.A. Hayek supported a basic income, although I haven't been able to verify that. The Nixon administration once had a proposal for a basic income.

The thing is that if we really run into this problem, we have 3 choices (1) do nothing (2) give people an income and let them participate in the market (3) Have government directly provide services (housing, etc).

#1 seems the likely initial choice but it has real problems in the longer run. #2 is the free market solution. #3 (not #2) is really the "big government" solution and it comes with waste, corruption, etc.

The problem with ownership- (rather than income-based) scenarios is that it is probably too late to implemement them...we would now need massive dedistribution of wealth -- which I think is even harder than redistributing income. Also, you have to think about the implications of a society where your survival (and your heirs' survival) depended entirely on what you OWNED. Would we restrict what people could invest in? If not would we bail people out if they made bad choices? Would everyone be too big to fail?
Brazil has not only had a Basic Income Law enshrined on the books since 2004, they've been making cash payments to their poorest citizens since then.

Cutting their Poverty Rate in Brazil by a full ⅔rds:

From 22% of the population living below the Poverty Line in the year 2003, to 7% of the population in the year 2009:

So we already have a clear and very direct Proof of Concept that this works on large, vast and sweeping scale.

And can be implemented on a National Level very quickly, and have results that are practically immediate.

Now I have no doubt that there is not a single member of the US Congress and Senate or any one of our 50 State Governors, (to include Sarah Palin who owed her Sky High Approval Rating of 80% as Alaska Governor in the year 2008 to Alaska's Permanent Fund, she tripled the Annual Payment that year to $3K per Eligible Alaskan Adult), that is not fully aware of the success of Brazil's Basic Income Program.

A key question is that of cost.

As in, just how much will it cost?

Surprisingly, very, very little.

Providing every single adult in the USA today between the ages of 18 and 62, (who have an annual income of under $1 million dollars, thus making America's 16 million individual millionaires and billionaires ineligible to receive a weekly Basic Income check), with $20K a year of Basic Income would cost a mere $4 trillion dollars.

Figure everyone between those ages and income level is roughly 200 million people, cutting them a weekly check, to spend as they please, of $400 dollars and that is what that number comes to.

Is this feasible?

Of course it is, it's certainly not that we don't have the money, because we do.

$4 trillion dollars is still _less than half- of what we loaned the TBTF banks:

A key difference being that this $4 trillion dollars would not just gather dust in a bank vault, doing no good for anybody, the bulk of it would go directly back into the US Economy because most people would spend what they have right away on the Basic Necessities of life.

Which, in all likelihood, would make Wal-Mart one of the main beneficiaries, and judging from the growth that they've seen in Brazil over the course of the last decade just like with our Top Tier American Politicians I'm quite certain that Wal-Mart's Board of Directors is quite aware of just how much a Socialistic National Basic Income Program would enhance their Bottom Line.

They'd be lying through their teeth if they were to deny this.

So what we have here is pretty compelling evidence that the Benefits of a National Basic Income Program in the USA would far exceed any Negatives that any such Program would have, yet, politically, all the Foot Traffic is going in the exact opposite direction that it needs to.

Not just in the US, but currently as I type this every single major 1st World Government, especially here in the EU, is pushing hard against the very idea and bending over backwards to dismantle their Social Safety Nets.

We just saw this quite clearly in the course of the last 2 weeks with Germany's Economic Annexation of the Nation of Greece where we got ourselves some real 'Lebensraum' that is much, much prettier than Czechoslovakia.

Just sayin', and no that last part was no joke.

I can't but help to think that this is deliberate on the part of our blessed TPTB, because by the time the years 2020 to 2025 roll around, and today's Austerity Programs reveal themselves for being what they truly are; a way for the Wealthy Elite Bandits at the top of the Global Economic Food Chain to accrue even more for themselves and give the people nothing, they can just turn around and say, 'It's too bad that you people voted for this back then, we didn't set these Rules, you did.'

And this, for the Elite Owner-Operators at the top of our Economic Free Market Capitalist Food Pyramid, is not about amassing and concentrating Wealth, they've already got that, but gaining and keeping Power.

They want this.

Want they don't want is for Americans to have any sort of Economic Freedom that a Basic Income Program would provide, because the Bottom Line is is that this is a threat to their power.
Here's my thoughts. The fixation on "jobs" and "income" is misplaced and short-sighted. What people need are not jobs, or income, but goods and services. Jobs and income are a means to that end.

As we automate the production of goods and services, the cost of those goods and services will fall to zero. An example of this is Google+, which is fully automated and which does not cost any of us anything. We do not need additional income (or even basic income) to take advantage of Google+, as it is free.

Money is used to allocate scarce resources. If resources are no longer scarce (i.e., goods and services are free) then money is no longer needed to allocate them. I know it is difficult to fathom, but one day canned peaches will be free or practically free, just like YouTube videos are now.

If we rely on a government to create a Basic Income for us, then we are also 100% dependent upon that government not to take our Basic Income away, or tinker with it. To me this seems far, far more dangerous to human liberty than to allow automation and technology to continue unabated.

Martin, I enjoyed your book but found it, in the end, unconvincing.
G+ is free. Food is not free. In fact the price of food is increasing.
The price of food is increasing for two reasons: #1 inflation and #2 because it is being burned in large quantities as fuel in a misguided attempt to save the world. If governments were to stop borrowing and printing money, and wasting food, we would have deflation in food prices just as we have in many other unregulated markets.
+Jason Pratt, you make some good points regarding the purpose of money & the need to focus on goods/services (including continued development of knowledge) with jobs/income being a means to an end. But, while agree that automation offers the potential to reduce costs, I don't see those costs falling to zero. And I don't believe that "resources are no longer scare."

Automation reduces one of the costs of goods/service -- the cost of rent on labor. However, there are still costs for input materials (raw natural resources, intermediate value products, energy). For the near future, those continue to be scarce resources that will demand a price from the market (in order to allocate those resources). I do believe that costs will fall across the board over time -- that is, as (for example) automation is expanded into the mining & harvesting industries, the costs of raw materials will go down; as transportation & warehousing is automated, intermediate product costs go down; as technology advances, the costs of energy should go down. But these technological developments, introductions and concomittant price influences will take time to percolate through the market.

How will workers who lose their income stream today afford to survive until the effects have percolated through a sufficient portion of the market that they have had time to force prices down?

Furthermore, as we saw in the 1930's, price deflation seems attractive to the average consumer (particularly one who no longer has an income stream), but it doesn't make any debtors too happy. And most of the first world economy is built on leveraged debt. What hapens when nobody has any hope of repaying their debts and huge numbers of individuals & businesses (and gov'ts) begin defaulting on their loans (obviously, we've been getting a preview of those problems)? I don't know, that's why I'd like to see some professional economists studying the issue in greater detail. Maybe what happens is the retarding effect of deflation results in a temporary inability to invest in additional capital (specifically, additional automated systems) which slows the economic disruption. And maybe we then iteratively step through this transition in something more digestable than a rapid freefall.

The last point I'll make is that I think you might be on to something as you reference the free services through things like Google+ or YouTube. In a discussion about this book w/ my sister, she pointed out that many of our traditional business models have been dramatically changing over the past decade as people explore new ways to generate revenue streams built largely around models that include giving products away for free. This seems easier to conceive of in the information world (where, of course, there are still very real costs for powering & maintaining servers, cooling systems, distribution networks, etc.), but perhaps we'll see similar models develop for more physical necessities (e.g. food, water, healthcare) and pleasantries as the costs of these other goods are pushed down to levels approaching the information sector due to the adoption of automated processes.

Ultimately, I think there is lots of potential for a functional society that broadly adopts technology. It's the transition to that end-state that is unclear to me, and I worry that if we just try to "muddle through it" (without even so much as a vision of what we are trying to muddle through & where we are trying to get) then things could get ugly as people either try to derail adoption of technology or they revert to their Hobbsian state in response to said adoption.
Assuming automation will create mass-unemployment, and a minimum wage for all is the best solution for future, I believe progression taxation will not work as there may be too few people with very high wages in future. It is not correct to assume that the amount of income high-earners may have may be sufficient to redistribute to major mart of population.

Instead the taxes can be levied on corporations to acquire the resources/raw-material/bandwidth itself for production/services or some kind of value added tax on end-product/service may work.

This kind of taxation and redistribution may be a workable solution.
Just pondering what it might take to create a basic income, in the UK, by raising corporation tax. It seems that the total UK corporation tax take for FY10/11 was 42 billion GBP. To create a basic income of £500 per month (£6000 per year) for every adult in the UK (41 million people) would cost 250 billion GBP - which is six times the current take. It doesn't seem workable? I guess an £84 per month basic income would be workable based on doubling corporation tax.
+Niki Hignett thats only if you assume that the total sum is fixed. A better approach is to print that basic income money. This increases the total sum of available money and effectively creates demurrage, which is a good thing. Of course the problem with that approach is that the entire world must agree to implement it, which is a great goal, but until then it's more practical to think in terms of P2P complimentary currencies as I discuss in the link above.
+Mohamed, no, printing money only contributes to the oversupply of money relative to other goods in the society, which causes inflation (and yes also demurrage) and a concomitant overemphasis on earning more money in order to survive. On the other hand, allowing technology to reduce the cost of living (in money terms) is called "progress" and will lead to a de-emphasis on money incomes overall, as more and more of the basic necessities of life require less money than before to procure. We forestall or fight this trend at a cost to our own future.
+Jason Pratt : you are saying "no" without trying to understand what I'm talking about. This illustrates the disadvantages of debate in a comment thread, people tend to be hasty and do not put the necessary intellectual effort for an intelligent discussion. Of course printing money will create an oversupply! That's exactly the intended point, because by creating oversupply you get demurrage, and when you have demurrage the economics of investment push toward long term thinking over short term greed. And of course there will be a de-emphasis of money, but we're talking about sustainable solution to scarce resource allocation.
No Mohamed, I understand what you are saying. There is another way to get investment to start thinking long term, and it's fairer and more sustainable, and that is to stop the printing of money altogether. If your plan was workable, why wouldn't we just start printing money willy-nilly and dropping it from helicopters? Why wouldn't we just print it on demand, from our home computers, whenever we wanted, and hand it out to anyone who asked for it? Oh, that's right. Printing paper cannot make and has never made any society wealthy, only work and innovation can do that. (And by wealthy I don't mean "having lots of money" -- I mean having wealth in the Buckminster Fuller sense of the word.)
Attempting to think this through - printing money to create a basic income would seem to have the effect of redistributing wealth from the rich to the whole population, at the expense of some inflation. I guess that every year, you'd need to print more money just to shift the same level of purchasing power. I suppose this is better than doing nothing because it, at least, keeps the economy moving and shifts wealth from those with income producing assets to those without. So this would amount to a tax on the rich?
+Jason Pratt I am open to anything sustainable, and if a solution is fond that does eliminate money that would be even better! But I have yet to see a reasonable path that does not involve an accounting system (money). Again, I think comment threads here (in their present format and spirit) are not the best place for a serious intellectual discussion. Let's keep it at that, please.
U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion:

WASHINGTON—The U.S. Economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy...
+Mohamad Tarifi I think you make a good point about printing the money for a basic income. I have often thought that this could be done at least initially -- in order to escape the "liquidy trap" that that deflation would bring on (many argue that we are in a liquidity trap now.) I am not sure you could continue that indefinitely -- you might then get excessive inflation -- so you might move to a scheme where part of the income is newly created money and part is based on taxation. Of course, it has never been tried, so most likely we wouldn't know until it is.

+Jason Pratt You sound a bit like Ron Paul... Once technologies like advanced AI and robotics are available, I believe it should be possible to enter an age with unprecidented economic growth -- if and only if we can solve the problem of where demand will come from if wages no longer provide an adequate income. Such a high rate of economic growth would require that the money supply be dramatically increased. The money supply has to expand to accomodate growth. So something like a gold standard would be completely incompatible with that -- it would be hugely deflationary and would hold back progress. I am quite certain that Milton Friedman would agree with this. You might be interested in a paper on Singularity Economics that Robin Hanson at GMU wrote. You can find a link to it from this blog post:

Here's a direct link to Hanson's article. You can see how the growth he is talking about require a rapidly expanding money supply:
When globalization is brought into the equation, the problem gets very complicated and coming up with any solution becomes hard. Different countries will face these challenges at different times and at different scale. Some countries will be manufacturing hub, some rich in resources and other may not have anything to offer. Countries will not come together towards a global solution and instead rely on bilateral-regional solutions.

One interesting question is what will happen to value of property assets, such as houses, when unemployment becomes very high. Will the home prices continue to go down for foreseeable future?
+Vineet you are correct about the difficulty of solving this through some form of national initiative, in a globalized world. Same problem affects climate action. Those who call for coordinated global action are in my opinion grossly underestimating the primacy of self-interest in national politics and especially in individual voters' decisions. It will be interesting to see under what circumstances 7 billion people are willing to set aside their own personal motivations in order to test out some type of plan sold to them by experts as a way to solve big problems. So far, these types of things have had very limited draw to the electorates of the world.

+Martin Ford there is no reason to conclude that limiting governments to the production of gold and silver money will limit the overall money supply. Private money systems can and do arise which are regulated differently than the national money supply. We have this at work in today's world with Visa and Mastercard, who issue money as credit each and every day, reaching quantities larger than the Federal Reserve. Private money systems carry the advantage of allowing competition and consumer choice to regulate the supply of money, rather than regulating it via the diktat of twelve regional governors of the government banking cartel, which sounds oddly undemocratic and anachronistic, does it not?

The Hanson article was quite interesting, thanks for the link. I did not see any reference to a need to expand the money supply dramatically in order to achieve the next singularity. Money is properly thought of as arising naturally as a product of the economic activity of market participants, just as things like receipts, commodities, warranties, price tags, etc. To assume that, without government to "issue" money, we would not have enough money to transact commerce is as silly as to assume that we would run out of price tags. The contractions in the money supply which have caused big problems in the past were the ones that were a result of a heavily-indebted economy suddenly finding itself without money to pay its interest payments...this is indeed a big problem for that group of people. Who is it who is flooding the world with debt and causing this dependence? It certainly is not robot producers or software engineers. Think about it.
+Jason Pratt I really do think there is a lot of historical evidence to the suggest that gold standard is not a good idea. Here's a video of Milton Friedman talking about how the gold stardard contributed to the Great Depression:
Milton Friedman on The Gold Standard
Thanks Martin, I am a Milton Friedman fan, and he is correct that the gold standard contributed to the GD, but that is not the same as saying that the GD was caused by the gold standard. It is more accurate to say that a few countries' (including the UK) decision to return to the gold standard caused the GD.

One economist, no matter how great, cannot make or break the case for any economic topic. Lined up against him are a whole pantheon of dissenters (growing in number as we see the wreck that debt is causing our systems) who would like us to use less debt-money and more commodity-money.

Times have changed greatly since 1933. There was no electronic private money to circulate alongside and compete against the gold standard, like there is now. Checking accounts were far less pervasive than they are today. And so on. The inflation of currency by the Federal Reserve in the 1920s was historically disastrous in that it "blew up" the gold standard and forced the world to abandon it. We have been financing wars and Wall Street bailouts and other politically advantageous (yet not voted-for) adventures ever since.

Look at it this way: Within fifteen years of setting up a central bank and debt money, the US and the rest of the world went into the longest and most prolonged economic depression ever seen in history. The gold standard up until that point had served humanity for 200 years, through the Industrial Revolution, even. Which caused 1929? (written in 1946) discusses this issue. One idea is that citizens receive a monthly dividend based on the two biggest factors to modern production: the inheritance of natural resources, and the inventions of past generations.
But Joe we all receive this dividend already, in the form of abundance and prosperity and technological advance that far exceeds what we ourselves have contributed.

What we need is honest money, not more debt...
Yes, but the dividend isn't worth anything if you have ZERO income. If you have no job and no income, it doesn't matter how cheap stuff is...
If you have savings you can live for a long time without income. We have no savings because of inflation -- things cost more and more as time goes by. If things cost less and less as time goes by, we would be able to live for a long time off of a very little bit of accumulated savings. Unfortunately that opportunity is stolen from us, as more money is created each year so that governments can spend more than that earn in taxes each year. Think about it. Read Buckminster Fuller's definition of wealth.
Buckminster Fullers definition of wealth: "Wealth consists of physical energy (as matter or radiation) combined with metaphysical know-what and know-how." "Critical Path", p.198
That's not the one I was referring to, it is the other one :) "Wealth is measured in the number of days one can maintain one's lifestyle into the future without earning additional income." (paraphrased). The definition you're referring to is the one where he explained that human wealth includes many non-monetary things like sunlight and language, none of which we pay for...a very enlightened definition for sure.
+Jason Pratt "Wealth is measured in the number of days one can maintain one's lifestyle into the future without earning additional income."

Yes, but wouldn't you consider the existence of a civil, relatively secure society part of your "wealth"? I understand that, as a libertarian, maybe you feel the primary function of government is to protect you from those who would seek to threaten you, or steal your wealth...but what if government cannot fulfill that role? Is it better to be wealthy and live in a secure world were you can move freely and fully enjoy the benefits of your wealth, or is it better to be SUPER wealthy (and keep ALL the fruits of your labor) but have to constantly worry about your security?
Of course, Martin. I don't understand how that is correlated with the definition of wealth, though. Would you rather be SUPER wealthy in a country like North Korea, where everyone is impoverished and oppressed, because of overarching government? No, of course you would not. That is a straw man.

We have a Constitution in America, and it is my wish that our government adhered closer to it. I am also a libertarian personally, so I prefer a lighter touch of government. But I understand the reality that decisions are made through political compromise, which is why a Constitution is so important for setting the boundaries of what the government can and cannot do. I think we had a pretty secure and prosperous society here for a long while, until wars and foreign entanglements got the better of us in the twentieth century. I wonder now if we will be able to keep a free society long enough to continue the march of automation your books refer to. Probably so, but there are risks and they definitely do not (these days) come from "too little government" - as our government is larger than ever and running massive deficits and in huge debt. Libertarians like me would simply like to swing the pendulum back towards more freedom and less government.
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