What I hope I have done through my writing is point out how our current system as structured has not “valued” the work people have done, as evidenced by the low wages a large swath of people has experienced. My conclusion is that it has been the result of Trickle-Down economics and modern business theory that has told us that the primary purpose of a corporation is to maximize “Shareholder Value”.
This focus on shareholder value has emerged right around the time that the general purpose technology behind computers, tablets, and smart phones started to become more of a part of our everyday lives. Some technologists call this the “great decoupling” where improvements in productivity do not translate into higher wages or an increased demand for jobs. During the Industrial revolution innovations like the steam engine and electricity made it possible to ramp up productivity by deskilling the production of goods. What once was done by a skilled craftsman by hand was done by a machine requiring a human to perform at a lower skill level at a greater scale. In the digital age it introduces a “skills bias” into the system that favors higher skilled technological workers who manage digital tools. This makes those who have acted as the cogs and wheels in our ecosystem to become at risk of being replaced. Numerous studies say that A.I. will displace workers but the numbers they predict vary widely. Planning how our society will deal with this is crucial. PwC estimates that by the year 2030 A.I. will add $15.7 trillion to the global economy.
A.I. will first focus on taking over tasks that (1) can be optimized using data, and (2) do not require social interaction. Unlike the days when the steam engine and electricity empowered more people to perform a task, these tasks will be replaced by intelligent machines. Those industries where white collar workers perform tasks where they take in information and make decisions or recommendations based on that information with minimal social interaction, those will be the most exposed to being replaced by intelligent machines. Once a Digital algorithm is created it can be freely distributed at little to no cost and updated for free. It can also be used to create a business model where “humans” were never part of the equation (see Smart Finance) as the A.I. and the digital tools will compete against employee heavy competitors, thus leading to a reduction in jobs to remain competitive.
In 2018, the Consulting Firm, Bain and Company, concluded that by 2030 employers will need 20 to 25 percent fewer employee’s (30 to 40 million U.S. workers). If you factor in automation and wage suppression, then 80% of all workers will be impacted. Initially most of that impact will be felt in those occupations that can be replaced by A.I. algorithms. Moravec’s paradox says that it is easy for A.I. to mimic high level intellectual or computational abilities of an adult, but it is far harder to give a robot the perception and sensorimotor skills of a toddler. So, unlike the physical automation of the Industrial revolution, white collar, not blue-collar work will be the most at risk in the emerging A.I. economy.
If A.I. will perform tasks better than humans, then wouldn’t it be wise for us to shift our economic ecosystem to one that elevated those area’s where being “human” is the true value we can add? Would it be worth it to explore policies that ask the question: “are we more than the sum of our economically productive parts”? Our ecosystem at the moment is running the following program “ the purpose of life is to accumulate and hold onto wealth” and we keep refining and repeating the process. Can we do better?
In Reading “A.I. Super-Powers, China, Silicon Valley and the New World Order” by Kai Fu Lee I was introduced to the idea of a “Social Investment Stipend”. The Stipend is a decent government salary given to those who invest their time and energy in those activities that promote a kind, compassionate, and creative society. Three broad categories would be eligible: care work, community service, and education. All pro social activities that leverage our humanity. This New Social Contract would be based on valuing and rewarding socially beneficial activities in the same way we currently reward economically productive activities. It would not replace the social safety net but serve as a way to provide a respectable income to those who choose to invest their energy in socially productive activities. His point was that in an age in which intelligent machines have supplanted us as the cogs and gears in the engine of our economy, it makes sense to nurture and value all of these pursuits, so we can build a more humane society. We need to make a lot of progress on this front, because at the moment the two fastest growing professions in the U.S. are Home Health Aides and Personal Care Aides (1.2 million jobs by 2026) that earn an average annual income of just over $20,000 (U.S. Bureau of Labor Statistics). I believe we would need to transition into such a system, and it would require us to levy a super tax on digital behemoths that control A.I. (if anti-trust laws are not fundamentally altered). But exploring such an approach is warranted because in an emerging A.I. economy the smaller number of available jobs will consist of lucrative work for highly skilled technological workers (and those capable of repairing the emerging equipment) and low paying jobs in tough industries. The middle will be hollowed out. From a policy standpoint we need to work at addressing the current inequalities in our ecosystem, updating the system, and then exploring policy idea’s like the one above that can be beneficial to society. I favor this approach over a Universal Basic Income because a UBI accepts a dystopian future where people simply collect a check without being given an opportunity to contribute pro social energy towards socially beneficial activities.
This idea can even extend to Climate Change, where we can create a system where people around the world are empowered to pick up the plastic in their communities in exchange for goods and services. Have people power serve as the grass roots recyclers who will clean up the environment and provide the feed stock to an industry that repurposes and recycles the material to make new products. The concept is called Social Plastic, and it is out there, and businesses are currently trying to implement it.
Planning for the future requires us to abandon short term, quarter to quarter thinking where we maximize shareholder value and cling too tightly to the “hyper individualism” that is rooted in our culture. Would it make sense to work at transcending the tribal mindset and move towards a system where we foster a more pro social attitude and attempt to build, nurture, and construct a diverse community that values the “humanity” in us? What would such a system have at its foundation? Unconditional Love!
Economic Journeyman 