What happens as the few workers we see in these videos below are no longer needed? And, even more importantly, when middle class and professional jobs get hit by the same trend through AI and more sophisticated software?
Capitalism has both a supply-side and demand-side. As more and more work is done by machines or software, the relationship between aggregate demand growth and private sector employment growth will start to break down – or at the very least become very weak. Eventually, a government will not be able to stimulate aggregate demand as an effective solution to unemployment, because this will tend to cause more use of machines, not human beings.
The solution to this is obvious: governments need to do much more to manage the demand-side. They need to find economically and socially useful work that can still be done by human beings and also move towards a guaranteed basic income. If you want income above the guaranteed basic level, you will still need to do some work of value to human society and civilisation (e.g., science, medical and technology research, helping development in the third world, human social services etc.).
Wednesday, February 17, 2016
The Future before your Eyes
Posted by Lord Keynes at 4:36 AM
Labels: automation, demand-side, future, guaranteed basic income, robotics
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"move towards a guaranteed basic income. If you want income above the guaranteed basic level, you will still need to do some work of value to human society and civilisation "ReplyDelete
See? I knew you were centre-right underneath it all.
Pop quiz: who was the most famous economist exponent of this idea? Answer: Milton Friedman. Other Chicagoans too as I recall.
Now it's true Miltie thought society would and should move away from it eventually. But then Miltie would have disagreed with your prediction about displaced workers being unable to find work.
Hayek advocated it too, but only as a safety net for the poorest. Saying it should provide the bulk of most people's income is a whole different ball game.Delete
"who was the most famous economist exponent of this idea? "Delete
hmmm.. but I seem to remember Friedman was also in favour of the quantity theory of money, Wicksellian loanable funds, the natural rate of unemployment etc. -- all false ideas like the LTV. I'm not sure he ever advocated government employment programs as a solution to technological unemployment, and when pressed probably would have said flexible wages will clear the labour market.
As i already said lord keyens i think the solution is subsidise labour in a somehow similar way to how set interest rate today.ReplyDelete
For example for every dollar that employer pay to employee he will get from the central bank some cents in return 20 30 40 cents of subsidy depends how much is needed to get full employment.
(of course its should have regulation like top floor salary which is subsidized and things like that or restrictions on hiring familiy members to avoid exploitation of the system).
Also in this case employers and innovators will get incencetive to invest in technology which make workers more productive instead of replacing them by machines.
I'm not sure I properly understand the proposal. You want to the CB to subsidise wages in order to halt or slow down the spread of automation, by making the price of laboug lower than the cost of machines? I don't see this as a good thing.Delete
Spread of automation is a very good thing in the long run, and the short term effects (e.g., technological unemployment) should by managed by demand-side policies, retraining, and government employment programs.
well the technology advance in rapid pace this days and as you said artifical intellegence big data 3d printers and automated factories can basically make labour irrelevant.Delete
at least until there will be any new breakthrough technology which will give advantage to human labour again.
its may take 2 10 20 years but its can take as well 40-50-100 years until technology like this will be invented.
so no my purpose is not to stop automation my purpose is to make automation complimentary to labour instead of automation which replace labour.
so why i support this idea more than demand led solutions?
1.not everyone is able to work in jobs which require a lot of creativity like research and not everyone is able to be a doctor,or to be in a job which require empathy (social worker, psychologists ,tour guide, martial arts, teacher yoga teacher).
so in this case most of the people will stay unemployed and will live on basic income and as i said before its can take 2 years 10 years 20 years but it also can take 40 60 100 years as well (we dont know its uncertain).
and it will cause a lot of problems for people both emotional and even technological.
a lot of people gain their self esteem their feel of worthiness and their meaning of life from their work,even when people always complain about work its playing important part in their life not only from material point of view but from social as well (even some amount of inequallity like it was in the golden age of capitalism era is way more healthier than fully equal unemployed society).
2.actually in case of massive automation which will replace labour there can be another problem.
of course really uncertain world is a problem post keynesians discuss it a lot and indeed the purpose of the state is to make the world more certain give security to people (physical economical and social).
but too certain world where most of the people cant really fullfil themself and their skills can put on hold innovation and dynamicity of our world.
which in turn will create static and stagnated society like the soviet union (even though without deficit and without human rights violations).
so the point of my idea is not to prevent automation at all,my point is to make it complimentary to labour so the automation will be healthy automation which will preserve the dynamic features of capitalism because of the value of labour for society and to prevent stagnation in the long run.
also in this case as i already said innovators and employers will try to create and adopt technologies which will make humans more productive instead of technology which will replace them completely.
ohh i forgot to tell something.Delete
as i said my point is to create in this case full employment if there will be full employment combined with high amount of automation or technology its ok as well so as i said i have nothing against healthy automation.
Lk i really want to know your opinion about my ideaReplyDelete
Lord Keynes, I also support a guaranteed income. If something like a basic income is not adopted, who would the customers be for these producers who are using automation? Is it unrealistic to expect those without jobs could become producers for one another? I can see this as one possible outcome. A society of resource owners who have machine labor and can buy and sell to each other. And another "lower" class that become producers for each other (assuming they can get access to land and other natural resources). Apologies, my comment is poorly thought out and probably not very well written.ReplyDelete
"If something like a basic income is not adopted,"Delete
A basic income cannot work. We have a state pension in the UK and politically we can't get it above £155 per week for the fairly obvious reason that people object to others getting something for nothing when they have to work for a living. And that's with retirement pensions where the argument you have done something for that money is pretty strong.
Basic income cripples the spend side auto-stabilisers which means that the entire control has to come on the tax side. Values for the basic rate of tax at about 45% of additional income are not supportable.
So we have a situation where £155 is about half the living wage. You can't live on it unless you own your house outright or you are getting your rent paid by the state.
What we need is a Job Guarantee - for which a living wage can be paid because you are producing something. That solves the resentment issue, the tax issue, the auto-stabiliser issue and the something to do issue.
The problem we have in society is an outbreak of involuntary unemployment - due to productivity improvements and the natural equilibrium of a market economy. Solve the involuntary unemployment and you solve the lack of effective demand.
The Job Guarantee allows people to earn more income and pay less tax.
What's really amusing about the right's "only private sector creates jobs" is that it is exactly the wrong way around. The job of a correctly constituted private sector is to *eliminate* jobs and replace them all with machines.ReplyDelete
You can only have the private sector creating all the jobs if you eliminate productivity - and move back to a neo-feudal system where you have human beings operating as car washes, which being subsidised by the state.
I totally agree with Neil Wilson : the basic income is a false good idea. It would create a "plèbe" of poor unskilled idle class. The hard working people would of resent them. And anti wellfare demagogues would then easily appeal to that resentment to get elected...ReplyDelete
Another question : what about energy shortage / depletion, especially if we are to tackle the carbon / climate issue ?
Is it (physically) realistic to hope that most of the economic tasks shall be done by machines ?