Chapter 8 – Perpetual vacation vs welfare dormitories
by Marshall Brain
While discussing these questions of unemployment, wealth concentration and the basic income for all, we should ask a second type of question as well. The arrival of robots should be an amazing time in human history. With robots doing all the work, we should in theory be able to enter an era of incredible human freedom and creativity. Instead of turmoil and massive unemployment, robots could theoretically release us from work. A significant portion of the population should be able to go on perpetual vacation and achieve true freedom for the first time in human history. This freedom would enable a period of creativity unlike anything that we have seen in the past. Is there a way to design the economy so that this level of creativity is possible?
Think about the era we are about to enter. Robots will soon perform every task essential to human survival. Robots will grow, package, transport and sell all of the food we eat. Robots will build all of the housing we live in. Robots will make, transport and sell all of the clothes we wear. Robots will manufacture all consumer products, put them on the shelves and take the money that we pay for them. And so on. Robots will displace the tens of millions of employees who are doing all of this work now.
In our current economic system, all of these displaced workers will become unemployed. If they are not able to find new employment quickly, they will burn off their savings and they will become homeless. “If you don’t work, you don’t eat” is a core philosophy of today’s economy, and this rule could make a robotic workers extremely uncomfortable for our society. It is quite likely that, as unemployment and therefore welfare rolls swell, we will turn to things like welfare dormitories, and eventually welfare cities, where the unemployed and poor are dumped to get them out of the way. Unless something like a Basic Income occurs, “Out of sight, out of mind” may be the rule of the day. Those who have concentrated the wealth will have no desire to experience the poor.
The question to ask here is simple but profound. Does the economy have to work that way if robots are doing all of the work? Is there a way to eliminate this dependence on a job? Can human beings actually achieve true freedom as the robots make this freedom a possibility? Can we all go on perpetual vacation?
Harry Potter and the Economy
Chances are that you have heard of J. K. Rowling. Even if you have not, you have heard of her work. J. K. Rowling is the author of the Harry Potter books. Her story is fascinating.
At the time she was writing the first Harry Potter book, Rowling was a single mother. In a Publishers Weekly article published on December 21, 1998, there are two important pieces of information about Rowling:
“Lacking child care and unable to take a job without it, she [Rowling] went on public assistance. In many ways, she says, it was one of the lowest points of her life.”
“She found Christopher Little in 1995, in the Writers’ & Artists’ Yearbook (the UK equivalent of Literary Market Place). He was the second agent to see her book — the first had sent it back “virtually by return of post,” with a form letter. In the year that followed, three publishers declined the book on the grounds that it was too long for children.”
Obviously Rowling’s original book, Harry Potter and the Sorcerer’s Stone, was a good book. It sold millions of copies. Her fourth book, Harry Potter and the Goblet of Fire, had a first press run of 3.8 million copies – the largest first press run in history. Over 30 million copies of the series have been sold.
When you think about it, it is a miracle that any of us ever got to read Harry Potter. Consider the fact that a book with this much potential was written by a person on welfare. Think about how many other works – music, art, literature, engineering, science, invention – have never seen the light of day because of the same sorts of social problems (or because the potential author/artist/inventor is working 12 hours a day scrubbing toilets in two minimum wage jobs to make ends meet). Think about the arrogance of the first three publishers who rejected the manuscript. Think about how many valuable works have never seen the light of day because of that same arrogance. Society as it is designed today wastes an unbelievable amount of human potential through mechanisms just like these.
At the very least, Rowling’s story shows us that the economic theory underpinning our world contains an element of dysfunction. It should not be the case that highly creative people sitting on top of billion dollar ideas have to go on welfare (and reach “one of the lowest points” in their lives by doing so) in order to express themselves. By removing this dysfunction, we could discover millions of Rowlings.
The GNU/Linux phenomenon specifically, and the free software movement in general, point in the same direction. GNU/Linux is one of the best operating systems on the planet, and it is free. It has been created by thousands of programmers who have donated their time and skills to the creation of GNU/Linux. What if we create an economy that encourages the creation of things like GNU/Linux? If people could make a living without being employees, we could unlock an unimaginable ocean of human creativity and human potential.
Other parts of our economy are showing similar levels of dysfunction. For example, in the U.S. today a growing number of baby boomers are headed toward retirement age. They will all stop working and make the transition to the social security system. However, the social security system is known to be in big trouble. Estimates vary, but as early as a decade from now, social security and its partner, Medicare, could collapse due to lack of funds. These systems depend on taxation on current workers to provide the funding for retired workers. But current workers are making less, retired workers are living longer, and the number of people retiring is immense. We will find ourselves in a situation where we have no way to support the growing elderly population. As medical science finds ways for people to live longer and longer, we as a society find ourselves wishing that the elderly would actually die sooner. That is dysfunctional.
The working poor represent another area of dysfunction. We have a large segment of the American population – tens of millions of people – who are playing by the rules. They are working hard. Many of them are working two or three jobs – they are some of the hardest working people in our economy. Yet they cannot make ends meet because wages are so low.
We have trouble raising minimum wage because of a polarized political climate. The fear of some is that an increase in the minimum wage will force employers to cut their payrolls, or put even more pressure on corporations to automate and shift jobs overseas. So we have tens of millions of minimum wage (or near minimum wage) workers employed by an economy which cannot raise their wages even though productivity is rising. At the same time, that same economy is increasing executive pay dramatically. That is dysfunctional. As discussed previously, robots will only increase the level of dysfunction in this area.
As a society, and as a nation, robots give us a choice. We are entering an historic era that has the potential to completely change the human condition. Yet we enter it with an economic system that is unable to spread those robotic benefits to a large portion of the population. Our economic system as it stands today stifles a great deal of creativity, has no way to deal with the elderly and is unable to significantly raise wages for the majority of its citizens. Robots allow us to remove these dysfunctional elements from the capitalistic system.
Stating the Goals
How do we make the most of the robotic revolution? How do we create an economy, and a society, that works for everyone?
- Should we ban robots from the workplace? Probably not. Banning technology from the workplace is the path toward economic stagnation. It also means that people rather than robots will be scrubbing toilets for the next century.
- Should we significantly increase the minimum wage so that people working in minimum wage jobs can actually make a living? Probably, but it is unlikely to happen. And most minimum wage workers will still become unemployed as robots arrive.
- Should we reduce the work week, say to 30 hours per week (then 20, then 10), to decrease unemployment and increase leisure time? It would be outstanding if we could make this decision as a society, but all indicators today point in the opposite direction. The working poor are making so little money that they are having to work 60 hours a week in two or three jobs. Many salaried employees are compelled to work far more than 40 hours per week. We would have to reverse a number of trends to move our society to a 30 hour work week, and corporations will resist these changes every step of the way.
- Should we dramatically increase the welfare and unemployment systems to accommodate all of the workers displaced by robots? That is unlikely to happen. Besides, who wants to be on welfare? Should the government hire all displaced workers in make-work jobs? Probably not. Do we really want tens of millions of people employed in meaningless jobs run by the government?
- Should we tax robotic labor? We have never taxed any other form of automation, so it is difficult to imagine this happening. For example, a burglar alarm is a robot that replaces a security guard. Should we tax all burglar alarms? And a traditional tax would go to the government, which would then have to distribute the money through something like the traditional welfare system – a system that has proven extremely uncomfortable to society in the past.
None of these “traditional solutions” are likely to help. So how are we going to solve this problem?
We start by stating our goals for the economy and then attempting to find a solution that helps us to reach them. Five important goals are listed below. If we can achieve these goals, in a context where robots are dramatically increasing productivity and doing more and more of the mindless work that wastes human potential, we will have an economy whose strength and growth defies imagination.
How do we achieve these goals?
- Goal #1 – For the strongest possible economy, we need to create the largest possible pool of consumers, and those consumers need to have money to spend.
- Goal #2 – For the strongest possible economy, we need maximum economic stability. Every economic downturn has occurred when people stop spending money, either because they don’t have money to spend through unemployment, or because they are afraid to let go of their money for fear of future unemployment. Consumers need to have confidence in the economy, both on the spending and the receiving ends of the equation.
- Goal #3 – For the strongest possible economy, we need to create the largest possible pool of innovators – people who create innovative new businesses, new inventions, new products, new art (films, music, etc.) and new intellectual property. Capitalism is strongest when new ideas are maximized.
- Goal #4 – For the strongest possible economy, we need for people to invest in these new ideas, both individually and in groups. An idea is nothing unless it is put into action. Without the money provided by investment, there can be no new businesses and no new products.
- Goal #5 – For the strongest possible economy, we need for people to have maximum freedom. People need the freedom to choose the products they want from an open marketplace of maximum size. They need to be free to start businesses of their own. They need to be free to work on their ideas and carry them as far as possible. At the same time, people need to be free to take time off and relax as they so choose. The notion that people should have to work 60 hours a week to make ends meet is the antithesis of freedom.
The following suggestion at first seems impractical because it is so simple: What if we, as a society, simply give consumers money to spend in the economy? In other words: What if the way to achieve the strongest possible economy is to give every citizen more money to spend? For example, what if we gave every citizen of the United States $25,000 to spend? $25,000 sounds impossible the first time you hear it, but consider the possibility.
Would this simple step – giving money to every consumer – accomplish the five economic goals set forth in the previous section? Yes. It would be a huge boost to the American economy:
- The economy would be stronger because of all of the consumer spending.
- The economy would be stable because income (and therefore spending) would be guaranteed.
- With $25,000 per year to spend, innovators would no longer be forced to work — they could focus their energy on innovation, living off of the $25K per year they receive. Inventors would have time to invent, writers to write, entrepreneurs to breed new companies, etc. Many people could devote their time to innovation.
- There would be billions of dollars for people to invest, especially in their own businesses. And investors would have a stable marketplace into which to introduce new products.
Most importantly, it would create a nation where the citizens are truly free. If every person had $25,000 per year in today’s dollars to spend, they would be able to live their lives even if they lost their jobs. If robots took their jobs it would not be catastrophic. People would be able to weather the robotic takeover, retrain and move into new careers.
The basic idea is that we have a choice. Everyone should be headed for perpetual vacation as robots do more and more of the work. But the concentration of wealth is blocking that. Can the basic income described in the previous chapter give us a way out?
Ultimately, whether we choose to free people with perpetual vacation or imprison them in welfare dormitories, the second intelligent species will arrive. Conscious, sentient robots will match human intelligence, and then quickly exceed it. It is inevitable. What will happen once the second intelligent species is here?