Saturday, October 10, 2015

For Whom Shall the Robots Work?

When robots do everything, will we have work? Will we have income? A review of Martin Ford's "Rise of the Robots".

No one knows when it is coming, but eventually, machines will do everything we regard as work. Already some very advanced activities like driving cars and translating languages are done by machine, sometimes quite well. Manufacturing is increasingly automated, and computers have been coming for white collar jobs as well. Indeed, by Martin Ford's telling, technological displacement has already had a dramatic effect on the US labor market, slowing job growth, concentrating economic power in a few relatively small high-tech companies, and de-skilling many other jobs. His book is about the future, when artificial intelligence becomes realistic, and machines can do it all.

Leaving aside the question of whether we will be able to control these armies of robots once they reach AI, sentience, the singularity ... whatever one wishes to call it, a more immediate question is how the economic system should be (re-)organized. Up till now, humans have had to earn their bread by the sweat of their brow. No economic system has successfully decoupled effort in work (or predation / warfare / ideological parasitism) from income and sustainance. The communists tried, and what a hell that turned out to be. But Marx may only have been premature, not wrong, in predicting that the capitalist system would eventually lead to both incredible prosperity and incredible concentration of wealth.

Ford offers an interesting aside about capitalism, (and he should know, having run a software company), that capitalists hate employees. For all the HR happy talk and team this and relationship that, every employee is an enormous cost drain. Salary is just the start- there are benefits, office space, liability for all sorts of personal problems, and the unpredictability of their quitting and taking all their training and knowledge with them. They are hateful, and tolerated only because, and insofar as, they are absolutely necessary.

At any rate, the incentives, whether personal or cooly economic, are clear. And the trends in wealth and income are likewise clear, that employment is more precarious and less well paid (at the median), while income and wealth have concentrated strongly upward, due to all sorts of reasons, including rightward politics, off-shoring, and dramatic technological invasion of many forms of work. (Indeed, off-shoring is but a prelude to automation, for the typical low-skill form of work.) There is little doubt that, left to its own devices(!), our capitalist system will become ever more concentrated, with fewer companies running more technology and fewer employees to produce everything we need.

What happens then? The macroeconomic problem is that if everyone is unemployed, no one (except the 0.00001%) will be able to buy anything. While the provision of all our necessities by way of hopefully docile machines is not a bad thing, indeed the fulfillment of a much-imagined dream of humanity, some technical problems do arise; of which we can already see the glimmerings in our current society. Without the mass production lines and other requirements for armies of labor that democratized the US economy in the mid-20th century, we may be heading in the direction, not only of Thomas Piketty's relatively wealth-heavy unequal society of financial capital, but towards a degree of concentration we have not seen lately outside of the most fabulous African kleptocracies.

What we need is a fundamental rethinking of the connection between income and work, and the role of capital and capitalists. The real wealth of our society is an ever-accumulating inheritance of technology and knowledge that was built in common by many people. Whether some clever entrepreneur can leverage that inheritance into a ripping business model while employing virtually no actual humans should not entirely dictate the distribution of wealth. As Ford puts it:
"Today's computer technology exists in some measure because millions of middle-class taxpayers supported federal funding for basic research in the decades following World War II. We can be reasonably certain that those taxpayers offered their support in the expectation that the fruits of that research would create a more prosperous future for their children and grandchildren. Yet, the trends we looked at in the last chapter suggest we are headed toward a very different outcome. Beyond the basic moral question of whether a tiny elite should be able to, in effect, capture ownership of society's accumulated technological capital, there are also practical issues regarding the overall health of an economy in which income inequality becomes too extreme."

As a solution, Ford suggests the provision of a basic income for all citizens. This would start very minimally, at perhaps $10,000 per year, and perhaps be raised as the policy develops and the available wealth increase. He states that this could be funded relatively easily from existing poverty programs, and would at a stroke eliminate poverty. It is a very libertarian idea, beloved by Milton Freidman, (in the form of negative income tax), and also emphasizes freedom for all citizens to do as they like with this money. Ford also beings up the quite basic principle that in a new, capital-intensive regime, we should be prepared to tax labor less and tax capital more. But he makes no specific suggestions in this direction ... one gets the impression that it cuts a little too close to home.

This is the part of the book where I part company, for several reasons. Firstly, I think work is a fundamental human good and even right. It is important for us to have larger purposes and organize ourselves corporately (in a broad sense) to carry them out. It is also highly beneficial for people to be paid for positive contributions they make to society. In contrast, the pathology surrounding lives spent on unearned public support are well-known. Secondly, the decline of employment in the capitalist economy has the perverse effect of weakening the labor market and dis-empowering workers, who must scramble for the fewer remaining jobs, accepting lower pay and worse conditions. Setting up a new system to compete at a frankly miserable sub-poverty level does little to correct this dynamic. Thirdly, I think there is plenty of work to be done, even if robots do everything we dislike doing. The scope for non-profit work, for environmental beautification, for social betterment, elder care, education, and entertainment is simply infinite. The only question is whether we can devise a social mechanism to carry it out.

This leads to the concept of a job guarantee. The government would provide paying work to anyone willing to participate in socially beneficial tasks. These would be real, well-paying jobs, geared to pay less than private market rates, (or whatever we deem appropriate as the floor for a middle class existence), but quite a bit more than basic support levels for those who do not work at all. Under this mechanism, basic income is not wasted on those who have better paying jobs. Nor are the truly needy left to fend for themselves on sub-poverty incomes and no other programs of practical support. While the private market pays for any kind of profitable work no matter how socially negative, guaranteed jobs would be collectively devised to have a positive social impact- that would be their only rationale. And most importantly, they would harness and cultivate the human work ethic towards social goals, which I think is a more socially and spiritually sustainable economic system, in a post industrial, even post-work, age.

The problem with a job guarantee, obviously, is the opportunity for corruption and mismanagement, when the market discipline is lifted in favor of state-based decision making. Communist states have not provided the best track record of public interest employment, though there have been bright spots. In the US, a vast sub-economy of nonprofit enterprises and volunteering organizations provides one basis of hope and perhaps a mechanism of expansion. The government could take a set of new taxes on wealth, high incomes, fossil fuels, and financial transactions, and distribute such funds to public interest non-profit organizations, including ones that operate internationally. It is a sector of our economy that merits growth and has the organizational capacity to absorb both money and workers that are otherwise slack.

Additionally, of course, many wholly public projects deserve resources, from infrastructure to health care to combatting climate change. We have enormous public good needs that are going unaddressed. The governmental sector has shown good management in many instances, such as in the research sector, medicare, and social security. Competitive grant systems are a model of efficient resource allocation, and could put some of the resources of a full job guarantee to good use, perhaps using layperson as well as expert review panels. Improving public management is itself a field for development as part of the expanded public sector that a job guarantee would create.

In an interesting digression, Ford remarks on the curious case of Japan. Japan has undergone a demographic shift to an aged society. It has been predicted that the number of jobs in health care and elder care would boom, and that the society would have to import workers to do all the work. But that hasn't happened. In fact, Japan has been in a decades-long deflationary recession featuring, if anything, under-employment as the rule, exemplified by "freeters" who stay at home with their parents far into adulthood. What happened? It is another Keynesian parable, since the elderly are poor consumers. For all the needs that one could imagine, few of them materialize because the income of the elderly, and their propensity to spend, are both low.

The labor participation rate in the US.

Our deflationary decade, with declining labor participation rates, indicates that we are heading in the same direction. We need to find a way to both mitigate the phenomenal concentration of wealth that is destroying our political system and economy, and to create a mechanism that puts money into the hands of a sustainable middle class- one that does not rely on the diminishing capitalist notions of employment and continue down the road of techno-feudalism, but which enhances our lives individually and collectively.