24 February 2013

Technological unemployment: a genuine threat, a great opportunity

Below is my attempt at a journalistic-like article which aims to shift people's thinking about money, cost, value, wealth, work and resources (I know, foolishly ambitious). I sent it to some newspapers, magazines and journalists, but have excited no interest with it. My intention is to broaden the debate, but to do so the ideas the article contains need a better distribution outlet than this humble blog. I strongly believe the broader public is now ready for this debate, and thus that something as simple as this article is appropriate at this time. So, in the absence of anything else, I am using this platform to at least have this formulation out there. Do with it as you will. It is not standard Econosophy format, but it is standard Econosophy argumentation. There's nothing new in it for frequent visitors of this site.
[Edited on 25 October 2014 to improve logical flow]

Recent months have seen many articles tackling the Luddite bugbear of technological unemployment – automation replacing jobs. I welcome this attention. Not because I welcome increased suffering, nor because I see no way out. No, I strongly believe technological unemployment is and always has been an inspiring challenge to humanity’s ideas about work, value and societal contribution. In this challenge I see great opportunity.

However, my impression from these articles and from reader responses to them is that we are not taking Einstein’s famous admonition sufficiently to heart: “We can’t solve problems by using the same kind of thinking we used when we created them.” Robots taking our jobs is only a problem if we fail to think outside the box in which it must remain a problem.

(Three points undergird this article: firstly, we are not in pursuit of Utopia; there can be no such thing. Secondly, we must ask the right questions to see intractable challenges from fresh perspectives. Thirdly, let’s not lose sight of the kind of world we want to live in.)

Currently, if the economy isn’t growing, it’s collapsing. Wages fall, unemployment rises, hope fades, the chance of war increases. This sad historical correlation lies behind President Obama’s recent characterisation of economic growth as an “imperative”. But even though it is a systemic requirement, perpetual economic growth is impossible. If we want to survive as a species, our relationships with GDP growth and orthodox economics must change, not to usher in Utopia, but to adjust intelligently to new knowledge and circumstances.

Why is the impossible an imperative?

For two main reasons. Firstly, the way money is designed requires growth; money is created as interest-bearing debt, and compound interest is exponential growth. Our system is wired to grow exponentially. Secondly, redirecting the economy from the growth track requires radical change, change that vested interests do not want. Nevertheless, either we push on with the impossible, or we do something different.

Something different would be an economy as happy with growth as with de-growth (steady-state). This only sounds crazy because de-growth currently causes social distress. Space does not allow an exploration of the many proposals for alternative money systems currently being discussed, but this is a technical challenge humanity can solve.

A steady-state economy powered by an appropriate money system would not cause social distress, it would free us to enjoy a healthy work-life balance. Think about it: what is economic growth? Ever more economic activity. What is economic activity? Production, buying and selling. Are these the source of all human happiness? We do more of them today than ever before. Are we happier than ever before? Most of us realise rampant consumerism is bad for environment and community alike, so not only is perpetual economic growth unsustainable, we don’t actually want it. It's a cultural addiction, not a genetic requirement.

How does this relate to technological unemployment? Well, we don’t need ourselves economically as we once did. When we contemplate economic de-growth exacerbated by technological unemployment, we see an ever-diminishing role for humanity, we fear “robot overlords”. But a dystopian future only awaits us if we refuse to accept that unpaid work can be more valuable to society than paid work. What does society value more: good parenting or investment banking? If money is our guide, the latter. Otherwise, the former (and similar social contributions). We need new money and money-distribution mechanisms that honour the former. With such systems in place, we would welcome technological developments that free us from boring jobs.

Looked at coldly, wages are a mechanism for distributing money to people. Wages imply that the work they reward is good for society, but this may only sometimes be true and then only partly. We also value contributions to society that cannot be remunerated by the market. In light of technological advances and the need to de-grow our economy, we should implement a Basic Income Guarantee (“BIG”), a new mechanism for getting money to people. To want to do this, we must first re-envision money as a public utility that both frees us to contribute meaningfully to society and rewards us for work the market deems valuable.

If you believe we cannot afford a BIG, you probably think it is money that affords. Resources and know-how afford (what is money without natural resources?). Let’s say we need 30% of the adult population to produce enough to keep everyone housed, warmed, fed and clothed. I.e., there’s enough of the basics, but not enough jobs. In this narrow example, market mechanisms must fail to provide everyone with purchasing power. Abundant supply meets impotent demand. Here the market is the problem, not ‘lazy’ people.

Just because we no longer need people economically does not mean we cannot learn to value what they might contribute when freed to do so by a BIG. Nor does it mean that giving money away must lead to inflation; the need for a BIG arises from the fact of what I’ve termed “impotent demand”.

Technological unemployment is real because production can exceed consumption. The “lump of labour fallacy” rightly argues there is no fixed amount of economic work for humans to do. Correct. It can shrink. Or it can be forced to grow against our better judgement; we neither want nor can the environment afford perpetual economic growth. The lump of labour ‘fallacy’ is thus a red herring. Far more important is redefining our cultural definitions of work, value and reward, and how we design and distribute money.

The cultural habits ingrained in us over recent centuries have dangerously narrowed our thinking. There are good alternatives to ever more jobs. BIG is perhaps the best of them, though just a first step. We have come to mistake money for wealth, and are having a hard time accepting that we can indeed afford to de-grow, that consumerism does not create health and happiness, that economic activity is not a panacea. If we automate more, consume less, move to renewable energies, set up a more appropriate money system, our work-life balance will improve. Indeed, work would become more and more pleasant, until our work becomes our passion, our life.

This is the potential of technological unemployment. From employment in meaningless, environmentally-damaging jobs, to meaningful work for society. To seize this opportunity, we must heed Einstein and transcend the thinking that got us into this mess.


Addendum, 25.02.2013:
Anyone seeking an insight into this would do well to consult a terrific report by Sarah O'Connor, the Financial Times's economics correspondent. She visited Amazon's vast distribution centre at Rugeley in Staffordshire and her account of what she found there makes sobering reading.
She saw hundreds of people in orange vests pushing trolleys around a space the size of nine football pitches, glancing down at the screens of their handheld satnav computers for directions on where to walk next and what to pick up when they get there. They do not dawdle because "the devices in their hands are also measuring their productivity in real time". They walk between seven and 15 miles a day and everything they do is determined by Amazon's software. "You're sort of like a robot, but in human form," one manager told Ms O'Connor. "It's human automation, if you like."
Source

Anyone seeking to understand what technological unemployment (and underemployment) is about, ought to think deeply about what these two quoted paragraphs are telling us. In short: money is more important than both humanity and environment in this system. Until we address this, this tightly controlled, robotic insanity is going to get worse and worse, simply to sustain consumerism and perpetual economic growth, both of which are unsustainable.