Basic income after automation? That’s not how capitalism works Philosophers, economists and other academics have long discussed the idea of “basic income” – an unconditional monthly check from the government to every citizen, in an amount at least high enough to cover all basic necessities. Recently, this idea has gained more political traction: Even conservative parties consider it, and …
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The author is a philosophy major.
It shows:
3.Those of us who are laid off are not entitled to any of the gains that the new technology produces. The owner of the new technology alone is entitled to its proceeds, while all of our fellow citizens are now responsible to pay for our living (through taxes that fund basic income).
Which is why we have things like corporation tax, which effectively takes a slice off the profits of the owners of the means of production. Well, once the tax management specialists have all been put up against the wall and shot...
The author is a philosophy major.
It shows:
Really? When The Git was in Big School, logic was taught by a philosophy major. Unsurprising really since logic has been an important part of philosophy since at least Aristotle's day over 2,000 years ago. There were quite a few computer science and mathematics students in that class. Perhaps when you get to go to Big School you will learn about such things.
>>"Really? When The Git was in Big School, logic was taught by a philosophy major."
If I were to list the number of occasions I had seen someone assume that because they understood logic and had decent reasoning skills, they could make pronouncements in any field by abstracting a few gross principles and finding a pleasing conclusion, we would be here for a very long time.
>>"Unsurprising really since logic has been an important part of philosophy since at least Aristotle's day over 2,000 years ago"
Case in point, Aristotle loved his idea of his five elements to explain matter. And justified it with assumptions and logic based upon them because the conclusion seemed elegant to him.
The arrogance of someone who thinks their logic skills from Philosophy classes allow them to dabble usefully in a field as complex of economics is staggering. Reminds me of a manger who used to do some coding and thus gets the basic principles. You'd think it would be good but it's so long since they did it and their understanding is so rudimentary that all it really leads to is someone thinking they understand it when they're really just making loose generalisations that elide a lot of complexity. Much like this article.
If I were to list the number of occasions I had seen someone assume that because they understood logic and had decent reasoning skills, they could make pronouncements in any field by abstracting a few gross principles and finding a pleasing conclusion, we would be here for a very long time.
In that case why don't you justify your argument for not using logic and reasoning skills? Presumably you have everyone join hands and sing Koombaya.
Case in point, Aristotle loved his idea of his five elements to explain matter. And justified it with assumptions and logic based upon them because the conclusion seemed elegant to him.
The strong compulsion people have to rubbish Aristotle has always mystified me. Apart from inventing logic, the metaphysical stuff of mathematics that allows computers to work, and his contributions to marine biology that needed 2,000 years to confirm, he also proposed an amendment to Empedocles' four elements (earth, water, air and fire, or solid, liquid gas and plasma in modern parlance). The fifth element he named aether and until the 20th C was considered essential in physics. After a brief period of no being needed, it would appear to have snuck back by John Wheeler under the name quantum foam.
"The arrogance of someone who thinks" they understand Aristotle without reading him is "staggering".
My comment was aimed at the comment, not the article. The article was rubbish and had nothing whatsoever to do with the author majoring in philosophy. It is entirely possible to major in philosophy in the 21st C without any understanding of logic, though it was not always so.
In that case why don't you justify your argument for not using logic and reasoning skills? Presumably you have everyone join hands and sing Koombaya.
If you're going to straw man try to use clean straw. That stuff stinks of obvious bullshit.
But if it needs saying, what you describe as an argument against using logic and reasoning skills is actually an argument that logic and reasoning skills are not enough if you don't also have knowledge about what the fuck you are talking about. Logic, reasoning and knowledge of the subject are the best option, but regurgitated book knowledge is a fair second over making it up as you go.
It was meant to be a simple example to illustrate the point; reality is never that simple. I work in a manufacturing firm and your pessimistic - and just as simple - example is also not quite true. Often, in cases such as this ( where increased automation leads to greater productivity), we redeploy workforce to other positions; extra capacity leads to driving sales to monetise that ability to manufacture more. In my time with my current firm (seven years) no one has been laid off because of increased automation - in fact I can think of at least one line that has seen standard operators up-skilled to become accredited technicians for the new equipment.
Perhaps you should be less cynical and actually read opinions that challenge your blinkered point of view.
Yes while no-one in your firm has been laid off another firm would have to scale back or go out of business as your firm took their business, while economics isn't a zero sum game it's not an infinite game either. Their is only so much growth and so much elasticity that economic players can take advantage of before someone has to lose.
Yes but car manufacturing was putting the horse tack manufactures out of business it was people that were being employed, when agriculture was being mechanised many people were required for work in the factories producing the machines (even then there was massive upheaval and shockwaves through society), with this next wave it is ai's that will be doing the work and humans need not apply https://www.youtube.com/watch?v=7Pq-S557XQU
All in all it's a big difference to many previous changes and will have consequences that people need try and predict and make plans for.
But there are many more cars now than there were horse carts then; partly through increased population but mainly through increased wealth and decreased manufacturing (and running) costs making them more affordable. Many more jobs - and indeed industrial sectors - have been created by the automobile than were lost as horse transport declined. as we get wealthier we get more stuff; how many TVs are in your house now compared to when you were a kid growing up?
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"If you see early films of London the streets were just as crowded as they are now but with horse drawn traffic. I suppose, however, that London itself is bigger."
There were 300,000 horses in London c.1900 and there are 2.6million cars registered in London today. In that time the human population has only increase by about a third (Wikipedia says from 6.6E6 to 8.6E6).
I reckon the horses produced more pollution, too.
"I reckon the horses produced more pollution, too".
That's an interesting one. It seems to me the horses produced more obvious, visible, possibly smellable pollution. Pollution you could (and very likely did) step in and swear at. But cars produce invisible pollution that attacks your lungs and gets insidiously into your blood. Healthwise, I think the horse manure was probably a great deal less harmful.
Healthwise, I think the horse manure was probably a great deal less harmful.
It was the basis of the French Intensive market gardening system.
How many of those cars are made in UK?
How many TVs are made in Europe now.
Large scale automation was common in the 1930s, though it started in the late 18th century.
There is eventually saturation and eventually a situation where very few people are employed. They are developing the technology to restock shelves and already have self service checkouts in some shops.
There will be no overnight change. However there are no "jobs for life" any more, except maybe in some Civil Services. We are a long way from having to make this decision, it could be another 150 years. It seems likely though there will be a slowly increasing number of people that never get jobs.
It's really a lie about retirement age being raised. It's the age to start getting a government pension that is being raised. If you are over 49, then you are more likely to be made redundant and if over 59 unlikely to to find a job if you are unemployed. Businesses have not raised retirement age, quite the reverse. It's obvious without an age, the approximate age of the person on a CV.
It's a dishonestly written article, typical of the propaganda from "The Conversation"
The author presumes that future economies must be Capitalist ones and then continues on that basis.
Society need not be so constrained.
Yes, that's more or less what I took from this story too. Capitalism as currently practised is broken and unsustainable. We seem to be heading back to the time of the robber barons trying to buy up sovereign governments. It'll take a strong leader to do to them what was done to Carnegie, Rothschild et al. Bank of America, Bank of China, Deutsche Bank have fingers in many pies but the ones we most see lobbying and influencing governments seem to be the tech titans of Apple, Google, MS, Amazon etc though Samsung seem relatively quiet on that front despite being the only tech titan in the top 10 most valuable companies list (5 are banks, 2 are big oil)
And as for the authors derision of "basic income", most of the civilised world pretty much has done that for many years, the USA (her apparent place of residence) being a notable exception. Dole, social security, whatever you want to call it, is not exactly a new experiment and gets tweaked and twisted on a regular basis in most of the countries which operate a form of unemployment benefits, sometimes to decent levels, sometimes to bare subsistence levels. The biggest problem with living on benefits for someone previously employed isn't the income and expenditure to survive, it's servicing the debts built up in the hope they'd always have a job (and the current pressures to cut budgets by governments)
The author presumes that future economies must be Capitalist ones and then continues on that basis.
Society need not be so constrained.
Capitalism is the organisation of the wealth of a number of individuals to create infrastructure that no individual can create alone. For example hospitals, railways, airlines and sewage farms. If you believe such infrastructure can be created by individual wealth, please provide examples.
there's a phrase in economics - something called 'inferior' goods?
anyway, certain products become so inexpensive to make, that, theoretically, at zero 'cost' goods should tend to 'infinite consumption'. clearly, if bread is 'zero' there's only so much you can 'consume'.
For TV's, as an example, the key here was the technology and the patents. When europe switched to colour, Philips, Thorn et.al. kept hold of the PAL patents, allowing Europe to keep its manufacturing base. Hence, Philips, Ferguson (Thomson, JVC [J2T]) and (yes!) Sony TV's made in europe. (at one time, Sony near Bridgend made most of their Trinitrons for the euro market here). However, come flatscreen and HD, all the TV's are made in China and Korea.
Once a 'good' becomes a commodity, then yes, you can own 2, 3 or 4 at low cost, but they quickly reach saturation point. But, 'robots', to quote Henry Ford, don't buy cars - people do.
I've forgotten my point now...
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"The new technologies result in new work that hadn't previously been envisaged. How many of the people reading this have a job that even existed 100 years ago?"
In the 19th Century (~100 years ago) there were over 3 million horses in the UK and they were mainly working animals. Today there are about a million, mainly in leisure and sports. We haven't been able to redeploy all the horses because they're not up to doing the jobs we have. That's the danger of robots and AI -- that not everybody is up to doing the jobs for which, yes, there might be a huge demand.
In the 19th Century (~100 years ago) there were over 3 million horses in the UK and they were mainly working animals. Today there are about a million, mainly in leisure and sports. We haven't been able to redeploy all the horses because they're not up to doing the jobs we have.
Would you want to redeploy them?
Those are some very old horses.
"The new technologies result in new work that hadn't previously been envisaged."
Sometimes. Can you point me to a proof in any economic theory that the number of new jobs gained must be equal to or better in terms of pay compared to the ones lost?
Worker wages in the U.S. have been stagnant in real terms for decades even though worker productivity and corporate profits have increased tremendously.
This was claimed to be impossible by the apologists of Capitalism as stated 30 years ago and earlier.
Why were they wrong?
The author presumes that future economies must be Capitalist ones and then continues on that basis.Pro Corporate Propagandists always do that.
Society need not be so constrained.
Vendicar Decarian1,
I don't think any society that isn't free market capitalist has ever risen above what we now call "middle income" level.
Of course I'm generalising horribly here, as there aren't many purely capitalist systems out there. But all the world's rich countries are free market mixed economies. Many countries did their catch-up growth under less free-market systems, but liberalised more as they got richer.
China is going to be an interesting case study. There's a lot of discussion as to whether they'll get caught in the "middle income trap", Only about ten countries have managed to make the leap from middle income to rich since WWII. The worst performing bit of the Chinese economy is now the state owned bit, and that's what's looking to drag them down at the moment and causing their huge credit spike. They've done the "easy" catch-up growth, and now need to transition to a more mature economy where you need more innovation. If you want long-term investment you need the rule of law, so the local Party bosses can't just take your stuff/company.
So no, capitalism isn't the only answer. In fact it's not the answer at all, as most successful econmies have a mix of state, cooperative, private and share ownership.
But no state that's tried to run the whole economy has ever succeeded (apart from maybe the UK in WWII) - and it's unlikely to ever happen because it's too difficult. So increasing cooperative ownership might well work if you want less inequality, plus maybe a bit more nationalisation - but if you start seizing assets from the rich and giving them to the poor, the rich bugger off as fast as their little legs will carry them, nobody will invest, and everyone ends up poorer. And the more you redistribute via taxation the more you end up trying to run the economy, and relying on the government's ability to do it competently.
Free markets are best of anything we've tried so far, requiring much regulation from government and a legal system to keep everyone as honest as possible - and mixed economies with a large capitalist element also. Though who owns stuff (capitalism) is less important than free markets.
As for your comment about US wages, that isn't true. US wages didn't stagnate until a few years before the recession. What is true is profit has been taking a bigger share of the pie than wages in the US, UK and large chunks of Europe - but the pie has been growing for both until just before the recession. Also I seem to remember from looking at stats that average wages in the US have grown slower than housing and medical costs since the mid 90s - so people have felt poorer - although consumer goods also got massively better and cheaper in that period so it's not all been one-way traffic. Plus all the stuff you can get on the internet for free, that's only been around for 15 years, but doesn't really hit GDP calculations.
In the UK real wages stopped going up in about 2003 - and housing costs have been rising even more ridiculously since the 90s - which obviously makes everyone who's not got a house feel much poorer.
On the other hand, while large chunks of the West stood still for a few years, billions in Asia, South America and now Africa became massively richer, in the largest rise in living standards in human history. So globalisation has helped companies to make more profit, and hopefully we can rebalance this back to wages in the next few years, but the upside is still pretty huge for the millions of people who didn't starve to death, the hundreds of millions who didn't die of preventable diseases and the couple of billion who now live much more comfortable and longer lives.
We could have managed things better, but it's hard to predict the future and globalisation has still been a good thing.
" US wages didn't stagnate until a few years before the recession"
WOW!!! And we need to win in Vietnam!!
This simply isn't true. I think it was about 1979 when corporations decided to cut wage increases for the 99%. Maybe early 1980. I still remember the way I felt believing the lies about keeping America competitive requires patience..wtf was I thinking? Ask anyone who manages a local bank, or works under that manager, or the people who feed them on lunch or even the people who physically built the bank ...ask them how their wages fair to wages 40 years gone.
Very rarely do i ever read anything in any article about technology, globalisation, free markets/capitalism versus socialism etc etc about how really we are just moaning about how bad it's been for us westerners ... and even that's relative ... the poorest in most western societies are sooo much better off than most of the general poor in other parts of the world. No, we're all moaning 'cos someone in india can bash about a bit of bog standard coding cheaper or someone here. So more upvotes to the OP for pointing this out .. the last 30-40 years have seen the biggest, faster uplift of people out of poverty in history. So the system is working ... just not in a way that's that great for complacent westerners. But even we are still massively better off than we in say, the 70s. I earn about the same now as i did 20yrs ago but my quality of life in many ways is better with cheaper computational devices and the internet etc
>>"How many of the people reading this have a job that even existed 100 years ago?"
Lots of us. However, unlike a hundred years ago, we had to spend the first 23 years of our life just preparing to do those jobs. In 1916, you could walk out of school at the age of twelve and find some sort of employment. A few years later it was raised to 14 years of age but still the point holds. The level of training and complexity required to compete with automated or semi-automated industry rises every year. This article chooses to reference history when convenient to its argument and disregard it when it isn't. You'll need to spend a quarter of a century on this planet soon before you can get a decent job. Maybe you already do.
One might think this means more work for teachers and professors, but actually modern technology is altering teaching too. You can learn from online training packages and book a slot to talk to a tutor who lives a hundred miles from you and services a hundred or more students. Universities with good reputations are using those reputations to look into delivering their product - education and degrees (which I class as separate items) - world wide, ultimately driving out local competitors.
So where is the tipping point? We are heading towards a future where there are only two jobs: being a celebrity or being the person who presses the button that makes everything happen. I imagine looking back at this article in twenty years time and having a very good laugh. Assuming I can afford the Internet connection and my licence for using the Internet.
Let's go back further, how common was involuntary unemployment two hundred years ago?
I don't know, but I'd hazard a guess at, "lower than today.'
The problem is not automation per se, its the disruption caused while adapting to the new environment. That isn't to say we should try to stop the tech, but we should, as a society, be prepared to help those less fortunate than ourselves. A sixty-year-old postman laid off because email has reduced the volume of letters probably won't become a software engineer. For all the unpleasantness of the printing industry unions in the 80's, those type-setter's families still had to live with the loss of income. I'll bet the tech was a bit of a surprise to them. Sure, the jobs (and the workers' attitudes) had to go, but the pain was not limited to the bolshy people on the picket lines.
"The new technologies result in new work that hadn't previously been envisaged. ..."
That is true, barely, but irrelevant to the point of being political spin. If you automate 1,000 autoworkers jobs off shore, the automakers are out their jobs indefinitely. There is no guarantee that they will (or can) be trained in some form of "new work." Especially new work that will actually pay a salary or wage comparable on an annual basis withe their old job. Otherwise how do they pay for the house and car they owe the bank a significant chunk of their income for the next 15 to 30 years for under the fractional reserve system which permits banks to print money and then point to the government as the culprit. The basic assumption of capitalism is that markets are efficient at redistributing wealth and generating new wealth. But we do not HAVE a capitalist system, nor a Marxist one for that matter. The wealthiest sectors - that one percent - dread real capitalism more than they do socialism. They can afford socialism but capitalism has a genuine potential to level the financial field in ways the socialist merely dreams of. Instead we have corporate welfare. Profits are privatized while losses are distributed socially. The vanishing middle class and manner in which wealth is becoming increasingly concentrated in the hands of a very, very few, is the problem, it is not a problem with capitalism or with socialism. It derives from oligarchic and kleptocratic patterns that are merely labeled as "capitalism."
Yes and no; with increasing technological innovation and consumer wealth, my company makes products that have never been offered in our marketplace before, driving new demand. In many cases we're creating new business areas. Granted, there's not room for infinite growth, but it would be incorrect to assume that every product we make is at the cost of one of our competitors.
>>but it would be incorrect to assume that every product we make is at the cost of one of our competitors.
In general if you are growing faster than your industry then you are getting business from someone else, that means they need less work to be done so someone is feeling the hurt.
Yes it can occasionally be that one business gets all/most of the growth and the other business stagnate or get little growth but that often leads to the point where other business are then not able to invest in upgrades to push themselves back into growth/relevance so they end up becoming niche or exiting a market so in the end someone gets the short end of the shit stick.
>> But there are many more cars
Yes but that is the past/current economy, one without general purpose robots and ai's to do the work far more cheaply than humans. If you have no job and no pay how many tv's and cars can you buy in the future?
The best reason for implementing basic income is so that we can abolish minimum wage and manufacturing shoes can actually be a competitive business here. Why should a business that makes shoes stay in the country if they can ship the jobs to Asia where they can make shoes for much less than the minimum wage? (This is just an example, but you get the idea. And I don't believe we should abolish min wage yet)
Sorry, communisim plus capitalism won. Look at China. Democracy is failing because people still think that UBI is some sort of dirty welfare scheme that gives everyone a free pass to retire tommorow.
There's quite a bit wrong with the article - but then that's because there's limited space, so it can'd talk about its assumptions, or go into detail.
So in our shoe factory example your factory owner has many choices. Firstly though, the piece ignores that they have to pay for their extra technology. This will be a large chunk of cash that they're going to have to pay off for many years. This means that the factory owners are taking risk which is a reason why they might be due some of the rewards for the money they're investing in that upgrade.
They then have a choice of making more profit at current output by sacking people, or redeploying them to other roles - or they can increase output and try to win some market share. In which case they'll probably have to cut costs.
But then they're not stealing all that market share off the competition, as they're going to bring new customers into the market at the new, lower, price point.
They might also decide to pay higher wages, especially if they have to train people to use the shiny new machine - and they then want to keep their staff.
Too many people think of economics as a zero-sum game, and it really isn't. In some situations everyone can be winners. And in others, everyone can be losers...
There is no similar public grudge against people who live off our work by other means: by living off dividends and off government transfers like tax exemptions. While welfare recipients form the bottom of our social hierarchy, the idle rich are even admired.
That's total bollocks for a start. There's plenty of public grudge against rich people.
But living off dividends doesn't necessarily mean you are doing nothing you're (actively or passively) choosing which risks to take with your money. Whether you earned it yourself or inherited it is another matter. Similarly tax exemptions are often made for a reason, i.e we want people with money to invest it in certain ways deemed to be socially beneficial which they otherwise might not. One downside is that the more of this we do, the more complex we make the tax system, and the more chance for people to abuse it.
But unless the author is calling for the end of private property, then there are always going to be people with more than others, and some of them are going to be investing their surplus - and are going to want interest/dividends.
In which case we're going to be trusting government to decide how much we're allowed to have and what we can do with it, and what new technologies we're allowed to invest in. Free market capitalism has many faults, but I'm not sure we've found any better alternatives yet. It's also pulled more people out of poverty due to globalisation in the last 30 years than has ever happened in all of human history - so I'd need some convincing of the alternatives.
What we need government to do is to regulate things (you can't have a functioning free market without a reasonably honest and effective government), stop people from taking the piss, and help those who get hurt by sudden changes. Government is also great for collectively doing the things we need to maintain a civilised society, like education/health/justice/social insurance. Not that it's perfect at any of them either. I think fetishising the caring power of government is as stupid as fetishising the uncontrolled free market.
@I ain't Spartacus - wish I had more than one upvote for you, well said! As a longstanding lefty (under the current political system (which I feel is itself in severe need of improvement)) one of the things that was startling to me (many years ago) was the realisation of what, precisely, had been shown to have removed most folk from poverty in the past.
I'm sufficiently pragmatic to not be into throwing the baby out with the bathwater, but I can't help but think that the capitalist system we have is rathern like an old tin bath that whilst, yes, it does get the job done, it doesn't do the job particularly well or efficiently (so far as societies needs are concerned, rather than the rather esoteric economic measure that mainstream economists like to play with), and wouldn't we be better seeing if we could design something more like a shower, perhaps? (NB: I absolutely am NOT talking communism vs capitalism. IMO what's been called communism was merely a foredoomed attemtp to tinker with capitalism by throwing a wrench into the works of capitalism rather than trying to invent a truly different economic system).
I mean, it seems to me that considering capitalism is a system which rewards psychopathic and sociopathic behaviour due to being founded on the flawed assumption that everyone is greedy (everyone is needy would be closer to the truth - we all need basic amenities) and has the faults it does, has anyone even TRIED to design something that rewards sociophilic behaviour (and thus disadvantaginging the kind of buggers that have caused the big economic meltdowns that have happened every now and then) ? And if not, why not?
Granted, no economic schele will be 100% fair, but surely a better one than what we have is possible?
has anyone even TRIED to design something that rewards sociophilic behaviour (and thus disadvantaginging the kind of buggers that have caused the big economic meltdowns that have happened every now and then) ? And if not, why not?
Esme, have a look at the Icelandic Commonwealth from ca. 930 and the pledge of fealty to the Norwegian king with the Old Covenant in 1262.
We do seem to be missing one point: while it is true that new jobs can come out of new technologies, it does appear that many of our 'new' jobs are virtual in nature. They don't actually produce physical product. They're either service (face-to-face or voice-to-voice) jobs; or information jobs (producing content or such like). For the service jobs, not everyone can do 'people jobs' well (I'm one. I have suspected ASD yet to be diagnosed). For the information jobs, most distribution of information is now virtual, and the consuming public does seem to like such content for free. The result of mainly service job types being available can be that if there are many people seeking work then the value of those jobs that remain goes down, giving low wages and leaving less for consumptive spending which means less products being sold, etc, etc. The result of an unwillingness to pay for content is less income to be made, leaving the same low wage problem and consequent lower consumptive spending. Yes, for some of those jobs advertising can take up a bit of slack, but when consumption goes down (which the entire world is facing right now) then it can't do the job of keeping people employed.
Exactly. The example is bad. And having worked in the food industry, where industrialisation of some area eliminates almost all jobs, the example makes even less sense.
One slaughter house I know of automated the targeting of carcases in the coolhouse. Here the system identified each carcass coming in (RFID tag married to the classfication data) and automatically sends it to the most appropriate lane. When the carcasses are needed for processing or for loading onto trucks, the system automatically pulls out the correct carcasses from the relevant lanes.
All of that is controlled by a single person. In the past, the slaughterhouse had to employ 12 people just to push the carcasses to the lanes and to find the relevant ones for shipping. With the automation, not only did they reduce the chance of infection (nobody actually has to touch the carcasses), speed up production (they now slaughter over 600 pigs an hour, instead of 300), but it also reduced headcount by a factor of 12 in that area.
Other slaughterhouses manage even faster speeds (one customer was is producing over 1200 carcasses an hour on an automated production line) through the use of robots, the robots automatically scan the carcasses and cut them open, on these high speed lines, that replaces at least 2 workers on the saws.
With manual cutting and manual sorting, you need a lot of workers, but with the automated lines, you can more than halve the number of workers needed (more if you go for robots) and at the same time you can double or quadruple your production capacity.
Obviously there are areas where such increases in efficiency are not currently possible, but it shows what can be done. So, although they have saved 12 workers in one area, reducing the headcount to one, they have also dramatically increased capacity, meaning in the past they would have needed another dozen workers to achieve the same speed (there are limits to how fast a single person can push a carcass along a conveyor system and switch points to push them into certain lanes. They have also increased accuracy and identify individual carcasses, without ever having to go near the coolhouse itself.
Those 12 workers? Were they used elsewhere in the production? No. There was just no need for them any more.
Automation wouldn't be the problem as the author states. BUT, combined with income inequality, outsourcing, and basic supply/demand economics for labour there is a real problem with automation.
Stagnant wages, and income inequality means more and more can't continue to afford a middle class lifestyle. In addition, companies are not investing more because less are buying. Negative interest rates anyone?
So, basic income is a far better solution to the current system than trying to re-create more jobs or letting more and more of the economy fall into the poverty trap. Our stupid system is set up to hate welfare because most of us aren't eligible and pay taxes.
Basic income would re-incentiveize working, small business, and increase the value of labour in the economy. Our system doesn't value labour as much anymore because people are working for capitalist business to make profit for someone instead of working for all our citizens.
I think we may have missed the point here.
The author isn't attempting to say that capitalism is forever and UBI won't work because capitalism is a natural law. She is saying that capitalism does not work, and we can't simply 'patch' it with UBI to make it keep working like it used to. It's a broken model, and the groups latching on to UBI as a kind of panacea for the many problems that emerge from it are barking up the wrong tree, because it'll maybe tide things over for a few decades before the fundamental contradictions cause it to collapse again.
This is pretty much what happened to the Gilded Age capital system, the post-WW1 system, the Bretton-Woods New Deal system, and it's what happening with the Neoliberal model too. Capitalism is basically the Adobe Flash of economic models; you can patch it to deal with immediate problems, but really the underlying system is so badly flawed that new problems will crop up fairly soon anyway.
This doesn't excuse the many, many, many factual inaccuracies, logical fallacies, weak rebuttals and generally poor arguments in the article (or that it's really very poorly written generally, as it's not really very clear in what it's trying to say), but it does make for a more useful piece than the alternative that many of us are arguing against.
Naselus,
I don't believe there's a better system out there than the one we've currently got. Which is free markets with mixed ownership of resources, but most of that ownership being capitalist. And anyone who argues against it needs to come up with something better which is actually workable.
You can of course play around with the ownership model a bit i.e. more cooperatives, certain sectors of the economy being state-owned, so you're not totally stuck with capitalism.
But that basically leaves us in the situation that we're always going to be patching capitalism and cleaning up its messes. But that's OK, because the same would be true of any economic system we use - governments are just as good at fucking up as greedy CEOs / casino capitalists / shareholders / bankers / [insert personal demonology of choice].
There is unlikely to be any perfect system.
Free markets work better to distribute scarce resources than any other system we've tried. However, only if they're regulated. You can't have a free market without property rights for example, and that means law, which means government. You also can't have a proper free market if people can pollute, pushing the costs onto somebody else and taking all the profits. That's called externalities - and is another place where government regulation is the best solution.
But as to alternatives, we're a bit short of them. Hence we're likely to still be patching free market capitalism 100 years from now. And maybe still getting people complaining about neo-liberalism too? Or maybe it'll be post-neo-liberalism by then...
The biggest problem with, current, capitalism is that everybody is looking to make money NOW! Very few are looking at investing for long term growth, decent quality products that last and make products that are environmentally balanced.
By this I mean things like electronics designed to break just after the warranty runs out, built in failure points, so that after a set number of uses the device will break, so that people will buy a new one. What happened to pride in the work and quality? My parents bought products, they were expensive, but they lasted decades. Today, the products are either cheap and fall apart after a couple of uses or they are expensive and last a few years.
A lot of "improvements" in products aren't there to improve the product, but are changes in design to make it look newer and cooler, so that people will throw out existing, working products to buy new ones.
We are in a consumer death spiral. The amount of waste we produce, because things break or go out of fashion so quickly is not sustainable. Investors are looking for a return on investment for the next quarter or, if they are investing "long term", then the next year or two at most. Nobody is looking to make sure a company is sustainable and will grow steadily, providing good income, for the next 10 or 50 years, let alone looking at the long term. It is all, "I have made my profit from the company and exited, now it can go to hell, for all I care."
"What happened to pride in the work and quality? My parents bought products, they were expensive, but they lasted decades. Today, the products are either cheap and fall apart after a couple of uses or they are expensive and last a few years."
How many people know the names Electrolux and Kirby? Not many these days, and they were as you described: companies that made expensive vacuum cleaners that lasted for years and years. But then that was their problem. Once customers got their vacuum cleaners, they never came back because they never needed another.
There's your answer. "One and done" isn't financially sound because ANY business in the world will have running costs. Thus, one key goal of any business is to have repeat business.
How many people know the names Electrolux and Kirby? Not many these days,
Shirley you're joking. "Electrolux is the fourth largest household appliance company worldwide based on its sales in 2013."
Statistics and facts about Electrolux
Mrs Git was given her Electrolux vacuum cleaner for her 21st birthday. It's almost as geriatric as we are ;-)
"Shirley you're joking. "Electrolux is the fourth largest household appliance company worldwide based on its sales in 2013.""
No, because I'm speaking from an American perspective, and over here the dominant names in vacuum cleaning are Hoover, Eureka, and Oreck. Except for the last who tends to cater to the hospitality industry (who can in turn pay the money and apply the pressure), those names aren't really associated with machines that last for generations. Finding either Kirby or Electrolux anywhere in America tends to call for specialty shops that can be difficult to locate. Trust me; I looked.
"The author isn't attempting to say that capitalism is forever and UBI won't work because capitalism is a natural law. She is saying that capitalism does not work, and we can't simply 'patch' it with UBI to make it keep working like it used to. It's a broken model, and the groups latching on to UBI as a kind of panacea for the many problems that emerge from it are barking up the wrong tree, because it'll maybe tide things over for a few decades before the fundamental contradictions cause it to collapse again."
But then that evokes a paraphrase. "Capitalism is the worst system out there...except for everything else." Meaning that if the best option we have for society is hopelessly broken, we're basically sunk. You say people are essentially needy. I say people are needy AND fighting with the neighbors. Many say economics isn't necessarily a zero-sum game. I saw it DOES at time, and it at THOSE times when things get ugly. When there's no external crisis or issue (like a war) to force us together, we start to turn inward and compete with the neighbors. It's instinct: humans I feel are most fundamentally social only in a tribal sense. We form immediate attachments to family and perhaps one level up, but when it comes to the neighbors we tend to be more mercurial.
Anyway, the discussion leads to what I feel is a fundamental human trait: humans will cheat if they can get away with it. And that affect any and all economic systems humans can devise. Some human somewhere WILL (not MAY) find a way to game the system...ANY system. And since it's practically instinctive in the human condition, I don't think it's possible to fix it (because there are those who have the will AND the means to actively prevent it because they benefit from it) without creating a better human, and as the saying goes, "Nice guys finish last."
"Nice guys finish last." That is the most depressing, and the most wrong statement ever made, and it is only ever used by psychopaths excusing their world-view. It is time the nice guys got together and made sure that the bad guys never, ever, get a chance to screw the world up again with their selfishness and hatred of standards of behaviour that most people accept as decent. There is much more to success than money and screwing everyone else over.
Something's got to give, in this case it will have to be the state.
The article seems to talk about who deserves their salaries, who doesn't, and massively reorganising pay so that it reflects that. That stage could only come after mass poverty and civil unrest which would only be brought about if there's no basic income.
I'm sure the same argument was made about the automation of farming, the printing press, gas lights making way to electric etc etc.
Many of us are plenty old enough to remember the printers being on strike to try and prevent the end of 'hot metal'.
Yet here we are with unemployment below 5%.
Unemployment is only under 5% if you:
1. Sanction large numbers of welfare claimants for very dubious reasons, thus taking them off the unemployment statistics
2. Force people to go self-employed, with no guarantee of any income
3. Force others onto zero hour contracts - where they may have earned NOTHING this week, but aren't allowed to claim benefits. They may have a clause in that contract that forbids them from working elsewhere, as it limits their availability for work. And if they resign from the job they have 'made themselves unemployed' and so can't claim anything either
THIS is why food banks are everywhere these days. In what is supposedly the 5th richest nation in the world.
Not to mention all the long-term sick who have to be assessed on a regular basis for their ability to work. Do you have any idea how many people (it's in the thousands) have died within weeks of being pronounced fit to work?
But no, you carry on believing that we have near full employment if that makes you feel better...
Unemployment is not the jobseekers allowance claimant count. That's a separate stat.
Unemployment is measure according the ILO (International Labour Organisation) method - which is the Labour Force Survey. This is a large survey which asks people if they're economically inactive by choice, or looking for work, or if they're part time and want more hours/full time. Plus other stuff. The ONS say they interview 40,000 per quarter to get it.
So whatever government does regarding who can claim benefits is irrelevant to it.
The unemployment rate is the numnber of people who are looking for work but don't have it. There's another stat for people who are "economically inactive", another for those claiming out-of-work benefits and yet another for those who are part-time who want to be full time/have more hours.
Zero hours contracts appear to be on the rise, though only the name is new - there have always been people employed like this. According to the ONS, it's about 2.5% of the workforce - and of those only 20% want more hours, 10% a different (I'm guessing full time?) job with more hours and 70% say they've got the number of hours they want.
While I believe that to a certain degree it is correct that automation doesn't necessarily result in less human work, the view taken and example in the article is fundamentally flawed.
In the case of the shoe factory given the example of a machine, operated by a human, being replaced with a more efficient machine not reducing the human work hours because the company simply produces more shoes has never been the concern about automation.
The idea that automation allows you to either increase efficiency or production volume or both is of course the driving force behind automation but the concern about job losses doesn't come from replacing one machine with a more efficient version of the same, it comes from the possibility of the automation removing the need for a particular skill set that a certain group of employees have.
If your skill set is no longer needed in your profession because the job has been automated, there may well still be human work to be done in the form operating and monitoring the new automated equipment but this is not part of your skill set and you are now out of a job.
To say that "there is no reason to fear (or hope) that automation will put people out of work permanently" may well be true on the grander scale, as a percentage of the population and over time certainly the unemployment will be temporary.
But what of the workers who are made unemployed by automation who don't have another skill set to gain employment with, and are of such an age where once they have retrained to do something else their prospects of gaining new employment are exceedingly low.
HGV or Taxi drivers are a good example of this, if we reach a point where all driving work of this nature becomes automated, what does a say 55-65 year old HGV driver with no other skills or work experience beyond driving HGVs and no qualifications besides a HGV licence do when he is made redundant? Where does his income come from when he can't find work because the only work he was qualified for has been automated, and he is still a number of years from being able to retire and draw pension.
Certainly I would agree that in the long term, on a large societal scale, there is no reason to fear automation putting people out of work. Since as certain areas of work are eliminated by automation, the education system will adjust to direct people toward other forms of work and training and new young employees will be seeking different kinds of work.
But to say "The Automation Argument simply misunderstands how our economy works" is not true. The Automation Argument does understand how our economy works, but our economy doesn't give a flying fuck about the individual worker it only takes account of the population at large scale.
Thank you, you have very eloquently conveyed exactly my concerns that people may not be able to re-train for a new type of job when their old one is automated. Sure new school leavers may be qualified to supervise and manage the machines and therefore balance the employment figures but the old workers won't just vanish into thin air, they will be the ones left on the scrap heap.
While it's not an exact comparison, I think a good real world example is the closure of various British heavy industries in the '80s. Most of the workers in those industries were unskilled and when the coal mine/steel mill/factory closed there weren't any new jobs in the area that they were qualified for and they weren't able to re-train for anything else. I could see automation doing exactly the same thing.
"Most of the workers in those industries were unskilled and when the coal mine/steel mill/factory closed there weren't any new jobs in the area that they were qualified for and they weren't able to re-train for anything else."
It was the lack of new jobs that was the real problem. The old industries closed because of cheaper overseas competition. The early C19th mechanisation of those industries also made old skills obsolete but replaced old jobs with many new ones. The challenge governments face now is to recreate that situation.
"If your skill set is no longer needed in your profession because the job has been automated, there may well still be human work to be done in the form operating and monitoring the new automated equipment but this is not part of your skill set and you are now out of a job."
This was the argument being made in my area about a century ago when one of the cloth making processes was mechanised. In fact the population in the area grew hugely in the following decades as employment in the textile industry soared. Those new recruits didn't arrive with the appropriate skills, they had to learn them to adapt from previous trades just as the Luddites would have had to do.
"Under capitalism, technological progress results in more products, not in more leisure. Factories that improve their efficiency don’t shut down and send workers home early – workers keep the same hours and crank out more goods."
Oddly, the most remarkable change in human life over the past couple of centuries of capitalism has been the massive expansion of leisure time.
The reason being that as we get richer we take some part of our greater wealth as more leisure. The substitution effect.
But then that's what you get when you've philosophers trying to do economics.
"Oddly, the most remarkable change in human life over the past couple of centuries of capitalism has been the massive expansion of leisure time."
That's only partially true. Men have more leisure time. Thanks to the wonders of feminism women have less leisure time than ever before.
"Thanks to the wonders of feminism women have less leisure time than ever before."
Really?
I grew up in the late '40s-early-'50s in a house that had no electricity. Doing the family wash occupied at least a full day of my mother's time once a week. Clothes had to be washed in a tub which had to be filled up by bucket. They had to be wrung dry by a heavy hand-cranked mangle. In the absence of modern fabrics they all had to be ironed - without the help of an electric iron. But perhaps you count all that as leisure.
There have been improvements in many labour saving devices
e.g. back in the day washing took a lot of time, however my mother did not have paid employment so had more free time so still had plenty of time after washing.
Father did not have massively well paid / qualified job, but was enough to cover a mortgage, buy food, run car, cover other bills.
Fast forward and it takes 2 of us working to cover mortgage etc (& we keep telly, car etc until they fall apart so not squandering cash on new shiny). We would love a scenario where we could afford for one of us not to work.
In UK the exorbitant cost of housing leading to (assuming a couple) in many cases both parties needing to work, is a killer of leisure time.
No, sorry, not true.
I'm sure someone or other has written an article about it around here too.
Male market working hours have fallen substantially, female market working hours have risen. Male household working hours have fallen, female household working hours have fallen substantially.
Leisure hours for men and women have risen strongly over the past century.
That Keynes and only working 15 hours a week thing has in fact happened. It's the household working hours that have fallen.
"In 1930, British economist John Maynard Keynes famously predicted that, within 100 years, only 15 hours of work per week would be needed to satisfy one’s “absolute needs.”
I think it's fairly easy to argue that that is true, at least in the UK (although current housing market distortions are trying their best to roll it back).
I can't quite work out where the author is coming from: libertarian - all state is bad - or socialist - all capitalism is evil? Their penultimate argument, if it is in fact an argument, that:
"Those of us who are laid off are not entitled to any of the gains that the new technology produces. The owner of the new technology alone is entitled to its proceeds, while all of our fellow citizens are now responsible to pay for our living (through taxes that fund basic income)."
could well be read as a rallying call to do something about taxation: Robo-Shoes Corp may 'own the technology' but the technology was almost certainly developed by a university paid for by the state, by workers educated by the state, using raw materials delivered by roads built by the state and protected from fire and theft by the state. At the very least robots should pay NI contributions!
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" I can't quite work out where the author is coming from: libertarian - all state is bad - or socialist - all capitalism is evil? Their penultimate argument, if it is in fact an argument, that:
"Those of us who are laid off are not entitled to any of the gains that the new technology produces. The owner of the new technology alone is entitled to its proceeds, while all of our fellow citizens are now responsible to pay for our living (through taxes that fund basic income)." "
What you're missing is the second part of the headline: "That's not how capitalism works."
The author includes a lot of spraff about economic theory, but that's a common fallacy -- equating industrial/post-industrial economics with capitalism. None of the economic theories capitalists adhere to are unique to capitalism. The difference between capitalism, cooperativism, communism and socialism is simply the model of ownership and the resulting distribution of profit.
Capitalism is nothing more sophisticated than "the guy (aka "capitalist") who puts the money (aka "capital") in to start/improve the business owns the machine and gets the profit". There is nothing more to it than that. The paragraph you quote is simply a restatement of what capitalism, and a claim that this means basic income shouldn't exist.
But taxation has always diluted pure capitalism, so we do not live in a truly capitalist society anyway.
modern money is nothing less than universal rationing vouchers, society agrees that is has worth in that you don't have to barter goods/time directly. But if most people become unemployable as the general purpose robot/ai takes over the work then money itself could start to become worth less.
It's called VAT and it's not going to drop below 20% anytime soon. The shame is that it's applied to the hospitality and building traders industries in the UK, Cutting it on those would result in not much revenue loss but a lot of social gain.
But also: The Swiss recently voted against a basic income in a referendum (doesn't make them right, only maybe too early).
An aside: I once visited a feedstuff factory in the North to work on their process control system - it basically ran the factory with a skeleton 24 shift system of 2-3 guys. The large canteen was eerily empty at lunchtime and I commented on this to the shift supervisor,. He said the guys who used to use it has been made redundant as a result of the automation system I was working on.
Re: Make robots pay taxIt's called VAT and it's not going to drop below 20% anytime soon.
VAT isn't a tax on the robots, or the company.
VAT is a consumption tax. It's paid by the final consumer of a good, or very small businesses.
Once your turnover is more than the threshhold (£60k?) then your only VAT obligation is to be an unpaid tax-collector for government. You invoice with VAT on, but then hand over the loot to the government at the end of the quarter - minus the VAT you've paid on stuff you've bought.
The tax on robots is corporation tax, which is a tax on the profits of business. So if they can cut salaries and so increase profit, then they're going to be paying more of that. Plus of course more tax from the shareholders on their dividends.
These model assume that the infinite productivity increase will be matched by an infinite consumption increase.
That is simply bollocks.
We are rapidly approaching a point where we produce more than the population can consume in most industries. At that point we have no choice, but to reduce production which in turn means reduce employment and/or working hours.
So, we have reduced them, now what? Two options:
1. Lay off the "this is not how capitalism works" the no longer needed workforce and get the mother of all winters of discontent.
2. Bread and circuses. Works in the short term (this is what the guaranteed pay is at the end of the day). We all know where it ended up for the Roman Empire.
Neither are sustainable - one is a short term disaster, the other one is long term disaster.
The reality is - an infinite productivity increase without providing a bread and circuses environment which is a killer in the long term mandates option 3:
3. Long term population growth control to match the actual labour demand.
"These models assume that the infinite productivity increase will be matched by an infinite consumption increase."
I couldn't agree more. To make things worse, all those masses of the unemployed will have to lower their consumption rates. Yeah, Mr. Capitalist got rid of most of his workforce but now he has nobody to sell his goods to!
The "basic salary" is just, as you said, bread and circus, and a temporary solution at best.
In my humble opinion, the only -acceptable- way out of this conundrum would be shorter work hours for everybody, mandated by the State with heavy fines -or even jail time- for those employers that don't comply. But I'm afraid that we'll have to survive several revolutions first. :-(
In my humble opinion, the only -acceptable- way out of this conundrum would be shorter work hours for everybody, mandated by the State
French tried it by switching to 4 day work week. They tried it too early. While their per-hour productivity is quite high (used to be significantly higher than UK), it was not high enough to sustain it and then the financial crisis hit them for 6. So they are now rowing back on this one.
That is one option, however, while there is quite a bit of runway in it, it is also limited ultimately leading to the obvious situation where we will have no choice, but to have "Third" as a swear word. That as well as licensing parents and giving child permits.
There are always more things we can buy. Obviously there's a limit, once we've mined all the available metal, but that's going to take a while. Then there are services. Personal shopping, troupes of 30 actors in a disused shopping centre who'll play zombies for a day for your stag do / corporate jolly to shoot paintballs at, fish pedicures, whatever.
If we've got more leisure time and cash, then we're likely to spend more cash on our leisure time - which then employs someone and so it goes round.
Automation has tended to change the jobs we do. And we're not going to have general purpose AI and general purpose robots for ages.
Work & capitalism are essentially products of resource competition. Back in the days of hunter gatherers when you'd secured your food, the rest of the day was free to doss around. Work, in the form of agriculture, came about when the population could not easily be sustained from freely-occurring natural resources. And while increasing productivity has been responsible for giving us more stuff, it's also being responsible for giving stuff to more people.
Most population experts seem to agree that the human population is not going to rise forever - in fact that it is peaking around now or in the next few decades. And at the same time our personal consumption of stuff (at least in the Western world) has probably peaked too - the physical stuff that people used to have like books, records, radios, cameras, photographs is all disappearing.
We're never going to get to a point of having an entirely digital economy - we need to eat - but we are going to have an increasingly digital economy. But a digital economy is not resource constrained and can't ultimately function on capitalist lines (as evidenced by streaming fees for musicians) - unless we constrain it artificially. That's where there is potentially a case for a universal income - not in paying people to sit idly by while machines make unwanted shoes.
The old "increased production" argument also fails to account for the limited resources we have to hand -- we're already churning through natural raw materials at an unsustainable rate (particularly crude oil, possibly the most inherently valuable yet underpriced substance on the planet). Mineral mining operations have negative effects on food production (either directly by digging up farmland, or through environmental pollution in the local area). Increased production is a Very Bad Thing, so we do need to find an alternative pressure valve to cope with increased productivity.
The old "increased production" argument also fails to account for the limited resources we have to hand -- we're already churning through natural raw materials at an unsustainable rate (particularly crude oil, possibly the most inherently valuable yet underpriced substance on the planet).
If only there was a branch of soft science that dealt with the constraint of resources...
Automation has always caused societal problems, in response society has evolved (not always without riots etc.). The big problem coming is the types of jobs that will be automated, that is finance, legal and numerous white collar jobs as well as driving etc.. While some people may be able to get other similarly paid work a lot won't and will be left looking at low paid manual work that society deems important enough to be done but expensive to automate and not important in a 'value add' way so there won't be enough to go around.
When lots of jobs go and there is not enough to go around society will have decide how to progress, it is helpful to have looked at possible choices ahead of time and discussed how they could be implemented rather than sticking your head in the sand and saying that the current capitalist system is perfect and nothing will change is at best a waste of time at worst a distraction.
"When lots of jobs go and there is not enough to go around society will have decide how to progress, it is helpful to have looked at possible choices ahead of time and discussed how they could be implemented rather than sticking your head in the sand and saying that the current capitalist system is perfect and nothing will change is at best a waste of time at worst a distraction."
The reason everyone's sticking their heads in the sand is because all the analyses point to an unpleasant fact (unpleasant because it will involve people dying, which automatically means it could be THEM): the planet is overpopulated, and the problem will only get worse as more people get hopelessly idled. Soon you're going to have a Cold Equations situation where, no matter how you slice it, there won't be enough to go around; people will have to go, and that never sits well, especially when they're voters.
Or to put it another way: Ten people stranded in the middle of an arid, barren desert, and there's only one bottle of water. Solve.
It's a leap for that article to claim that basic income would be regarded as a charity or a replacement for welfare. Most (all, that I've ever talked to) advocates of basic income describe it thus... that mankind has reached the point of development, via our ingenuity and use of productivity boosting technology, that all the earths resources when fairly distributed could now provide all with a life that satisfies their basic needs, and that everyone should by right have a share of it. Basic income for all would at a stroke turn employment from 'something necessary for survival' to 'something I do if I enjoy the job'. It obviously wouldn't eliminate employment, but those sucky jobs would finally get the pay they deserve.
Yes, thank you capitalists, you raised us up to this level. But going forward, you're going to have to share now. The times they are a changin'. Damn dirty socialist thoughts. Utopian for sure. My biggest worry is some kind of lukewarm fudge is supposed, and allowed to fail in order to preserve the vested interests of the capital owning class. "We tried 'basic income*' and it crashed and burned, now get back to work, slave! And let us never speak of this again."
* too early, set at the wrong level, with qualification criteria and strings attached, without necessary social reforms or education or wealth distribution and corporate taxation
"everyone should by right have a share of it"
Based on...????
We like you.
Your parents couldn't control themselves and popped you out?
I want to share mine with you?
I want to share yours?
Someone else has more than I consider fair, so we're going to just take it?
WTF people...WTF
"Yes, thank you capitalists, you raised us up to this level. But going forward, you're going to have to share now. The times they are a changin'."
Unfortunately, we have lots of productivity now because of capitalism. Get rid of the capitalism, and see how long your centrally planned economy keeps productivity that high
That is a pretty interesting article. We have gained leisure time from automation but from the side of automating chores. The basic income is an interesting idea as it would be easy to administer and fairly transparent. Unfortunately it would upset the left and right as it would have to be cash for people to spend, it could not be topped up with continuous bribes (or it defeats the point) and people will spend it as they please even on what we consider bad for them.
Personally I am not convinced of the basic income. I dont think govs could leave it alone but also I wonder if it will just inflate prices as most gov interference does.
The key argument, repeated through the article, is that technological advancement through capitalism never reduces total working hours.
30 seconds of thought shows how nonsensical this is. For 200,000 years humans essentially spent 100% of waking hours at 'work' - acquiring food and shelter, subsistence farming, etc.
For the last 200 years the use of technology has only ever reduced those working hours. From agriculture meaning that survival took less than 100% of hours, through to factories and the labour movement changing 'standard hours' from 7 days to 6.5 days to 5 days to 40 hours to 39 hours.
Not only is that a clear trend, it overstates the comparison. 39 hours work in a developed economy usually provides for excess income and the ability to build capital. The number of hours needed for pure subsistence with no surplus is much less than that. To survive in an equivalent manner to a 18th century serf takes less than 20% of available hours. That's a massive reduction in working hours directly attributable to the deployment of technology.
Indeed. The article's argument is from a very narrow perspective and I think misses a few other issues of Basic Income on a population level.
One of this is to consider its effect on publicly funded activities. It achieves a reduction in cost of these activities, as the employees minimum wage requirements are already covered, and the biggest cost of any activity is (almost always) the wage bill.
"the logical conclusion of this is two very rich people owning half the factories each and only having each other to sell to."
You say that as if it's a bad thing, but perhaps these two (or say, four or five) may well be content with the walled garden if the proles are kept out. Or they could just fight winner takes all, after which no competition means the winner no longer has to share or divvy.
I think a few people are missing the point about basic income. The idea is that it's set at a level that means no-one HAS to work if they don't want to; their basic needs are covered. Much like (in theory, if not in practice) unemployment benefit, etc. It also removes the need for the welfare system as it is now, as we all get it (I imagine the severely .disabled might need additional help, but it does come down to what level the UBI is set at)
A certain proportion of the population will still want to work, to top up their income so that they can have whatever luxuries they'd like. Or just for their own personal satisfaction. Increasingly, though, full-time employment won't be needed (or, indeed, available) - so larger numbers of people might work a few hours each.
It's getting toward the nirvana promised in Star Trek, without all the whizzing around space. It's a great idea in theory, but might be very difficult to transition to. The countries that are planning to experiment with it will be very much worth watching.
UBI also means different things to different people. For some it's a utopian idea of only working when it suits you in an automated economy. That looks far enough in the future to me to still be science Fiction.
To others, it's a way of saving loads of admin money, by abandoning a huge chunk of means tested benefits (pensions, tax credits, unemployment etc). You also lose your tax free allownces on income of course. The basic income is lower, I think the theory is it's to cover basics but not housing - but then you can do without some complex and expensive government benefits admin. Plus you don't get the huge marginal increases in taxation that are caused by the banding on benefits, where it's possible to work a couple of hours longer a week and actually lose money because of the benefits you lose.
Actually, I don't think most people would stop working because of UBI. Most people would work more on things that they want to do and get done. (and i'm not talking about arts/poetry/childcare etc)
Many more people could re-train their skills and work because suddenly there would be a huge increase in availible jobs because most of the Lower and middle classes could afford to buy stuff and spend money without fear of becoming destitute and poor with no job.
And thus we see the inherent flaw in Capitalism, it requires population growth. More people buying more stuff is an absolute requirement. We need to sell more shoes to grow our company, but people only have 2 feet, therefore we need more people or we need them to buy more shoes. That is how "Marketing" got invented so they could persuade people to buy stuff they don't need or even want, all in the name of growth.
The idea of Basic Income is excellent. Since everyone will get BI regardless of what they do (or don't do) people will be freer to choose what they want to do, and if what they choose generates more income for them, then great, but if not then their kids won't starve. Paid work will become graded according to how difficult it is to get someone capable of doing it to actually do it. Want to buy a house, but making crocheted doilies isn't generating enough income for you? Spend a year cleaning portable toilets and buy that house for cash. :D
"but people only have 2 feet, therefore we need more people or we need them to buy more shoes."
The only consequence of having two feet is that shoes are bought in pairs. The relationship between numbers of feet and numbers of shoes is that the latter is an ever increasing integer multiple of the former.
Spend a day as a binman and spend a day in HR.
See which you complain about more. See which pays more!
Spend a summers day on first line and then spend a summers day painting your roof.
There are loads of examples.
Plus, in my spare time I'm a guitarist. Should you have my paid jobs because you find the songs harder to play than me?
That's what the Labour market is. Obviously there are distortions, but binmen get paid less not because they don't work hard, but because there's no shortage of binmen. Whereas HR departments require people to have a university degree for some reason and no soul - which is a smaller subset of the population than those able to walk and lift a bin.
When companies can't recruit people to do the job, then they put the wages up, or train their own staff to do the new thing. Well admittedly they first complain about lazy people not wanting to work, then complain the government doesn't train enough people, and then do those things. On the way though, they look at automation. One reason why UK productivity hasn't risen in the last few years is that it's been relatively easy to employ people, as we've had a fast-expanding workforce and relatively stagnant wages - which gives less incentive to take the risk in buying capital plant to do a job. Even if the plant can do it cheaper than employing people, you've got to tie a lot of money up in it for a long time.
Electric monks don't cause unemployment.
Their job is not to replace priests, but to believe them, so that you don't have to waste your time doing so and/or listening to their sermons. So you could argue that the electric monk is a job-saving device, as well as a labour saving one...
Automation means there is more to think about and more to go wrong but does deliver consistency
Yes I would love a monthly paycheck to sit on the sofer outside by house in my dressing gown with a beer on my cornflakes and wave at everyone going to work, bu who deserves a basic income?
My mom is a medical secretary, every day she sends letters to people that are ill because they can't be bothered to wash.. seriously same with people who have smoked 40 cigs a day and now can't breath should we care, probably not.
But if there is a family with both parents working and can't put food on the table, perhaps yes.
Same for an 18-year-old with no parents. has a job but nowhere to live, when does the government step in.
So how about a GDP contribution tax, the less you contribute to GDP the more tax you have to pay, it on your arse but have plenty of shares, you pay, boozed up all day you pay, own a factory and work 1 day a week you pay
Well, AC. You assume that BI would be sufficient to pay for beer. Bad assumption on many levels.
And maybe you need to tell your dear mother that not being bothered to wash is actually a symptom of a number of recognised conditions.
But then it is your mother that I would like to do out of a job. Not because I have anything against her - but because her role needs to be made obsolete. Medical secretaries are there because medicine runs in an archaic, inefficient and costly manner.
But I digress.........
The automation in the past was mainly automating the labor not the skill. The job still required skilled workers, it just reduced the effort required by the workers and increased the speed.
Over the last couple of decades skill has been slowly automated. The automation rate of the skill set is increasing, reducing the need for manual labor and skilled labor.
The only jobs that will be left in the short term (relatively) are the design and running of the systems and software. So software designers, engineering, etc. In the log term not much, especially if AI comes about as they are jobs that AI will target, creativity.
Steam and Electric age, reducing manual labor
Computer age, reducing skilled labor
AI age, reducing creativity needs.
What is left after that for us to do?
https://www.youtube.com/watch?v=Yvs7f4UaKLo
That's if you believe AI is going to replace accountants and lawyer, doctors and the like. Not to mention musicians, personal shoppers, fish pedicure specialists, party organisers.
Actually this argument forgets skilled trades and small manufacturers. We make a unique product in the water industry, but only sell a few thousand a year. The market is probably ten times that - but only if people choose to comply with the regulations - which they won't unless forced. So only those at risk of inspection buy our kit.
In that circumstance automating the manufacturing process would cost us hundreds of thousands and cause our prices to rise massively. The only way it would be financially viable to automate production of that unit is if we first invented the robot water regulations inspector to drum up trade...
"Actually this argument forgets skilled trades and small manufacturers. We make a unique product in the water industry, but only sell a few thousand a year. The market is probably ten times that - but only if people choose to comply with the regulations - which they won't unless forced. So only those at risk of inspection buy our kit."
And what happens when someone else comes up with a way to cheaply do short runs on demand using techniques like 3D printing (not necessarily for the part itself but perhaps to produce molds)? Then they can plunk down because they can combine many short orders and still be profitable because their works are more versatile and can switch jobs more easily.
not exactly very good
Take one example, the company I attend every day
35 years ago it employed 4 lathe setters, 4 mill setters, 2 inspectors, and about 30 machine operators
It ran 18 hrs a day (double shift) and kept the owner in Jags and foriegn holidays (and the operators were treated like crap in a classic industrial setting)
Now, we have robots and computer controlled machines, the company employs 4 lathe setters, 4 mill setters , 1 inspector, and 7 operators, spread across the same double shift system
We produce about 50% more than 35 years ago
That is the cause of the unemployment in manufacturing , and more to the point, what does happen when 1000's more jobs go as a result of automation....... 25% of the workforce sitting idle anyone?
"Other industrialized countries have seen similar increases of work productivity without a decline in work-hours. Many European countries recently raised the retirement age, effectively increasing the absolute number of work-hours per life."
I think this statement is missing the point that the raised retirement age is to prevent a pensions crisis; the average life expectancy increased a lot between 1950 and 2000 so many of the people working today are not saving for their own retirement, they are still paying for the retirement of the previous generation of workers who got lucky in the life-expectancy versus actuaries-estimates failure.
"many of the people working today are not saving for their own retirement, they are still paying for the retirement of the previous generation of workers who got lucky in the life-expectancy versus actuaries-estimates failure."
The real problem here is that, at least in the UK, the state and the Civil Service pension schemes are essentially Ponzi arrangements. I'm not sure if there was any actuarial planning at all when they were set up. If the IR, as it then was, had had a genuine contributory pension scheme along the lines of private industry's funds I doubt that they'd have done away with tax relief on dividends of such funds or taken the short termist enforcement of contribution "holidays" which have left so many of those private pension schemes in deficit.
One thing. How do you deal with the families of those who die working AND have the power of the vote? That's always been the problem of just cutting people loose and forcing population control. That goes against human instinct (which was geared more for environments when people tended to die much younger and under rougher conditions) which in turn results in a lot of cheating and distortion (ask China how their population program is turning out--they now have a massive imbalance of the sexes). How do you deal with this problem without making a better human first?
I work in a factory. Traded stress for less pay, I'm financially poorer but happier.
Anyway - I'm not alone. There are loads of low wage workers in the western world. The obvious question is that if a basic income from the government covers the necessities of life...well...what exactly then is our incentive to even bother going to work?
The problem is with general purpose robots on the way even a lot of the low paid jobs will be gotten rid of, then on top of that there's the ai issue that will take over a lot of the clerical and skilled workers and even creative workers, this will include code monkeys and helldesk fodder the last employed person could well be the final programmer that sets the final ai going
The non-necessities. It's called a 'basic' income for a reason: It's supposed to give you enough money to live on, and that's about it. If you are happy in your little low-rent flat, watching TV and roaming the internet, that's fine. Good for you. But if you have expensive hobbies to pursue or desire a more luxurious standard of living, you can go join the queue for employment. It may take a long time before you strike lucky and get a job, but with the basic income to support you there is no hurry.
This is absolutely right. Opponents of the basic income seem to believe that people won't work at all. To me that's ridiculous: if that were true, capitalism wouldn't really work at all. People want more even poor people they are not some non-aspirational subspecies. I'm highly suspicious of highly paid people who say "pah, what's to stop me sitting on the sofa all day?" How about not being able to afford your Jaguar XKR?
...I will demonstrate how 'trickle-down economics' really does work, despite the ample evidence that it just widens the divide between rich and poor.
The 'automation argument' is a massive straw-man argument. It's just not the point of universal income. Universal basic income as a concept is primarily there to provide a negative feedback so that the ultra-rich don't end up with all the money, lifting the poorest out of poverty, and actually stimulating the economy (because that those who work are guaranteed to have a disposable income).
At the moment, we have an increase in the numbers of people in poverty, while the richest in society enjoy massive wealth and luxury (and tax breaks) despite never having to work. Somehow, those at the top (with everything) are not viewed as freeloaders, whilst those at the bottom (with nothing) are.
We don't have an incease in poverty. We've had (but the recession caused this to go down) an increase in inequality. Up until 2005 for the UK almost everyone was getting richer, but those at the top were getting richer faster.
The usual figures given for poverty are for households earning under 60% of the median income. So it's a relative thing. Poverty is much harder to measure, are you poor if you can't afford one family holiday? Or if you can't afford a mobile phone and broadband? Or are we going for washing machine and fridge?
We don't have an incease in poverty.
We have an increase in people relying on food banks to get them through the month. I'd call that poverty.
The current government also massively missed its targets to reduce child poverty (hint: it went up). So what did they do about it? They changed the metric by which they measure poverty, so that it couldn't be measured year on year. That's right out of Yes Minister, which was supposed to be satire, and not a how-to guide for Machiavellian arseholes.
Edit - oh, and I supposed the cuts of £30 a week to ESA for disabled people aren't driving them into 'inequality', and benefit sanctions aren't driving desperate people to suicide. Except that is exactly what is happening.
Lyal Commenter,
As I said, Child poverty used to be measured as any child growing up in a household with less than 60% of the median income. That tells us nothing about poverty, but something about inequality.
For exmaple, 60% of the median income in Luxembourg is lots and lots, whereas 200% of the median income in Syria is bugger-all. So child poverty actually went down during the recession, because incomes fell - i.e. almost everyone got poorer. I assume it will have gone up again, as wages start rising faster than (the very low) inflation, which is what benefits are linked to.
Using relative income as a measure of absolute poverty is ridiculous. Otherwise deporting Richard Branson (insert name of any other very rich person) would reduce child poverty - and allowing Bill Gates to move to London would increase it. In fact a rise in the average wage, or say pensions, would also cause a rise in child poverty.
It's a stupid measure. As I said, it doesn't measure poverty, it measures income inequality. That's something worth doing, as it's also important - but children living in poverty is a serious issue and we can only target resources on it properly if we measure it properly.
As for your mention of foodbanks, the figures from the Trussel Trust about how many people rely on these were about the number of people who'd used a foodbank once during the year. I wouldn't call that relying. I think their rules limit the number of times you can use them - i.e. they're an emergency "it's either this or a payday loan" thing, rather than a charity that provides food to families every week.
Poverty is complex.
Alternatively, either:
1. Don’t automate (so that there are plenty of jobs for all). This is an obviously silly idea since it results in the sort of shitty build quality and strikes that the seventies were famous for.
2. Automate everything that can be automated and incentivise people not to have children - thereby reducing the population and hence the demand for jobs. Get the population of the UK down to 30 million or so and we could be self-sufficient (if necessary), and a lot greener. We might even build up some eco-credits so that we can continue to enjoy eating meat and driving cars and doing all the fun things that we’re occasionally told we have to give up for the good of the planet. Personally, I agree that we need to fix the planet - but the easiest and best way of doing that is to stop polluting the world with more of us. More than two children? Punitive tax (or sterilisation for those who can’t afford the tax). No children by the time you reach retirement age? Fat bonus in your pension. And with increased automation we don’t even need to worry about a shrinking workforce - because that’s one of the objectives that we should be seeking to acheive.
incentivise people not to have children
3. Watch the ageing population starve in their own homes and die in filth because there are not enough people of working age to look after them and support their pension funds.
4. Refuse to increase immigration to fill those roles because 'forriners takin our jobs innit'.
5. ???
6. Profit."Take back control"
@Loyal Commenter
3. - Not a problem. There are enough sprogs being born right now to deal with the short term. In the longer term, robotics is advancing at such a pace that decent human simulacra will be available thereafter. In fact, I wouldn't bet against such androids being available before the babies born now reach working age - and that's the real problem. Oversupply of humans for a dwindling number of jobs, which will result in societal unrest caused by bored, unemployed, humans. As to the pension funds, the cost of living will likely continue to drop as 'cheap' robots replace 'expensive' humans in many roles.
4. - Immigration isn't the problem and never has been, despite the whinging of the brexiteers. The vast majority of the UK workforce was born here (surprise surprise), but (alas) many of us Britishers seem to have a peculiar sense of entitlement and want to land in a well paid plum job from the off, rather than working their way up to it. And if the plum ain't available from the start then they'd rather claim benefits. So it isn't really surprising that less entitled, more willing, bodies from other parts of the globe should be employed in, let's say, more menial roles whilst the lazy Britishers lie on the sofa, watching Jeremy Kyle, and screwing the pooch with their Brexit votes. That said, I do feel that anyone immigrating to the UK should be subject to the same rules on child count as everyone else - so don't come to my dystopia (a dystopia being the practical implication of a utopian dream - it never quite works out!) with more than two kids unless you can afford to pay child tax, or have no objections to being sterilised.
5. ¿¿¿!!!???
6. We never lost it.
2. Is pointless. Both the labor pool and consumer demand scale with population. If you halve the population then you halve the number of jobs required to meet demand, and overall unemployment doesn't actually shift that much.
You don't need to incentivise, anyway. There's a consistent pattern that happens in all countries as they develop: First there is a long, long period of steady population, in which short live expectancy and high infant mortality balance a high birth rate. That's the bit where every family has six children. Then there's an explosive population growth when industrial agriculture, sanitation and medicine come along: You still have the big families, but now people aren't dying any more and population shots up, more than doubling in a generation easily. Then a remarkable thing happens: The birth rate falls. Higher educational standards and sex equality serve to discourage people from wanting children until much later in life, and contraception gives them the option. Population can actually start to fall. This creates its own problems, like an overburdened health system.
Some countries have had to resort to coercive population control during the explosive growth period, but even China is phasing out their population control efforts now - they recognise that their need has passed.
"Some countries have had to resort to coercive population control during the explosive growth period, but even China is phasing out their population control efforts now - they recognise that their need has passed."
More like it's had an unfortunate side effect. They're still massive overpopulated (~1.7 billion), but now it's also massive imbalanced because China's social traditions have an almost exclusive focus on SONS (as in only sons can inherit the family name). The child limit exacerbated that problem.
"With UBI people no longer 'need' to work to live, so scrap minimum wage. This lowers the cost of starting up new and interesting businesses. Who knows what would happen. But to say UBI would not change things much is blatantly wrong."
Except that the UBI has to come from SOMEWHERE, and it can't come from the beneficiaries themselves. Guess who that leaves? The business owners and the rich people who tend to back them.
Why does the Reg keep on reproducing these articles from the Conversation authored by failing academics?
I assume the author of this one found an editorial from the early 70s, jazzed it up a bit and sent it for publication (an example of this is the editorial Welfare Farewell from Analog of April 1973).
At that time the buzzword was NIT (Negative Income Tax). Programs were run in the US which gave mixed results mainly because no one was sure of what they were doing and they were too short to give significant results.
Applied to today, there is no reason why NIT wouldn't work, in fact it could cause an upswing in overall wealth for everyone (it would give, for example, a programmer that has an idea for the ultimate program the time to write and test said program without them ending up destitute).
Automation is only 'bad' from the point of view of the 18th and 19the century 'work ethic' which says that people have to work to be happy and support themselves (it also makes the boss very happy from the wealth he gains off the back of the worker). Once you remove the idea that people 'have' to work to live and start looking at people that want to work for extra pocket money automation becomes a tool to do that.
Rant over.
Many more cars produced, MUCH less human labour. Does this author really live in the real world? Human labour goes from "living" to "dead", that is, humans, to artefacts that humans have created ( machines ), in all industries.
Having said that, BI would only be one more way that capitalism tried to maintain the profit stream. A stream, as it turns out, that is shockingly bad for humans anyway. It would not surprise me if they gave it a try, given that QE and the socialising of debt was only a sticking plaster.
1) It would make it less risky for people to consider changing jobs, which is probably a good thing
2) If you found yourself out of work, you'd not need to apply cap-in-hand to the welfare state and wade through a morass of paperwork, feeling like a piece of shit in the process.
3) Once we all got used to it, we'd stop working ourselves into such a state over people who have decided they'd rather just lounge around watching Jeremy Kyle on their big plasma TV all day, as they'd be exercising a right we all have, rather than forcibly demanding something which the rest of us think should only be a temporary 'safety net' to help people in difficulty.
I don't think it would make much difference to the number of people seeking employment. Whilst some luxury items have decreased dramatically, others have increased. Look at the price of housing. If you regularly swing cats, you'll have to buy a 'luxury' house whose walls are far-enough apart to avoid killing them on a regular basis. So there will always be the desire to work to earn money for dream fulfilment. And lots of people like having a job. Some free time can be nice, but lounging around at home all day soon becomes boring and depressing for most.
So I'm looking forward to the results of the studies that were mentioned in the article.
" If you regularly swing cats, you'll have to buy a 'luxury' house whose walls are far-enough apart to avoid killing them on a regular basis."
In my experience, most people with a tendency to swing cats live either in very small homes or in big mansions.
One thing that always seems to be missing in discussions about BI is the figures. If the BI is X then at what multiple of X are you paying pack all of the BI (plus handling charges) you are getting in tax? What percentage of people would need to be earning over a multiple of X in order to cover the people not paying enough tax to pay back their BI and also cover normal state spending?
More simply, is BI even feasible?
Would it work if all automated production and therefore profit belonged to the state and people only did service and creative work? Oh and being a member of the government of course.
Come to think of it wouldn't BI put lots of public sector workers out of a job due to the simplification of the benefits system?
There is an article on Basic Income that includes numbers. Published right here on El Reg, even.
Unfortunately that article is wrong.
1) Automation presents a far greater degree of ongoing risk to jobs than any previous industrial revolution. It CANNOT be assumed that new jobs will be created just because they were in the past.
2) The entire financial system WILL collapse at some point. Fiat money and a debt based money system cannot survive. The mountain of bank created debt is already fuelling casino capitalism to the extent its beginning to destroy the productive economy.
3) Inequality will become so great that the pitchforks will come out. War is the inevitable consequence if wealth isn't shared out. Would you rather a re-run of the 1930's again ?
4) If few people have jobs, who's going to buy the products ? Robots ?
I'd rather not end up living in a 'mad Max' type world with the elite vs. the rest armed by robots.
In the past, people designed machines that reduced the amount of human labour required in a given process. Increased production created economic growth, bringing mode jobs. A high proportion of those losing jobs in one industry/workplace found new ones in another.
AI potentially doesn't just remove human labour from one process. Eventually, it is likely to remove the need for human labour at all. In the immediate term, we are already on the verge of being able to replace a large proportion of the workforce with machines that can do any job those humans are equipped to do, including any new ones that come with economic growth.
Some of those people will be able to retrain to do something that machines can't yet do, but the numbers will grow year on year that can't. If we don't find some way for those people to share in the new economy, then civil unrest is inevitable. The Terminators of the future may not serve a machine intelligence, but rather a ruling human elite.
This is the key comment in all this discussion. I've just spent 20 minutes finding to prove I don't have to write it from scratch. The key change is that we are facing a future where the combination of AI and robotics could create a situation where some humans are unable to acquire the skills to do a job that returns an economic pay rate. Some people will end up competing with fully automated solutions where the viable pay rate is too low to live on. This has multiple consequences.
As SparkyPatrick pointed out this can lead to an underclass with a ruling human elite. A very popular dystopian future that pervades both literature and visual media. There is however a second issue which is that the true driver of our existing economic system is people buying stuff and when the automated factory turns out many more shoes without any human workers then only the owners are left to buy the shoes and the economy goes into a recessionary spiral. To prevent that enough of the money has to be given to people who will spend it (and spend it fairly promptly). This is the economic argument for the universal guaranteed income and it makes perfect sense. The proviso that changes it from a "that isn't how it works" to "we need that" is the situation where some fraction of the population are no longer redeployed into new roles.
I would suggest that we are seeing the beginnings of this effect with the expansion of minimum pay jobs in the service industry. This is using people to deal with other people because this is were your low paid human currently still wins out. The rise of the automated MacDonalds fast food joint would probably be the point where UGI really needs to be considered.
The fundamental premise of the basic income argument is that there will be an unprecedented transformation of the economy that will drive the value of all wage labor exponentially to zero including science, engineering, and the arts. You disagree with this premise as indicated by your shoe factory trope. The problem is the premise indicates that even after all the workers have been replaced by machines, the value of the factory itself is literally zero.
If you disagree with this premise then of course you disagree that there is an unprecedented problem society will soon have to solve. I suggest you open your mind and consider that there are those who have more knowledge than you about the technology involved that are sounding the alarm. It's as if you don't believe the makers of the atom bomb about how different this technology is, Which is not surprising if you don't know physics.
If those who know more than you are right, you are doing a disservice to society by telling people not bother preparing for judgement day.
"If you disagree with this premise then of course you disagree that there is an unprecedented problem society will soon have to solve. I suggest you open your mind and consider that there are those who have more knowledge than you about the technology involved that are sounding the alarm."
Or the cynic in your could say they're just crying wolf to ensure there's more business for them. If people smarter than me were crying alarm for something that, should it be averted, would make THEM redundant (IOW, they're saying to do something that would threaten them), THEN I'll listen.
This is one of those "because it has always been true it always will be" type articles which makes it pretty lame to start with, but which also fails even more because unless you are selective with the facts it isn't even true, and hasn't been for a long time.
Over the last few decades there may not have been quite the scale of job losses that might have been predicted, though the reality of unemployment rates have been massively massaged, but the pay of the newly created jobs has sucked, reducing the working class more and more to the position of poor peasants paying rent to their feudal overlords.
Sooner or later automation will destroy even the fading illusion of high employment levels.
As badly written articles go, this one is... quite badly written. Where to start?
First, the entire article is based on the strawman that a basic income policy is only intended to address a shrinking job market. However, there's far more to it than that: not only does it reduce inequality and poverty (pleasing the left) and reduce government bureaucracy overheads (pleasing the right), but it also leads to more entrepenureal activity (pleasing both). After all, if you have a guaranteed economic safety net, you're free to experiment and take risks that would be unthinkable otherwise. And this isn't just a theory: this effect has been seen in many of the pilot schemes carried out to date (https://en.wikipedia.org/wiki/Basic_income_pilots) - in Madhya Pradesh, "The study also found an increase in economic activity as well as an increase in savings, an improvement in housing and sanitation, improved nutrition, less food poverty, improved health and schooling, greater inclusion of the disabled in society and a lack of frivolous spending".
Dismissing the concept as being just "charity" is therefore both foolish and misleading - as is the claim that it would "not be progressive or emancipatory".
Then, there's the shoe-factory example. There's an underlying assumption here that there's an infinite market for shoes - i.e. if you make 200 pairs instead of 100, you can sell all 200 for the same price as the original 100. In practice, the market will become saturated sooner or later, and then you'll have to either drop your prices or reduce your output. Either way, that shop-floor worker will lose out, as they'll either get fired, work less hours or get a reduced wage.
"There's no correlation between how burdensome and how well-compensated a job is". "Burdensome" generally isn't factored into compensation calculations because it's irrelevant (and often subjective, to boot). A manual job may require some degree of physical fitness but often requires little in the way of training or experience, so there's a very large number of people who can do it and the laws of supply and demand kick in again.
"The principle of production increase over leisure increase applies independently of the type of job in question". It does up to a point - the point where supply exceeds demand. At that point, you either scale back, start making a loss or end up with a large chunk of unsold/unsellable inventory - which essentially also means taking a loss.
Then, there's the claim that there will be new jobs to replace the old jobs. However, the current industrial revolution is different to previous ones in at least one important way: it's happening a lot quicker, and it's affecting many more economic areas. After all, a lot of it is being driven by software, and new apps and updates can appear virtually instantaneously across the world. Take Google Maps for an example: it's eliminated the need to keep a physical map in the car, and it's getting increasingly better at identifying and routing around traffic jams. So there goes the paper-map industry *and* the traffic-report DJs. Along with everything else that can now be handled by a mobile phone - checking your bank balance, taking photos, booking hotels, ordering food, checking mail, etc. There goes the bank-teller, the camera-manufacturer, the people on the phone and even the computer manufacturers...
Admittedly, people are using technology to create new jobs for themselves - t-shirts, 3D printed cosplay accessories, self-published media, etc. Sadly, the people I know who do this are generally making little or no money. Because with technology being so cheap and easy to use, anyone can do what they're doing and the rules of supply and demand have come into effect once more. However, having a basic income would give them more freedom to experiment, innovate and differentiate themselves, and therefore increase the revenue they earn.
It's actually worth looking at some of the classical civilisations to see how they handled over-production and over-population - Egypt, India, China, etc. Generally, what you ended up with was a heavily striated society with very limited movement between layers and increasingly complex social models and policies - such as the imperial examinations in China, where you had to study philosophy, poetry and even horseriding and archery. They also tended to have either low productivity or some form of resource-sink, such as the Great Wall of China or the Egyptian funeral industry. And in the long run, they also tended to be dominated by more efficient and less striated civiliations - the Romans, the Mongols, the British empire, etc.
Of course, there's always another approach to dealing with over-population: going to war - not only does it reduce your population (and that of whoever you target), but it distracts the general population and you also get to spend resources on equipping and training your troops. Win-win, except for the people at the sharp end of the axe.
So personally, if a Basic Income offers even the slightest possibility of avoiding a striated society or war, I think it's something we should be spending a lot more time looking into!
In the main yes but if you look at world population graphs with the dates blanked out you would be very hard pushed to spot the wars, they really don't make that much different (not to say the next big won't) things like spanish flu had vastly larger impact but even that was soon made up for (human fecundity is a problem that we need to actively manage after all)
To be fair, I was thinking more historically, but even more recent wars have had something of an impact - according to the ever-reliable Wikipedia, up to 80 million people died "[including] 19 to 25 million war-related famine deaths". That was 3-4% of the entire world population at the time.
Then too, it was significantly worse at a country level - some (e.g. Poland) suffered 15%+ casualties.
Any which way, war sucks.
money is something we believe in. until we stop doing that.
so is having to work, or having to work to earn a living.
there will simply not be work for all of us, we say.
wrong.
there is no need to keep working 40 hours or a 100 in some places.........
unless we find it necessary to fill the virtual coffers with virtual money in the not so virtual hands of maybe 3 or 4 -thousand people, who where not elected to rule us, but actually do.
You'd have to storm all corporations, and seize the means of production. Simply opting out is not enough. We don't have the land (a means of production) to grow food.
Most of us don't have the food and shelter secured (payment free) so we can't purchase or create a means of production with our full effort. Furthermore, assuming we all decided to become overnight entrepreneurs, and each of us had some ware or service to sell on day two. How do we organize who buys what? Someone will have no business on day two, week two, month two, year two, if they don't starve first. In order for people to actually work less, en masse, we need revolution or revolutionary policy.
A) Automation does put people out of work. We''re putting in a new sales back-end at work, and once that is operating I can think of at least 2-3 order management headcounts that are going away. I drive across bridges where the toll takers have disappeared in the last 5-6 years, because of license plate scanners and electronic payment systems.
B) You can't just keep producing "more shoes" ad infinitum. Eventually you will saturate the market.
C) The issue is not just getting a new job, it's getting a job that allows you to support a family. Way back in the mid80s SF bay area, I got a job as a trainee grocery store cashier. I started at about $8.50 an hour. I know someone who recently did the same thing, for the same grocery chain, and also in the bay area. They started at about $8.50 an hour, only now it's 30 years later and inflation has halved the value of that wage. Butchers, construction, many manufacturing jobs-- these used to be solid middle class jobs in the U.S., but they aren't anymore.
basic income because it might fix a highly unbalanced wealth redistribution program run by the government? A lot of benefits are doled out based on complex and exploitable rules. A basic income concept would be simple and transparent and might fix that. It would also help to overcome regressive benefit/taxation models that currently keep a lot of unemployed or underemployed out of work.
After all, if we only need benefits for disabilities which incur additional costs then it's a lot easier to organise.
And there would be no good reason to have a zero rated tax bracket - probably paying for most of the system to start with...
Let them eat cake! That always works, right? Because no one ever got mad, overthrew governments and burned everything down and killed rich people (who thought they were untouchable) by the thousands because they and family and friends were dying and starving to death, right?
Several billion people will just accept being left die.
Right? RIGHT?!
Yeah, that will end well. History says so! Oh wait...
It assumes demand for goods in general is really elastic.
The people of old who predicted automation would bring about a three-day work week were wrong because they assumed demand would be inelastic: That the people would want only so much 'stuff' and so with increasing per-person productivity there would come a point where that demand would be satisfied with only a small number of people in employment. This didn't happen, because with falling cost of production consumption increased accordingly: Even the low-income today live a lifestyle that would have been the envy of a preindustrial king. Clothing so cheap that people will throw away a piece rather than spend time stitching a hole? Items imported from half-way around the world just to decorate our homes? Holidays to exotic locations?
If we all lived like an 1800's peasant, we really would need only a fraction of the population in work.
An important question is how far this can be taken. If further automation leads to even greater per-person efficiency gains, what happens? Do we reach the point where clothes are so cheap people will throw them away each day rather than wash them and just buy anew? There has to be a limit to how much useless tat people want in their lives - and there are only so many hours in the day to watch television. Even if consumption continues to increase, there are other costs to this solution: Massive resource usage and environmental impact.
a) slow capital punishment by starvation or exposure for being too lazy to work
b) an army of people and machinery trying (and failing) to make sure no-one cheats the system.
To me, a basic income is a *highly capitalist* idea (and I like it). It enables the removal of vast amounts of red tape. You could ditch minimum wage, tax allowances, and probably a good deal of protectionism. We could also get rid of hundreds of thousands of public sector jobs which don't really contribute anything positive to the economy. The situation we have at the moment tho, where people who could do a few hours work per week just cannot do that in any legal fashion seems to me to be ridiculous. For the employees, every hour you worked would make you richer, and for the employers, the workforce would be much more flexible and mobile.
Yes, we still have a surprising amount of work. One reason for this is of course that we can burn through more and more resources. However resources are typically finite. There's only so much oil you can turn into cheap plastic toys.
For areas where the limiting factor is the workforce, we have found other ways to keep more people employed. In engineering we purposefully stop giving students good education so they will get worse and worse. This results in engineers needing exponentially more time to solve problems. Essentially since they have never learned how to actually solve problems, or how other people have solved problems in the past, their solutions often involve creating more problems than they were trying to solve. This causes a chain reaction which can even become critical.
In other areas like management, we are seeing the creation of "bullshit jobs". Jobs which serve no purpose but to create things for people to do. There are companies producing household appliances which have whole departments thinking about how to create an overarching theme of management so they can justify, more or less logically, why they have production plants.
We are currently still doing rather well at wasting work, however I believe it is very naive to think that this can go on for ever.
Where I'm from in the US (Milwaukee, WI) the unemployment rate among African American males is over 50%. Not only is it because manufacturing jobs leaving, which will never be replaced, there is systematic racism and the effects from the history of their (our) community. Problems like this exist throughout major cities in the US.
The economics of that situation creates a really strong argument for a reparations of some kind. A reparations of some kind may be the only answer to the problems which arise from that situation. There is no way reparations, for African Americans, will ever happen but basic income can.
It could also be argued that basic income could reduce many of the costs of some social programs and the social impact of having so many people out if work. There is a basic income of a kind that's being utilized in cities across the country. Free housing, with no strings attached, for the homeless.
There is also an emerging class of citizen, and I find myself as one of them, which will have no interest in the "lavish" lifestyle of the full time working class. Technology has greatly reduced the cost of living a comfortable lifestyle . With a shift in one's economic frame of mind early retirement is something which is available for everyone who can make, and live on a low percentage of, a decent wage.
Anyhow every place around the globe will have to figure out how basic income plays, or doesn't play, a role in their social well being. The answer won't be on the extreme side of for, or against, basic income.
People started hawking their food stamps for beer money or cigarettes. Even with the transition to EBT cards, there's still a black market for trading in EBT benefits for those particularly exempt items people would prefer to food.
Here's the hint: people will CHEAT. It's in the human condition.
I have seen the effects of mass unemployment for myself.
For centuries, Liverpool was a major port, and built an extensive dock system to serve all its traffic. Whole sections of the city were built as housing for dockworkers, within reasonable walking distance of the docks. These were not wealthy people, but they made an honest living through hard work.
Then containerisation happened, and ships were unloaded by huge cranes instead of armies of men. New, enormous docks were built to accommodate this new method of working and the larger ships it engendered. The old docks, unable to compete on equal terms, closed - putting thousands upon thousands of dockworkers out of work, all at once.
They couldn't just move to another dock or port - all the other ports were containerising too, and the containerised docks required far fewer men to handle a much larger volume of goods. In happier times, they might have gone to work for the railway instead, but British railways were in the middle of a full-scale retreat from goods traffic. Likewise, mines were closing all over the place.
There was thus no other industry that could take on a large influx of unskilled physical labourers, which is what they were if you discounted their docker experience. And besides, who would they sell their houses to in order to move - if they owned them in the first place, that is. If they didn't, they were still stuck paying rent *and* council tax (which wasn't income-linked) without a steady job to pay for them. The only viable way out was the welfare system.
The result was the Toxteth Riots of circa 1980 - Toxteth being one of the more centrally-placed docker districts. If you look in the right places, you can *still* find burned-out buildings from that event. And, even though I didn't live there, for some reason my parents sent me to school there. Several of the other children in my class regularly came in hand-made uniforms, because their families couldn't afford the official ones.
Containerisation was, of course, an overall benefit to the economy, since it greatly reduced the cost of shipping over long distances. But it was a sudden shift which caused a huge amount of localised human misery.
Conventional economics assumes that increased productivity (due to automation or any other technological change) leads to increased consumption and we all get more things and feel better. Unfortunately the planet is finite, you logically cannot have economic growth for ever on a finite planet.
you logically cannot have economic growth for ever on a finite planet.
Economic growth is a metaphysical quantity and so is not likely constrained by a finite planet. In any event, the universe is more than likely infinite and there's no good reason I know of to believe that we are forever confined to living on one planet.
Economic growth is a metaphysical quantity and so is not likely constrained by a finite planet.
It may, or may not be thus. It does arise, however, from economic activity, which in the real world depends on the consumption of physical resources, such as coal, oil, minerals, cotton, wood, energy, etc. which are all of finite supply, to a greater or lesser degree (for example most metals are recyclable, but you'd be hard pressed to recycle coal once it has been burned, and all recycling consumes other resources such as energy).
People can't buy what they can't afford.
Example: in the U.S. new car sales averaged 10 million vehicles per year during the 1970s and 80s. After the Saving and Loan disaster and resulting recession, car sales have never reached 9 million again with the average being 8 million in the 1990s and then 7 million in this century.
Why? The 3 recessions from the late 1980s to now have destroyed that much disposable income of the potential buyers.
https://www.statista.com/statistics/199974/us-car-sales-since-1951/
Killing the golden goose, customers, is considered a bad idea. Why American capitalism thinks this is good idea is beyond me.
Well, apparently Ayn Rand called it a "magnificent job of theoretical exposition." Given that pretty much everything that Ayn Rand said was total egotistical bollocks along the lines of 'greed is good', I'd take that as an indication that this guy was talking bollocks too. Also he died in the mid '90s, so I'm not sure anything he said is necessarily still applicable to 21st century reality.
"True, technological progress can cause temporary unemployment. But a look at history will tell you that, unless we switch to another economic system, there is no reason to fear (or hope) that automation will put people out of work permanently".
Then how do you explain the fact that the unemployment rate in the USA is 23% and rising? http://www.shadowstats.com/article/c810x.pdf
"Under capitalism, technological progress results in more products, not in more leisure. Factories that improve their efficiency don’t shut down and send workers home early – workers keep the same hours and crank out more goods."
But but but...
Back in the 19th century heyday of British industrial capitalism, a typical factory worker did 12 hours a day for 6 days a week. Modern factories are more efficient and these days, a typical British factory worker expects to do more like 8 hours a day for 5 days a week. Technological progress in manufacturing has in fact gone hand in hand with a huge increase in leisure time for workers at least in Britain (and Europe).
But but but...
Back in the 19th century heyday of British industrial capitalism, a typical factory worker did 12 hours a day for 6 days a week.
Unfortunately for Grand Theories, the relationship is not at all simple. Hunter-gatherers worked ~4 hrs/day to make their living and spent the rest of the time presumably doing what we do i n our leisure time these days: getting pissed, fornicating and telling lies. The typical 19th C rural labourer worked six days and at harvest time very long ones. But much of the year was nowhere near as arduous and there were ever so many holidays.
In the mid 1950s to 1960s my father made machine tools on piecework in the UK. Mostly he only had work 3 days a week and needed to supplement the family income with two part-time jobs: collecting the football pools and selling seafood snacks in pubs on Friday and Saturday nights. My mother had three part-time jobs: bus conductor, football pools collecting and also selling seafood snacks on weekends.
Moving to Australia in 1965 increased both their leisure time and their income.
It is incorrect to consider new technology from microeconomics point of view only. After all any new technology takes money to develop and deploy. And that money has to be returned with profit from sales of product of that technology. And matter what this technology/product is profit will appear only as result of final consumption (usage without profit). Then end game is obvious less workers brings less consumers, less final consumers bring less sold product and therefore less profit from technology products.
In illustration I can remind famous anecdote:
In November 1956 Walter Reuther delivered a speech to a Council group of the National Education Association. The transcript of his talk was published as part of his “Selected Papers”, and it contained an extended description of this intriguing episode [WRNE]:
I went through this Ford engine plant about three years ago, when they first opened it. There are acres and acres of machines, and here and there you will find a worker standing at a master switchboard, just watching, green and yellow lights blinking off and on, which tell the worker what is happening in the machine. One of the management people, with a slightly gleeful tone in his voice said to me, “How are you going to collect union dues from all these machines?” And I replied, “You know, that is not what’s bothering me. I’m troubled by the problem of how to sell automobiles to these machines.
The automation argument can be answered very simply - allow people to retire earlier.
When the state retirement age is heading every upwards towards 70 it's very difficult to take the 'automation' argument seriously at all. When it gets down below 50 there may be a case.
But of course that isn't the argument for Basic Income at all. The desire for Basic Income comes from a certain section of the middle class who want a 'passive income' they can use to buy new Wellies for Glasto. All the 'justifications' raised are smokescreens to hide the real reason.
What they forget is that the reason the rich are detested is because they are seen as not having earned their income.
"When the state retirement age is heading every upwards towards 70 it's very difficult to take the 'automation' argument seriously at all. When it gets down below 50 there may be a case."
But doesn't that in turn put a burden on the rest of society? When people live longer without working, they tend to end up taking away more than they put in while they were working, which is actually one counterargument to a robust healthcare system that doesn't raise the retirement age to compensate.
Japan's really feeling the pinch now as their population distribution skews heavily towards the elderly. Many other first-world countries are starting to feel this pinch as well (the US gave some concrete examples; e.g. Social Security was once feed by 20+ workers per recipient. Now it's just 2).
All of the retirees defiantly puts a huge strain on the economy. Not because they have stopped working, but because many will spend a lot less money because they don't need to, and their income is limited and fixed, plus they might have to help their children which quite possibly still live in their basement
Many of the retirees leave companies and no younger person will replace them. The job has already been automated or contracted out, or the trainee that may replace them makes much less than them. Of course there will be a "talent shortage" when we can't find someone with 20 yrs experience anymore and companies will bemoan that they can't find qualified canidates pushing to allow them to hire foreign talent rather than training people.
Contrary to what most of the press has been spouting, we won't need millions of more workers to take care of the consumption habits of the retirees. Most of them aren't needing to buy houses, cars, pay for education, etc. Of course health care is where retirees are going to spend more, but until there is a massive wage inflation among nurses and caregivers, I don't think that is a problem.
The reason japan is feeling the pinch is because they have the same problems with the job market and not enough higher paying jobs which leaves less taxes for the government.
What Japan needs to do is implement a UBI so that employers can't threaten peoples survival with 80hr workweeks or no job and no money.
What has actually happened is that China has finally taken most of the manufacturing jobs, and if they haven't then automation probably has. Governments are afraid of increasing the debt. The whole cycle has started breaking down because the people that actually want to buy what is being produced don't have a job to pay for it.
"Contrary to what most of the press has been spouting, we won't need millions of more workers to take care of the consumption habits of the retirees."
Not saying you do. In fact, the problem behind the problem is that it's difficult to correct a severe population imbalance without consequences. First world populations waxing elderly (which also puts political pressure: seniors are consistently the most active voters). China heavily male, and so on. Best I see it, this can't help but get ugly at some point because, in spite of imbalance, none of the imbalanced side are going to be willing to step aside.
"What Japan needs to do is implement a UBI so that employers can't threaten peoples survival with 80hr workweeks or no job and no money."
Only one problem. Who PAYS for it that isn't going to just up and leave the moment you try?
"What has actually happened is that China has finally taken most of the manufacturing jobs, and if they haven't then automation probably has. Governments are afraid of increasing the debt. The whole cycle has started breaking down because the people that actually want to buy what is being produced don't have a job to pay for it."
Which then raises a real specter. What happens when NO ONE is able to pay for the stuff and the people with all the money, realizing the game is up, have gone into their walled gardens to cater exclusively to each other?
We already do this for old people. Everybody over 67 gets £120 a week (rising to £155 in a couple of decades) regardless of personal circumstances or history.
No, no, don't say "they've paid taxes!!!" You get a UK state pension whether you've been rich enough to pay taxes or not. It is a universal non-means-tested payment. There is a contribution-based amount which it topped up to the flat rate if you haven't paid any enough contributions. So if you've paid zero contributions you get a 100% top-up.
But they exist none the same.
Sad that simple supply and demand should elude so erudite a poster. We paid for production, when production was scarce, that's economics. When production is abundant, and consumption is scarce, what does economics say we will pay for?
In short, supply and demand trumps legacy outcomes of risk/reward models.
So, one of the main reasons against basic income is it's "unaffordable" and if the government spent all that money on its citizens the government would have to raise taxes dampening the economy.
There are two ways this plays out: the government raises taxes on the wealthy and some of the upper middle incomes which causes them to look elsewhere in the world to live. "But the rich would leave"...and less taxes from them etc.
Yes the pound would take a short term hit but the economy would recover fast because of increased spending power of all the citizens plus tourism, plus weaker currency means greater competitiveness for manufacturing.
The government impements UBI but doesn't raise taxes enough to cover for it. The pound would take a hit but the rich wouldn't flee as much. At least the "stimulus money" is directed where it will actually be spent.
If the UBI amount is modest amount initially, it might not cause a shock and we could just begin to forget what income insecurity and poverty are.
In either scenario the outcome seems seems better than the current situation of increasing poverty, income inequality, and the government trying to make up for the loss in GDP by getting more rich immigrants or not rich immigrants that the government thinks will boost GDP.
The welfare trap and income tested benefits disincentives working. Basically the government plus the rich sold us out and expect we keep paying for it with the majority of our measly paying jobs. (Because money is what you pay, value is what you give when you're working )
Okay here is an idea:
Why don't we actually find out people's marginal propensity to work rather than their marginal propensity to survive?Implement UBI and this would happen.
If there is a low demand for workers but a high demand for jobs we see what the marginal propensity to survive is: minimum wage.
Those idiot politicians that say UBI disincentivises work or that there are jobs, just not desirable ones, or that welfare or unemployment insurance is an incentive to work just don't get it and should take a class in human psychology.
Late to the party as I so often do...
In the future, it will be mathematically impossible for everyone who wants a job to find one. We can therefore no longer deny income to those who don’t work.
We have that here in NZ. As do many other countries. The reason so many are out of work? Well, yes, sorry Mr Key et al but the big reason is that so many jobs have become "automated" or gone overseas, largely to factories that have a huge amount of machinery replacing jobs.
The ideas espoused in the article - that increasing productivity can go on forever, are obviously flawed. So the shoe maker can double her work. And in time instead of doing 400 shoes per week she'll do that per hour. But instead of paying people to do more productivity, many companies lay off excess staff. After all, the shoe factory has several limits on how many shoes it can produce : limits on market (how many people will buy their product), limits on supplies (they can get 50 ton of leather shipped in per week, therefore they can only use 50 ton of leather per week - doesn't matter if they can run through that in a minute or the whole week, that's the limit).
I used to do some support work in a large warehouse not far from me. 10 years ago they had some 50 people working 3 shifts to handle the various jobs : some loading/unloading trucks, some doing office work, but the vast majority doing the work of grabbing product off the shelves, loading it onto pallets for the various shops ready for the incoming trucks to collect. Now each shift has 2 forklift operators, 2-4 people handling orders (ie putting the orders into the computer), and just 3 people on the shop floor. The rest have been replaced by automation. There's been a slight increase in the overall workload - a couple more shops added, but the savings are significant - the savings on over 30 people's worth of wages per year is quite significant.
Then there's the flow on effect. The shop that they generally went to for lunch etc? Well guess what happened to a large part of their custom when those workers were made redundant. Fortunately they have a fairly large catchment area but if another firm replaces a large amount of staff.
When I was born, it was reasonable to not only expect you'd have your job for life, but that you could also bring your child into the same role. But most products were made here, and most products were quite labour-intensive to make (compared with today). Then we got cheap imports, machines that could literally replace a hundred workers, and so many jobs lost to automation or lost overseas. We now have children whose parents have never had a job, and that is much likely to get worse. And it's not from comfortable benefit levels - they're barely subsistence levels.
So yes, it is quite certain that technology will replace more and more jobs. You cannot have ever-increasing sales of product to sell, you are limited by how many people will buy and how much raw materials you can receive/process
So like I said, wealth has gravity. Those that have a lot of it tend to naturally accrue more as people still demand their daily bread and you demand their wealth in exchange. It's like a big poker tournament: eventually people will drop out as they run out of wealth and eventually the ones left with all the wealth will close off their walled garden and start hashing it out amongst themselves. It's happened before, and this time they likely have the resources to actually keep the unwashed masses at bay.
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