- Friend of a friend owns a small chain of grocery stores in New Jersey. A few years ago, when Amazon got into groceries, he changed his mind about investing in the growth of his own business. He started buying Amazon shares with his investment capital instead. He saw what happened to Circuit City and Tower Records, Borders and Barnes & Noble. So he bought some Amazon and then he bought some more.
This wasn’t retirement investing. This was something else. What should we call it? Disruption Insurance?
I don’t know. Anyway, long story short, Amazon is up over a thousand percent over the last ten years, and <jersey accent>he don’t need the stores no more.</jersey accent>
I'm completely convinced existing AI could replace my job with perfect satisfaction. The only reason it hasn't is the cost of the custom software is more expensive than the salaries of a few niche employees. I would bet that twenty five years from now, there will be half as many engineers doing what I do. They'll mostly be baby sitting the automation and interpreting results for other humans that have an interest. Twenty five years after that, both the engineers and the people who wanted to hear the results from a human and not a computer will be gone. And it will be the money that drives each change.
I'm still unconvinced that many of our problems couldn't be solved with some innovative tax solutions. I see no reason that this tech revolution should be any different than any other in the past (i.e. it increases economic opportunity for the vast majority of people over time), but 4,000 Uber employees making boku bucks while 2,000,000 Uber drivers starve is an invented problem, and thus can be solved by invented solutions. Wealth is filtering upwards for a variety of reasons, but the onle thing all of those reasons have in common is that the law currently allows or even encourages it. Laws aren't immutable. What we need more than anything is bold, new political leadership (on BOTH sides; as crazy as GOPers are, Dems are ossified dinosaurs who need to go away fast).
Key phrase: over time. If you fear technology, you're a Luddite. If you're a Luddite, you were a protected trade at the turn of the 19th century that saw their profession destroyed. And lo and behold this led to mechanization and a growth of output and the whole of the modern era etc etc. It also led to 120 years of Dickensian nightmares and a slum class unprecedented in Europe. Everyone fawns about the Victorian era without paying lip service to the nasty, brutish and short lives of the 95% of people who lived it. The problem with invented solutions is they have to be implemented and they generally don't favor the rich. And, as the rich tend to make the rules, they aren't immutable per se... but the natural tendency of culture is towards a Dore woodcut of hell.
The first American retirement system – available only for gun fighters – a colonist in Massachusetts picks up his arms and goes off to defend his settlement against the Indians. They chop off his arm, rendering him unable to participate in the only form of labor that existed in those days (manual). He can’t build shelters anymore, raise animals or till the soil. So the colony takes up a collection, in the form of taxes, which enables the wounded fighter to retire and continue to support himself and his family. You know who collected these taxes from the colonists? Usually the guy himself. True story. If we’re following history, our adjustment to our robot overlords, and our new jobs, may be similar to our wounded fighter. Albeit we should adjust faster than he did. We have much better modes of communication. Maybe basic incomes? Seems a natural progression of social support.
I really want the basic income wonks to be right. I really want that to be a good solution. The first problem you rarely see addressed is "where's the money come from?" 90,000,000 = working-age Americans $15,060.00 = American federal poverty level, 2017 $1,355,400,000,000.00 = poverty level basic income for working-age Americans $824,000,000,000.00 = 2017 federal defense budget $3,210,000,000,000.00 = all federal taxes collected in 2017 So. Assume we're doing everything exactly the same, except we're gonna add basic income of "poverty level" for all Americans. We're talking a 50% tax increase (and remember, we're running a $400 billion budget deficit). And yeah - clearly it isn't that simple. But also clearly, "poverty level for every working-age American" isn't what most people have in mind for "basic income." it's not a problem so obviously intractable that it should be dismissed out-of-hand, but it's a long way from simple. The next problem is that economies are based on scarcity, and UBI is based on abundance. That's not to say it won't work, but it would also upend a bunch of shit. There have been promising experiments but economics experiments in general have a bit of a checkered history when they're extrapolated out to the economy. Dunno. It seems like it would solve a lot of problems but I haven't seen too many in-the-weeds analyses on UBI.Maybe basic incomes? Seems a natural progression of social support.
I always assumed it would be something like earned income tax credit, or supplanting existing welfare models. I don't think your arithmetic accounts for that, and assumes that every working class person would receive a UBI payment, but maybe I'm reading it incorrectly. Like, why would I, for instance, with my full time job and decent income, get a basic income on top of that? The answer to your question, for me, has always been: I would get taxed and it would go to those out-of-work or under the poverty line, and I would be able to take advantage of that if I were in either of those two categories.
You can go one of two ways: You can give it to the people who can't earn enough to not need it. let's make it a nice livable number like $30k. That's half again more than SSDI, which averages closer to $1100 a month. I know a guy trying to live on $1100 a month; it ain't pretty but regardless, where does the cutoff happen? 'cuz it's gonna be a cutoff. And at that cutoff, there will be a big angry discontinuity between "low-end job" and "job not worth taking" which will of course go to non-citizens who can't qualify for UBI. If UBI gets you $30k a year, what kind of job would you take for 38? 40? 50? 70? If you can scrape by doing nothing for $30k or work 90 hours a week filing TPS reports and spending three hours in traffic for $60k, are you still going to do it? How 'bout $90k? How 'bout $120k? Or you can go like the Alaska Permanent Fund where everybody gets $2,072 a year. And where everybody pays $9 for a Big Mac combo meal. The APF basically pays the price difference of a big mac a day... much like the price of a popcorn and a coke is pretty much the price of a movie ticket. Your understanding of UBI isn't dissimilar from welfare - we make enough to not want to qualify for it. But we can all agree, I think, that UBI is supposed to be more than welfare. It's supposed to be more than the pathetic food stamp existence we expect our poor to grovel for. And if I'm an employer paying my employees $50k a year, and the government is suddenly giving them $30k to stay home, how can I not be expected to raise my salaries to $80k a year? And by the way, I'm paying tax for that $30k to stay home, both business and personal, right? So really, if I'm an employer I'm now paying an additional $60k to keep every $50k employee working. UBI is a system of wealth redistribution. I think everyone can agree on that. it's the nitty gritty that gets ugly, and that's usually where the UBI proponents start shining it on.
To what degree do you agree with this article? I thought you made an argument against job automation dooming us before. If I were to look into my crystal ball, I think structural unemployment will increase but not to the point where it will break society or the economy.
I think the middle class is getting squeezed like a grape, and I think "automation" is an easier bogeyman to point to than "elitist economic policy and a fundamental societal structure that defaults to feudalism unless carefully tended." Less flippantly, I think fundamental value theory points to the overvaluation of FAANG stocks. I think castle in the air theory says that if you can sell it for X, its value is X. And I think everyone trying to retire, save for college, pay for a pension, you name it, gives two fucks about theory. They see FAANG going up and they know that they need to beat 1%. So if they're gonna beat 1% by following the other lemmings off the cliff, they'll do it. After all, the money's good and if they all lose their shirts together, nobody's to blame. I keenly remember listening to people commiserate over their dotcom craters in 2000. they weren't retiring for another 20 years so it was an abstraction... an abstraction they could have in common. I do think that we'll remember things like "retirement" and "the middle class" fondly when I'm in my '80s. And by "we" I mean "America" and by "America" I mean "everyone who didn't manage to grab the top rung before it was out of reach." The "go big or go home" window is closing for most Americans and I think they sense it subconsciously even if they don't grasp it intellectually.