A Possible Future: Automation Shifts The Economic Paradigm

In exploring possible futures, we give ourselves an opportunity to shape them. With all the existing and emerging science and technology building blocks converging with domains like society, the economy, and geopolitics, predicting the future is impossible. But we can look at possibilities and what they mean to our future. One great recent example was described in an article by Tristan Greene. In looking at artificial intelligence and related automation, Mr. Greene focused on how automation could turn capitalism into socialism. This is not a political discussion, rather, it is following a thread to a logical conclusion. In this case, the impact of automation on the future of work. Mr. Greene said:

There can be no doubt that automation is the future of work. There’s plenty of debate as to what extent AI will displace workers in the near and far future, but the general consensus is that blue collar work is an endangered species. It’s only a matter of time before robots can perform skilled human labor better and cheaper than we can.

Tristan Greene

The article leverages one of my favorite approaches to understanding the future – Learning from History. We travel through the early nineteenth century and the factory-driven blue collar worker employment boom, which built the early foundation for the American dream. We then travel to the end of the 1970s, when the dream died for millions as manufacturing shifted to low wage countries. From there, the article moves to current day with this statement:

When automation technologies become robust enough to replace blue collar workers, they will. This is the logical evolution of labor outsourcing.

Tristan Greene

There is a lot of debate about that statement, as many believe that automation will work hand and hand with humans, not displace them. Here is where history is very instructive: whatever could be automated, was automated. Given this, what is the link then between the future of automation and the economic paradigm? The author argues that although displacement ravaged cities and livelihoods in the 1970s, the economy kept growing on the back of credit-fueled consumer spending. But as instructive as the past is, the present can be prescient. Mr. Greene calls COVID-19 “a sort of dry-run for the automation economy.” Said differently, COVID-19 and the displacement of millions of workers in a short period of time may be a foreshadow of things to come:

If US companies shift to automation with the same abrupt callousness as their predecessors chose to outsource American labor, the banks won’t be able to save the economy by loaning us all money like they did in the 1970s. The average American already carries about $90K in debt.

Tristan Greene

In the present, stimulus payments in the United States allowed those that lost their jobs to put money back into the economy. That stimulus was driven by an extreme event. What happens if the event is the slow, then sudden elimination of jobs to automation? That is the linkage to our economic paradigm. If the technology giants have maximized profits through automation, but workers are a casualty, who will buy their products and services? If credit is not the savior that it was in the past, then it is not in the best interest of these giants to automate their way to a future without consumers. So, it could come down to choices: do not displace workers through automation or maximize profits and be taxed accordingly. Those taxes then form the foundation of a universal basic income that allows consumers to sustain themselves. In this possible future, what is the new economic paradigm? The author calls it corporate-friendly socialism.

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