If the Robots Outdo Us

A while back on Facebook, or maybe it was twitter, someone asked what would be left for our own lives if artificial intelligence ever came to exceed our own.

Or similarly it could be asked, if the robots ever became better than us at everything, what would be the point of life?

I don’t know the limits of artificial intelligence, but one answer to these questions is that we would be freer to focus on learning, exploration, self and group development, social interaction and play. If these robots ever became so amazing that they could compose better music than us, create more captivating movies, engineer sturdier bridges, devise smarter phones, play a more riveting style of football and produce superior widgets of all kinds in next to no time, then by learning from the robots, their activities and their output, we could be educated in all sorts of ways that would enable our own human improvements. We might never match the robots, but our own understanding and appreciation of life and the universe would expand tremendously.

Such a prospect need not be daunting so long as we manage the social transition. It would be necessary either to disassociate income from labor time or to re-envisage the nature of paid employment to encompass a far richer set of human activities.

If the transition can be accomplished, the prospects seem bright.

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28 thoughts on “If the Robots Outdo Us

  1. Increased leisure supplies time for increased creativity and increased exploration.

    No worries. Humans will be fine — as long as the distribution problem is cleared up. Otherwise.….

  2. That’s an interesting question.

    I’m not sure if you guys have noticed this or not, but from observing myself both in times where I have been working (paid employment) and times where I’m laid off or injured that the whole concept of ‘idleness’ takes on a different meaning – in other words, when I am working my butt off (because i’ve been taught idleness is bad), all i can think of is how can I find a way to retire early, and yet when I am unable to work and I’ve been told I need to rest, I can’t sit still, I feel I need to be busy, and it drives me mad!!

    Provided I am not some freak and what I observe in myself is somewhat the general feeling of most people, then it might not be so much a matter of whether or not AI can even exceed our intelligence or not but rather, can we change our attitude to idleness? If we begin to think of idleness as good, it may actually promote far more productivity in us than we can currently imagine, and not from a quantitative perspective, but a qualitative one, pretty much in line with what you said above Peter about how people could spend their time. This means we may not need AI to achieve this, but to challenge a belief that was created at a time when England was ravaged by the plague and population shrunk massively, but which still persists today for no real valid reasons.

  3. When Native Americans on the West Coast invented the fish wheel It allowed more leisure time. The fish caught by the fish wheel were shared with the community, so everyone benefited. Wealth accumulation was frowned upon, and the Natives held “potlatch” ceremonies to give away their wealth. The person who gave away the most of his possessions was held in the highest regard.
    .
    But when a capitalist invents a fish wheel, all the benefits accrue to the capitalist (in the absence of a union or a pro-labor government to redistribute the fish) and some people become involuntarily unemployed. The fish are sold to rich people far away, while poor locals do without. Perhaps some of the poor locals will find a job in the service sector, cleaning the fish wheel owner’s toilet.
    .
    Of course there are policies that might address the problems of unemployment and distribution in a capitalist society, but the people who run capitalist societies are typically not interested in such policies because capitalist societies tend to be run by people who believe in capitalism. As Erich Fromm pointed out, economic systems, value systems, and political systems tend to be linked. If you embrace an economic system that says selfishness is natural and good, that’s probably going to carry over into your values and your politics, and you may not lose a lot of sleep over “public purpose” or fairness.
    .

  4. Such a prospect need not be daunting so long as we manage the social transition. It would be necessary either to disassociate income from labor time or to re-envisage the nature of paid employment to encompass a far richer set of human activities.

    If the transition can be accomplished, the prospects seem bright.

    I like the way Spartans supposedly answered a Persian threat: “If…”

  5. Tom Hickey: just a slight modification: the issue is not the distribution problem per se, so much as egalitarian CONTROL over the means and outputs of production.

  6. What’s being missed here is that our society going through a technological revolution as life-changing as the earlier industrial revolution (that moved us from an agrarian to industrial society), but whereas that one automated only manual labor, this one automates intellectual labor. Just to emphasize the enormity of this change, let me make a flat statement that will almost certainly be disagreed with (and then buttress that with some logic to be challenged).

    THERE IS NO JOB TODAY THAT CANNOT BE AUTOMATED

    First, accept that intelligence is a combination of memory, deductive reasoning and inductive reasoning. If that’s not acceptable, come up with a better (usable) definition. Then understand that computers have proven to be superior to humans in both memory and deductive reasoning. That’s been obvious since Watson and such machine-learning algorithms and resources are continually improving. Then accept that most paid work requires (mentally) no more than memory and deductive reasoning – and what little inductive reasoning is required can be provided by one human working in cooperation with many robotic entities. At this point it should be obvious that we’re facing an irreversibly shrinking job market. A counter-argument is that the technology will produce new kinds of paid work – but in that case, the basic kinds of such work should be describable – and, most importantly, an explanation offered as to why this new work isn’t as susceptible to automation as was the old work.

    Just because a job CAN be automated doesn’t necessarily say it WILL be. However,when the machine can provide a product/service at lower cost and/or better quality than can the human, competition dictates it WILL be.

  7. I would agree with this as a generality.

    The basic principle is that if effectiveness is equal to or greater than the existing process, then the more efficient process will replace the existing process over time as more efficient firms out-compete less efficient firms.

    This is a generality, however, and many other factors are involved that influence the process, such as asymmetries that result in imperfect competition, non-economic factors such as preference for human interaction, and transaction costs.

    So the generality needs to be modified by context.

  8. Tom,
    So do you or do you not believe in a ‘irreversibly shrinking job market’? If not, why? Which of my logical steps would you challenge? If so, what do you see as magnitude and rate? I would not be surprised to see 90% of non-government paid-work gone within 25 years.

  9. I am hoping that there will be an irreversibly shrinking job market to the point that human labor is at a minimum.

    This will represent increased opportunity for leisure, which is the basis for culture.

    This would also imply a shift in economic systems based on Marx’s “guiding principle that the “material forces of production” condition “the relations of production” on which the social and political superstructure of a society is erected.

    This would signal the potential end of capitalism and the rise of its dialectical replacement.

    See, for example, PostCapitalism by Paul Mason review – a worthy successor to Marx?

    “Mason doesn’t have the answers – he is not even close –, but he is asking the most interesting questions, unafraid of where they might lead.”

    The key point is that when work becomes unnecessary, so does capitalism, which lives on the surplus value as economic rent created by wage labor and extracted through ownership of capital. End the need for wage labor and end capitalism by making capital redundant.

    What will replace late-stage capitalism? To be determined. Are we actually in late-stage capitalism? Also to be determined. But there are reasons for thinking that we may be approaching this watershed transition.

  10. If not, why? Which of my logical steps would you challenge? If so, what do you see as magnitude and rate? I would not be surprised to see 90% of non-government paid-work gone within 25 years.

    To answer the specifics of the question, I intimated in the original post that the thesis is based on a generality that assumes near perfect competition.

    In a nearly perfect competitive environment with minimal asymmetries, this could happen quickly, perhaps as quickly as a couple of decades. It’s difficult foreseeing the results of technological innovation owing to emergence. So far, change as often come about much faster than expected or even imagined. So I would not venture a guess.

    However, the world in which live is far from perfect competition and infected with huge asymmetries socially (class), political (power) and economic (endowments). Vested interests cannot be expected to go quietly.

    The historical dialectic is often messy and sometimes gets ugly.

    This is especially true when a phase transition from one state to another is involved and here we are potentially looking at major transition comparable to the transition from the agricultural age and feudalism to the industrial age and capitalism. Now we seem to be in the transition from the industrial age into the information age.

  11. Tom,
    I’ve read your posts, the Mason critique & the Marx preface. Thank you for that. However, I come away with the feeling, why do economists work to make things so complicated? Let me explain where I’m coming from. I’m an engineer and entrepreneur. I bootstrapped a company (google Ann Arbor Terminals) that introduced the first computer display terminal, which I operated from ’70 to ’87 – and then counseled entrepreneurs worldwide through a site, TENonline.org, helping them do what I did. A couple of years ago, concerned with the job loss I saw resulting from digital technology, I subscribed to The Economist to see how economists planned to deal with it. To my dismay, I found there were no plans (or even recognition) and became active in the magazine’s Comments to try to add some understanding of digital technology. In parallel, I’ve been reading everything I can find dealing with macroeconomics and find most of it gobbledygook (equivalent to counting how many angels fit on the head of a pin).

    MMT caught my attention because I had already concluded that an earnings statement made sense for a national government but a balance sheet didn’t (ie, that money had no value other than as a medium of exchange). But the jobs guarantee proposal doesn’t sound workable (beyond a short-term fix). I’d like a discussion with you because you seem past even conventional MMT understwanding, but you’re using words and phrases (eg, asymetries that result in imperfect competition, leisure is the basis of culture, when work becomes unnecessary…) that carry no meaning for me, leaving me wondering if there’s a level of understanding I’m missing. Is that possible?

  12. Tom,
    I’ve tried replying but my post isn’t accepted. However, when I post this, it is. Is there a message length limit here? (My post isn’t that long.) I’d like to talk with you further.

  13. Hi Edward. Your comment got caught in the spam filter for no good reason that I can see. Sorry about that. It’s posted now.

  14. “But the jobs guarantee proposal doesn’t sound workable (beyond a short-term fix). I’d like a discussion with you because you seem past even conventional MMT understwanding, but you’re using words and phrases (eg, asymetries that result in imperfect competition, leisure is the basis of culture, when work becomes unnecessary…) that carry no meaning for me, leaving me wondering if there’s a level of understanding I’m missing. Is that possible?”

    I’m sure it would be fruitful to pursue this. My background is in philosophy, and I came to economics first through trading, and most recently asking what happened at the time of the global financial crisis when most economists were flummoxed. That’s when I stumbled on MMT.

    My study of social and political philosophy convinced me, as it did philosophers Adam Smith and Karl Marx, that it is necessary to understand economics to approach social and political philosophy critically.

    Early on in commenting on economic blogs, Professor Nick Rowe told me he could not understand me since I was not using economic terminology and that I should spend the weekend reading an intro to economics. So, I realized that I had to learn how to talk to economists using their language. This is an economics blog.

    If I am beyond MMT in some ways, it is on account of my approaching the issues chiefly philosophically rather than economically. So I see things through a different lens that economists. Business people, entrepreneurs, and engineers, etc., do too. In my view that makes up for some of the lacunae in the approach of most economists since most see social and political issues chiefly in economic terms.

    From the vantage of the history of ideas, the chief question of social and political thought is, “What does it means to live a good life as a person in a good society.”

    I would say that the chief question of most economists is, “How do we make capitalism work efficiently and effectively as a social and political paradigm, given that there are tradeoffs?”

    I view this a subsidiary question in the larger design problem.

    In one sense the design problem is an engineering problem since it involves material systems.

    Philosophers would caution that while this is a necessary, it is not sufficient.

    An economy is the life-support system of a society, and a society is a social and political system involving many more factors and some of those factors are more important and need to be prioritized over the economic.

    Assuming liberalism as most in the West do, skewing priorities results in paradoxes of liberalism that result in illiberality. Neoliberalism is a social and political theory that prioritizes economic liberalism.

    This the most pressing case it point now since it involves most of the issues that are vexing humanity globally. The elite are freaking out that the liberal world order that had been securely in place is now unraveling owing to internal contradictions that are manifesting (as Marx’s dialectical approach to history would predict).

    So I would say that if we are discussing economics then we must use economic terminology to be understood. But we should not let conventional economic terminology skew the debate either, since that terminology is loaded in favor of a particular viewpoint that is based on interests, mostly vested.

    Regarding the job guarantee, the key point is that the choice is between a buffer stock of employed (JG) and a buffer stock of unemployed. The latter is inefficient and therefore costly not only economically but also in terms of human well-being. A buffer stock of unemployed is one of the foundations of modern capitalism.

    Substituting a buffer stock of employed would remove one of the corner stones of capitalism not only as an economic system but also a foundational factor in the social and political system based on liberalism. It would increase freedom. It’s a game-changer.

    While the MMT, including the JG, is an approaches within capitalism, this is a practical step that could be accomplished that doesn’t require reconfiguring the existing system. It’s not only doable politically, but also it would go a long way toward resolving issues involving sustainability, for example.

    So I see this as a next step rather than an ultimate end, which under liberalism is expanding freedom for exploration and unfolding inherent potential. This necessitates increasing distributed leisure, which technology makes increasingly possible.

    The challenges that humanity faces today requires a comprehensive solution. This necessitates a correct view of circumstance and possibilities in order to state the design problem and propose design solutions for debate.

    It’s an engineering problem in so far as material system go, but it is not exclusively an engineering problem, since the chief issues are human. Here I think Marx limited himself by assuming materialism.

    Maybe a useful analogy is using engineering in architecture, which is concerned with using space for social purpose. A building is for people, and buildings are situated in an environment.

  15. Tom,
    I like your central question: “What does it means to live a good life as a person in a good society.” In the broad context, that’s what made me start looking into economics. And I understand the terminology problem – not just in understanding, but internally in shaping the goals and limits of that understanding and externally in conveying to others how that understanding may affect them.

    I find it interesting that you were able to get a working understanding of economics with a little reading, whereas that was much more difficult for me. In thinking about it, I suspect that’s because the vocabularies of philosophy and economics are much more human-oriented, whereas mine are much more mechanical or technical. If economists use a word like “liberalism”, you already have a broad definition of the word and just have to fine-tune it to the way economists (or a specific economist) are using it. I have to go to a dictionary (or Wikipedia) where I find philosophical, economic, political, religious definitions of the word and seemingly unlimited nuances of each. So to me the word is meaningless as I’m not equipped to ferret out the real meaning the user intends. (And to complicate matters further, so many of the words used in economics carry emotional contexts far beyond any literal meaning.)

    The approach I had (and still have) to take is to wait for someone to express a position that appears challengeable and then challenge it with common words. In the subsequent discussion (working to avoid it becoming an argument), I can generally home in on what that person really means and either learn from it or refute it or mutually modify it. Although more laborious than book-learning, it’s had the advantage of allowing me to quickly screen through much of what I perceive as “noise” (elaborate attempted logical or staistical trees that on reduction to common language obviously defy basic common sense) and avoids many of the emotional biases I’ve found all too common. And, over time, it’s allowed me to construct common language explanations of relatively complex issues (like the automation/jobs explanation I offered earlier) that seem to get a sensible understanding across to most people relatively quickly.

    I’d very much like your assessment of this approach as I’m too close to it to judge beyond “it seems to work for me”.

    Where I’m torn on the JG vs UBI issue is do people really need to be given work? Are they incapable of coming up with productive work themselves? And what do we mean by “productive”? If they perceive it to be productive (to them), isn’t that enough? That work must be supplied by others seems like such a dismal view of human nature. And it’s certainly not what I saw working with young entrepreneurs over the years. The obstacles they had to overcome – not from the economists’ view of an objective to make money, but simply to do their own thing – was incredible. In some countries, not only their birth but government and most of society seemed to be against them. That’s the view of human nature I’d like to believe, but so many view that as hopelessly idealistic. How does one pursue a rational assessment of that issue?

  16. I prefer the method you propose since it makes the debate accessible to all. So-called experts often either couch their expression in jargon understand only in the field, or they use highly technical arguments that require expertise beyond the ability of most people. This comparable to medieval theological debates carried out in Latin, making it impossible for all but the learned to access it.

    That said, there is a more practical reason for resistance to expression in popular terms. It’s hard to do for most people that are not used to translating expert knowledge into something that can be understood popularly. This why a great many popularization are written by ghost writers that collaborate with the expert.

    However, this has to be done if there is going to be an informed electorate capable of making choice based on deliberation of the issues, as democracy is supposed to work.

    Moving to the job guarantee, it’s necessary to understand that three principal factors influence policy — economic growth measure by GDP, employment measured by the unemployment rates, and price stability measured by the inflation indexes.

    Most economists assume that all three cannot be addressed simultaneously, only two at most. The current policy is to address growth and controlling inflation using employment as a tool, based on the assumption that a rising wage rate is the more pernicious negative influence on price stability.

    It is believed that monetary policy conducted by a central bank that is independent of political influence is best suited to this.

    Current monetary policy is based on a fairly complicated theory that boils down to interesting the policy rate (interest rate the central bank pays members of the payments system on excess reserves). The belief is that raising rates increases savings desire and decreases firm investment, thereby inducing economic contraction and raising unemployment, which decreases wage pressure, relieving inflation. This results in a chronic unemployment rate higher than it would need to be if the assumptions are wrong, This results in a chronic buffer stock of unemployed, which is economic inefficient since it idles available resources.

    The reality is that analysis reveals that the assumptions are indeed wrong, but that is a somewhat complicated argument that is probably not simple for most voters to grasp, even if reduced to popular expression.

    The reality also is that conventional economists and policy makers are unfamiliar with financial operations involving money creation.

    When these are understood it become obvious that currency issuers that are “sovereign” in the currency (needs explanation, too) can always afford to employ available resources that the private sector is unable or unwilling to utilize. There is not reason to run under optimal capacity and full employment for financial reasons as the “sound money” and “fiscal discipline” crowds assert.

    Nor need there be an issue with inflation (more explanation needed, some of which is a bit wonkish).

    So the real issue with the JG is neither affordability for the US, nor how to implement it — it’s not rocket science. There are many options that should be under discussion rather than dismissing them based on erroneous assumptions or prejudice.

    The real issue is whether it is a wise choice socially, politically and economically to idle resources unnecessarily by resorting to a chronic buffer stock of unemployed rather than instituting a buffer stock of employed.

    Why a JG and not a UBI. A UBI doesn’t address the employment issue. These are aimed at different targets.

    What’s wrong with a UBI. It’s demonstrably inflationary (again explanation required).

    There is no problem with combining a JG to address unemployment with an income guarantee to address welfare. These are different issues that require different approaches and they are not mutually excluding but complementary.

    But the basic income guaranteed needs to be targeted rather than universal.

    Some of the economics involved is a bit complicated and a bit even wonkish, but it can still be explained. Even if everyone can’t get the details, they can at least understand that there is a cogent explanation available that is different from what they are hearing in the corporate media.

    The problem of democracy is that most political issues are complicated. This buts them beyond the reach of most people, even though capable of understanding the details since they just don’t have the time to delve into it themselves and rely on the corporate media. Thus, most voters are operating based on ignorance at best and more likely based on persuasion. What is actually happening is that factions of the elite compete with each other for elite share, which the elite as whole attempts to maximize as a percentage of total share.

  17. In their recently published book, Bill Mitchell and Thomas Fazi cite work of David Autor, who questions the idea that everything can be automated. Some of this material is summarized by Mitchell in a post at billy blog, which provides a quote from Autor:

    there are many tasks that people understand tacitly and accomplish effortlessly but for which neither computer programmers nor anyone else can enunciate the explicit ‘rules’ or procedures.

    A full reference is provided in the linked post:

    Autor, D. (2015) ‘Polanyi’s Paradox and the Shape of Employment Growth’, Federal Reserve Bank of St. Louis: Economic Policy Proceedings: Re-Evaluating Labor Market Dynamics, 129-77.

    ‘Polanyi’s Paradox’ is that “we can know more than we can tell”.

    The reference provided is:

    Polanyi, M. (1966) The Tacit Dimension, New York, Doubleday and Company, Inc.

    Needless to say, I don’t know the limits of artificial intelligence. Autor may well be correct, but one question mark I’d have with his view is that capitalism engenders a tendency toward deskilling. This can occur not only by deskilling existing production processes but by opting for production processes that are amenable to such deskilling.

    For the sake of argument, suppose for a moment that it does prove possible to automate all necessary roles. There would still be the question of whether we will want jobs.

    Even if we share the enthusiasm of some for the entrepreneurs, do we really want everybody to be entrepreneurs? Even people who don’t want to be entrepreneurs?

    (By the same token, since we are temporarily considering a world in which full automation is possible, it could equally be asked, should we really place the same importance on employment as we do now? Even for people who don’t want jobs?)

    An entrepreneur utilizes resources (including other people’s labor-power) that are not the entrepreneurs’ resources to utilize except to the extent that society grants such a right to them. Who is making this decision? The robots? Should we cede democracy and governance to the robots? Presumably we would send our votes to the robots. Who, then, does the research to guide voting on the various matters that come up? If it is the robots, who decides what the robots prioritize in their research? Us or the robots? If us, how do we know what should be prioritized if we are not familiar with the best research? And so on.

    Not just entrepreneurs, but anyone who actually tries to do anything requiring resources is making use of something that is not really theirs to make use of unless, and to the extent that, society has granted them this right.

    Two questions seem to be:

    (i) To what extent should the receipt of *income* be made conditional on employment?

    (ii) To what extent should *human activity* be shaped within formal employment?

    If Autor turned out to be mistaken, and all necessary roles could be automated, then I suspect many would agree that receiving an *income* should not be made contingent on employment. In such a world, people taking jobs (provided by a JG) would be doing so strictly because they wanted jobs, not because these roles would be any more necessary than roles played by people opting out of the workforce.

    Although I would certainly share that view, it would be possible to take a different position. For instance, it might be argued that taking a job – even where people don’t want one – is necessary because of positive social effects, including on the mental health of individuals possibly coerced into taking employment, and the spinoff effects of this on others around them. Such a view might have more merit in our current institutional framework than in a more rationally organized society, but it would remain a possible view to take.

    Even if it were deemed that income should not be made contingent, in any degree, on employment, there would still be the question of the extent to which human activity should be shaped by employment. For example, how is space exploration to be conducted? Would it be anything goes? Or perhaps it would be confined to approved or regulated activities, but otherwise left outside the structures of a job? Or perhaps some of this activity would still best be codified in employment roles?

    In a world where anything necessary could be automated, jobs might not even be paid a wage. Income might be completely separated from employment. Yet, if a person wanted to engage in certain activities, this might still only be permitted within the structures of a defined role (a job).

    The above has been on the provisional assumption that Autor will turn out to be mistaken. If, instead, Autor turns out to be correct, and some necessary roles simply cannot be automated, then a much stronger case can be made for making income contingent on employment. One argument would be: if it is necessary for some people to work *within a job*, why should others be exempt? The relatively free activity of some can only occur because others must take jobs that need to be done.

    It is possible, of course, to take a different position here also. My own view has been outlined in the past. (For anyone interested, there is a Job & Income Guarantee category of posts on the topic.) Briefly, I favor a combined job and income guarantee program. If people were allowed to self-select into guaranteed jobs or basic income, at least those opting for jobs would be doing so of their own volition, faced with the same options as those who chose the basic income.

    But whatever our own views, so long as some jobs are necessary, there is likely to be considerable and understandable opposition to basic income.

    Assuming a job guarantee were in place, one logical position would be that, until all roles have been made unnecessary, receipt of income (by those able of mind and body) should be contingent on a minimum labor-time commitment. I would not object to this principle, provided everybody (able) was held to the same requirement, with no exemption for the wealthy.

  18. Imagine a fully automated world with only very few slots for humans being. Everyone gets a “citizens’ dividend.” Those wishing to occupy those few remaining slots must bid against each other from their dividend to win them. Or maybe they are distributed by lot among those who volunteer.

    Makings of a novel?

    Economics tends to focus on states and determine causal factors, holding the system steady (cet. par.)

    But business and military strategy is planned on a “chessboard” that takes all concievable contingencies into consideration and prioritizes them on probabilities. But even the outliers need to be considered and address, because of surprise.

  19. Tom, Peter
    Wow! I didn’t intend to trigger two extended treatises. I’m pleased that Peter has found it worthwhile to jump in. There’s so much material here I want to re-re-read and respond to that it will take some time – and I hope maintain some interest.

    Tom’s post first. I’m pleased that you affirm my approach to try to reduce technical and economic concepts to common language. I’m a firm believer in the KISS principle (Keep It Simple, Stupid). That’s served me well through the years (and every time I’ve encountered difficulties, I could trace the problem back to ignoring it). Your first paragraph expresses perfectly my feeling toward economic jargon and arguments.

    But then you go on and engage in that same abstraction in discussing the JB vs UBI issue, bringing in the complexity of monetary policy. Let me explain the simplicity that I see and open it to your challenges. First, my anchor in understanding macroeconomics is the federal earnings statement – GDI on the income side and GDP on the expense side. It uses accrual accounting and even includes a Statistical Discrepency account to assure the two sides are reasonably double-entry tracking.

    The earnings statement is a fundamental business anchor. One could not run a sustainable business without it. With the proper accounts (which obviously depend on the individual business), one can tell everything (economic) they need to know about the business operations – and through understanding the accounts, see what their options are in correcting any undesired trends. The business needs a balance sheet to track its status (its reserves against error) but I see no need for a balance sheet at the federal level since it can use its fiat currency to bail itself out of any national error.

    In my view, the national government is just a big business. It needs a manager to manage its economics – that manager needs to be apolitical – the legislative branch of governement should play a role similar to the corporate board of directors – so a central bank seems to fit the manager role. So why aren’t they using their earnings statement the same as any competent business manager would? It seems to me their basic role is simply to see that the revenue/expense accounts of the major sectors – households, business and government – stay reassonably where the legislative branch wishes them to be – and they have virtually infinite sub-accounts through which to effect those wishes. So tell me why that can’t work – and if it can, why the need for all this arcane complexity?

    “What’s wrong with a UBI. It’s demonstrably inflationary”. WHY? Obviously if government doles out a pile of money the recipients will tend to go on a spending spree – and that’s inflationary. But if it doles out enough money to ensure sustenance, how could that possibly be inflationary? And what possible difference could it make whether the amounts flowing into the GDI’s “Compensation of employees paid” account come from private employers or the government so long as the amounts are comparable?

    I’ll leave that here and go on to Peter’s post (dealing with the effects of automation). My position is succinctly presented in my earlier “THERE IS NO JOB TODAY THAT CANNOT BE AUTOMATED” post. There are just two assumptions there: what constitutes “intelligence” and what part of that intelligence paid work requires. Given those two assumptions, doesn’t my conclusion logically follow? I’ve had a number of opportunities to discuss that position with both digital technology academics and those actively working in the field with relatively equal agreement and disagreement – but significantly, no one has refuted it or offered modifications to the assumptions. I’m familiar with Autor’s work. There are a number of assumptions in his work that I see as flat-out wrong that I would love to discuss with him (in a serious discussion), but to date I haven’t been able to find the opening.

    “Since we are temporarily considering a world in which full automation is possible…”. Note that I am not arguing that FULL automation is possible. Computers are incapable of performing inductive reasoning and, to date, I’ve seen no credible approach to endowing them with that. (Such a breakthrough MAY come from current neural research, but so far it hasn’t – not even the beginnings of an understanding of inductive reasoning in the human brain.) Nor am I arguing that all work WILL be automated – only that is CAN be. So let’s continue from there.

    I haven’t yet read the posts in your Jobs & Income Guarantee category, but will when I finish this post. So for now lets just deal with the one issue: “so long as some jobs are necessary, there is likely to be considerable and understandable opposition to basic income.” WHY? There’s no opposition to billionaires having more money than they could ever spend – and there’s opposition by a working neighbor to one not working?!! Might that be the result of the one neighbor HAVING to work for his sustenance resenting that the other doesn’t? If he didn’t – if it were his choice to work – would that opposition still exist? I haven’t had a job in the >30 years since I wrapped down my business – and I don’t feel resentment, even by neigbors and acquaintances who don’t know why I don’t do a 9-5 commute. And I’ve never found a lack of work I want to do – my ToDo list is ALWAYS much longer than my available time.

    I’ll terminate this here – and look forward to responses to some of the positions I’ve taken in this post. In the meantime, I’ll be reading the category posts Peter pointed me to.

  20. @ Edward

    Let’s imagine an end state in which all work is automated, so here are no work is required This is a material utopia.

    Some fundamental questions suggest themselves.

    For instance,

    Is a material utopia necessarily a human one?

    How is optimal output determined given the planet’s finite resources and expanding population?

    Who owns the means of production?

    How is distribution determined and who determines this?

    Another fundamental issue involves getting from here (present state) to there (state) in a dynamical world characterized by not only risk but also uncertainty, rife with challenges in addition to opportunities and in which every choice involves tradeoffs and opportunity cost.

    What are the options for getting from the present state to the end state?

    Is there only one to get there, or are there many?

    How is the optimal path to be determined considering that the starting point is a monetary production economy with distribution based market prices in market operating under imperfect competition owing to asymmetries of class, power and wealth?

    What are the contingencies that need to be taken into account? What could go wrong given the assumptions of different scenarios?

    This involves social, political, and economic issues, that involve many other categories. It’s neither a business problem, nor an engineering problem. It’s a human problem and humans seldom agree for a variety of reasons and are some are willing to fight to the death over disagreements. This includes many of the people in positions of power and authority.

    Some of us think that it’s probably best to think in terms of one step at time, that is, iteratively and incrementally, and also in terms of policy, strategy and tactics.

    This involves addressing current issues in a way that is practically achievable that advances the game strategically and tactically toward policy objectives that present policy makers may not subscribe to and actually oppose. At some point they will have to replaced. How does that figure into the plan?

    Some of this involves doing the numbers. This what economists are experienced in doing with respect to economies. Economists are not in agreement about their discipline. Conventional economists are committed to the status quo.

    Heterodox economists are generally the one that have considered revising or overhauling the status quo. MMT economists represent a sub-school on one strand of heterodox economics.

    Approaching this as a non-economist I came to realize that without understanding the background in economics, the social and political issues I was concerned with could not be fruitfully addressed, since the economic infrastructure of a society is so dominate an influence on virtually all aspects of life in the society and change can only take place relative to it.

    As an entrepreneur and engineer, I am sure you understand the importance of models in rigorous thinking. So I don’t see now it is possible to approach this without recourse to financial and economic models and their interfaces, as well as social and political models and there interfaces in terms of the society as system. With the extent of globalization, this needs to be integrated into the global economy.

    After the rigorous thinking is far enough along, it has to be translated into terms that voters can understand to be viable politically. There also needs to be a strategy for moving the ball down the field politically in the face of intense opposition.

    You may think I am avoiding the question but the MMT JG is a key tactical iteration in the MMT strategy for accomplishing its policy objectives, which are oriented to making the present system work as the life-support system for the existing society without major revision and without an overhaul. MMT also provides argument why a UBI is a side-track, which is why many in the establishment have advocated for a UBI but oppose a JG. They understand the issues and the implications.

    Reading Peter’s posts on this matter and others provides insight into all this from the point of view of an economist with a gift for simplifying explanation of the complicated.

  21. “In my view, the national government is just a big business. It needs a manager to manage its economics – that manager needs to be apolitical – the legislative branch of governement should play a role similar to the corporate board of directors – so a central bank seems to fit the manager role. So why aren’t they using their earnings statement the same as any competent business manager would? It seems to me their basic role is simply to see that the revenue/expense accounts of the major sectors – households, business and government – stay reassonably where the legislative branch wishes them to be – and they have virtually infinite sub-accounts through which to effect those wishes. So tell me why that can’t work – and if it can, why the need for all this arcane complexity?”

    I can tell you why it doesn’t work now. First, ignorance and cognitive-affective bias. Secondly, social , political and economic asymmetries and differences.

    There is no magic wand to wave to remove these obstacles in liberal democracies.

    Conversely, in China the CCP can and does “simply see that the revenue/expense accounts of the major sectors – households, business and government – stay reasonably where the government wishes them to be.” But that is a different system than pertains in the West.

    According to MMT, “the national government is just a big business” is a misconception. It is the one of the foremost reasons that most people don’t have a correct understanding of the issues and how to approach them.

    National accounting does not mirror of accounting in non-government. There are important differences. Failing to understand this skews understanding and debate.

  22. ““What’s wrong with a UBI. It’s demonstrably inflationary”. WHY? Obviously if government doles out a pile of money the recipients will tend to go on a spending spree – and that’s inflationary. But if it doles out enough money to ensure sustenance, how could that possibly be inflationary? And what possible difference could it make whether the amounts flowing into the GDI’s “Compensation of employees paid” account come from private employers or the government so long as the amounts are comparable?”

    With a JG, productive contribution is involves. In a UBI, it is not. In addition, the JG base compensation serves a price anchor.

    There is no price anchor in the case of a UBI. If the UBI lifts everyone out of poverty, the injection would have to be huge and if it were not taxed away or saved, or lead to investment that expands capacity, prices are likely to rise down the line. if the UBI is not indexed to inflation then the bottom tier falls into poverty, and if it is so indexed, indexing is recognized as leading to spiraling inflation as the index rises on at upward sloping curve.

    As an economist, Peter can explain this better than I can, that is, more clearly and precisely. There is MMT literature on this but it is expressed in economic terminology.

  23. Peter,
    It’s important to your efforts to have a clear and reliable understanding of digital technology as it may affect the future job market. So a suggestion: How about sending a copy of my post to those researching the technology side of this issue saying here’s a post that caught my eye (for whatever reasons it did), what do you think of it, and see what responses you get. At worst it could gain you a contact from that discipline you could talk with.

  24. Tom,
    I do appreciate your patience – I do read every word and do my best to understand what you’re saying. You’re the only contact I have with the breadth of understanding and lack of bias that I can ask these kinds of questions of and get answers I can comnpletely trust. My main concern at this point is how not to lose you as a resource. I’m feeling that my questions are requiring far too much time from you. How can I ask questions of you that you could feel comfortable responding with shorter answers?

    For example, the first paragraph of your 25 January response was priceless. I could not have received a more clear and succinct (and useful) response from anyone.

    And I value your volunteering of the central question: “What does it means to live a good life as a person in a good society”. My short answer to that is “opportunity” – I want people to have the opportunity to do what they want (or aspire to) within the constraint of not unduly denying that of others. I don’t care how we get there – I’m sure there are very many ways – and, at 85, I’m too old to actively participate. All I want is enough understanding of macroeconomics that I can intelligently use my in-depth understanding of digital technology (which I view as revolutionary) to argue for or against proposed changes in the practice. So any advice you can offer or resources you can point me to are much valued.

  25. For me, politics, religion, economics (PRE) are reflections of triadal energies (I know that’s a meaningless term to most), manifesting through the human consciousness; limited, eulogised, dramatised, concretised, within the envelope of the personality as force (desire). This means the lower mind is involved, in which ideals are envisioned, ideas are woven into plans, and icons built; reflecting an inner and higher more natural creative reality whose purpose is not societal ‘progression’, but evolution of consciousness.

    So, from this point of view, whatever is happening in the world of PRE is dependent upon evolution of consciousness – and the content of the lower mind reflects that. Consciousness working though the mind and form of an ant, is different to consciousness more evolved, working through the mind and form of a human being; either bounded by mind (intellection), or opened to higher energies (intuition – direct knowledge).

    In the reflected activity around the world (that people assume to be reality because everyone else says so from the day they were born) the ‘I’ struggles for oxygen, expansion, meaning and recognition: – in this struggle, the ‘I’ is served.

    Rising above the personality life, as far as we may in this viewpoint at least, the fundamentals of Yoga – union of the highest in man’s nature with the lowest, and subsequent lifting of this lower nature (transmutation, transformation, transfiguration) apply; and this for the benefit of the nation, individual, and humanity as a whole; as part of something much greater. The lower world through the mind, will change, expand, vibrate to a higher key only as these higher energies work their way through. I just wanted to point this out as a major factor (in this view). This summons us all to express that which is highest in us, inadequate as it may seem.

    The question for me is not so much concern with the ambitions of the ‘I’ in humanity, but more the ‘seed of energy’ springing into life within the human heart. This energy is the only precipitation that can make fertile the human mind; turning it from the selfishness and limited vision of the ‘I’ to the evolution of the whole. This is at the forefront of events in the world today. Nothing emotional or sentimental, but an energy born of love~wisdom, unattached, free, embracing all existence – bringing with it light and a new mental orientation. The greatest sin of mind is separation because it is not a fact in nature. This must give way to self-knowledge. In such a mind there is no political, country, religious, material, social, or racial affiliation or entanglement – just a love of life and a desire to see consciousness grow in all life forms, and the personality life as gift and basis to this.

    Every day is human being day on ‘The Human Planet’ and we are privileged to be alive today – we should celebrate something that is worth celebrating.

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