The answer to the rise of automation?
by Vittorio Compagno for the Carl Kruse Blog/
The views expressed in this article are those of the author and do not necessarily reflect the views of the Carl Kruse Blog.
Image being a 16th-century nobleman, instructed in fine arts and literature, living in all the luxuries your parents could give you.
You suddenly discovered that someone called “Thomas Moore” wrote a novel about a magical island, where everyone is equal, money is not something to worry about and gold is not considered valuable.
You would be infuriated. How could it be? Your entire honor is based on that same gold! How would you differentiate from the poor?
A world where the money is just a bargaining chip, and people live as equals: this was Moore’s Utopia, and the concept of Universal Basic Income helps to get close to that.
“Universal basic income (UBI) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based
social programs that potentially require greater bureaucratic involvement.”
Source: investopedia.com
The idea behind Universal Basic Income is that everyone, as a member of society, should receive an amount of money based on what the standard of living in that country is. There have been many experiments for UBI, like the “Permanent Fund” in Alaska, where every citizen gets a fraction of the annual national oil profits.
While these are virtuous examples of how wealth can be divided more equally among citizens, the argument behind the creation of UBI is different.
Today, the argument for a Universal Basic Income is getting stronger as technology rapidly evolves. It is becoming clearer to the public that, since machines are better than us in some fields, they will soon replace workers in many areas. How will those people pay for rent and common goods?
The downside of automation
The last factory worker takes off his uniform, as an army of robotic arms, all specialized in various fields, from manufacturing to assembly, replace him. Soon people will realize that industry is going in a precise direction: automation.
The concept is simple: companies want to spend the least amount of money possible and gain the most profit. As machines get cheaper, and more accurate on their tasks, they will soon replace human labor with mechanic employment, because it costs less money.
A robot doesn’t require days off, doesn’t go into maternity, and most of all can’t complain about working conditions. You pay the machine only once, and then once in a while, you need to replace some parts, but that’s it:
it’s a deal.
Automation in factories is something that’s been going on for quite some decades really, but today, as technology runs at a faster pace, everything is happening more rapidly. The scary thing behind automation is that its application field is expanding.
Today your regular spam calls are made by a robot instead of a human, and cashiers, tax preparers, drivers, janitors (the list goes on and on) are in line to see their jobs replaced (if it has not happened yet).
Automation affected and will affect at least one-quarter of U.S. jobs that involve repetitive routines, as this study from Brookings suggests. Another one by Oxford Economics suggests that robots could take over 20 million manufacturing jobs by 2030.
What’s at stake
These losses will, in the short term, be devastating. As more people lose their jobs to automation, shops and malls will close, since fewer people will have the money to afford common goods, focusing more on survival ones.
Governments won’t only be under pressure by the public, but also by tech giants, and companies like Amazon, or Apple, who will see their profits plummet due to fewer customers.
The market works by demand and offer, but if there’s no demand anymore, the offer will crash.
A new economic crisis, worse than the Great Depression and the one in 2008, could be at the horizon.
What could save society from collapse?
The counter-argument of resilience
Resilience is the ability of a system to recover from a shock.
Many theories suggest that society will recover from its losses after a certain “assessment” period. The counter-argument of resilience comes from past human experience on new inventions.
Let’s examine that.
If you were a horse trainer during the 1930s, you would almost certainly lose your job over a short period due to the invention and popularisation of cars.
But where a breakthrough disrupted a market, one on the other side created a whole new one. Cars allowed for gas station industries to proliferate, as well as oil industries, or jobs like mechanics.
Breakthroughs have always done that, they created new jobs while making others unnecessary, that has been a truth since the invention of the wheel.
Today this semi-rule that has existed since forever is not valid anymore.
You could say that among the may inventions in modern society, only few of them disrupt the market the same way cars did. Today the platforms that use the Internet, arguably one of the greatest inventions of the last century, as innovative as they could be, don’t employ as many people.
In the 70s General Motors had 800.000 workers only in the US, giving a diner to eat to the same amount of families. Today can’t say the same thing about companies like Facebook. They employ less than a tenth of the people and make way more money.
Resilience doesn’t apply to the market anymore.
In a world where every company is getting a bigger and bigger cake, saving money on labor costs, UBI is a way for everyone to have a piece of that cake.
The concept is simple: if you are a registered citizen of a country, and you pay taxes, you can get a state subsidy, funded by either the partial replacement of the welfare system or the so-called “Robot Tax“.
The introduction of a Universal Basic Income is inevitable if governments want to save the social fabric from disrupting completely. There’s already a considerable gap between people living under the poverty line and the 1%, as stated in many economic inequality reports.
People who lost their jobs due to automation need to gain their place in society again,
With a reliable source of income they could specialise in more fields, maybe get a job again.
It also gives a good leverage against underpaid jobs because, since you already have a safe income, you don’t have to accept humiliating conditions.
UBI is the 21st century’s welfare, and in a few years it will be the only answer to the the inevitable rise of automation.
