Probable Future

COVID19, Robots, Artificial Intelligence and the future of Australian Society. 

In relation to recent comments about the Australian “economy” and the budget, it is necessary to acknowledge that the “economy” is actually the people, the citizens, of Australia. Without people, there would be no “economy” and therefor by default no need for a budget (in surplus or otherwise). Pursuing the logic of this it would seem very obvious that people are the important factor – look after people, first and foremost.

Now, I understand that many are considering the benefits of either a Universal Basic Income (UBI) or Negative Income Tax (NIT) to counteract the economic effects of the current COVID19 pandemic. There is also the effect of Robotics and the adoption of Artificial Intelligence (AI) to consider, that will also have long term effects on the economy and society (people) here in Australia.

It would appear to be indisputable that the robotic and AI future has implications not only for commerce and industry but more especially for society in general. Many of the jobs that have been lost in Australia to low wage countries will never return to these shores. The days of the old unskilled, labour intensive jobs are numbered; the mining industry has quickly adopted driverless ore trucks; there are advanced plans to use more driverless trains to transport iron ore; there are farmers using drones and driverless machinery and there are other uses of these technologies, now a reality, that were unimaginable just five years ago. 

Now COVID19 just adds to the confusion roiling world trade and the well-being of hundreds of millions of people.

The world is changing – what was, will no longer be – the status quo has evaporated. The vista of unending employment growth is no longer a likely, or even probable, future. 

While it must be acknowledged that not all jobs will be automated or impacted by AI – for those that are, restructuring workplaces, educating and retraining employers and the remaining employees to adapt to and manage the new technologies will be a necessary long term requirement. 

This is no light matter and needs to be seriously considered. If a large percentage of people in Australia  – or any country for that matter – become unemployed and are unable to see any possibility of future long-term employment, what are they supposed to do? 

The consensus is narrowing down to introducing either a UBI or an NIT.

Many, if not most politicians, and those in business may be horrified at such solutions – giving everyone, and I mean everyone – employed or unemployed – giving everyone a UBI or access to NIT. The universal basic income is already in place, as in Alaska a scheme similar to an NIT has been in place for years. 

In an economic environment that is unable to provide long term paid employment for all, there will be, as an urgent necessity - a requirement - for a population that is underpinned by a universal basic income or a negative income tax. This would open up the possibility of a life without poverty and reduce the vexed problems arising from income inequality.

The gross inequality of incomes world-wide resulting from current globalization impacts unfavourably on the health and well-being of millions of individuals (including here in Australia). Unless this is alleviated anger and frustration will consume many people and overwhelm governments. I am sure you will be aware that currently (2018 figures) the gap between the wages of the typical worker and that of the typical Australian CEO is at least 45 times the average fulltime wage. The disparity is much wider overseas. In the USA, where minimum wages are less than half of Australia’s and CEO salaries above $20 million are common, the difference is more than 200 times. This disparity is economically and socially unsustainable. 

Without some basic assistance it is suggested that people – millions of people – will swamp the Australian Government with pleas for help. If the Government adapts and is proactive it will plan for this eventuality and the only safe option is to pay everyone, repeat everyone – employed or not - pay them a Universal Basic Income or provide the benefits from a Negative Income Tax. There are no other viable options, particularly with an aging population. 

Many will object to such policies claiming they are unsustainable. They will, however, be outnumbered by the millions of educated, unemployed, destitute, poor, frustrated and angry people clamoring at their doors, clamoring for assistance. Clamoring to have enough money to just exist. Again the question needs to be asked, what else are they supposed to do? 

{Note: Negative Income Tax - For people who do not earn enough to pay tax (or earn below the minimum wage or some other agreed amount) their income would be supplemented to arrive at the agreed amount or the minimum wage. Everyone, working or not, would be obliged to lodge a tax return and any supplement would be “refunded” via the ATO, similar to the process for a normal tax refund.}

Both the UBI and NIT would do away with the plethora of welfare payments currently in place; both would be funded, it is suggested, by adjustments to current programs and/or adjustments to marginal tax rates, investment allowances (negative gearing and capital gains?) and corporate taxation, or possibly a very small (.001 percent) financial transaction levy (colloquially known as a “Tobin” Tax).

Any additional funding for the UBI or NIT involves a simple principle: go where the money is. “Since money has been increasing going to the top, that’s where the additional revenue will have to come from. It is really that simple.” (Quote is from The Price of Inequality (2013) by Joseph E. Stiglitz – former World Bank chief economist and 2001 winner of the Nobel Prize for Economics).

Political will aside – what is it that the future unemployed are supposed to live on?

I suggest this is the future - and it’s coming soon – get used to it. Plan for it. Now.  

Robots revisited - a "Workless" future

Now that driverless cars are a reality and the US Air Force has pilotless planes – not just drones or UAVs – but unmanned combat aerial vehicles (UCAVs), I’m sure the armament industries around the world will soon produce driverless tanks, driverless self-propelled automatic radar controlled self loading artillery, armed robots to replace foot soldiers and who knows what else is on the artificial intelligence (AI) robotic horizon.

Anything to save the cost of people – soldiers needing to be trained, uniformed, fed, housed, then possibly injured or killed.

But then we need to ask the question – who will these robots be trying to kill?

This robot and AI problem applies also, of course, to commerce and industry. Many of the jobs that American politicians want to bring back to America will never eventuate. The days of the old unskilled, labour intensive jobs are numbered. We are told that within 10-20 years many, if not most, of the unskilled laboring will be gone. As an example there is a giant 3D printer in China that can “print out ten houses on a block of land in 24 hours - the houses were built in Shanghai by WinSun Decoration Design Engineering. Each house was 10 metres wide (about 33ft) and 6.6 metres high (about 20ft) using a mix of cement and construction waste, with walls being constructed layer by layer, like making a cake.” This construction can be seen at work on a YouTube video and refers only to the walls. The roof is a separate construction by men. Also on YouTube is a video of the Tiger Stone Paving Robot that lays a road at four times the speed of a team of human workers. (These quotes are from book called ‘Why the Future is Workless’ by Tim Dunlop). I’ve seen the videos – amazing!

So the world is changing – what was will no longer be – the status quo has evaporated.

So what is the solution? Certainly some “service” jobs will still need individuals – cleaning, cooking, nursing, teaching, child-care and such like – but many others will be automated or performed by robots.

Just consider the impact on the poor and middle class in the USA. Even now, with the globalization of work, there are more workers than there is work for them to do (i.e. the “rust belt” in the USA). In a report by Carl B Frey and Michael A Osborne from the Oxford Martin School at Oxford University (full report is available free on line - Google it) they examined 702 jobs in the USA and determined that 47% are vulnerable to automation within the next twenty years. The main finding is that “algorithms for big data are now rapidly entering domains reliant upon pattern recognition and can readily substitute for labour in a wide range of non-routine cognitive tasks.”

A similar conclusion was arrived at by MIT scholars, Erik Brynjolfsson and Andrew McAfee in their research paper, “The Second Machine Age”.

Basically these reports say that the only “safe” jobs will be those that require social intelligence – the ability to interact with other humans in an intuitive way; those that require creativity – a deep understanding of what humans want from their creative tasks to be effective; and, surprisingly, the ability to manipulate objects in unstructured and cluttered environments (i.e cleaning jobs).

Many, if not most politicians, and the “ruling class”, may be horrified at the obvious solution – give everyone, and I mean everyone – employed or unemployed – give everyone a “Universal Basic Income”. This universal basic income is already in place in the city of Utrecht (Netherlands) and is being actively considered by the Governments of Finland, Switzerland, India, Canada, New Zealand and, as mentioned, the Netherlands.

A world that no longer revolves around full time paid employment, one underpinned by a universal basic income, opens up the possibility of a life of, for instance, more civic, social and community engagements – using our skills for personal satisfaction and free exchange rather than channeling them into the need to earn income or profit.

This is no joke! If a large percentage of people in the USA – or any country for that matter – are unemployed and are unable to see any possibility of future employment, what are they supposed to do?

Anger and frustration will consume many people, especially when they are made aware that currently (2016) the inequality gap between the wages of the typical worker and that of the typical CEO is 200 times. That is right  - the typical CEO in the USA earns 200 times the wage of the average worker!! In Japan it is 16 times.

To me it is a no brainer that people – millions of people – will swamp their governments for assistance. If all Governments adapt and are proactive they will plan for this eventuality and the only option is to pay everyone, repeat, everyone a “Universal Basic Income”.

Many right wing politicians and those in the “ruling class” will fight such a policy but they will be outnumbered by the millions of unemployed, destitute, poor, frustrated and angry people clamoring at their doors, clamoring for assistance.  

This is the future  - and it’s coming soon – get used to it.