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Me, Myself and Robots

Robot builderIn his book The Moral Consequences of Economic Growth, Benjamin M. Friedman posits that steady economic growth: “fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy.” Friedman’s hypothesis is defended with an impressive range of evidence from disciplines including economic and political history and other relevant sources. He also highlights our understanding of the relationship between economic growth and our willingness to cooperate by drawing on literature in psychology and especially behavioral economics and he emphasizes that economic growth transforms society into a “cooperative venture for mutual advantage.”

But when economic growth stagnates society has less tolerance and social unrest coupled with people less willing to cooperate and more focused on satisfying their own basic needs – a me, myself and I world. Some authors have predicted we are already in a Great Stagnation, others indicate that economic growth, in ‘advanced economies’ will continue at a nominal rate of growth of circa 1 to 2 per cent for many years, possibly decades.

The big question is – are we likely to see the growth rates of the 20th and early 21st century again?  Even though much of it was built on a house of debt!

The economic boom after the Second World War was predominately built on two sectors: housing and automobiles – which collectively accounted for 40 percent of the high growth rates. In more recent years we can see the same sectors responsible for the high growth rates in emerging markets such as Dubai, Abu-Dhabi and other Emirates and in Europe countries such as Poland which emerged from Communism some 25 years ago, a housing boom and flourishing car market quickly followed. The same is happening today in China.

Flourishing housing and automobile markets have many spin-offs: fuel, highways, transportation, associated household equipment, mechanical parts, banking, finance, etc. As history shows, housing and automobile markets do slow and the consequences are now being felt across the developed world.

Without such markets how will we get the levels of employment near to 95 or 100 percent?

The facts are; new flat screen TV’s, smartphones, tablet computers, laptops, mobile Apps, etc. will not generate anywhere near the level of economic activity that is required to grow the economy and put people back to work.

Historically, technological innovation has provided the momentum for long-term economic expansion. The area with the greatest potential for technological innovation today is advanced Robotics and the associated technology of Artificial Intelligence. But let’s not kid ourselves, there is no point in developing these technologies unless they serve a significant purpose – and the overall purpose for robots and A.I., especially within the workplace, is greater efficiencies and reduced costs. Much of these reduced costs will, in the long run, come from reduced headcount – people.

I am a strong proponent of the advances in robotics. Our lives can be greatly enhanced by exoskeletons, driverless cars, artificial assistants and so on. In the short term these sectors will create more jobs, but over the next two decades the full economic benefits of investing in robots will mean one thing – less people working.

Government investment in infrastructures, green energy and other advanced technologies will of course help spur the economy. But these will have to be paid for from somewhere and with Government debts at record levels few countries can sustain the levels of investment required to make meaningful long-term investments.

This is where I believe a new welfare state is increasingly becoming one of the only sensible options. Many are calling for a ‘living wage’ or Basic income Guarantee. Seattle in the United States and Switzerland, where approximately 45% supported such a motion in a recent referendum, could prove to be very informative test cases. The former US Secretary of Labor Robert Reich has said:

We’ve got to seriously think about how we widen the circle of prosperity, how we get shared prosperity. Otherwise, who’s going to be the customer? And a minimal guarantee with regard to income, it seems to me as almost inevitable in terms the direction that the structural changes of our economy are taking us in.

With excessive household debt, low savings, wage stagnation, almost 2 in 5 on the poverty line in advanced economies it will take something of the order of a basic income guarantee to spur economic growth or we can be sure to witness Gartner’s prediction of mass social unrest in the coming decade.

Let’s also not forget – robot’s are now good at building structures and 3D printers are capable of building houses!


1 Comment

  1. Colin Lewis says:

    comments via Robohub

    Javier Lopez • a day ago
    This is one of my favorite topics. And yet I have no idea how it’s all going to pan out. The most optimistic outcome requires some major leaps of faith and societal upheaval that could end in major conflicts if not full blown war.

    Although I like and fully support the idea of a basic income and believe there is more than enough available wealth and resources to fund such a program, it may not be that easy to ‘extract’ said wealth from the minority that currently hoard it. It would require some rearranging of chairs so to speak. And that could get nasty. Still, what other options would people have when their way of life becomes increasingly threatened.

    If 3D printing takes off on a local community level, more than just individual households, then it could provide the minimum requirements for a comfortable existence, possibly more. You still have to deal with the emerging problem of ‘runaway wealth’ – the richest families and corporations on the planet that will want to continue their quest for global dominion. If they see their goals being threatened by the alternative lifestyle choices of the general public, they may end up playing the role of ‘sore loser’ and trash the place just to get their way.

    What good is all the trillions of dollars of wealth and military power if one has no subjects to rule over? No wage slaves to tend the machines and pay their dues in taxes? No, that simply won’t do for the reigning global crime syndicate. They’ll come up with a way to encourage the plebs to chip themselves so as to receive their daily ‘slop’.

    Regina Dugan over at Google wants everybody ‘chipped’ so we can do away with passwords and other such inconveniences. Ray Kurzweil says we’ll all have nanbots coursing through our veins some time soon. All I’m seeing is an orchestrated attempt to control the population even more than they are now. At some point, something will have to give. There are those who will happily or unwittingly accept their cyborg enhancements and there will also be a vast army of humans that will reject invasive technologies. A line has been crossed and they are learning more and more about the consequences of allowing power-hungry psychopathic corporations and their minions full access to your body, your brain, your life.

    It’ll be an interesting ride that’s for sure!
    see more
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    RobotEnomics Javier Lopez • 2 hours ago
    I totally agree with you on the 3D printing – I think the whole maker movement will bring resources much closer to ‘home’ as it were — do you know 30% of energy in Germany is now green (solar and wind) powered energy and more than half of that is owned by individuals (generated on farms and homes) and communities – and shared at closer to zero marginal cost after initial investments. Facilitating denser and more inclusive social relationships.

    With respect to Basic Income please see my comment below.

    With respect to your comment on ‘controlling the population’ Do you know the Panopticon? I don’t think recording our every move and collecting terrabytes of data about us is necessarily healthy – at least we must preserve the freedom of choice.
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    Captain_Sakonna • 2 days ago
    But if we’re worried about having enough money for things like green energy infrastructure … which seem fairly easy by comparison … who’s going to pay for the guaranteed income?

    My favorite idea right now is to pursue strategies that help give everybody ownership — rather than employment — in the new robotic economy. The proliferation of 3D printers in private homes seems to me to be an early example of this; you don’t need wages to pay others to make things for you, because you and your printing machine can make the things yourself. If we could somehow encourage the development of low-cost robots and support systems for things like food and electricity production, and get them into the hands of as many people as possible …
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    Andra Keay Mod Captain_Sakonna • 19 hours ago
    I agree – distributing ownership of robots and the tools of production is critical. If most of the wealth resides in only a few hands (not govt) then how can govt guarantee basic income, and who else is motivated?

    Dystopically, I think there is more money going into creative ways to continue extracting money from the consumer class, including using robots. The new wave of social robots is all about better personal outcomes on the surface, but actually engages with practices of ‘market manipulation’ as described by Ryan Calo.

    http://papers.ssrn.com/sol3/pa
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    RobotEnomics Andra Keay • 18 minutes ago
    Comment from Ryan Calo on Twitter – Ryan Calo ‏@rcalo

    RobotEnomics @Robohub Andra made the point beautifully. It’s also something IIllah Nourbakhsh discusses in Robot Futures (I just learned).
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    RobotEnomics Andra Keay • 2 hours ago
    The challenge is certainly funding such a scheme as Guaranteed basic income. Buffett offered one solution with his tax proposal on the 1% and in Europe the EU are looking how at how to reform the entire welfare state to include GBI – this to some extent is currently taking from Peter to pay Paul as it were.

    Overall I see there will be a mixture of elements, GBI, own the robots (investments) and a significant growth in the already $2.2 trillion not for profit sector which could become the largest sector in the world funded by major corporations and wealthy individual initiatives such as the Gates Foundation, the Allen Foundation and so on as I wrote in this article: Robots may take your job but it could lead to a more humane society: http://robohub.org/robots-may-

    Great point on the Calo paper Andra.
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    Andra Keay Mod RobotEnomics • an hour ago
    Good points – but we are very dependent on altruism (atleast initially) from the 1% or their foundations. Perhaps we can build something from the crowdfund/crowdsource/micropayment movement. Angel list was a good start but there are no moves afoot to increase the threshold for becoming an investor.
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    RobotEnomics Andra Keay • a few seconds ago
    That would be a fascinating idea to pursue – I’ll throw it around in my head for a few days and see what comes out.

    I do like the welfare reform spoken about in the NY Times: “The case from the right is one of expediency and efficacy. Let’s say that Congress decided to provide a basic income through the tax code or by expanding the Social Security program. Such a system might work better and be fairer than the current patchwork of programs, including welfare, food stamps and housing vouchers. Housing vouchers have to be spent on housing, food stamps on food. Those dollars would be more valuable — both to the recipient and the economy at large — if they were fungible.” (http://www.nytimes.com/2013/11

    I also agree with you about relying on altruism of the wealthy – but the case is being made from inside their own ranks as it were – see this Memo: From Nick Hanauer (multi billionaire via Amazon and many others) To: My Fellow Zillionaires

    http://www.politico.com/magazi

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