America's economy is grounded upon the idea that everyone who isn't disabled or independently wealthy will work at a full-time job for 45 to 50 years. Some folks have argued for a long time that it doesn't have to be that way; if we were to shift away from capitalism, we could all work less or retire earlier. Or maybe we could even distribute resources in a way that would allow people to live above the poverty line without having a job at all, if that's their thing.
As architect and visionary Buckminster Fuller said in 1970:
"We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living."
OK, let's stop right there. This is a not a blog written to answer the question, "Is a socialist utopia viable?" I don't have time to write that. Like most Americans, I have to work for a living. But as I discussed in my last post, artificial intelligence is rapidly delivering an economy where it will be very difficult to create useful jobs for every able-bodied, not-already-wealthy adult. The solution, according to some, is basic universal income (UBI). Whether UBI is workable in the United States is debatable.
If you're interested in UBI, I recommend visiting Andrew Yang's campaign site. Yang, a Democrat seeking the Presidential nomination, has created a very detailed Q & A on the subject. He'd grant $1,000 per month to every adult American, in addition to single-payer healthcare (free to the poor) while continuing social security and veterans benefits. UBI would however replace disability payments and welfare such as food stamps.
So, according to Yang, how would we come up with the money? In short:
* Corporations and wealthy individuals would start paying a lot more in taxes.
* All that money in the hands of consumers would grow the economy.
* A healthier society less prone to incarceration and homelessness would mean less tax money targeted to those problems.
For the record, I think this program is workable and in general a good idea. But I see two big problems with ever getting UBI implemented. The first problem is: your puritanical, pull-yourself-up-by-your-own-bootstraps American is not going to get behind a welfare program like this, and big business and the wealthy will fight paying for it tooth and nail. Andrew Yang's UBI program, combined with single payer healthcare isn't really very different with the New Frontier/Great Society programs created to fight the "War on Poverty" of the 1960s. Those programs worked - Under Presidents Kennedy and Johnson, the poverty rate fell from 23% to 12%. Unfortunately, a great many Americans hated those programs. Personally, I've had any number of conversation about politics that began with someone indignantly asking, "What about all these people on welfare?" Ronald Reagan based much of his first Presidential campaign on the idea that people on welfare were robbing everyone else, and even Democrat Bill Clinton was adamant about "ending welfare as we know it."
Second, UBI is easily perverted into a libertarian dream of destroying public services. As Daron Acemoglu of Marketwatch.com pointed out recently:
"Sacrificing all other social programs for the sake of a UBI is a terrible idea. Such programs exist to address specific problems, such as the vulnerability of the elderly, children, and disabled people. Imagine living in a society where children still go hungry, and where those with severe health conditions are deprived of adequate care, because all the tax revenue has gone to sending monthly checks to every citizen, millionaires and billionaires included."
Actually, we don't have to imagine such a society. The state of Alaska has already perverted the idea of UBI in exactly the way described by Acemoglu. Alaska has had for decades a Permanent Dividend Fund, which makes annual cash payments derived from oil revenue to every Alaskan. Republican Governor Mike Dunleavy ran for office on a platform of raising these payments from $1,600 to $3,000. Unfortunately, those increased payments now necessitate devastating cuts in state spending. From Josh Axelrod of National Public Radio:
"The University of Alaska System is bracing for a 41% cut in funding it receives from the state, after Gov. Mike Dunleavy vetoed a $130 million line item in the state's budget.
The announcement came last Friday, three days before the fiscal year began on July 1. Dunleavy vetoed roughly $400 million in items in the budget, with education receiving the largest cut.
The university system will lose $130 million from the veto — on top of an additional $5 million previously agreed upon by legislators. The governor's 182 line-item cuts also included Medicaid, senior benefit payments and homelessness services.
University President James Johnsen says he was caught by surprise."
""I'm not arguing against the [Permanent Fund] dividend necessarily, but if we didn't have it we would actually have a budget surplus this year," Johnsen says. "But given that 37% of the state's budget is proposed to go to $3,000 checks to every Alaskan – that's what creates this this fiscal challenge.""
To summarize, we live in a country where the President of the United States has recently issued an executive order demanding that federal agencies review their welfare policies and find ways to crack down on the lazy and indolent. A country that elects a President like that is not going to warm up to the idea of universal basic income any time soon. So what will Republicans do when artificial intelligence means jobs are no longer available? In my estimation, they'll do the same thing they're doing in addressing climate change, Americans with no health insurance, ballooning budget deficits and every other problem faced by this country: Republicans will do nothing at all.
Sunday, September 22, 2019
Sunday, September 08, 2019
Adventures in Late-Stage Capitalism #6: America’s Economy as Player Piano
I. The Problem of Artificial Intelligence and Automation
Kurt Vonnegut’s debut novel Player Piano, published is 1952, is a reflection on the impact of automation on daily life. It’s a story of people searching for meaning in their lives in a world in which there is no meaningful work for them to do. In the world of Player Piano, everyone has an adequate standard of living but most men are assigned by the government to useless jobs to keep them busy, while virtually all women are housewives who watch a lot of television.
The dystopia of Player Piano has not come to pass... yet. As in the novel, during the second half of the 20th century, millions of Americans did leave their workbenches and assembly lines as machines and robots replaced factory workers on a vast scale (or factory jobs just went overseas). This has not resulted in a economy with widespread unemployment however, because the US successfully made a transition from an industrial economy to a post-industrial service economy. (The term "successfully" is subjective; in 1952 virtually any man could get a good job working at General Motors, while in 2019 America’s largest private-sector employer is Wal-Mart, a company that pays below the poverty line.)
So, questions regarding the shrinking middle-class aside, America’s post-industrial economy is humming right along. Or at least it will be, until the next revolution in automation eliminates the service jobs that are now the backbone of the job market. No doubt about it - artificial intelligence will soon make millions of workers obsolete, both in the industrial and service sectors. From a recent Fortune.com article by Gwen Moran entitled, Your Job Will be Automated - Here’s How to Figure Out When A.I. Will Take Over:
"Automation is increasingly making its way into the workplace, raising concerns among employees about the ways technology will change their jobs—or eliminate them entirely. A June 2019 report by Oxford Economics predicts that 8.5% of the world’s manufacturing positions alone—some 20 million jobs—will be displaced by robots by 2030."
OK, robots replacing factory workers is not news. But from the same article:
"A 2013 paper, "The Future of Employment: How Susceptible are Jobs to Computerisation?" found that roughly 47% of jobs were at high risk of being automated with advances in artificial intelligence."
"This isn’t some futuristic hypothetical. Michael Chui, Ph.D., a partner at McKinsey Global Institute (MGI), says roughly half of the tasks people perform at work could theoretically be done by technology that exists today.
And it’s not just low-income workers whose jobs will change. Chui and his team estimate that roughly six out of 10 jobs are made up of 30% or more tasks that can be automated. CEOs, financial advisors, insurance agents, and others all fall into this category."
II. Don't Expect Any Help from the Republican Oligarchy
So now it’s 2052, the centennial of the publishing of Player Piano, and the automated world described by Kurt Vonnegut has come to pass: there is no productive work for many or most folks to do. In Player Piano, most men are assigned to killing time in public works jobs that aren’t really needed. Ironically, if millions of workers were given public works jobs in today’s America it would actually be a great thing, given our crumbled infrastructure.
My key concern regarding an automated world is this: what makes anyone think that the billionaire oligarchy that controls America's economy and politics will establish a nanny state that would provide employment and social security for millions of people simply because folks can’t find jobs? Knowing what we do about today’s Republicans, isn’t it more likely they would just shrug their shoulders and let widespread poverty takeover?
Consider the Republican attitude to the Medicaid expansion included with Obamacare. The law was designed to provide health insurance to those who cannot afford otherwise afford it, generally because they have no income or resources. Most states controlled by Republicans have refused the Medicare expansion, going so far as to turn down federal grants that would provide life-saving care to those who cannot otherwise afford it.
Conservative Kansas typifies the Republican non-solution to the problem. From a 2015 article by Kartrina vanden Heuvel of the Washington Post:
"Kansas has some of the most restrictive Medicaid eligibility requirements in the country. The program is available only to non-disabled adults earning less than 32 percent of the federal poverty level, and most childless adults don’t qualify, regardless of income. The Affordable Care Act was supposed to raise that threshold to 138 percent, but Brownback declined to implement the Medicaid expansion. As a result, thousands of poor Kansans who would qualify for Medicaid in other states remain uninsured.
Brownback has often characterized his opposition to expanding Medicaid and other poverty programs, in (editor of The Nation Kai) Wright’s words, as a "moral rejection of dependency." Last June, for example, Brownback told the Heritage Foundation’s Daily Signal Web site that Kansas had not expanded Medicaid because "We’re trying to push people that are able-bodied right now to get a job." Similarly, Brownback pledged in his State of the State address this year to continue "helping people move from dependence on the government to independence."
But, in practice, Brownback’s resistance to Medicaid expansion is causing some people to move from independence to desperation. Wright spoke with several Kansans who are suffering because of Kansas’s severe eligibility requirements. Far from the right-wing caricature of lazy moochers, they are hard workers who aren’t looking for a handout. One woman, RaDonna, is too sick to hold down food, let alone a full-time job. Yet, as a childless adult, she doesn’t qualify for Medicaid — and the state rejected her application for disability benefits. While RaDonna now lives with her sister, Cathy, she insists on helping with the laundry and dishes to earn her keep. "She can’t do the whole sink full of dishes without stopping and sitting down for a while," Cathy says.
The stories from Kansas are heartbreaking, but unfortunately they are not unique. According to the Kaiser Family Foundation, "Nationally, nearly four million poor uninsured adults fall into the ‘coverage gap’ that results from state decisions not to expand Medicaid." Republicans have full control of the legislature in all 21 states that have not expanded the program.
"For most Republican leaders, opposing Medicaid expansion is simply a matter of ideological faith. "Why is more people on Medicaid a good thing?" (Wisconsin Governor Scott) Walker asked last year. Echoing Brownback, he added, "I’d rather find a way, particularly for able-bodied adults without children, I’d like to find a way to get them into the workforce. I think ideologically that’s a better approach, not just as a conservative but as an American. Have more people live the American dream if they’re not dependent on the American government." More recently, Walker framed his position in religious terms. "My reading of the Bible finds plenty of reminders that it’s better to teach someone to fish if they’re able," he said."
To summarize, millions of Americans cannot afford health insurance. Many of these folks are too sick or otherwise disadvantaged to be able to find and retain the kind of full-time work that provides insurance. Yet Republican leaders have responded to the problem with a shrug of the shoulders, effectively dooming these these Americans to continue to be denied healthcare. Given these facts, is there any reason to believe that Republicans won’t also deny other basic necessities to those who are unable to find work after being displaced by artificial intelligence? The country has had crises of unemployment in the past; Republicans responded to both the Great Depression of the 1930s and the Great Recession of 2009 mostly by doing nothing.
So let’s assume we remove Republicans from power before everyone who loses a job to artificial intelligence dies from lack of food, shelter and health care. What then? Well if you ask some leading technologists, they’ll tell you we need a program of universal basic income. Next time, I’ll discuss universal basic income in detail; who thinks it's viable on a large scale, how it might work and what might go wrong.
Kurt Vonnegut’s debut novel Player Piano, published is 1952, is a reflection on the impact of automation on daily life. It’s a story of people searching for meaning in their lives in a world in which there is no meaningful work for them to do. In the world of Player Piano, everyone has an adequate standard of living but most men are assigned by the government to useless jobs to keep them busy, while virtually all women are housewives who watch a lot of television.
The dystopia of Player Piano has not come to pass... yet. As in the novel, during the second half of the 20th century, millions of Americans did leave their workbenches and assembly lines as machines and robots replaced factory workers on a vast scale (or factory jobs just went overseas). This has not resulted in a economy with widespread unemployment however, because the US successfully made a transition from an industrial economy to a post-industrial service economy. (The term "successfully" is subjective; in 1952 virtually any man could get a good job working at General Motors, while in 2019 America’s largest private-sector employer is Wal-Mart, a company that pays below the poverty line.)
So, questions regarding the shrinking middle-class aside, America’s post-industrial economy is humming right along. Or at least it will be, until the next revolution in automation eliminates the service jobs that are now the backbone of the job market. No doubt about it - artificial intelligence will soon make millions of workers obsolete, both in the industrial and service sectors. From a recent Fortune.com article by Gwen Moran entitled, Your Job Will be Automated - Here’s How to Figure Out When A.I. Will Take Over:
"Automation is increasingly making its way into the workplace, raising concerns among employees about the ways technology will change their jobs—or eliminate them entirely. A June 2019 report by Oxford Economics predicts that 8.5% of the world’s manufacturing positions alone—some 20 million jobs—will be displaced by robots by 2030."
OK, robots replacing factory workers is not news. But from the same article:
"A 2013 paper, "The Future of Employment: How Susceptible are Jobs to Computerisation?" found that roughly 47% of jobs were at high risk of being automated with advances in artificial intelligence."
"This isn’t some futuristic hypothetical. Michael Chui, Ph.D., a partner at McKinsey Global Institute (MGI), says roughly half of the tasks people perform at work could theoretically be done by technology that exists today.
And it’s not just low-income workers whose jobs will change. Chui and his team estimate that roughly six out of 10 jobs are made up of 30% or more tasks that can be automated. CEOs, financial advisors, insurance agents, and others all fall into this category."
II. Don't Expect Any Help from the Republican Oligarchy
So now it’s 2052, the centennial of the publishing of Player Piano, and the automated world described by Kurt Vonnegut has come to pass: there is no productive work for many or most folks to do. In Player Piano, most men are assigned to killing time in public works jobs that aren’t really needed. Ironically, if millions of workers were given public works jobs in today’s America it would actually be a great thing, given our crumbled infrastructure.
My key concern regarding an automated world is this: what makes anyone think that the billionaire oligarchy that controls America's economy and politics will establish a nanny state that would provide employment and social security for millions of people simply because folks can’t find jobs? Knowing what we do about today’s Republicans, isn’t it more likely they would just shrug their shoulders and let widespread poverty takeover?
Consider the Republican attitude to the Medicaid expansion included with Obamacare. The law was designed to provide health insurance to those who cannot afford otherwise afford it, generally because they have no income or resources. Most states controlled by Republicans have refused the Medicare expansion, going so far as to turn down federal grants that would provide life-saving care to those who cannot otherwise afford it.
Conservative Kansas typifies the Republican non-solution to the problem. From a 2015 article by Kartrina vanden Heuvel of the Washington Post:
"Kansas has some of the most restrictive Medicaid eligibility requirements in the country. The program is available only to non-disabled adults earning less than 32 percent of the federal poverty level, and most childless adults don’t qualify, regardless of income. The Affordable Care Act was supposed to raise that threshold to 138 percent, but Brownback declined to implement the Medicaid expansion. As a result, thousands of poor Kansans who would qualify for Medicaid in other states remain uninsured.
Brownback has often characterized his opposition to expanding Medicaid and other poverty programs, in (editor of The Nation Kai) Wright’s words, as a "moral rejection of dependency." Last June, for example, Brownback told the Heritage Foundation’s Daily Signal Web site that Kansas had not expanded Medicaid because "We’re trying to push people that are able-bodied right now to get a job." Similarly, Brownback pledged in his State of the State address this year to continue "helping people move from dependence on the government to independence."
But, in practice, Brownback’s resistance to Medicaid expansion is causing some people to move from independence to desperation. Wright spoke with several Kansans who are suffering because of Kansas’s severe eligibility requirements. Far from the right-wing caricature of lazy moochers, they are hard workers who aren’t looking for a handout. One woman, RaDonna, is too sick to hold down food, let alone a full-time job. Yet, as a childless adult, she doesn’t qualify for Medicaid — and the state rejected her application for disability benefits. While RaDonna now lives with her sister, Cathy, she insists on helping with the laundry and dishes to earn her keep. "She can’t do the whole sink full of dishes without stopping and sitting down for a while," Cathy says.
The stories from Kansas are heartbreaking, but unfortunately they are not unique. According to the Kaiser Family Foundation, "Nationally, nearly four million poor uninsured adults fall into the ‘coverage gap’ that results from state decisions not to expand Medicaid." Republicans have full control of the legislature in all 21 states that have not expanded the program.
"For most Republican leaders, opposing Medicaid expansion is simply a matter of ideological faith. "Why is more people on Medicaid a good thing?" (Wisconsin Governor Scott) Walker asked last year. Echoing Brownback, he added, "I’d rather find a way, particularly for able-bodied adults without children, I’d like to find a way to get them into the workforce. I think ideologically that’s a better approach, not just as a conservative but as an American. Have more people live the American dream if they’re not dependent on the American government." More recently, Walker framed his position in religious terms. "My reading of the Bible finds plenty of reminders that it’s better to teach someone to fish if they’re able," he said."
To summarize, millions of Americans cannot afford health insurance. Many of these folks are too sick or otherwise disadvantaged to be able to find and retain the kind of full-time work that provides insurance. Yet Republican leaders have responded to the problem with a shrug of the shoulders, effectively dooming these these Americans to continue to be denied healthcare. Given these facts, is there any reason to believe that Republicans won’t also deny other basic necessities to those who are unable to find work after being displaced by artificial intelligence? The country has had crises of unemployment in the past; Republicans responded to both the Great Depression of the 1930s and the Great Recession of 2009 mostly by doing nothing.
So let’s assume we remove Republicans from power before everyone who loses a job to artificial intelligence dies from lack of food, shelter and health care. What then? Well if you ask some leading technologists, they’ll tell you we need a program of universal basic income. Next time, I’ll discuss universal basic income in detail; who thinks it's viable on a large scale, how it might work and what might go wrong.
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