What Happens When Humans Need Not Apply?

Last week we wrote about our trip to Africa which, given the state of affairs, was perhaps a little too upbeat and cheery. Life isn't all vacations and new experiences. Life is work, and disappointment, and setbacks, and sometimes dealing with hardship. Especially the kind of upcoming hardships that CGP Grey talks about in depressing-but-fast-paced-and-somehow-still-entertaining videos.

In case you hadn't heard, automation is coming for us...and probably not the kind of automation you're used to, either.

This post won't make a lot of sense unless you watch the excellent video from CGP Grey first so, here it is.

Depressing, right?

For anyone who can't watch the video right now, here are the highlights:

• Automation of labor to this point had two important factors: 1) automation used mechanical muscles to replace human and animal muscles and, 2) it usually involved fairly dumb, specialized robots, like machines that are very good at building cars in an assembly line, but fairly terrible at doing anything else.
• Two new aspects to modern automation may have drastic impacts. 1) There are now general purpose robots that can do most tasks they are shown and, 2) instead of mechanical muscles, engineers and programmers have created mechanical minds that can do the work of human minds, except they are faster, make fewer mistakes, and operate at lower costs.
• A whole mess of our workforce is potentially at risk. People who drive vehicles of any sort are the obvious candidates, but people in the professions (like doctors or lawyers), white collar workers who type on computers for a living, and creative types are all candidates for automation. As a result, the newly unemployed may not be able to lean on the old advice to just get better skills or education and find new jobs.
• New technology does not necessarily bring more jobs. It can mean fewer, and possibly lower paying ones, to boot. Just as horses used to have a ton of work 100 years ago and, through no fault of their own, were replaced by mechanical muscles, we humans may be replaced in large numbers without it really being the workers' fault, per se.
• Automation is inevitable. It's the natural next step in innovating business processes and making them more efficient.
• The devastating conclusion is that we need to prepare for a future in which drastically high unemployment is simply part of our new reality.

Of course, we have heard before that "it's different this time" when it comes to technology and, usually, the thing that was once novel and exciting just ends up being par for the course. Planes, trains, and trucks have changed the way we travel and get goods forever, but they generally have made life better for us and have provided more jobs as well. PCs and the internet have certainly been game changers but, again, they're generally good for humans and have created more jobs. Plus, in a lot of material ways, life isn't that dramatically different than it was in 1992 thanks to computers: I just get my information and entertainment from different screens now. (But as I am writing that notion on a blog, the irony has to be noted.)

Still, with any revolutionary change, stating that things will turn out the same way as they always have is not all that insightful. And in those rare cases of an actual once in a lifetime change, it's also probably incorrect. This time, with mechanical minds entering the workforce, it really might be different.

Let's assume that CGP Grey is right on both main ideas: that automation is inevitable, and that human employment is going to be dramatically and negatively impacted.

What should we do to prepare for and solve for unprecedented levels of unemployment?

Idea One: Basic Income
Basic Income is one of my favorite topics to discuss, even if I'm not all that much of a proponent. Basic income is, as far as I understand it, a system where individuals are paid a fairly decent income, just enough to live, regardless of how much or how little they already make, and with no strings attached or requirement to earn that income. Everyone just gets a living wage on top of what they already make.

I love the boldness and scope of the idea. You need brass balls to propose something like this in a serious way to governments, businesses, or voters.

While Basic Income is perhaps seen as a cute-but-not-serious proposal today, it provides an interesting solution to the problems posed by this new brand of automation. Grey posits that humans will not be able to compete with their automated rivals, in the same way that, no how hard they worked, horses could not compete with their new motor-driven counterparts. It's not a matter of laziness or needing new solutions: horses lose to their motor powered competitors because the animals are outmatched.

If we extend the metaphor, human taxi and Uber drivers just aren't going to out-compete automated vehicles, no matter how hard the drivers try. And it will be like that in a lot of other fields, too. Thanks to cleverly designed, superior technology, a lot of people will become permanently unemployable. Basic Income solves the "we have a mob of hungry citizens who want to break down your door and steal your stuff" problem.

Still, there's the pesky issue of how to pay for Basic Income. Since our government struggles with paying Social Security to old people who've paid into the system for four or five decades, this seems like a tough program to fund. The simple answer is to target the entities doing the automation: the businesses who formerly hired human employees, but now hire bots. And there's a nice symmetry of having businesses somehow pay for the living expenses of the labor force they're putting out of work.

But this taxation has some serious drawbacks, such as disincentivizing innovation, and potentially forcing companies to simply do their now-automated work outside the reach of our government (i.e. - abroad).

Idea Two: Widespread Frugality and Financial Independence
As naive as this idea is (most of us Americans are neither frugal nor are on the path to any sort of financial independence) spending less and untethering ourselves from employment certainly mitigates the problem of having too few jobs to go around.

If we all spend much less than we currently do then, by definition, we are less reliant on our current employment income. Assuming society had a sudden and large exodus of people from the workforce, and assuming the companies we invest in continue to do well in an age of widespread automation and reduced average incomes, then, hey, we might not need that many jobs anyway.

There's a tiny part of me that hopes that this niche financial revolution that Early Retirement Extreme and Mr. Money Mustache cultivated will reach a tipping point, and become somewhat mainstream. But this is America, home of the second car loan, the jumbo mortgage, and the negative savings rate. Widespread financial independence is such a long shot that it's hard to see it becoming a reality, even with my rose tinted glasses.

Idea Three: The Sarah Connor Solution
If we are ever to avoid this machine-centric future, we first need to convince the corrupt guards at our psychiatric hospital that we don't actually believe in Judgment Day any longer, so we can get to John and keep him safe.

Step two is kidnapping computer researcher Myles Dyson, taking his ID card, and sneaking into Cyberdyne headquarters. Then, we destroy the last remnants of the first T-800 and Skynet, before AI is realized and all of civilization is incinerated via nuclear war.

I'm obviously an advocate for financial independence and for living simply. That's a big part of why I write this blog, instead of just working towards these financial goals in private. My wife and I find a modicum of peace from living well while still within our means, and trying to build some financial security for our future. This kind of life stands on its own merits, and we need not be driven to good financial goals by fear.

But after seeing that kind of video, that depicts a future that seems both terrifying and strangely inevitable, we American workers with our cushy white collar jobs, sipping coffee and reading blogs on a Monday morning instead of doing our actual work, maybe we ought to get our financial house in order sooner rather than later.

*Photo of Baxter, the bot coming for your job, is from jurvetson at Flickr Creative Commons.