Words&Dirt

“In an interview with CBS News, the president of the United States was asked if the nation’s dire unemployment problem was likely to improve soon. ‘There’s no magic solution,’ he replied. ‘To even stand still we have to move very fast.’ By this, he meant that the economy needs to create tens of thousands of new jobs every month just to keep pace with population growth and prevent the unemployment rate from rising even further. He pointed out that ‘we have a combination of older workers who have been thrown out of work because of technology and younger people coming in’ with too little education. The president proposed a tax cut to stimulate the economy, but he kept returning to the subject of education––in particular, advocating support for programs focused on ‘vocational education’ and ‘job retraining.’ The problem, he said, wasn’t going to solve itself: ‘[T]oo many people are coming into the labor market and too many machines are throwing people out.’

The president’s words capture the conventional––and nearly universal––assumption about the nature of the unemployment problem: more education or more vocational training is always the solution. With the proper training, workers will continuously climb the skills ladder, somehow staying just ahead of the machines. They will do more creative work, more ‘blue-sky’ thinking. There is apparently no limit to what average people can be educated and trained to do––and likewise no limit to the number of high-level jobs the economy can create to absorb all these newly trained workers. Education and retraining, it seems, are a solution that is immutable across time.

For those who hold this view, it is perhaps of little import that the president quoted above was named Kennedy and the date was September 2, 1963. As President Kennedy noted, the unemployment rate at the time was about 5.5 percent, and machines were confined almost exclusively to ‘taking the place of manual labor.’ Seven months after the interview took place, the Triple Revolution report would land on a new president’s desk. It would be another four yeas before Dr. King would make his own reference to technology and automation in Washington National Cathedral. In the nearly half-century since then, belief in the promise of education as the universal solution to unemployment and poverty has evolved hardly at all. The machines, however, have changed a great deal.”

––Rise of the Robots: Technology and the Threat of a Jobless Future, by Martin Ford, pg. 249-50

“The conservative argument for a basic income centers on the fact that it provides a safety net coupled with individual freedom of choice. Rather than having government intrude into personal economic decisions, or get into the business of directly providing products and services, the idea is to give everyone the means to go out and participate in the market. It is fundamentally a market-oriented approach to providing a minimal safety net, and its implementation would make other less efficient mechanisms––the minimum wage, food stamps, welfare, and housing assistance––unnecessary.

If we adopt Hayek’s pragmatism and apply it to the situation likely to develop in the coming years and decades, it seems very likely that government will ultimately be called upon to take some type of action in the face of the increased risks to individual economic security brought about by advancing technology. If we reject Hayek’s market-oriented solution, then we’ll inevitably end up with an expansion of the traditional welfare state, along with all the problems that accompany it. It’s easy to imagine the eventual rise of vast new bureaucracies geared toward feeding and housing masses of economically disenfranchised people––perhaps in dystopian quasi-institutional environments.

Indeed, this is very likely the path of least resistance––and the default if we simply do nothing. A basic income would be efficient and would have relatively low administrative costs. A bureaucratic expansion of the welfare state would be far more expensive on a per capita basis, and far more unequal in its impact. It would almost certainly help fewer people, but it would create a number of traditional jobs, some of which would be very lucrative. There would also be abundant opportunities for private-sector contractors to jump on the gravy train. These elite beneficiaries––the high-level administrators, the private-company executives––are sure to exert substantial political pressure for things to evolve along this path.

There are, of course, plenty of examples of this kind of thing already. Massive weapons programs that the Pentagon does not want are protected by Congress because they create a small number of jobs (relative to their enormous costs) and pad the profits of large corporations. The United States has a staggering 2.4 million people locked up in jails and prisons––a per capita incarceration rate more than three times that of any other country and more than ten times that of advanced nations like Denmark, Finland, and Japan. As of 2008, about 60 percent of these people were nonviolent offenders, and the annual per capita cost of housing them was about $26,000. Powerful elites––including, for example, prison guards’ unions and executives at the private corporations that operate many prisons––have strong incentives to ensure that the United States remains an extreme outlier in this area.

For progressives, a guaranteed income may be an easier sell in the current political environment. Despite Hayek’s argument to the contrary, many liberals would likely embrace the idea as a method to achieve more social and economic justice. A basic income could effectively become a brute-force algorithm designed to alleviate poverty and mitigate income inequality. At a stroke of the presidential pen, extreme poverty and homelessness in the United States might effectively be eradicated.”

––Rise of the Robots: Technology and the Threat of a Jobless Future, by Martin Ford, pg. 259-61