Automation and the Case for a Universal Basic Income – Part 1/2
March 31, 2020
by Steve Beckow
President Donald Trump signs the coronavirus stimulus relief package in the Oval Office at the White House, Friday, March 27, 2020, in Washington, as Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, R-Ky., House Minority Leader Kevin McCarty, R-Calif., and Vice President Mike Pence watch. (AP Photo/Evan Vucci)
Part 1 looks at Dr. Ibrahim’s well-stated case for a universal basic income. Part 2 looks at an article from 1998 discussing twenty years ago what Dr. Ibrahim is talking about now.
COVID-19 and the case for the universal basic income
Dr. Azeem Ibrahim, Arab News, Marc h 29, 2020
The idea of a universal basic income (UBI), also called a citizen’s dividend or national dividend, has a long tradition going back to Thomas More’s “Utopia” in the 16th century, and Thomas Paine, one of the US founding fathers in the 18th century.
Among other prominent advocates have been the 19th-century British philosopher Bertrand Russell and, under the guise of negative income tax, even American neoliberal economist Milton Friedman and President Richard Nixon.
Advancements in artificial intelligence and automation have brought the concept back into vogue. Perhaps the most visceral example of why people have started taking it more seriously is the case of self-driving cars. The technology is already functional, and within a mere few years of being good enough to be widely deployed. It is expected to create about 100,000 engineering and related technical jobs in the US alone — the world’s biggest economy — but will kill a potential four million lower-skilled jobs.
And that is just one application of this new family of technologies. Other applications are expected to make large numbers of clerical, paralegal, even lower-skilled medical jobs obsolete. In previous technological revolutions, low-tech jobs have always been replaced by better, more skilled, better paid employment.
But there is no law of nature to say that this needs to happen. And from where we are standing at the moment, it is just not obvious how we might, as a society, even begin to aim for some kind of ideal of full employment when we already think we can automate away more than half of the jobs we currently do.
So goes the argument in favor of looking at ways to keep people within the economic system, even as our societies may not be able to find meaningful employment for them. And the simplest, most obvious way to achieve that is to give people direct subsidies.
This ensures they can sustain themselves and their families, without governments having to engineer artificial jobs just because we feel strange about unconditionally giving people money to live on.
What nobody expected was that this would be politically possible in the face of ideological opposition from Republicans. President Trump has just removed any basis for that opposition in the future. Sure, Congressional Republicans will continue to oppose UBI in principle — but they will not be able to claim that it is impossible.
Dr Azeem Ibrahim
There are two arguments for why we should not try to implement any kind of UBI. The first one was the moral one, that it is not the job of the government to give people something for nothing. But when the government does not allow people to live off the land, because it has decided that land has private owners, and when the government then is unable to give people any other means to survive and feed themselves, this argument does not stand.
Either the government stops enforcing property claims on land and allows people to feed themselves off the land directly, or the government owes people the sustenance it is currently denying them through these laws.
The second argument is financial; that we cannot afford to give everyone enough money to live on. Except that it turns out we can. In response to the lockdown imposed to contain the COVID-19 pandemic, the Trump administration announced that people will be sent checks directly from the federal government to help tide them over — though the details are still to be worked out. Or, for an example of how to do this properly, the government of Denmark has already guaranteed upwards of 75 percent of income to everyone affected by the lockdown they have imposed in their country.
But surely this kind of handout is not sustainable outside this very specific emergency? Paying $1,000 a month to about 300 million Americans, for example, adds up to $3.6 trillion per year. For context, the US government budget for 2019 was $4.4 trillion, which amounts to only 21 percent of GDP. By comparison, European countries typically have budgets in the region of 40-50 percent of GDP.
Factor in the fact that UBI would allow the US federal government to eliminate a great deal of other social programs, and that Trump’s multitrillion-dollar tax break for companies and wealthy individuals in 2017 was unnecessary and easily reversible, and yes, UBI at $1,000 per month per individual is well within the realm of possibility.
This arithmetic was already known. It formed the basis of Andrew Yang’s campaign to become the Democratic party nominee for the presidency. What nobody expected was that this would be politically possible in the face of ideological opposition from Republicans. President Trump has just removed any basis for that opposition in the future. Sure, Congressional Republicans will continue to oppose UBI in principle — but they will not be able to claim that it is impossible.
• Dr. Azeem Ibrahim is a director at the Center for Global Policy and author of “The Rohingyas: Inside Myanmar’s Genocide” (Hurst, 2017).
Source: Golden Age of Gaia
Automation and the Case for a Universal Basic Income – Part 2/2
March 31, 2020
by Steve Beckow
By 1998, when this article was published, automation had been stripping the labor market for one, perhaps two decades already.
We were nowhere near considering addressing the social costs of automation. We were busy playing Tetris and loving our computers.
If This is Your Job, Watch Out!
Steve Beckow, Toronto Globe and Mail, June 1, 1998
Canada is not suffering from a simple recession, though we often read that it is.
Mergers and their downsizing, globalization and its restructuring, free trade and the flight of factories to low-cost labour areas, the retirement of the national debt and the disappearance of government deep pockets — all these are part of the picture, but the most important factor is left out. Without appreciating that factor, nothing we do to address the situation will work.
That factor is the permanent downsizing of the labour force through the capture of work by “labour-saving” technology. Sales force automation, syndicated selling, laboratory automation, warehouse management systems, automated booking, automated tellers, e-tickets, online banking, automated underwriting, automated front desk clerks — all these “systems” have no other purpose than to reduce manpower.
As Canadian Datasystems once wrote: “What is a computer for, if not to save labor?” “Saving labor” means eliminating wages, holiday pay, pension plans, security, careers, a future. It may also mean eliminating our ability to exist as a cohesive society.
Technology is a paradox. It helps as well as it hurts. Technology has greatly benefitted us in many ways, but it’s a two-edged sword. We all know its ability to enhance our pleasure, add to our productivity, and increase our profit. But we choose to remain unconscious to the magnitude of its ability to capture work. When it is applied across the board to take work away from large numbers of Canadians, we create a major, national problem for ourselves — not quite an extinction level event, but definitely deep impact.
Since the Second World War, unemployment has steadily risen, averaging 4.2 per cent in the 1950s, 5.1 in the 1960s, 6.7 in the 1970s, and 9.3 in the 1980s. In the 1990s, it has hit peaks of 11 per cent. For youth, unemployment stubbornly stands at more than double that figure. We are learning to tolerate higher and higher levels of unemployment. We shall be required to tolerate levels soon that we would now consider difficult to contemplate.
Why is this? Because up till now, technology has been capturing jobs, but now it is beginning to capture whole occupations. Corporate travel agents, medical lab technicians, printing trades, and warehousemen are examples of whole occupations that are threatened by “end-to-end solutions” and “automated workflows.”
When “recession” does hit, it masks the shedding of the worker. But when recession lifts and workers don’t return to jobs, the trend is starkly revealed. If we truly wish to find the explanation for a “jobless recovery,” we need go no further than business plans like this:
“Sam Pierson, president of AGA-PGT Inc. wanted to expand capacity without adding employees. But he realized that, with conventional hydraulic injection molding, he could not reach his goal of a ‘lights-out’ [i.e., workerless] molding plant. … But the firm achieved near lights-out conditions at its Vernon, Conn., molding plant by using new computer numerically controlled servo-driven electric injection presses, plus impressive automated material and parts-handling systems.” (Plastic News, Sept. 1997.)
Is this not a thumbnail sketch of manufacturing and service automation’s impact?
Unions have been weakened by the reduced need for labour and so can’t represent the workers’ interests as well as they once did. Governments find revenues falling as Canadians’ incomes drop They in turn are rationing funds to hospitals, schools, and social services, which are also rapidly shrinking their services. Bankrupt of ideas, governments follow a business model, cutting costs by shedding workers themselves.
These conditions will persist through good times and bad. They are not cyclical; they are structural. If we continue following the path we are on, we shall create a gulf between the employed and the technologically displaced that will lead to a permanent, growing, and impoverished underclass.
Please do not be fooled by the conventional wisdom that manufacturing jobs are being eliminated but service jobs are opening up or that computers create one new job for every one they close down (they do not). Automation is eliminating service occupations faster than it did manufacturing jobs. Why is this? Because service tasks are simpler, more repetitive, and thus more easily automated.
Unless corporations are stopped by an aroused and united public voice, anything that can be automated will. Watch for any occupation that earns its keep in the following ways to disappear in the near future (please hear me clearly: I said “occupation,” and not “job”): (1) storing, filing, and retrieving; (2) monitoring, analyzing, accounting, and reporting; (3) doing middleman work (booking, selling, ticketing, dispensing, shipping, receiving); (3) making transfers of money, mail, stocks, or information; and (4) making decisions or issuing policies whose choices the consumer can just as well indicate to a machine.
The list will get bigger as “systems” get better at doing our work. No occupation, not even computer programmer, is immune. If any of these job descriptions fits you, watch out!
Consider this as well. Automation leads to centralization and centralization knows no boundaries. Just as corporations centralize, so do economies. Peter Drucker recently suggested what this should mean to Canadians. He pointed out that the U.S. is now the only country with sizable service exports. Soon the United States will be the hub of all automated, online, remunerated services. In the same way that companies squeezed out workers, so U.S. services will squeeze out “hinterland” economies.
Already our unemployment rate is typically twice that of the U.S. Expect the difference between the two rates to rise. Unless the trend towards automation is stopped, the only significant employment pool left may one day be in the United States. Just as the Canadian worker has been displaced from work, so may the Canadian economy.
Let me remind you of what Business Horizons magazine said in 1993: “We are moving rapidly toward a ‘post-service’ society in which most routine and repetitive service jobs are significantly reduced or eliminated. … What appears to be happening is no less momentous than the end of industrial society as we know it and the dizzying arrival of a new type of society with a far different economic base. … We are witnessing what may be the permanent downsizing of the human work force.”
We are seeing our standard of living decline, our country getting poorer rather than getting ahead. None of us would have wished this upon ourselves had we known then what we know now. It was an unforeseen consequence of unwise decisions.
Automation is not a bug; it is a virus that will spread throughout our population, claiming people’s jobs and eventually taking the corporations down with it. StatsCan reports that consumers are getting poorer and financing their consumption out of debt now rather than income. Because robots and “systems” do not buy goods and services, they may some day be producing them without buyers. Then corporations themselves will begin to fall. When corporations start clamouring with the rest of us, what then?
When that point comes, it will be no easy matter to put our people back to work. They will be technologically obsolescent, the frontier of productive knowledge having passed them by. The solution to the structural unemployment problem will not be as easy as a simple infusion of government cash.
If we undermine work, we undermine the entire basis of our peaceful existence together. It may be fine for other countries to raise coca and deal drugs on international markets, beg by the\ roadside, topple governments, loot and burn, or remain docile while living in poverty and fear. But Canadians don’t live life these ways.
We have tacitly agreed among ourselves to earn our keep by working. An honest day’s wages for an honest day’s work, full employment these have been our social contract. Take work away from us and it isn’t clear how we will earn our living. This is really the new frontier, the uncharted territory that the mixed blessing of technology has led us to.
Expect government revenues to continue shrinking. And, yes, expect the demands on government for relief (retraining, placement, medical services, unemployment insurance, welfare), to continue to grow. Governments will be left to handle their paradoxical finances until they find ways to raise revenue by either taxing those in whom wealth is concentrated or else putting people back to work.
The paradox that governments face is that the governed will demand more services even as governments’ revenues are falling. Such is the result of putting one’s population out of work. Robots do not pay taxes. But the people they replace still pay taxes and still require social services, even as they are less able to pay for them. After all, life will go on for the unemployed.
A trend is not a law. We shall permanently downsize the work force only if we allow it. If we stand firm in demanding that public policy not permit the permanent downsizing of the Canadian workforce, then we shall in time collectively find a way to reverse this trend. I urge Canadians to begin widely discussing this global problem.
I also urge Canadians to elect a government next time that can see clearly and has the courage to wrestle with this problem. If the government feels its hands are tied because it cannot contemplate taking a leading role that involves increased expenditure, then please, accept our thanks and step aside. If jobs are to be saved, then the next phase of things will involve a tighter rein on business practices and the expansion of government’s role in the whole arena of work. I recommend that the voters of Canada in the next election insist that their party have a full platform addressing the technological capture of work and its impact on the people.
I also invite the media to leave aside discussion of “recessions” for the time being and cover the impact of technology on work. If we don’t zero in on this phenomenon, we shall face a situation eventually that is worse than the Great Depression and harder to get out of.
Sidebar: Automation in the Printing Industry
“Automating workflow has been one of the primary benefits of electronic prepress systems since their introduction. However, much of the prepress automation has been done piecemeal, producing islands of automation, each with its own type of workflow. In the early stage of automating the prepress crafts, the new digital workflows tended to mimic the steps followed by the craftsmen. Automation of estimating cost and price, prepress operations, printing, postpress finishing, shipping, and billing occurred more or less independently–digital files from one stage were seldom passed on to the other stages.
“There has been a growing impetus to develop a single, all-digital workflow throughout the prepress, printing, and postprinting stages. An industry consortium called CIP3 (which stands for International Co-operation for Integration of Prepress, Press, and Postpress) is developing standards for the transfer of digital data from one stage to another.
“How close are we to automating the digital workflow for print production? The technology now is at the bleeding edge. … Ten years from now, the automation will be taken for granted.” (“Anticipating the All-Digital Workflow,” Electronic Publishing, March 1998.)
Source: Golden Age of Gaia