The Next One - Economics

Bearing in mind that more and more jobs are automated every day, it follows that fewer jobs will be available on the market. If that is true, and it is, there is one important question we have to consider: in the fully-automated world, who decides who has access to resources?

Who are the people who will get food, when all production is automated, and no one needs to work anymore?
What are the criteria for accessing food or clean water, when jobs do not exist?
How are you going to get food, if everything is in the hands of those few wealthy people?

This is the coming reality, and it is already mentioned a number of times throughout this series, as it is a serious problem we need to find a solution for as soon as possible.

While discussing new systems, some people are hasty to use the “utopian card” as a dismissive argument, and that argument is neither valid nor beneficial for either the discussions or the attempt to find a solution. Every idea on social structure, regardless how carefully it is thought through, will have pros and cons, and humans, being humans, we will always have some kind of problems. The rich people or celebrities are the best proof of this, regardless of the amount of money they have and the fame that follows, they have their own serious problems (health, addiction, identity etc.), and they can still end up being unhappy.

It is necessary to emphasize that this is not a discussion on how to make some utopian, futuristic system. Because we know what kind future awaits us, we can conclude — from the way things are going currently — with a degree of certainty that we will probably end up in dystopian world.

We already know that perfect solutions and utopian systems are more or less an impossibility, and that they do not and cannot exist. Also, we do not want to end up in a dystopian system; therefore, what are our options? What is the solution?

As we know, we cannot find the perfect solution. We can try to find an optimal solution — the solution that will be the best intersection between good and bad traits.

Whatever we choose, we have to realize that it will not represent the final system, and, wherever we decide to go, we will carry some of our problems with us, but the good thing is that, along the way, we can always change and improve things that do not work as we expected them to.

Prerequisites

The good thing is that we already have all the necessary technology that can allow us to do many things that were impossible before. With every passing day, we have even more new, amazing technologies that can allow us to resolve our problems much quicker.

Over the period of time many mathematicians, philosophers, thinkers, scientists gathered vast collection of knowledge, and, there are many theories and many experiments that can shows us how to continue further without causing major disruption of our society and creating a dystopian world. I have chosen one path that looks like the most logical move from the position where we are currently.

Why we do things we do?

Ask yourself the following questions:

As a species, do you know why we do what we do?
Is it knowledge? If it is knowledge, what is the purpose of that knowledge?
Is it curiosity?
Is it laziness?
Is it life preservation?
Is it immortality?
Is it preservation of conciseness and culture?
What is our goal?

Sometimes, it looks like we are not sure why we do some of the things we do. It is important to verbalize answers on those questions. When we ask, “What is the goal?,” we should not be necessarily asking, “What is the end goal?” Goals can change over time, and most of us understand that. We do not have the same goals now as we did when we were children. We need to clarify our goals. Just like driving a car, if you do not know where are you going, there are very good chances you will never get there, at least not in a foreseeable time. Clarifying what the long-term goals of civilization are will give us better odds of getting there quicker.

If we can define “why we do what we do” and “what are we trying to do?,” it would make it much easier to find the fastest solution to get there — the optimal solution — while taking into account all necessary points of view related to it.

For the purpose of this post, let’s assume that our goals are to use technology or modify our bodies, in order to make our lives easier and more enjoyable, and to promote learning, curiosity, exploration, creativity and invention, and by it fulfill our human potential and enhance our abilities.

In the process, maybe we will hand over manual jobs to AI or use it as knowledge support, but, surely, we would like to keep something for ourselves, such as decision-making or creativity. Also, there is a high probability that we do not want a perfect solution instantly, but we would like to get there gradually, because we intuitively know that this perfect solution will make us obsolete, or it will make our existence a very boring experience. Gradual change will allow us to adapt while moving to those long-term goals.

The only thing left is to identify feasible middle steps to that long-term goal we have defined.

From an economical standpoint, we know that we will need to get rid of the current system, as technological unemployment will make it impossible to work, anyway. That being said, let’s suppose that our goal is a moneyless society while having more existential security for every member of society. The next thing we need to find is the middle step: how to provide some kind of income for people in the currently existing system while trying to find something new that will make the entire thing obsolete.

The good thing is that a natural step in that direction was already invented quite some time ago: it is a system that is already a widely discussed topic in the media. Its name is:

Basic Income

Also called “unconditional basic income” or “universal basic income” (UBI) ^*2, it is a form of social security system in which all people of one country receive a certain amount of money that is unconditional. This amount is usually enough to cover the basic existential needs of one person. If the amount of money is not enough to satisfy all basic needs, it is called “partial basic income.”

Unconditional Basic Income -- does not discriminate

The idea of a minimum income first appeared at the beginning of the 16th Century, theorized by More and Vives as a means of providing welfare for poor people or as more astute way of fighting theft than sentencing thieves to death. ^*3

Usually, basic income is paid by the government from tax revenues. Because the cost can be significant, in order to decrease pressure on the budget, all other welfares are discontinued, largely simplifying bureaucracy and additional costs connected with granting those welfares.

Basic income can do many positive things, but, among the things basic income is, it is not a utopian tool, and also it is not a solution for all of our problems.

Basic income can be a beneficial tool that can solve technological unemployment, reduce inequality, free up our time, and it may spark entrepreneurship. In several test runs across the globe, in places where basic income was truly unconditional, people have shown the ability to self-organize and to create a more vibrant and more economically valuable society.

The removal of existential issues frees up our time, and with that time we can pursue higher goals, such as education, creative work, or even personal projects or startups.

When a person is struggling to satisfy existential needs, most of his or her time will be wasted looking for a new job or working any job that can fulfill the minimal requirements necessary for survival. In order to overcome that struggle, a person needs to find a better job. For a better job, the usual requirement is better education. For better education, a person needs free time and money. Because all time and money are spent on basic survival needs, freeing up the time and finding the money for better education becomes the impossible task; it is a classic “Catch 22” problem.

With basic income provided, a person becomes the master of his or her own time. By overcoming that struggle, a person can dedicate his/her own time to education, personal projects, volunteering, or creative work that can actually benefit something or someone. By removing the worry about existential needs allows us to reduce economic inequality, which can otherwise hinder a person’s development.

Additionally, raising people above the poverty line can, among other things, effectively prevent population explosion and can save us in the long run.

Furthermore, in countries where tests were conducted, there were many other positive effects: salaries for jobs no one else wanted to do were increased, crime rates went down — reducing the need for police and justice systems — entrepreneurship went up, people started working more for the betterment of themselves and society, women become more independent, and it had an overly positive effect on the economy, largely reducing paperology connected with other types of welfare.

What are the major fears?

The largest fear is that, if we get universal basic income, we will just turn to watching TV and play video games — basically not doing anything and crippling future society.

In order to tackle this problem, let me ask you one question: if basic income is enough just for basic needs, would you still work?

When we are asked that question, usually 99% of people answer, “Yes, we will continue with some type of work.” They list reasons for that answer, such as ambition, socializing with other people, having access to more things, etc.

However, if we were asked whether we think others will continue to work if they get basic income, we tend to answer in the negative, saying that they won’t do anything and that they will be lazy most of the time!

We have to shift from that or any similar biased thinking. We should start trusting our neighbors. Many people who traveled around the world by foot or bike, despite experiencing a few bad things along the way, have a similar story: “the majority of people are good.” The same goes for the basic income question and whether we would work while receiving free money. Survival is not the only thing that drives us as human beings. There are many other reasons why we do what we do: love, ambition, competition, curiosity, knowledge, compassion, altruism, and many others.

What can be the problems of Basic Income implementation?

Introducing Basic income can backfire, and there are multiple reasons that can happen, but, also, there are many ways to deal with those issues.

Job side-effect

Introducing UBI in the current economic system could create a more competitive job market; therefore, it would be more difficult to find a working force for those jobs that need to done but which no one wants to do, as they are either low-paying, hard, or boring.

That is not necessarily a bad thing, although it looks like a catastrophic economic chain reaction waiting to happen.

Another issue is that it can create an economically unsustainable situation for some companies or public services, as it would affect profit so much that it would not be economically viable for the company to exist.

How do we deal with this?

The answer is simple: either automate/innovate or do not do the job.

If you cannot automate, innovate, or increase the price of the product or service, in order to achieve economic viability, then that product/service should not exist.

Price side-effect

The one more serious issue is that the introduction of UBI can cause a pricing bubble.

If we give free money to everyone suddenly, excess money on the market can cause a price hike. For example: rent can jump by an amount equal to what we have distributed for basic income, siphoning money into the pocket of a few and again creating the same poverty issue we had at the beginning. Eventually, this can cause an inflationary bubble that can collapse the economy.

How do we prevent UBI from causing an inflationary bubble?

In order to avoid this, we would need to either create policies that would not allow products or services to increase prices over the typical inflation rate, or we would need to rethink that type of industry.

One glaring example of something that needs rethought: housing. It is not a thing anymore; it is not innovative, it is the most expensive investment people make, and, by and large, it is a major economic problem. It can be resolved entirely, if we start thinking in a different way. The only reason why housing has existed in its unchanged state for so long is because it is one of the biggest tools of enslavement and control of the masses.

Housing can be solved in different ways for the future society, and you can read about some of the ideas in the following post, “Housing solutions ^*.” (* Link will become active in few weeks)

Behavior side-effect

Although I explained earlier that, in test runs, Basic Income had positive effects on people’s behavior, and that the majority people are not lazy, let’s consider the hypothetical possibility that this is exactly what will happen — that for some group of people, adapted to poverty conditions and high crime, basic income will do them ill favor and enhance their bad behavior.

How do we solve that possibility of a bad behavioral side-effect?

It would be wrong to introduce basic income, expect that everything will resolve on its own, and then judge the idea based on a group of people who failed without looking into the reasons for that failure.

It is very much like giving a winning lottery ticket to everyone: of course, many will not know how to handle it, but the good thing is that the majority will know. Those who had working habits, knowledge, or are naturally self-driven will manage, but a certain percent of people will not live better.

It is similar to giving money to an alcoholic; of course the person will buy more alcohol, because his biggest problem in the first place was not the lack of money but his addiction.

Basic income will not prevent crime; people who have problems with addiction will still have issues. Murder, theft, and gambling will still continue to exist. Basic income also does not tackle greedy people, who will continue to exist. People who are terrible with money management will still spend it all at once. However, it will help to those who are caught in bad neighborhoods without a chance to move forward; it will help many who are willing to make a change and improve their lives.

In order to combat crime and anti-social behavior, society would need to create more support groups and free learning help groups. Similarly, just as we are taking care of childhood boredom, we would need to find a way to educate and animate those groups toward positive change. Education is the key; if we do not want to let people slide into boredom, we need to open those people’s minds and expand their horizons through continued, voluntary education. Teach people to dream better dreams, and they will rise to grab them.

The new structure of society would require psychological help for every member of society, but not in the specific sense of psychotherapy; instead, it would be more like orientation-therapy — basically, helping people to find what they love, if they cannot remember on their own.

Ask yourself:
If basic existance was not an issue, what would you do in your life?
What do you want to do with your life?
How happy are you with your life?
What is your contribution to society?
Can you help us get there?

We always have a choice, we can continue dealing with crime and anti-social behavior with the existing punitive approach, like we have done before.
Or, maybe we can find a better way and help each member of society to find its own way?

Age exploit

As every person receives universal basic income, this can create issues where parents or guardians are attracted to the idea of having multiple children, in order to gain more money.

This can either promote a baby boom behavior, like it already happen with young UK teen mothers, or it can create “Oliver Twist” types of fraud, where children in foster homes or orphanages are kept in terrible conditions, so that their “patrons” could enjoy a wealthy life.

Population explosion on a finite planet with finite resources is a huge issue, and, in some sense, basic income can be used effectively as a tool for “controlling” population numbers.

Limiting the age for receiving basic income would violate the basic premises and simplicity, which say that everyone should receive it, regardless of age, gender, or origin. The work around for this problem would be that children can be given access to their compounded basic income funds only when they become adults, so they can decide what to do with that money.

That approach could resolve one more issue, by the time they become adults they would have enough funds to buy their own homes and continue living on their own basic income independently.

The argument that “It is wrong to give something for nothing”

To begin with, everything we have and nearly all infrastructure that surrounds us has been created by other people. In many ways, we are using it for free or almost free. Countless generations before us created knowledge, roads, the electric grid, underground tunnels, ships, cars, etc. Regardless of how big we may think our contributions to society are, we have done these things only because of those who came before us.

In order to address ownership of capital, we may argue that our social contract was wrong from the beginning. If our ancestors had a better social contract, we would not need to argue this question at all. If they had a proper social contract, they would have had shares in each company for which they have worked, proportional to the contribution they have made to that company. In this way, when everything becomes automated, they would have if not equal then at least enough access to resources that would allow them and their descendants to survive...

Imagine a scenario where a couple of people worked toward a similar goal. For instance, the goal was to build a machine that mills wheat seeds into flour. At the beginning, the job was done manually, and it was tiring and time-consuming, as everyone needed to work, in order to produce enough. Someone had the idea to harness river stream and build a waterwheel to roll the milling stone. In the process of making the machine, everyone had some job. It was not just building the waterwheel but also creating the stone, the hut, the road to the river, cutting trees, preparing food, etc. When the job was done, it was not reserved only for the one who invented the waterwheel; it was accessible and available for everyone who was involved in making the project possible. Everyone could use it for free. With time, the waterwheel would need just a bit of maintenance, now and then, and that is all. It is there for everyone to use, for everyone to share.

This idea is not socialism. It is not communism or any other –ism. It is common sense. It is collaboration, instead of competition. It is giving and sharing, instead of guarding and hoarding. It is what society really means — creating a better life for everyone.

Master and puppet issue

One more issue that can arise is the active control of the public through price manipulation and income control. In a democratic society, there is a huge difference between having the ability to decide and being controlled.

One possible danger is that in fully automated system, basic income can become a tool of keeping the masses deliberately very close to the poverty level, not giving them access to resources. The decision of controlling the amount of funds dispersed could fall to the government, giving it the ability to control and manipulate the market through inflation and price increases, in order to siphon all the funds into the pockets of a few who are at the top.

In order to avoid possibility of master and puppet issue in the society with basic income, it would be necessary for that society to become a full democratic society, where all will be involved and work for the benefit of the society.

How do we get there?

Although basic income is probably the most logical step we can think of at this point, it seems that many people are still reluctant, and they still do not know how to manage the transfer of the current system toward basic income society.

One of the approaches would be just voting — maybe have a referendum, switch, and see what is going to happen.

A more cautious, infrastructural approach would be to prepare systems and institutions (education, consulting, volunteering, charities, group therapies, art, etc.), making a campaign to educate people, and outlining the goals and ways how to move toward the future.

One good example of already built infrastructural approach is charity in the United Kingdom. Charity there is part of the culture, and it has quite a developed infrastructure. I won’t go into a discussion on how effective they are, as my only point is that people are keen to give away money to charities and different causes and that, for them, that act of giving is as natural as breathing. The same can be done with supporting infrastructure for basic income.

Although Universal Basic Income is gaining traction, progress is still quite slow, and I have a couple ideas on how to speed up this process and how to move toward a more direct democratic society, which would eventually lead us to a fully-functional, moneyless world.

Glimpse of the future: A World without Money

Personally, I think that date is not very far off. We will have a society without money. When I say no money, I also mean that there will be no type of credit calculation or quid pro quo merchandise exchange. It is just a personal, intuitive hunch, but, somehow, I know it will happen as natural, evolutionary step in our society that is unavoidable.

One of the earliest thoughts about similar systems can be found in ideas about Technocracy, Sociocracy, and Cybersocialism ^*5, where computers were used to calculate how much work is necessary to satisfy the need for a certain commodity.

Some of the people and ideas worth exploring are Robert Owen and the idea of labor notes that suspend the usual means of exchange and the need for middlemen; Salvador Allende and his “Project Cybersyn;” Leonid Kantorovich and his mathematical solution on how to best use equipment in the plant; and Sergey Lebedev’s ideas advocating for cybernetic socialism. I will mention many more in some of my future articles.

Notes & References:

The Next One (The New Game: Economics - draft)