Eliminating taxation and implementing a basic income payed for by new money created out of thin air, pegged to the GDP for the year, is how the world will deal with machines creating more wealth than we know what to do with, without people.
It's a direct form of wealth transfer that requires zero force, no "putting people in cages because they can't/don't pay" nonsense.
For social spending, you do the same: print new money that's a percentage of GDP, and let citizens allocate their share to various social causes (police, fire, education, natural disaster relief, etc.).
As a concrete example, if the USA produces 15 trillion in GDP for the year, you could print 3.75 trillion for basic income, and 3.75 trillion for social income. The 3.75 trillion for basic income would be split evenly among the 330 million people, amounting to $11,364 annually per person. Each person would also have $11,364 to allocate ("appropriate") for various social causes.
Taxation is eliminated. Everyone is fed and sheltered. Growth in wealth is shared equally. Anarchists still get to keep all of the money they earn (remember: no taxation). IRS is gone. All of the tax-funded welfare programs are gone, but we've got plenty of money annually to dedicate to social welfare programs. People don't have to give money to the police if they care more about education. There's no need for a minimum wage, or tracking people's incomes. There's no downside (in terms of extra taxation and lost benefits) to working more. And on and on.
This is entirely doable today, at a purely technical/administrative level. Once robots are doing the work of the labor class, and 40% of the country literally has no jobs, and won't, ever—then it'll become a social necessity.
That's why the problems in this article don't keep me up at night: not only is the solution easy, it's far preferable and way more democratic and fair than what we have today.
For extra humanity, create a global currency, peg new money creation to the world's annual GDP, and do a basic and social income for everyone in the world equally, full stop.
Since 1930 productivity in my home country Sweden has increased fivefold, mainly due to technical achievements. Does that mean that we work 20% of the time we did then? No it does not. Wealth has increased of course since the 1930s, and perhaps we want a higher material standard.
But also consider than since the 1970s productivity in Sweden has doubled. Does that mean we work 4 hour days instead of 8 hour days now? No, of course not. Instead, since the 1970s we work 100 hours more each year.
As a society i feel that we should be using the technical achievements to give us more time for the things and the people that we love. Is that too much to ask for?
Whenever I hear the phrase "the dignity of work", I'm reminded of Jeffrey Bernard's quote:
"As if there was something romantic and glamorous about hard work ... if there was something romantic about it, the Duke of Westminster would be digging his own fucking garden, wouldn't he?"
There are at least two major indignities connected to a conventional life and career. The first is that mainstream education is about winning prizes rather than learning what is interesting to you, for its own sake. The second is that most people don't particularly enjoy their jobs, they're only working for money.
Although there's still a taboo around not working, it can't last. The future, as Arthur C. Clarke said, is not full employment, but full-time playing. (Some of that playing will resemble what we now call 'research'.)
Meanwhile, there is work for anyone who has minimal food, shelter and web access. There are many unsolved problems out there and not just in open source software. With dignity galore, because they're important.
I am not an unconditional advocate for Basic Income but I think that the idea is intriguing and could potentially be very efficient. I am not going to argue about what BI could or could not do but I would really like to see more experiments with it to have some tangible information. I would rather see that it fails than hope that it would work. Of course, I'll be delighted to see it work.
We might talk instead about the dignity of endeavour for its own sake, or the dignity of contribution to society. Such phrases may seem to have the makings of a social infrastructure for socialism. Indeed they do, for a world in which machines can do much of the work will need to become more socialistic if it is not to become intolerably unequal.
You know we're in new territory when the Economist puts forward something like this without pulling it apart in the next paragraph and explaining why a free market solution is preferable.
I'm a cynical ass, but whenever I hear the phrase "the dignity of work" I can't help but sarcastically mentally add "yeah, work will set you free".
I don't get the philosophy behind the "dignity of work". People primarily work in order to get paid, money they then spend on themselves or their families. Work is no more altruistic than going to clubs and having casual sex.
Society functions not because people feel compelled to work out of principal, but because if no one worked, the price of labor would go up until people were enticed to do it.
And it's also very strange that eroding the labor supply is painted as a "loss of jobs", when lowering the labor supply means more and better jobs for those who do want them.
Finally, the idea that making poor people better off is bad because they might work less, is ridiculous. What is society striving for in the first place, if not the benefit of its members? Sure, the disincentive to work creates real deadweight economic loss. But this loss has to be weighed against the gain to the people receiving the handouts. It seems pretty clear that the wrong balance between work incentive and reducing inequality was struck in the US, and Obamacare is helping to fix this.
This is slightly off topic. Work is rather a vague term. If you break it down into it's components: effort, compensation, social-benefit, etc. then you can start to assign relative merit to different kinds of work. For example financiers which might be categorised as: high compensation, low to moderate effort and low social benefit and janitors: low compensation, moderate effort, low compensation. Now you can start to make value judgements about how different types of work are rated or (should be) valued by the general public or society as a whole. You can also factor out the ideological or moral components attributed to work by various political factions and start to answer interesting questions such how much should teachers be paid and what jobs which are low compensation, low social benefit should we be automating as fast as possible.
There is a lot of joy to be had in doing something for someone, that they want done so much that they are willing to pay you for the work. After I've slogged 80 hours in a week on something, getting a huge fat check from my customer is a great joy, indeed.
Its not work that matters - its the formal exchange of value that occurs when someone pays you for something you've done for them, because they want to pay you that amount and are happy to do so.
The value of work is in the exchange - not the doing, not the acting, not the 'being a worker' mentality - but in actually receiving a great reward which prolongs ones own life and increased ability to survive in the world.
Fat checks are great! Work hard for them: even greater!
I would argue that many modern 1st world jobs are a form of pointless busy work. I am also concerned by the waste of resources and damage to the environment many of these jobs entail. Most of the truly important work (like food production) is achieved overseas or by a very small percentage of the population. The victorian "work ethic" way of thinking needs to be re-examined and possibly discarded as I do not think it is useful anymore, in fact I think nowadays it is detrimental. A more exigent social philosophy for this age would be more focused on trying to achieve a more sustainable society.
I think there's several separate issues: Krugman correctly points out that work disincentives are different from job destruction. However there are different kind of work disincentives: it is certainly hard to view people working _just_ for healthcare (as opposed to switching jobs, retiring early, or starting their own business) as something positive. By all means, disentangling healthcare from employment is at least a worthy goal -- there are many artificial reasons which currently make non-employer health insurance (and non-insurance health care) far more expensive than would otherwise be.
On the other hand, the individual mandate and increased price of even the most basic catastrophic coverage does seem to cut into disposable income, which (in a sense) has the equivalent effect of huge marginal tax hike: essentially as the salary increases, essential benefits decrease (no eligibility for food stamps, subsidizing housing, or subsidized healthcare), while taxes increase. Incentive to do anything other than get by decreases, strong incentives are created to cut out other "unavoidable" payments such as by moving to places with less expensive housing costs, even if at the cost of less employment opportunities. Replacing the system that offers increasingly little to honest working poor(1), but imposes regressive mandates to fund what are essentially transfers from working classes to middle-class senior citizens (e.g., medicare and social secure) with a a universal basic income (funded through income tax or perhaps a Georgist "rent tax") would help, but making it a political reality may be tricky but feasible ( see here for an interesting analysis from a "left-libertarian"/classic liberal perspective: http://bleedingheartlibertarians.com/2014/01/the-positive-po... )
This does not automatically imply that various "mandates" of are always bad policy, the job of policy advocates should not be to hand-wave issues, but to present them in a way such that the public could make an informed choice. There are many times where Krugman does an excellent job of this (indeed, I'd imagine he rightly sees this as the very point of his NYT column); yet, it's odd that while Tyler Cowen (another trained economist) discusses this topic in a great deal in Great Stagnation and Average is Over, Krugman does not mention this and talks about what is really a related, but separate (even if important) matter of income inequality. Honestly, I don't see how income inequality (which is a serious danger for many reasons -- I don't mean to handwave it) has a role in this: if we raised the salary of teachers in Bay Area to that of software engineers, these salaries will still remain minuscule compared to that of top CEOs, but does anyone doubt that this would greatly increase teachers' job satisfaction? The problem with low pay isn't that someone is paid higher, the problem is that low (or no) pay makes life extremely stressful as basic needs and rudimentary wants are harder to fill: never mind being able to send kids to college, it's more about being able to afford a place where kids have a room to themselves while still having room to grade class papers after work -- one can't afford this on a teacher's salary in most parts of Bay Area.
(1) This is what irks me a lot about the debate on this topic. It's one thing to argue that welfare programs are wrong because taxation is wrong (then your job is to prove that taxation is wrong), but if taxation is wrong why not first cut programs that impose a greater tax burden? Military and medicare spending each cost more than food stamps and don't seem especially under-funded, yet it's the food-stamps program that got cut.
So we are saying that most of the people out there are of no use to the economy and thus, most probably, to society. Well, welcome to fascism 2.0, this vision is elitist, it creates a huge power lobby (the entity paying up the basic incomes...), and it sees people as sheep with no brains.
A similar idea: When good ideas (like the Protestant Work Ethic) turn bad:
http://stumblingandmumbling.typepad.com/stumbling_and_mumbli...
I'm confused by the idea that technology will somehow eventually render most of the population jobless. Why should this cause a breakdown of the capitalist system? These discussions seem to take this for granted without explaining why this is true.
It looks like technology will continue to allow more and more people to pursue business ventures that are less and less related to filling basic needs. We will still consume, we will still find ways to trade that are mutually beneficial. We will simply have a better standard of living. It seems the logical conclusion is that there will be more opportunity for everyone, not less.
Different jobs and different opportunity is not the same as no jobs and no opportunity.
It's all fun and games with the citizens basic income until the government hits hard times and has to think about what to cut. Having the vast majority dependent on income from a single, fallible organization is a recipe for disaster.
What dignifies people is autonomy. Someone intelligent enough to write for The Economist should be able to figure that out. That they couldn't (or chose not to) makes the article little more than propaganda.
Everybody in the USSR had job. But these jobs didn't produce any (usually) value to the society. Who wants to have a job like this? You want to do something valuable so you know that what you produce people are willing to pay for (vs. being forced to pay for it). It just seems much more healthy too.
There are these interesting developments that I noticed and I'm interested to see how many others noticed that: (1) Polarization of left vs right views among people in both US and EU (2) Sudden drastic turn to the right in many places in the EU while at the same time turn to the left in the US.
It seems to me that since 1945 the US has been mostly right wing and is turning left radically, while the opposite is true in the EU.
"Maybe the jobs are gone forever" - Good analysis, economist. This article is full of bullshit 'maybes' and aggressive 'income inequality' overtones.
I don't know how this garbage gets onto HN.
> A world in which a healthy adult has the reasonable expectation of earning a decent living while working full-time at a market wage is absolutely a world in which the dignity of work is a useful social value to cultivate. In a world in which that is not a reasonable expectation, the dignity of work can be a harmful concept.
Interesting times ahead. It's going to be painful getting there, if we get there at all, but the idea of a Universal Basic Income seems to be getting more popular. (It wasn't so long ago it was pretty much pure sci-fi.) Particularly I guess as it begins to look like modern capitalism may not actually be good at providing jobs for everyone who needs one.
Potentially UBIs could be very good for the world, freeing people to work on things they personally desire and value, and in some ways redistributing the 'means of production' back to the little guy.