Guest Post by The Zman
In the coming decades, Western nations are going to be faced with a number of problems stemming from the technological revolution. Some are already with us. We are now post-scarcity societies, where we have more than enough food, medicine and housing for our citizens and even some non-citizens. The pruning force of scarcity is no longer doing its magic to keep the population fit or even sensible. The next big problem is what to do with the tens of millions of extra humans, no longer needed to contribute to society.
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The hardest part of the automation wave coming in the next decades will simply be language. What do you call people who no longer have any purpose, in terms of producing goods and services through their labor? For as long as anyone has been alive, the very small slice of the population that has fit this definition could simply be dismissed on moral terms. The underclass is assumed to be lazy or anti-social. Trying to fix this has been a good way to keep the useless off-spring of the middle classes busy is social work.
When the numbers swell as automation eliminates the need for human labor in wide swaths of the economy, it will be impossible to dismiss the idle. When many of the idle are people who formerly occupied office jobs or semi-skilled laboring positions, blaming their condition on a lack of ambition is not going to be possible. The current labor participation rate is about 63% right now. This is about where it was in the Carter years. In the coming decades, that number will fall below 50% due to automation and demographics.
The other challenge is how to support the swelling ranks of the useless in a way that keeps them from causing trouble. The hot idea currently is the universal basic income, which is being experimented with in Finland. In the US, some states are talking about how to replace their welfare programs with something more simple like the UBI. Libertarian economists like the idea of the UBI, because it theoretically allows the under classes to participate in the market economy, unencumbered by the state.
The trouble with this idea, one that they can never overcome, is math. If all citizens have a floor, in terms of their basic income, whatever that floor is, will be the new zero. The only possible way to have a negative income, in real terms, is if someone is paying their employer for the right to work. There may be some bizarre situations where that exists, but in the main, zero is the smallest number that can appear in box #1 of your W2. If that number is bumped up by the UBI, that becomes the new zero, the lowest possible.
Think of it this way. Imagine the government decides to help BMW sell more cars, so they offer every citizen $5000 if they spend it on a BMW, rather than some other car. BMW is now facing a wave of people coming into American dealerships toting a $5,000 check payable to BMW. The logical thing for BMW to do is raise the price of their low end models by $5000. That way, they don’t increase production costs, but they increase the profit per car. In effect, the floor for entry level buyers was just raised by $5000 by the government.
There’s a pretty good real world example of this. The government decided to do something to help working class people get into college. Since many need remedial help, before taking on college work, the scheme was to offer a subsidy to be used for community colleges. The students would use the money to prep for college then head off to a four year university, presumably using loans and aid at that level. The result, however, was the community colleges just raised their tuition by about 65% of the subsidy.
The Universal Basic Income would most likely follow the same pattern. By guaranteeing that no one would earn less than some amount, in lieu of traditional welfare payments, the absolute floor becomes the subsidy level. In effect, the new zero becomes the subsidy so all other wages would be based off that, as the price of goods and services would correspondingly adjust. It is really no different than printing up money and dropping it from helicopters into the ghetto. The UBI would be as inflationary as debasing the currency.
The truth is, the zeroes that our rulers will be forced to address are zero population growth and zero TFR among the surplus populations. For example, you could fix Baltimore in a generation with mandatory Norplant for the underclass. A generation of childless females means the last generation of 80 IQ residents with a propensity for violence. The reason Baltimore is a violent city is not an excess of hard working, college educated STEM workers. The reason the city is a violent mess is the surplus of violent stupid people.
It also means zero immigration. When 80% of today’s immigrants end up on public assistance, the immigrants of tomorrow will be nothing more than useless people to police, feed and house. Japan is the model to follow. They have no immigration and their population levels are about to drop in the coming decades. They are the only nation on earth that is truly ready for the automated future, as they have the demographics to meet a shrinking demand for labor. They also have the cultural confidence to pull it off.
There’s one other zero the West will have to tackle and that is zero participation. The fact is, free-market consumerism and mass democracy work when the right answer is not obvious. As automation takes over more and more tasks, the number of issues that need to be hashed out collectively will diminish. Rule by robot means exactly that, which means voting and popular government will have to be reconsidered. What’s the point of being mayor when there are no more patronage jobs to dole out to friends and family?
Wealth is really productivity. If everyone was productive we would have an even better country.
Universal Basic Income (UBI) – well you see where LBJ and the great society got us – it has created a culture of dependence and crime. Wrecked black families, and their family structure.
A new example of screwing the productive ones, the taxpayers:
Luxturna gene therapy for blindness to cost $850,000 – Spark Therapeutics, which makes Luxturna – knows there is no limit – how can we deny someone their sight? If insurance companies pay for patients to be treated, they’ll pass along the costs to other patients in the form of higher premiums, Public Citizen’s Peter Maybarduk said.
Then also – there is a drug for Hepatitis C – costs $100,000 to cure. Well prisoner’s are demanding their rights to be treated – it will bankrupt state’s budgets.
Seems everyone has a right to a bottomless pit of the taxpayers money.
The UBI has a number of key features.
1, Unlike benefits when you receive the UBI you can still work. In addition UBI should be used in conjunction with the removal of minimum wage rates. Hence marginal low paying jobs would kick in to absorb the excesss labour.
2, As UBI is not means tested but a right of citizenship all of the other means tested benefits will be removed along with the vast payroll of government employees administrating them.
3, UBI will be used in conjunction with steeper marginal rates of tax. So the net cost of benefits paid and taxes collected should be the same as existing schemes.
Currently you either receive benefits or work and the problem is that you need high paying work to incentivise leaving benefits. Under UBI you do not lose benefits. So any extra income is exactly that this raises the incentive to work even on marginal low paying jobs.
Good analysis of why UBI can never work and how the market would simply adjust. Maybe there’s some kind of lesson there?
However, what never seems to get considered is the exponential growth of technology. It looks something like this:
There are no scales, but the shape is obvious. Has this type of curve EVER done anything but collapse and rapidly at that? But no, since it’s technology and since technology has never collapsed before, we can easily (and correctly, no doubt) assume that it will not only never collapse, but continue to grow exponentially forever. Hurray!
I’ll say it again, empires collapse because of diminishing returns on energy and complexity. I may be wrong, but I predict there will be a peak in automation (and a subsequent rapid collapse) within the next 20 years (to be comfortable) but more likely within the next ten. At which point we will have a LOT more to worry about than high unemployment.
I’m pounding the table on this ZMAN article.
UBI is very inflationary; more so than printing greenbacks.
DRUD refers to a lesson: The lesson is that whenever the Gov’t interferes with altruistic efforts to its citizens, human behavior turns that effort to a negative result.
Interesting that on the same day we’re considering whether Millenials will ever be able to stop working we’re also considering whether there will be enough work for them to do.
What he said.
Star Trek economics. Everybody works, nobody gets paid, everything is free. Only Ferengi get rich.
Outlaw the 40 hour week. Mandatory triple time pay for anything over 20 hours.
Everyone back to work with time for family and friends and health restored.
That comment gets 6:1 thumbs up to down? Are TBP readers really that stupid?
For starters, can you live on half your wage? Can increasing the labor content of goods by double have a good outcome for anyone? That is the stupidest thing posted here, well, all day, and people liked it. Amazing.
I’m pretty sure “Reality Wins” was using sarcasm.
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I’m sitting in the Sonata, charging up the battery. The temp is -3 ….. minus three, actual, not wind chill. But they say it might get to around 50 by Thursday. Bipolar fucken shit.
” the reason the city is a violent mess is the surplus of violent people ” Nope ,the reason the city is a violent mess is because of Black people .The city is ruined because of Niggers. Period .
UBI ,is just paying people to sit on Their butts .It does nothing but encourge more dependence.
Besides you could always just ” kill the surplus population.”
I’m all over the place on this one with you, Z, but there’s some real gems in here. I ask people all the time, what are we going to do with the useless people? I don’t quite define them the same way as you do, but I agree there’s a bunch of them. And this is some real clarity right here. “Japan is the model to follow. They have no immigration and their population levels are about to drop in the coming decades. They are the only nation on earth that is truly ready for the automated future, as they have the demographics to meet a shrinking demand for labor.”
That’s interesting about the Japanese. I never thought of it that way. Those smart little yellow fuckers may yet rule the planet.
It makes sense when you think about it
The NWO folks already have a plan for the new zeros, eliminate most of them. This is well spelled out on the Georgia guide stones which I saw this past Summer.
I think zarathustra’s point is a good one. We get rich.
“you could fix Baltimore in a generation with mandatory Norplant for the underclass”
Curious – what would be the criteria?
BMI>30
Smokers
Unnatural hair color
Credit score <640
Tattoos
Any young woman of child bearing age receiving .gov subsidies to exist should be “Norplanted”. If you can’t support yourself, you have no business having children.
“The Universal Basic Income….is really no different than printing up money and dropping it from helicopters into the ghetto. ”
Let the Keynesian Dems float a trial run of that in Baltimore, and have the cameras rolling.
And you thought them shines in the Waffle House were throwing haymakers?
Whoo boy. It would be mayhem, until the 9’s came out of the waistbands blastin’ before the fluttering greenbacks even landed on the pavement. America’s Shittiest Home[boys] in Videos.
-suds
The UBI plan has its problems- all of which are listed above. But, if it is used as complete – 100% complete – replacement for all of the social programs we have now, it would upend completely the underclass culture as it exists today.
The problems that have evolv s in last two generations are almost all created by the welfare state programs and how they work. Every one of those programs reward and incentivize bad behaviors. The shiftless thugs with mines in their waistbands are the product of that phenomenon. Take away WIC EBT AFDC Section 8, et al, and the incentives go away. Sure it’ll take a decade or two for the thugs to die off, but the trend will be established.
The ONLY way for Western civilization to be saved is to get away from industrial food production and go back to small family farms. By doing that alone, we could create probably 100 million jobs in North America alone within a decade. Until the Great Depression, the majority of almost every Western country’s workforce were farmers and had been for centuries. Our entire system of common law, property rights, and traditional virtues was borne from agriculture. More so than almost any other occupation, farming requires hard work, strategic thinking/planning, a broad working knowledge of a diverse range of subjects (botany, genetics, hydrology, mechanics, carpentry, basic finance) and an acceptance that Mother Nature cannot be controlled. Few livelihoods produce such well rounded CITIZENS as farming, and farmers are never simply consumers.
People are meant to be in touch with the land and with each other. Let technology take over the factory and office jobs (who really enjoys a factory job or sitting in front of a computer all day?) and let the real humans do things they did before the industrial revolution. Things like farming, fishing, teaching, and creating works of art in visual, musical, written or functional form.
Laughs are “post-scarcity.”
“Libertarian economists” like it, eh? Names? Or are those scarce?
“The reason the city [Baltimore] is a violent mess is the surplus of violent stupid people.” And this happened in a racial vacuum, just because they’re black and with no other socioeconomic impetus, right? The Zman is a flaming racist. What a shame TBP has to lace its otherwise insightful libertarian commentary with so much of this simple-minded tripe.
Regan – eliminate Baltimore, Detroit, Chicago, a few others from the stats, and guess what? US is one of the safest places on earh.
And what do those cities have in common? Let me think – lots of Jews? Nope, that is not it.
The answer is lots of blacks. Deal with it. To change things, you must first acknowledge the truth. And cities that are heavily black populated are dangerous as hell – every damn one of them.
I did not realize violent stupid people was a race. But if you are virtue signaling and projecting that violent stupid people are blacks, wouldn’t that inherently make you the racist, Reagan Straley? Really, you think only blacks are stupid and violent, whose the racist now Reaganism Straley? I thinks you Are!
I’m not signalling anything. Any intellectually honest reader [which I suspect you are not] would know that Zman is referring to the predominantly black population of inner city Baltimore. Like Zman, you have in your reply ignored the socioeconomic reasons why Baltimore is full of “violent and stupid” people. You and Zman are saying they are violent and stupid because . . . [fill in the blank]. If anyone is virtue signalling, it’s you. You’ve just not so cleverly disguised it by not directly filling in the blank with the words “they are black.” Besides, if I was the type of person who was prone to virtue signalling, I wouldn’t be a daily reader of TBP. I like it’s focus on economic and geopolitical reality and it’s defense of civil liberties. I just have to cringe occasionally at the racist undertones of some of the articles that are posted here. Also, the name is Regan, not Reagan. I know how to spell my own name.
Don’t even have to read the article to answer this one….you create a narrative of white privelege, self hate, bring tones of refugees into a country they hate and want to kill, bring in religious zealots hell bent on killing infidels and then allow them to vote, run for office become elected and allow certain people welfare benefits and force all white people to work until they die and never be allowed to retire while certain people get a living wage and free housing, an obummer phone, gas vouchers, free healthcare, free internet because now it’s considered a utility like heat and air conditioning and electricity. That’s what you do with million of useless bastards. Let them live free and fun while the white people nowmlive as slaves to them….