Click You

Given the development of today's economic and technological trends,  a fundamental problem of the present is likely to dominate the future: due to various forms of technology and how that technology is used, there are meaningfully fewer jobs that pay a middle class income.  And if growth in these technologies continues, there will be fewer and fewer jobs that pay much of anything.  The obscenely rich will become more so, until the whole system is radically different or collapses into chaos.

The fundamental problem has been known since the 1960s, when one kind of remedy was first proposed: the guaranteed income, in which the government would pay everyone a minimum income so they could live and support a consumer economy.  The idea has been revived in various forms, and even tested in a few places.

But somebody has come up with another idea, to at least ameliorate the problem in certain sectors.  Jaron Lanier is a first-generation Internet guru, developer of virtual reality and as close to a digital philosopher as we've got.  His first book,  You Are Not A Gadget questioned the values currently supported by high tech, and his next Who Owns the Future? analyzed the economic situation, present and future--and proposed something of a solution.

I'm just starting the books, but there are a number of his associated talks on YouTube, both short and long.  I liked one of the longer ones, a talk at Microsoft.  It gives a pretty good range of his personality and ideas.

I can summarize this particular point with a couple of early paragraphs from Who Owns the Future?:

"I will argue that up until about the turn of this century we didn't need to worry about technological advancement devaluing people, because new technologies always created new kinds of jobs even as old ones were destroyed.  But the dominant principle of the new economy, the information economy, has lately been to conceal the value of information, of all things.

We've decided not to pay people for performing the new roles that are valuable in relation to the latest technologies.  Ordinary people "share," while elite network presences generate unprecedented fortunes."

People making these fortunes (in finance, insurance, etc. as well as the big Internet media companies), he argues, make them based on access to information that individuals produce on the Internet for free, as through social media.  The "elite networks" pay nothing for this information, and the people whose information it is, get nothing for it.  (Note that this comports with Bruce Sterling's point:while those who bought into borderless friction-free data have been immiserated by the ultra-rich.)

Lanier's proposal involves a system of micro-payments (sometimes called nano-payments) that essentially provide a small amount of cash for every piece of information anybody accesses for profit. That presumably adds up.  Something like this, he says, is essential if there is to be a middle class in the future.

He got to this analysis because he's also a musician, and he saw the bulk of middle class jobs in the music industry disappear with file-sharing and streaming.  There are lots of people posting music on the Internet, and almost none of them make an income from it.  He has also noted what the Internet has done and is doing to journalism jobs and entities.

He also notes that just as self-driving cars are about to put a lot of people out of work, if 3-D computer printing develops, alot of the manufacturing sector could shrivel and die.

Granted that this is an analysis based mostly on the Internet (though that is where business is going) and new technologies.  (At least in these speeches--there may be more in the books I haven't gotten to yet.)  There are other ordinary factors and likely extraordinary ones that will pertain--like the many disruptions and resulting economic changes due to climate crisis effects. Noticeable now, in a decade or two they are likely to be pervasive.  How these will interact seems outside the scope.

But I note Lanier because this the only new idea I've seen on this problem, and it might be a basis for discussion.  And he's a fascinating guy with a lot of knowledge to share.

Guaranteed Income 2016 Update

Added to my post on the Guaranteed Income 2016 is reference to a new column in the New Yorker that takes a positive view of proposals for what the author calls the Universal Basic Income.

The Guaranteed Income 2016

For the past 40 years, nobody wanted to hear from the Guaranteed Income, which was once a live proposal and even a live possibility in the 1960s, as a way of circumventing the social disaster in the likely future of large numbers of people losing their jobs and income, because of what was then called automation.

But some folks--mostly academics and Europeans--kept up the conversation, though it could also be uncharitably characterized as a lot of academic noise with some signal.  Then this year, somewhat in response to growing wealth disparity, the idea resurfaced.

There are various names for it--Basic Income Guarantee (BIG, which holds an annual conference and has a website), Universal Basic Income, Guaranteed Income, etc.

One version of it actually made it onto the ballot in Switzerland, not because politicians proposed it but because the idea got 100,000 Swiss signatures.  The proposal was soundly rejected, though the vagueness of the proposal as well as its novelty probably didn't help.  But pilot project versions are proposed or in the works elsewhere in Europe.  There's also a pilot project for the very poor in Kenya and Uganda.

The Swiss debate did recycle basic arguments for the idea--the impact of automation, the economic consequences of large drops in consumer demand due to lost incomes.

In many ways it is still such a novel idea that the New York Times got the topic of the Swiss measure wrong, and it's a good bet that even well-informed Swiss citizens didn't fully understand it.  It is however getting some hearing in the US.

Though initially proposed by economists with no particular political ax to grind, it has usually been supported from the left, most notably by Martin Luther King, Jr. From the right the objection was easy: it's money for nothing, sapping initiative, etc.  (Although the actual objection might be closer to making wage slavery and almost free labor a thing of the past.)  But certain rightists, such as Charles Murray, are now behind their own version.  However, his proposal is basically an efficiency measure aimed at replacing all existing social programs, including Social Security.  No hidden agenda there.

There are Libertarian versions, and the idea is reportedly percolating in Silicon Valley.  But once again, it depends on what's actually being discussed.  In the NY Times, columnist Eduardo Porter argues against a "universal" income proposal--i.e. giving everybody in the country a set amount --regardless of their current wealth.  Which is the easiest proposal to destroy, so it's almost a straw man.   (His other objections are in this dialogue.)

What the idea originally meant I believe was a guaranteed minimum income--that is, a guarantee that annual income won't be less that a certain amount.  Billionaires wouldn't get it, or at least wouldn't get to keep it.

So it seems a long way to go to something practical.  But as a basic idea, it has a certain elegance as a solution to real and growing problems.

First, there's current need.  The stupidities of the Consumer Price Index apparently says that the cost of living is not increasing (at least, that's how Social Security interprets it--no cost of living increase this year.)  But a new study says what people outside the wealth bubble already know--the costs of everyday purchases are rising, and taking more of small and fixed incomes.  Fixed costs, like higher and higher rent, that don't make a dent in big budgets, soak up a perilously greater percentage of the small.

Second, the reason the guaranteed minimum income was first proposed is already a reality, and is likely to get worse.  While certain politicians want to blame the economic troubles of a former working class growing into an underclass on immigration and bad trade deals, the reality is more complex--and apart from things like corporate greed taking jobs to countries where near- or actual slave labor is available, a big cause is robots.  And the trend is "engineering the labor out of the product"--i.e. more robots, and automation of tasks performed not only by factory workers and clerks but skilled office, medical and even professional occupations.  So the future those 60s folks envisioned is getting here fast, and for a growing number of people, already here.

There is the somewhat different problem of the virtual economy--the online centers of wealth--employing relatively few people, and putting a lot of other people out of work (like freelance print journalists I could name.)  In Rise of the Robots, Martin Ford notes that General Motors peak earnings were $11 billion in 1979, when it employed 840,000 (union) workers.  In 2012 Google cleared $14 billion, with fewer than 38,000 (mostly nonunion) workers--some of them very well paid, and a lot not so much.  That's a lot of purchasing power gone from the economy, as well as a lot of waste.

In terms of the economy, there's the worry that in the event of a new recession, the usual fiscal tools aren't available (you can't reduce 0% interest rates) and the current support programs aren't going to be sufficient to prevent a steep rise in poverty and further wounds to the economy from less consumer spending.  So something that doesn't exist now will be needed.

Even without steep recession, some economists argue that we can't depend on technology to continue to fuel economic growth, for society at large and certainly not for a great many people.

The guaranteed income idea was always meant to fulfill a social as well as economic need, and indeed, an opportunity for an affluent society to free humans from the increasingly unnecessary and coercive burdens of working for the money to live.  The benefits in human freedom and creativity to make the choice to pursue work and ideas without being forced to serve the self-interests of people in power  might also mean great benefits to human society, and even the economy.

There's also the idea of a revived WPA, supported by the likes of economist Robert Reich, as government employment for public works, which often goes by the name of infrastructure.  There might even be some combination of guaranteed minimum income with public service.

Taking it from a different direction, the time may come fairly soon, under the pressure of the climate crisis and its effects, that the idea of a guaranteed minimum income will seem  like a sensible transition to a radically different economic order in the future.

Update:James Surowiecki's column in the New Yorker summarizes in better depth the history and current status of Guaranteed Income (which he calls the Universal Basic Income or UBI) proposals and concludes: "If the U.B.I. comes to be seen as a kind of insurance against a radically changing job market, rather than simply as a handout, the politics around it will change. When this happens, it’s easy to imagine a basic income going overnight from completely improbable to totally necessary." He starts the column with a real world successful experiment in Canada in the 1970s I wasn't aware of.

Into the Gap Pours Fear

In his brief time in the public spotlight, Martin Luther King championed at least three interrelated causes.  The first of course is racial justice in America.  That aspect has been the focus of protests today related to the wanton killings of black men by police.

But King's concerns did not end with Selma or the March on Washington.  His persistence and eloquence advocating the end of racial injustice has become the least controversial of his public commitments, though it takes an unhealthy dose of hypocrisy for most conservatives to claim common cause.

He also became an outspoken opponent of the Vietnam War, which roiled his reputation at the time.  But his most controversial concentration that remains a flashpoint (and therefore most ignored) is poverty and more broadly, economic injustice and inequality.  That's one reason I led the day with a quote from him on that subject.

It happened that his holiday saw the release of the latest and probably most detailed report on growing "income inequality," this time on a global scale.  The report from Oxfam made some headlines, since it found that by next year, the world's top 1% will control more wealth than the other 99% combined.

To be more specific, it's the combined wealth of 80 billionaires versus everybody else on planet Earth combined--all 3.8 billion.  This is a change from 2010, when it took 388 billionaires to balance out the rest of the global population.  And when the 1% had just 48% of the world's wealth.  The incomes of these 80 doubled since 2009.  Did yours?

“The scale of global inequality is quite simply staggering,” Winnie Byanyima, executive director of Oxfam International, said in a statement. “Despite the issue shooting up the global agenda, the gap between the richest and the rest is widening fast.”

A summary of this study, with graphs and pie charts, can be found at the end of this article that begins by noting that a lot of these billionaires along with business and political leaders are going to be in Davros, Switzerland this week, talking about all this.

There are a number of even less appetizing details in the study, such as the fact that many of the top billionaires made their money from healthcare and pharma.  In other words, they became obscenely wealthy by taking advantage of the sick and dying, their pain and their fear.

It's already been widely reported that in his State of the Union on Tuesday President Obama will again talk about income and economic inequality, and barriers to fairness and opportunity in the U.S., and that he will propose new tax revenues from the very rich and tax breaks for the middle class, and that they have no chance of passing Congress.

But the situation remains, the proposed solutions are clearly inadequate (absolutely no one of prominence I know of is talking about anything like a guaranteed income, as King did) and even these paltry proposals are unlikely to be instituted. People are increasingly afraid.  You can tell because they aren't talking about it.

The Dreaming Up Martin Luther King Day Quote

"I am now convinced that the simplest approach will prove to be the most effective -- the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.

Earlier in this century this proposal would have been greeted with ridicule and denunciation as destructive of initiative and responsibility. At that time economic status was considered the measure of the individual's abilities and talents. In the simplistic thinking of that day the absence of worldly goods indicated a want of industrious habits and moral fiber.

We have come a long way in our understanding of human motivation and of the blind operation of our economic system. Now we realize that dislocations in the market operation of our economy and the prevalence of discrimination thrust people into idleness and bind them in constant or frequent unemployment against their will. The poor are less often dismissed from our conscience today by being branded as inferior and incompetent. We also know that no matter how dynamically the economy develops and expands it does not eliminate all poverty."

Martin Luther King, Jr.
1967
excerpted Seattle Times

The irony is obvious. We're going backwards.  For more on the guaranteed income, an idea widely discussed in the 1960s and 70s, see the posts on this blog accessible through the "guaranteed income" label, and this post at Soul of Star Trek.

The Gap

I don't have explanations or theories about this, nor do I have a plan or even a suggestion to propose.  I only have an observation, and I can't get past how astonishing it is to me.

Let me begin where I started thinking about this lately, with some history that is clearly still relevant.  Since technology began to reshape the workplace after World War II, forward-looking economists and other social thinkers saw that what was soon called automation was probably going to lead to a social crisis.  Machines were going to put humans out of work.  Unemployment would rise, incomes would fall, the economy would suffer with fewer consumers, and poverty would grow, with its attendant social problems as well as human suffering.

In the mid 1960s an approach was developed that came to be called the Guaranteed Income (also called the Guaranteed Minimum Income and Guaranteed Annual Income.)  Economist Robert Theobald edited a book of essays on the subject in 1966 called The Guaranteed Income: Next Step in Economic Evolution? It advocated the idea from economic, political, institutional and psychological points of view. (Psychologist Eric Fromm called it the key to the transition from a pre-human to a fully human society.)  Other books explored the moral dimensions.  We're talking facts and figures, studies and complex arguments.

A guaranteed income was seen as an antidote to job losses through automation, but also as a way to attack poverty and its attendant problems more efficiently. In substituting for a grab bag of inefficient and dehumanizing programs, a guaranteed income would not even cost more than the programs it replaced.  Society would have to bear less financial burden for health, education and other problems that were rooted in poverty, in not having enough money.

These ideas were influential and persuasive enough that they informed proposals for laws and implementation. Martin Luther King (whose federal holiday birthday so many piously and cynically celebrate) supported one version as part of the proposed Freedom Budget. George McGovern was ridiculed for proposing his version in the 1972 presidential election, but something like a minimum income passed the House and almost passed the Senate during the Nixon administration, with White House support.

Today we are living in the world those people were worrying about.  It hasn't played out exactly as any of them foresaw but the basic situation is here: technology combined with other factors has created a permanent surplus work force, either permanently or often unemployed, underemployed or unemployable.

And we continue to have complex and dehumanizing social programs that really nobody likes, and they are insufficient.  So given how long ago these problems were anticipated, you'd think we'd be pretty smart about them now.

Instead, what do we have?  Not only aren't we progressing on this growing problem, we're falling back from where we were in the 1930s.  The U.S. Congress has once again failed to renew unemployment insurance which they let lapse just in time for Christmas.  Unemployment insurance is something that workers have paid into, and so the government took the premiums and refuses the insurance.  Sounds like the health insurance business before Obamacare.

Congress is balking at raising the pitiful minimum wage.  Republicans are busily trying to prevent people from getting health care.  Congress cut food stamps--food stamps! for the poor.  At best, damaging individual and national health and nutrition,  at worst telling poor people to please just starve.  At least, poor people in Democratic states (the cuts targeted 16 states and DC; 15 went Obama twice, 28 of their 32 Senators are Dems.)  

This of course comes at a time when the gap between the very wealthy few and everyone else is as extreme as it has been since at least World War II.  Such a huge proportion of money in the hands of a few helps to cripple the economy by keeping that money out of circulation.  But coupled with this, the public views of the very rich and their minions also have never been so extreme.

This was summed up in a recent dumbfounding story. When Oxfam released its report showing that the 85 richest people in the world hold more wealth than the 3.5 billion poorest (that's the collective wealth of 85 vs. the collective wealth of 3,500, 000, 000), an on-air apologist for the wealthy exclaimed that it was great news.

These extreme views of a handful of very wealthy men and women are so politically powerful that any semblance of democracy is threatened.  Some of these views are so outrageous that they seem surreal, but they aren't just the views of a few cranks (Josh Marshall has some penetrating thoughts on what they are.)

Whatever the psychology involved, it's a clear threat, especially when politics is more and more about money.  When the Koch brothers, through their tax exempt groups, spent more money in the 2012 election than all of the candidates combined in 2000, it's just a matter of time before that investment pays off.

 It clearly is paying off in Congress.  It's becoming clear now that the story isn't a sane Republican business class trying to control and manipulate the Tea Party rabble.  The rabid right as well as the Tea Party is the direct product of some of the wealthiest and most politically active right wing extremists.

Meanwhile the spiral continues downward.  A new report confirms that nearly half of Americans are living paycheck to paycheck.  These include the new lower middle class, mostly two-parent, two-job families with at least one college education--yet they still struggle.  It seems that everybody sees the growing wealth gap, and can't agree on anything else.

Meanwhile the suffering continues and grows, and so far mostly in silence.  If there isn't a hell I hereby authorize Sister Editha to design one, just for that billionaire who said that he's rich because he works harder than people who aren't rich.  Here's just one story about the lives of people who work harder than that asshole can even imagine, and are still in a world of pain.

It's not completely bleak.  President Obama keeps shining a light on all this, and much to my surprise, there's a Pope now who is more than mouthing platitudes.  Some like Robert Reich call for a new WPA (some guaranteed income proposals call for community service and public works), stating the same basic economic point: "The real job creators are the vast middle class and the poor — when they have enough money in their pockets." There are even corporate leaders who are aware of the dangers of the growing gap.  And even versions of the guaranteed income or negative income tax are being discussed--in Europe.  

 Another variation getting some attention is the "Citizen's Dividend."And as eye-rolling as otherworldly academia can be, it's worth mentioning that in its precincts, the guaranteed income remains alive and well.  Now it's called the Basic Income Guarantee--" an unconditional, government-insured guarantee that all citizens will have enough income to meet their basic needs."  There's a U.S. Basic Income Guarantee Network with a website, academic papers and an annual Congress.  The 12th was last May in New York (a joint project of Basic Income Canada Network and the U.S. network.) The 13th joint confab is scheduled for June in Montreal, perhaps to prepare an actual proposal for Canada.

Still, the state of the U.S. political zeitgeist is clear.  At a time when most everyone agrees the income or wealth gap is so extreme (and the numbers clearly show it is), we are at the extreme edge of not dealing with it--of actually penalizing the people who suffer the most instead of coming up with the best ways to help them, and to help this economy and this democracy get better, instead of sliding into decadence and despair.  And it is the most wealthy--the greatest beneficiaries of the political system, including efforts by the Obama administration--who are the most publicly aggrieved.  It seems the gap between political perception and reality is just as enormous.

And it reminds me a little too much of the political zeitgeist in regard to the climate crisis.  You could essentially write the same story.

It's the Technology, Stupid

Within the major movement of President Obama's speech in Kansas that's the subject of the previous post, there's a more specific one that is a lesson of the past that he is applying to "winning the future."  In a way, it is what he means by winning the future.

President Obama was in Osawatomie because it was where Teddy Roosevelt made his New Nationalism speech in 1902.  It's clear by the way that Obama has known the TR speech for a long time, as it seems a source of his own rhetoric and approach--for instance in his first famous speech, to the Democratic Convention in 2004.

 TR made the speech in response to economic and social problems he saw as a consequence of income inequality and corporate domination (huge corporations called trusts.)  But both of these were partially products of the same phenomenon--one which we share now.  And it is not in itself political.  Here is what President Obama said about what TR faced:

At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: Would we settle for a country where most of the new railroads and factories were being controlled by a few giant monopolies that kept prices high and wages low? Would we allow our citizens and even our children to work ungodly hours in conditions that were unsafe and unsanitary? Would we restrict education to the privileged few? Because there were people who thought massive inequality and exploitation of people was just the price you pay for progress."

This transition was the result of the industrial revolution; it was in essence caused by new technologies.  Those technologies allowed corporations that controlled them, and the few who controlled the corporations, to benefit greatly, while workers did not.  The economy expanded rapidly, but since workers weren't making enough to buy enough, there were severe economic downturns, called panics (there were other causes and specific events that set them off, but this was an underlying problem.)

Though TR and others in the Progressive era began the process to institutionalize economic justice that would eventually profit the entire economy, it was only partially accomplished.  The Great War expansion and other factors created a bubble of prosperity in the 1920s, though again mostly a very small percentage--the 1%--got most of the wealth and the buying power.  By the end of the decade, the stock market crash and the Great Depression of the 1930s.

"Seen in perspective, the Depression appears to have been the last convulsion of the industrial revolution creating a hiatus before the technological revolution," writes William Manchester in his sadly neglected historical masterwork, The Glory and the Dream.  The techniques of mass production, he continues, raised efficiency by man-hour over 40%.  "This enormous output of goods clearly required a corresponding increase of consumer buying power," but that didn't happen.  Workers weren't making more money, though they were being urged to spend more.  They did, on credit.  Sound familiar?  Enter the Great Depression, caused in part by a failure to respond to an economic problem caused by new technology.

"Today, over 100 years later, our economy has gone through another transformation," President Obama said, with reference to the time of the TR speech. "Over the last few decades, huge advances in technology have allowed businesses to do more with less, and it’s made it easier for them to set up shop and hire workers anywhere they want in the world."

And that's just for starters: once again, there is a gap between technological change and the response of the economy.  Now a rational politics (not to mention a discipline of economics not controlled by ideology and corporate interests) would see how this problem has recurred, and would recognize it when it happens--even anticipate it.  And act accordingly.

President Obama has recognized it (see? He just said so) and since he took office he has advocated and engineered programs to address it, some of which he emphasizes in the rest of this speech: education, infrastructure, innovation in new technologies, particularly in the globally growing sector of green energy.  These lead to tech jobs that pay well (and with wages rising globally, America becomes more competitive.)  All of these recognize that technology now defines and largely determines the global economy.  (He didn't mention programs like health care but they also contribute in increasing buying power for people as well as for businesses, not to mention, you know, health.)

But here's something else that isn't part of this speech, or even part of the public dialogue anymore.  Because the impact of new technology--so quickly obvious in the last couple of decades--has been clearly in the cards for a half century.  It went by the name of automation for awhile, and it was a major topic for economists and sociologists in the 1960s.  (My first paper in my freshman sociology class was about a book on automation and alienation.)  The larger problems were foreseen: more production, less work.  The current situation wasn't always foreseen: employed people working a hell of a lot more, tied to their jobs around the clock by computers and cell phones, while millions of others aren't employed at all.  So these academics worried about the increased leisure time.  But they also worried about the basic problem that always occurs, that had happened in the Great Depression when many of them were in school--when technology increases production and the economy expands, but not enough people have enough money to buy what's being produced. 

They went so far to seriously consider...well, you're not going to believe me.   You might believe me if I told you there is really a Hogwarts, or that Jane Austen really was a vampire.  But you won't believe this.  But it happened, it really did.  What was seriously considered, by mainstream economists among others, was something called the Guaranteed Minimum Income.  It was clear that a high tech economy could produce such an abundance that the economy would actually work better if everyone got a minimum living, so they could buy stuff.  Businesses would profit far more than supporting the Guaranteed Income would cost them in taxes.

There were other benefits.  Poverty would essentially be abolished, if that means anything to you.  And therefore a lot of other social costs would decline--as poverty-borne disease and a lot of crime declined.  There would also be long term benefits.  Crazy geniuses wouldn't have to starve or get wage slave jobs--they could just create and innovate, and some of their art or science or whatever might benefit society. 

In any case, there was concern that at minimum there would be a gap between changes caused by new technologies and the ability of many people to deal with those changes, especially economically.  And that the economy itself would suffer, again. So something new--something to fill the gap--would be needed.  If not the Guaranteed Income, then something else.  This was foreseen in the 1950s and 1960s, and we've had half a century to figure it out.

So here we are, having not figured it out and having apparently forgotten we even knew the problem, in a situation that includes several important features of the early 1900s and the 1930s: a small number of extremely wealthy people, and a lot of people barely getting by or not getting by.  A few pigs, and a lot of suffering.  A dwindling middle class sunk further by credit (card) debt.  Growing unemployment, including people who will not be employable again, at least not with their current skills.  Technology increasing prosperity for some, but sinking many many others.

Oh, and one more factor, which the 60s economist didn't foresee.  They assumed that strong unions would protect workers incomes, and so would society.  They may have realized that capitalism has always depended on some form of slavery, but they thought that thanks to unions and the kind of progressive laws advocated by TR and instituted by FDR, the slaves of the future would all be machines.  They didn't realize they would at first be Mexicans and then Asians, and then de-unionized Americans. 

And you can tell how sophisticated our political dialogue is about these problems by listening to Mitt Gingrich and his plans to return to the child labor of the mid 19th century. Once again, the poor and the unemployed have nobody to blame but themselves, it's all their fault.  The necessary role of government in preventing economic collapses, and in responding to technological and other change, which was largely accepted 50 years ago, is now considered an alien ideology.  As President Obama said in this speech, this is partly a consequence of income inequality--the filthy rich and their institutions are dominating and corrupting the political system, and actively destroying the resources of institutions that they see as a threat.  Beyond the bumper sticker of greed, this is a source of the growing darkness.