Why the Market and Technology Aren’t Playing Well Together (and Five Possible Solutions to Fix the Problem)

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A SYLLOGISM TO EXPLAIN THE PROBLEM IN THE ECONOMY

The impact of new technologies on the economy is a hot topic right now. Just a few years ago, the idea of machines replacing human labor was widely dismissed, but now a growing number of pundits and economists are expressing concerns about the impact of automation technologies and the possibility of technological unemployment.

People tend to approach this complex issue in different ways. It can be a difficult topic to think about, so for the purpose of discussion, I’d like to present a simple syllogism as a possible framework for understanding what is happening.

MAJOR PREMISE: Economic opportunities arise from the monetization of scarce commodities.

This is Economics 101. For a good to have a price on the market, it must be scarce. That is, the good must be in demand and exist in limited supply. If you have only one of these two elements, the good will not be worth anything.

For example, breathable air is in high demand but it does not exist in limited supply. Good luck putting air in a bag and trying to sell it. Conversely, your old dirty socks might exist in limited supply, but since no one demands them, they are probably unsellable.

The market rewards people who are able to take a scarce commodity—whether a physical good like a chair or a service like massage therapy—and monetize it. In this way, scarce commodities are the source of all economic opportunities.

MINOR PREMISE: Technological progress reduces the number of scarce commodities by creating abundance.

Technology is a tool that humans use to get more of what they want. So it shouldn’t be a surprise that over the years technological progress has made a wide variety of goods—from food to music—less scarce and more abundant.

Today in the economy, a few trends in particular are having a big impact:

  • Goods are being digitized. Example. Mp3s have digitized music.
  • Services are being automated. Example: Self driving cars will automate driving.
  • Processes are being disintermediated (cutting out the middle man). Example: The web has made travel agencies unnecessary.
  • Markets are being globalized, allowing superstars to crowd out competitors. Example: MOOCS might enable a few top-tier professors to lecture to world-sized classrooms.

All of which are part of the same bigger trend: technology is making all manner of goods and services—music, driving, travel planning, education—less scarce, more abundant, and therefore lower price in the marketplace.

It should be acknowledged that abundance in one area often gives rise to new scarcities in another. An abundance of fatty foods gives rise to a scarcity of healthy choices. An abundance of entertainment options gives rise to a scarcity of time to enjoy them all.

That being said, I still believe we are making progress towards a more abundant world. I think it would be wrong to suggest we are just treading water. Like a mathematical limit that approaches zero but never quite gets there, we are getting incrementally closer to the post-scarcity ideal with each passing year, even if such an ideal is fundamentally unreachable. The result is that progressively fewer scarce commodities exist as technology moves forward.

CONCLUSION: Therefore technological progress reduces economic opportunity.

I believe this is the simplest way to understand what is happening. Our technology and our market system, once comfortable collaborators, are increasingly on a collision course. This is because these two institutions have fundamentally opposing goals. The goal of the marketplace is to find and exploit scarcity. The goal of technology is to find and eliminate scarcity. The second goal undermines the first.

If true, this conclusion would partially explain both the unemployment and the inequality we see. Unemployment could arise from the fact that it is increasingly difficult to find a scarce resource to exploit. More and more people find themselves without a scarce service to offer or a scarce good to sell.

Inequality arises from the fact that the few remaining scarce resources are increasingly concentrated in the hands of the few. We can think of the economy as like a game of musical chairs where the chairs are scarce resources. As the chairs get removed, fewer and fewer people have a place to sit.

In the past it has been possible to find new chairs to replace those that have been taken away. It might still be possible to do so. But it increasingly feels like the game is being played faster and faster—that the chairs are being removed much quicker than we can replace them.

CATEGORIZING POSSIBLE SOLUTIONS

Actually developing a detailed solution for this problem is a complex policy question that I do not hope to answer in this article. However, I think the above framing makes it possible to categorize broad types of solutions.

SOLUTION ONE: Freeze Progress

If technological progress is undermining our market system, one option is to try to stop technological progress. This could take the form of government bans on automation technologies that displace human workers.

However, this hardly seems like a good choice. Aside from the fact that technological progress is generally desirable and gives us lots of nice things we want, such an initiative is probably infeasible given that it would require muzzling scientists and inventors the world over. In addition, without avenues for continued growth, the market might stagnate or collapse.

SOLUTION TWO: Artificial Scarcity

If we are running out of scarce commodities for ordinary people to exploit, then one response is to create new scarcity by artificial means.

Our society creates artificial scarcity all the time. We create artificial scarcity when we grant an author exclusive copyright over a book he’s written or an engineer exclusive patent on an invention he’s developed. We create artificial scarcity with licenses that make it illegal to practice law, drive a cab, or sell alcohol without permission from the government.

It might be possible to greatly expand our current system of artificial scarcity and thereby create more economic opportunities for ordinary people. With regards to the musical chairs analogy mentioned above, you might view this as one way of creating more places for people to sit. Less favorably, you might look upon this solution as counterproductive: essentially encouraging people to put air in bags and charge each other to breathe.

(In his new book, Jaron Lanier argues that "in a world of digital dignity, each individual will be the commercial owner of any data that can be measured from that person's state or behavior.")

One possible artificial scarcity scheme is to treat all data like property. Ordinarily, data is not scarce. Just as their is no limit to the number of times you can tell a joke, there is no limit to the number of times you can use a piece of data. However, in the future it might be possible to turn every idea, photo, or bit of text you generate into an artificially scarce commodity to be monetized. Enforcing such a system would require either a universal operating system or an overarching surveillance system to strictly monitor and regulate all instances of copying.

I view this solution as less extreme than solution one, but still counterproductive to technological progress. A growing body of evidence suggests that artificial scarcity in the form of intellectual property hinders rather than helps innovation. In addition, by creating artificial scarcity and erecting walls around various goods, we are working at cross purposes to what one might consider the primary goal of technology: to have more access to the things we want.

Still this is a solution which might gain some traction since it could be seen as one way to empower ordinary people. At the same time, elites might like this system because it would afford them numerous levers of control in the form of legal bureaucracy. However even with broad support, it is questionable whether a full-fledged artificial scarcity regime would actually be enforceable. History suggests that decentralized technologies are hard to contain. Our failed wars on drugs and piracy are prime examples.

SOLUTION THREE: New Platforms

There are some commodities that will always remain scarce. These include intangible goods such as authenticity, status, good will, and belonging. Is it possible to carve up these remaining scarce resources in such a way that we can continue to create economic opportunities for ordinary people?

For example, could we have an attention market that allows broad participation? Right now the attention market is dominated by a few advertising middle men like Google. Perhaps with further disintermediation, we could all become our own localized advertising platforms—the digital equivalent of wearing your friend’s band t-shirt and getting paid for it. Alternately the advertising giants might find it worth their while to start paying users for their continued attention/loyalty. These are just a couple (not very imaginative) ideas.

(In Race Against the Machine, McAfee and Brynjolfsson discuss how "new platforms leverage technology to create marketplaces that address the employment crisis by bringing together machines and human skills in new and unexpected ways.")

In addition, there are bound to be temporary pockets of human ability that cannot yet be duplicated by machines and are therefore still scarce. Although these pockets will shrink and vanish with time, if we can find and exploit them quickly enough via some sort of crowd-sourcing scheme we might be able to ease unemployment in the short term.

Effectively monetizing the remaining scarce resources may require the creation of new economic platforms, along the lines of current platforms like Kickstarter, Flattr, HumbleBundle, and Mechanical Turk, but on a much larger scale. We can think of these platforms as being like “apps” that run on top of the market “operating system.” They do not rely on artificial scarcity; instead they find novel ways to facilitate the exchange of existing scarce resources.

It remains to be seen, of course, whether it is possible to develop a platform or platforms that can actually come close to replacing more traditional forms of employment. I think there is great reason to be skeptical such an outcome is possible. However, we cannot entirely rule it out. This solution is highly desirable because it would cause the least disruption to our current system.

SOLUTION FOUR: Expanded Welfare

(An expanded social safety net could take the form of a universal basic income. In his essay Robotic Freedom, Marshall Brain asks "What if we, as a society, simply give consumers money to spend in the economy?")

If ordinary people are being crowded out of the market, then one solution is to reduce our dependence on the market as a means of providing for people. We already have a variety of social safety nets that seek to accomplish exactly this goal. So we might extend these safety nets to ensure that people who are no longer economically viable still have access to food, housing, and essential services. This could get expensive, but advanced technologies might help make up the difference by lowering cost of living.

This solution would not require getting rid of the market entirely. Under such a scenario, the market could continue to do the important job of distributing those commodities which still remain scarce. However, over time fewer and fewer people might be active market participants. This could be a smooth transition or a disastrous one, depending on how things play out. To prevent market collapse and maintain the cycle of consumer spending we may need to ensure that people not only have money, but continue to routinely purchase products from the marketplace. Like shaking any addiction, weaning ourselves off the market could be a slow and painful process.

SOLUTION FIVE: Automation Socialism

(Futurist Jacques Fresco has long advocated abandoning money and markets in favor of what he calls a "resource based economy.")

We could decide that since the market is no longer working well with our technology, we ought to just get rid of the market system entirely. A central government body would then have to take over the distribution of resources. Ideally wealth would be shared equally amongst all people.

Obviously a socialist system would have many detractors. However, some of the traditional problems of socialism—lack of motivation on the part of workers, inefficiency of central planning—could perhaps be mitigated through aggressive use of new automation technologies. It would be incumbent upon the government to aggressively invest in the sorts of technological breakthroughs that would make a fully automated society feasible.

In a best case scenario, automation socialism could speed us on the way towards a utopian society. In a worst case scenario, automation socialism could lead to tyranny and stagnation.

CONCLUSION

The above solutions can be placed on a loose spectrum that runs from those which prioritize the market over technology (freeze progress) to those which prioritize technology over the market (automation socialism). My personal opinion is that the best path is somewhere in the middle, utilizing a combination of artificial scarcity, new platforms, and expanded welfare.

Specifically, I favor new platforms if they can be made to work. Barring that, I would vastly prefer to move in the direction of expanded welfare rather than artificial scarcity. My intuition is that scarce resources are best handled by markets, care of people is best left to governments, and abundance is best left unfettered by artificial scarcity.

What do you think?

A Dystopia Based on Pleasure and Manipulation is More Likely than One Based on Pain and Repression

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People are fond of imagining futuristic dystopias ruled by sadistic elites who crush the people into the ground at every opportunity. Hunger Games is a recent example. Hunger Games is, of course, fiction, but it’s indicative of a common attitude. When you tell people that things might get better—that technology might bring us greater peace and abundance than we’ve ever had before— their answer often is that the elites won’t let that happen. Which I admit is possible. But while it’s rational to consider powerful interests that might be lined up against positive changes, it’s a strange leap to expect active sadism from elites when they have little to gain from it—when in fact, giving people pleasure might be a more effective strategy for maintaing control. In other words, I think somas probably work better than hunger games.

Along these lines, I was amused to discover a letter by Aldous Huxley to George Orwell in which he argues that Brave New World is a more likely outcome than 1984:

“The philosophy of the ruling minority in Nineteen Eighty-Four is a sadism which has been carried to its logical conclusion by going beyond sex and denying it. Whether in actual fact the policy of the boot-on-the-face can go on indefinitely seems doubtful. My own belief is that the ruling oligarchy will find less arduous and wasteful ways of governing and of satisfying its lust for power, and these ways will resemble those which I described in Brave New World…

“Within the next generation I believe that the world’s rulers will discover that infant conditioning and narco-hypnosis are more efficient, as instruments of government, than clubs and prisons, and that the lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience. In other words, I feel that the nightmare of Nineteen Eighty-Four is destined to modulate into the nightmare of a world having more resemblance to that which I imagined in Brave New World. The change will be brought about as a result of a felt need for increased efficiency…”

We Need to Start Shedding Our Old Romantic Ideas About Wage Labor

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Technological advancements increasingly allow us to conceive of a world without wage labor. But the fact remains: a lot of people are very attached to the idea of having a job. Many pundits who talk about these issues are aware of the possibilities of automation but still maintain that jobs are an important source of meaning and purpose in our lives.

Andrew McAfee, MIT economist and coauthor of Rage Against the Machine, is fond of quoting Voltaire: “Work spares us from three evils: boredom, vice, and need.” In a live hangout on Google+, McAfee’s partner Erik Brynjolfsson suggested that there is an important psychological value to people having work, which is why a universal basic income would be a bad idea.

People do need meaning in their lives, but nowhere is it written that people must get this meaning from wage labor. Our reverence for wage labor is culturally determined. In America especially, identity is very much tied to what one does for a living. But this is not how things have to be, and I think we ought to start changing this value system if we want people to feel happy and well adjusted in a future rife with automation.

Wage labor is a mechanism that forces you to work on what the short term market finds important, rather than what you yourself find important. This is perhaps the dominant form of coercion in our lives. Do your job or lose it. Lose your job and face poverty, debt, and loss of status.

I’m not saying all jobs are bad. But let’s not celebrate the glory of wage labor without also reminding ourselves of how terrible and soul crushing jobs can be. How many questionable or even terrible things have been done because someone was scared of losing their job? How many times have people uttered the common refrain “I’m just doing my job” in order to justify behavior entirely contrary to their conscience and character? Where is the dignity in that?

As automation advances, it’s not even clear if wage labor is economically efficient. Wage labor has a built in bias towards short term outcomes. If you are living at the low end of the wealth spectrum (as increasingly many of us are) the imperative of living expenses forces you to fulfill short term market niches to the exclusion of more long-term economic projects. What is the opportunity cost when smart, talented people take on taxing day jobs that preclude them from innovating or starting entirely new businesses?

Could Gamification Contribute to Technological Unemployment?

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The goal of gamification is to make a non-game task more engaging by introducing game-like elements. Gamification is still a new field but it has had some key successes, such as Foldit.

How could gamification contribute to technological unemployment? Well if you can make certain jobs fun and game-like enough, then people on the internet might do them for free. Or at least for far lower pay.

Imagine a company that is trying to keep costs low. First they might automate as many of their tasks as possible. Then they could take the few remaining tasks that still require human intelligence and gamify them. The company gets free or cheap labor, and people on the internet get to play a fun game. Everybody wins… except for the people who are now out of a job.

It remains to be seen whether gamification can be pushed this far, but I suspect it could. I imagine with the right designer you could turn almost any boring information task into a “game” that some people on the internet might obsess over and play for free.

Data is Not Labor (or the Problem with Jaron Lanier’s Idea)

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A week ago I was compiling a blog post entitled “Ten Responses to the Technological Unemployment Problem”. There was one response that occurred to me, but that I intentionally left off of the list. I omitted this response because I didn’t know of any serious proponents. That is, until I caught wind of Jaron Lanier’s new book Who Owns the Future.

Lanier is proposing what you might call a “data ownership society.” The basic premise is that Silicon Valley companies such as Google and Facebook are using our data to make massive profits; therefore they are “stealing” from us. Since we are not being compensated for this data we generate, we are victims of “slave labor.”

I have serious problems with this perspective. Data is generated constantly as a mere byproduct of existing. Computers have just made that data collectable and storable. The fact that wealth accrues to people who salvage this data and then process it with algorithms hardly seems exploitative on the level of slave labor.

It’s also important to remember that data is not rivalrous. Companies cannot “steal” your data in any meaningful sense, because if you’re smart you can still have a copy of that data on your own machine. If you write a status update, for example, that update can exist at the same time on Twitter, Google, Facebook, and a private computer you control, and all parties benefit. Similarly, data regarding your walking patterns can be simultaneously scanned by law enforcement for terrorist activity and by your smart phone for fitness diagnostics, and neither algorithm is worse off from sharing. Data is a positive sum game.

I agree with Lanier that there is a problem. Technological disruptions are indeed hollowing out the middle class. I think people need to be able to make a living, and I think government may increasingly have a role to play in guaranteeing that. I just don’t think the solution is to start confusing data with labor and treat it as something that therefore needs to be compensated.

To fully understand the problems with Lanier’s vision, I think you should click through to this Time article and watch the embedded video. In it, Lanier explains how people ought to be constantly given small micro-payments throughout the day every time someone uses their data. This would include payment for just walking through a city and being captured by a video camera. The following summary appears at the end of the article:

“Ultimately, Lanier envisages a future in which we would retain ownership of our virtual selves, the content we produce online, and the incremental improvements we make — passively or actively — to the products created by powerful companies. Some sort of universal micropayment infrastructure would be necessary to allow capital to flow to and from each player in the economy. Setting up this infrastructure will be a monumental undertaking for sure, but as Lanier points out, no more monumental than the infrastructures that have already been created.”

I have numerous objections, but I will boil them down to just two:

(1) Lanier’s system would be so complex that it would likely lead to further concentration of wealth and inequality of the type he wants to avoid. It would require a centralized algorithm to enforce an extremely complicated set of rules. When you have big centralized bureaucratic systems like this they tend to not only be inefficient but be highly game-able by wealthy people, lawyers, and other algorithms. Inevitably the rules get skewed to benefit a few. If you compare Lanier’s solution to another option on the table—universal basic income—it’s clear that a UBI is far simpler to put into practice. UBI would also require a centralized institution to run, but the rules would be orders of magnitude more concise: everybody gets the same monthly check.

(2) Lanier’s system would probably act as a disincentive to innovation. Big Silicon Valley corporations are not the only ones who might want to use your data. What about individuals, students, and small businesses, to name a few? Wouldn’t they be discouraged from using data when faced with an avalanche of compulsory micro payments? On the more extreme end, things could get even worse. For example, would I have to dole out money every time I take a photo and accidentally catch the face of somebody in the background? That might sound absurd, but I think if you watch the video with Lanier you will see that it is in tone with the general future landscape he is describing. Specifically, he implies a world where every piece of data we generate—every step and every breath—is bought and sold. To me that not only sounds impractical, it sounds miserable.

The Internet is Bringing Us Closer Together

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You often hear technology characterized as a dangerous temptation that disrupts social growth. Technological interactions are fundamentally “not real,” we are told, and are antithetical to “real” traditional social interactions.

Among many examples to the contrary, file this: a study out recently finds that, with reasonable attempts to control for compounding variables, access to broadband internet increases marriage rates. If the study’s conclusions are valid, that means a traditional social interaction (whatever one thinks of it) is directly being supported and encouraged by computer communication technology.

Vernor Vinge on Technological Unemployment

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Vernor Vinge is consistently one of the most interesting and conceptually dense futurists I’ve had an opportunity to listen to. While watching this excellent talk of his at Singularity University, my ears perked up at the mention of technological unemployment, the primary focus of this blog.

About halfway into the talk he broached the general issue of technological disruption:

“In the present era we all seem to be involved in the Red Queen’s race. Myself as a writer, I’m up against eBooks, and I’m up against all the piracy. I’m racing as fast I can, and if I hadn’t actually had some success in the past, it would be of course much, much worse for me to be in this steam turbine that’s called modern progress. When I talk about it happening to some other job category, I don’t feel quite so tragedy-struck about their plight. But we’re kind of all up against a situation of terribly disruptive new technologies.”

Soon afterward he addressed the topic of technological unemployment more directly:

“What comes after technological unemployment? There are certain things that humans are still very good at. And some of these crowd-sourcing [successes] tell us that those certain things that humans are still very good at are maybe much larger than we think in comparison to the machines, at least if the work is done in coordination with the machines. But what we’re really good at are isolated things. So you can imagine a civilization in which there are these bright little sparks of human level intuition and creativity and insight that are separated by vast stretches of algorithmically accessible problems. And there’s a lot of occupations and businesses, where the successful insight on the part of management is figuring out how to do all the stuff you can do without those expensive people, and then what remains are those bright little spots where you need to have the people.

So technological unemployment, I think, is a very real thing and, in the early twentieth century, the white collar and academic sorts could kind of say grandly, and with great objectivity, ‘Don’t worry about the buggy whips no longer being something that can be sold, there are other jobs that technology will create for you.’ I think their objectivity is cracking a little now that the tide of automation has risen to the point that more and more of their academic and white collar jobs are also under that sort of pressure…

Having a survival strategy for that sort of world is one that might get us automatically into a situation where, in the late teens, the average form of at least white collar work throughout the world is actually to be participating in social networks or group minds that allow enterprise to focus the humans on the things that the humans can really do and can do much better than any contemporary machine. I mentioned at the beginning of the talk that in past years I kind of turned up my nose at the human thing in the long run, because as I said ‘biology doesn’t have legs.’ However I think it’s true that at the present time, there’s no machine on earth that is of the intellectual caliber of a human being. Personally I think that we will get that and things that are much better. But the present situation is that we don’t have anything like that. On the other hand, we already have an installed base of seven billion human equivalent intelligences out there, and they’re self sustaining for the most part. That is really a remarkable resource, and this talk could be regarded as talking about how to make that resource all that it can be, for the benefit of humanity.“

Essentially Vinge is describing a theoretical crowdsourcing platform (or platforms) that could systematically harness human minds and direct them towards the tasks humans still do best. This is actually very consistent with the point of view expressed in Brynjolfsson and McAfee’s book Race Against the Machine, in which unemployed human beings are described as a large “slack resource,” one that hopefully some entrepreneur or platform designer will figure out how to put to efficient use. I do think this is a very credible possibility and I particularly like Vinge’s image of a few bright shining stars of human ability twinkling against the blackness of algorithmic space. True, over time, more and more of those stars might blink out, and new stars might become much harder to find, but it’s entirely possible that there are still enough stars out there to see us through the coming transitional period, and computer networks might have the potential to help us identify and exploit those stars.

Of course today we do not have anything like such a platform, though we might have potential precursors. Vinge’s examples from the talk, such as Wikipedia and Foldit, have been tremendous successes, but they do not compensate the people involved. Alternately many of Brynjolfsson and McAfee’s examples, such as eBay and Threadless, are merely retail marketplaces and don’t seem particularly future proof to me. Taskrabbit and Mechanical Turk seem a bit more promising, though neither works on the scale or level of efficiency that Vinge seems to be implying might be possible or necessary. It will be fascinating to see what entrepreneurs come up with over the next ten years.

During the Q&A section, Vinge was asked (by Federico Pistono, interestingly enough) to elaborate on technological unemployment and how we might transition to a post-scarcity economy. Vinge began by addressing issues with the term “post scarcity”:

“Let me start out with a small disagreement in terms of terminology.  A “post scarcity” economy is certainly not a post singularity idea. I think that the reach of the mind will always exceed its grasp. Whatever is thinking will always be able to think of projects that are beyond what it can presently do. And that automatically gets you into a sort of scarcity situation. So sometimes when I read utopias, where everyone has everything they want and that’s the start-off assumption, that’s something I disagree with.”

While this is merely a semantic point, it is one I agree wholeheartedly with and tried to express in my own way in a recent blog post. As long as some mind somewhere wants something, then scarcity will probably exist. However, in Federico’s defense I believe that he was using post scarcity more in the sense of “post material scarcity”— as in a society where everyone’s basic needs are met and people have the ability to opt out of wage labor and the market economy if they so desire.

Vinge then continues:

“On the other hand, there’s still the very valid point about what happens when large numbers of people cannot economically compete with what they do and that there is no alternative project on tap. I don’t call that post scarcity, but I do see it as a problem. Up until about six weeks ago I was kind of in a tailspin about this issue. But then I started preparing this talk, and it occurred to me that we still have a lot of mileage left, if you take advantage of the fact that we no longer have to have physical location involved in our work—and I mean that in a much stricter way than just telecommuting. At that point, the fact that there’s all these billions of human level intelligences out there is very powerful, and if you’re willing to work in that way, I think there is plenty of career left for any such person. That takes us a long way, and I think eventually I’m very much in favor of the [intelligence amplification] stuff. I think we will get into a situation where those people who prefer to work, in addition to having the social networking and group mind stuff, will have real group minds (that is where you have connections at the mind level) and intelligence amplification.

“Let me say a little bit more about real group minds. It’s scary in its own way because you come face to face with issues of identity and awareness. I’m gonna get mystical here for a minute. Imagine that the human soul is like processes not just on a single machine operating system, but on a network. In that case, depending on the bandwidth and depending on the size of the problem, the size of the mind that is working on it changes. In that sort of world, you’d have super intelligences for a few minutes and then they would decrease perhaps into isolated intelligences if there was some reason for working in that way. So there are some very strange things that are gonna happen in the latter era as we get into the singularity and I don’t claim to know what they are. What I just went through is some dreaming about how strange it could be. I think there is full employment in a situation like that, and our goal as present day group minds is to make sure full employment is entertaining to us.

“I think that especially if things work out in a mellow way that there will be significant number of people who choose to be consumers but not participants. And that the people who make things, and the automation that makes things will be plenty powerful enough to satisfy those consumer desires.”

Later, in response to another question, Vinge continues along these fairly optimistic lines:

“About five or six years ago I gave a talk at a corporate research center and I brought up the issue of the internet as a testbed for group enterprise involving large numbers of people and someone raised their hand and said, “The average person, do you really think they have either the motivation or the talent to be of use?” And I think I can give a somewhat better answer now than I did in that case. The short answer is: yes. And then caveats: I think it was Voltaire who said the average person just wants to cultivate their garden,’they’re interested in their friends and their family, and they don’t want someone to come and blow it all away. But that still is a human level intelligence. If it turns out that a group mind or social network sort of employment is still something that can pay them money, they may very well be willing to donate their human level intelligence to participating in social networks to solve problems and get money for it. Then also if you look at the demography—this is intuition now, off the top of my head—that I see in contributors to Wikipedia, I think that there is an enormous number of people—perhaps still a small minority compared to the total human population—that have intellectual interests of a certain sort and certain sorts of talents, and they really think it’s cool to work with that and get that out to where it can be used…

“This is very likely going to be the sustainable form of employment for the next fifteen or twenty years, and I think that gives them plenty of encouragement to do something that otherwise is very pleasurable to begin with. So I do think the human race as a whole has these segments that can happily participate in doing very clever things.”

Of course there are a lot of unresolved questions regarding Vinge’s vision. It’s not clear that the marketplace will actually compensate people who participate in these crowdsourcing/social networking/group mind schemes. As Vinge points out, people participate in these tasks for a variety of reasons, often because they enjoy it (Wikipedia), or because the designer of the platform has managed to make the task into a game (Foldit). Making sure people get compensated for the crowdsourcing work they do might require some sort of government mechanism. It is unclear at this point.

However, as far as the general notion that we might “still have a lot of mileage left” in terms of useful tasks for humans to perform, I think that position does have a fair amount of plausibility.

The Term “Post Scarcity” Could Maybe Use Some Clarifying

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I have always found the term post scarcity problematic. The common definition of scarcity defines it as, loosely speaking: insufficient supply to meet demand. If we take this definition at face value then we have achieved post scarcity the moment nobody demands anything. Therefore, we could achieve post scarcity simply by taking happy pills and making ourselves artificially satisfied. Alternately, we might never achieve post scarcity if some cosmic beings somewhere in the universe still want the same rivalrous good, such as to be “undisputed king of the Milky Way”.

Thus when people talk of post scarcity what they often mean is something more like post material scarcity. This isn’t necessarily a great term—it’s added length means it doesn’t roll off the tongue with the same ease—but it is clearer in intent. In the short term, what we should strive for is not necessarily the end of all scarcity, but rather the creation of a world where all of people’s basic material needs are met.

This of course raises the question of what constitutes “basic material needs”. I would propose that the bottom two levels of Maslow’s hierarchy—physiological and safety needs—might be a sufficient starting point, with the added qualification that ideally no one ought to be coerced into work they don’t want to be doing. This landmark alone would constitute a pretty big change to the human condition.

Some Possible Effects of Near Future Technologies on Real Estate Prices

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Real estate is one of those goods that will remain scarce for the foreseeable future. It is hard to imagine a time when territory on planet Earth will not still be considered a valuable resource.

However, real estate prices might be dramatically affected (and in many cases lowered) by some near future technologies that are already on their way:

  • Automated construction techniques will allow buildings to be fabricated with less workers, at a lower cost, and in less time. Thus the price of actual structures, if not necessarily the underlying property, should fall accordingly.
  • Likewise, new automation-enabled architectural designs might allow the creation of structures that more efficiently and comfortably fit larger numbers of people within the same plot of land.
  • The growing efficacy and acceptance of telecommunication technologies should allow increasing numbers of people to choose where they live regardless of whether that location is near a job site.
  • Growing numbers of permanently unemployed people who have given up and dropped out of the labor force may find it increasingly compelling to move away from cities and other centers of economic activity. If they are not going to find work anyway, they might as well live where things are cheaper.
  • Commuting in self-driving cars will be a vastly improved experience—why not enjoy a movie or a nap during your two hour drive? Thus it may become increasingly viable to live farther away not just from your job site but from your loved ones and other amenities. Do you necessarily need to live right next to nightlife, for example, if an automated chauffeur will drop you off wherever you want and then pick you up at the end of the night?
  • Virtual reality will improve our currently narrow-bandwidth communications technologies. Over time, people will be able to get more and more of the benefits of being “face to face” by simply connecting remotely.
  • Eventually virtual reality may even get good enough that people will be able to tolerate living in much cheaper and more cramped living quarters. What if after you got home, you could put on a headset and be transported to a virtual mansion?
  • New food production methods (such as lab-grown meat) might allow us to reclaim land currently devoted to tasks like farming. Similarly, technological disruption of industries might lead to many formerly commercial districts getting repurposed as residential.

Ten Responses to the Technological Unemployment Problem

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On the internet and in the media there has been growing discussion of technological unemployment. People are increasingly concerned that automation will displace more and more workers—that in fact there might be no turning back at this point. We may be reaching the end of work as we know it.

What happens if vast numbers of people can no longer make money by selling their labor? How should society respond? What follows is a list of possible responses to technological unemployment. This list may not be complete. If I have missed anything, or misrepresented anyone’s views please say so in the comments below. Also these responses are not meant to be mutually exclusive; many of them can overlap with each other quite nicely.

(1) THERE IS NO PROBLEM; TECHNOLOGICAL UNEMPLOYMENT IS A MYTH

There are many economists who still maintain that technological unemployment cannot happen, at least not on the large scale described above. The reasoning for this argument is called the luddite fallacy, which explains that although automation does displace workers, it simultaneously leads to lower prices. These lower prices in turn stimulate consumer demand and provide the basis for new industries, which in turn hire more workers. The luddite fallacy has more or less held true for two hundred years. The question is will it continue to hold true in the face of the computer revolution and accelerating technological progress? How can we be sure new jobs will arrive fast enough to offset the jobs lost?

(2) UNCONDITIONAL BASIC INCOME

This is a fairly straightforward solution. Since growing numbers of people won’t be able to earn money from their labor, it might make sense to just give everyone a guaranteed income whether or not they work. This would allow the market economy as we know it to continue, since putting money in people’s hands would prop up the cycle of consumer spending. Often this idea is characterized as socialist, and in some senses it is, but this characterization overlooks that the goal of a UBI is actually to save market capitalism. Moreover, with a guaranteed basic income many other socialist programs like social security, unemployment, and food stamps could be dismantled and replaced with this far more streamlined system. An obvious question is, where does the money come from? A variety of ideas have been suggested; Marshall Brain details several possibilities in his essay Robotic Freedom.

(3) OPT OUT OF CAPITALISM AND TAKE ADVANTAGE OF DECENTRALIZED TECHNOLOGIES

This is a more individual approach that does not rely on government intervention. By taking advantage of new decentralized technologies and living as cheaply as possible, people might be able to increasingly just opt out of capitalism and consumerism entirely. This approach is advocated by Federico Pistono in his book Robots Will Steal Your Job But That’s Okay and could be facilitated by forward thinking engineering projects such as Open Source Ecology, as well as upcoming advances in technologies like solar panels and 3D printers.

(4) RESOURCE BASED ECONOMY (OR AUTOMATION SOCIALISM?)

This is an alternate economic system advocated by The Venus Project “in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few.” This arrangement is made possible by aggressive use of advanced technologies to create an abundance of resources and thereby negate the need for any sort of rationing. Although Jacques Fresco, the founder of the Venus Project, claims his system is distinct from socialism, it appears to me to be fairly consistent with an extreme version of what has been called “automation socialism.” I believe the socialist comparison is apt since RBE implies the end of both private property and wealth concentration. In any event, this system sounds idyllic in principle but naturally raises the question “How could we get from here to there?”

(5) WEALTH REDISTRIBUTION ACCORDING TO AN INCENTIVE SYSTEM

This approach is advocated by Martin Ford in his book The Lights in the Tunnel.  His approach overlaps heavily with the unconditional basic income idea in that his goal is the same: put money directly in people’s hands so they can spend it and keep the market economy going. The main difference is that instead of making the income unconditional, Ford advocates doling out money according to an incentive scheme that encourages behavior society desires. Among the hypothetical examples Ford mentions is paying people to read books.

(6) WORK TOGETHER WITH THE MACHINES
In their book Race Against the Machine, Andrew McAfee and Erik Brynjolfsson suggest that we should try racing with machines. In addition, seminal futurist Ray Kurzweil has repeatedly expressed his view that we are destined to “merge with machines.” How might this resolve the technological unemployment problem? Well, technological unemployment ultimately stems from the fact that automation advances much faster than people can learn new skills. So if we can find a way to directly upgrade human minds—such as through the use of brain-computer interfaces—then workers would be able to keep pace with technological change and readily adapt to new jobs and industries as quickly as they crop up. Moreover, super intelligent humans might develop new desires which would in turn stimulate new industries. Alternately humans might become enlightened and decide they no longer need a market economy. Either way the problem would be solved.

(7) SMALL SCALE POLICY ADJUSTMENTS DESIGNED TO ENCOURAGE EDUCATION AND FOSTER INNOVATION

A lot of more traditional pundits admit there is a potential problem with technological unemployment (or at least technological inequality) but seem uninterested in any of the more drastic solutions mentioned above. Instead they push for a series of common sense policy fixes, such as fixing education to better prepare people for STEM fields or reforming the patent system to mitigate drags on innovation. These policy tweaks are designed to make the economy function incrementally better in this new technological era.

(8) GET THROUGH THIS TRANSITIONAL PERIOD AS FAST AS POSSIBLE

One line of reasoning argues that technological unemployment can only ever be a temporary problem, since the day is approaching when we will literally print out all of our food and other necessities. Thus the problem only arises in the awkward transitional period: after we’ve automated large numbers of jobs, but before technology has lowered the cost of living to near zero. Therefore we should try to accelerate technological progress by whatever means necessary so that we can make the painful transition as short as possible—much like tearing off a bandaid.

(9) OPTIMISTIC LIBERTARIAN

This position argues that as long as government stays out of the way the transition will be relatively smooth and painless. Yes, there will be less jobs available, and certainly people’s incomes will suffer, but technology will simultaneously bring down the cost of living at a fast enough rate that people will survive just fine without the need for government invention or economic restructuring.

(10) ISSUES LIKE TECHNOLOGICAL UNEMPLOYMENT ARE DWARFED BY EXISTENTIAL RISK

It’s possible a technological unemployment crisis would simply be a pitstop on the way to a much more dangerous crisis involving artificial general intelligence.  Once AGI arrives we will have much bigger issues to contend with, such as will the human race survive being displaced as the most intelligent beings on planet Earth? So while technological unemployment might be worth worrying about at the margins, really the bulk of our energy ought to be devoted to this more substantial threat on the horizon. This position is advocated by the Machine Intelligence Research Institute and others.

(Thanks to the Google+ Technological Unemployment community and commenter Yosarian2 for contributing to the ideas in this article.)