Economy of the Future

Worker-less Economy

What does the economy of the future look like? I’m not talking about 10, 20 or even 50 years down the line. I’m talking about the future, that will come at some point, where the amount of actual human capital needed to sustain the tasks for daily life cannot support a worker economy. Put more simply, what do we do when machines can do everything for us?

Some disagree with the premise that this will ever occur, the argument being that we’ve had the discussions before and our economy has adjusted. Predicting something will happen earlier than it does doesn’t make the prediction incorrect, just mistimed. There are two reasons why this type of structural change in our economy seems inevitable:

1. Innovation isn’t linear — In an interview with Sarah Lacy (Pando), Marc Andreessen talks about Kodak’s big bet in Asia. With the assumption that vast parts of Asia are developing and those individuals will want to take photos, Kodak invested a large amount of resources in physical film. As you can imagine this endeavor proved unsuccessful further crippling the once photo giant. The reason being that just because we had to evolve from physical photo to digital photo doesn’t mean less technologically advanced countries will have that same evolution. Once an innovation happens, for the most part, following countries will jump to that point. In relation to our economy, this matters because the idea that developing countries will still rely on physical labor and therefore hold up part of the economy is incorrect. Once the technological advancements that occur in developed countries takes place, they will trickle down to developing areas as well creating the same issues we will have.
2. Innovation compounds — The idea against this dramatic shift in the economy stems from the idea that we have already had great technological advancements and still have a large labor force. The important factor is not that people are still working but that less people are required to do the same amount of work. This type of “efficiency” doesn’t remain constant, it compounds. Meaning that over time less and less people will be needed to do more and more work. On a long enough timeline even a small level of efficiency improvement will lead to a situation where human necessity is almost non-existent.

If these two theories are to be excepted than what is the structure for the future economy? Some nations have tossed around the idea of giving citizens a base wage that in the present will allow them to live off lower wage earning jobs. In the future could this wage be used entirely to live off?

The reason we have jobs now is because we need to get things done, specialization allows individuals to do what they do well. This creates efficiencies in the market that everyone benefits from. If humans are no longer needed to create these efficiencies is there any reason to work? Individuals do ascribe some sense of personal worth to what they “do” but that could be accomplished without the necessity of earning a wage. Athletes are famous not only because they are paid well but because they can do something few others can. The same could be said for any person with talent, we are amazed at the rarity of skill and currently value that skill with money (because we have no other way).

Even in a situation where machines are able to accomplish a majority of the things we currently need humans to do there will still need to be some human involvement in the system: oversight, governance and further innovation would all be areas where we would still need humans involved. This excludes other things essential to human life, the arts & entertainment, that could expand even further given this new time freedom we’d have.

No. 5 by Jackson Pollock - What machine would create this?

Given that some individuals will still need to be “working” will that create the distinction between the “rich” and the “majority?” Will the individuals who have the desire to work in these now limited but important roles be ascribed the wealth that is currently allocated amongst a much greater population of individuals?

It’s difficult to theorize of a structure that would function properly given this new type of reality because we’ve never experienced this level of “efficiency.” For thousands of years we’ve created the structure of the job, whether that’s hunter or stock broker. It’s molded who we are and it’s allowed us to form the “peaceful” society we have. When that structure is taken away what takes it’s place? As you can see even in my own writing I pose more questions than I do answers. This is because I have no concrete ideas of what I think this world can be. For every possible theory comes thousands of ways in which it could have adverse effects.

The bright side of this economic shift is that it will happen slowly. We won’t suddenly wake up one day and realize the world no longer needs us to function. In the same way, like steering a ship, it’s important to consider the route we take now because the small adjustment today can place us in a very different location tomorrow. It’s possible that we never get to this place, whether it’s nature that impedes this progress or man made engineering that places barriers to this type of future, we could stop ourselves before we reach this destination. If not, and we do reach what seems to be an inevitable worker-less future, what will we do?