3 Reasons We Need A New Economic System
I will start by saying I have no idea what that new system should look like, but it is not a model we have in any country right now.
Right now the most common systems can be simply explained as we trade products and services for money that represent a value that we have placed on the product and service. The money is then able to be traded again for another service or product of equal value.
So I give you $5 for a shirt that I think is worth $5 and then you can take the $5 and buy a burger that you agree with the business is worth $5.
Simple. Straight-forward. And a successful business person can make that shirt for $0.50 and through $1 in advertising and marketing make you feel it is worth $15 and make a $13.50 profit margin minus some other costs. The smarter the business person, the more money they can make. We are all ok with this, right?
So why do I think we need to rethink this whole system and fast?
The Panama Papers
If you are like me, you have heard only the headlines about the Panama Papers and really do not need to follow this scandal because frankly, nothing about it really surprises you. Some wealthy powerful people have taken vast amounts of their wealth and hidden it so it is not taxed.
I. am. so. shocked.
But remember the economic example we discussed. I buy a shirt from you for $5 and now you take that $5 and buy a burger. That is the idea that makes this economic system work. If I give you $5 for a shirt and you hide it away — don’t pay taxes on it, that is money that goes away. Now you are telling you local government, “hey, fix these roads.” So the government comes to me, who has not been hiding my money and says “hey, pay us more taxes to fix the roads.” I do. I now have less money. But I am hungry, so I go buy a $5 burger from your friend, who you taught how to hide their money. So that $5 disappears from circulation. Now I am buying stuff and paying taxes and getting more and more poor while you and your friend are accumulating wealth.
This is an obviously broken system and it is just one example of the many ways the system is taking money out of circulation and allowing it to accumulate at the top while everyone else is scraping the bottom.
Jobs are Going to Unpaid Workers
The key word here is unpaid. Not low wage workers of illegal immigrants or shipped overseas. I am talking about computers and robots. Jobs for humans are going to continue to disappear at a faster rate over the next decade.
According to CNN:
Bank of America estimated that there’s a 90% risk or more of the following being replaced: Tour guides, bakers, butchers, pharmacy technicians, insurance sales agents, retail salespersons, tax collectors, telemarketers, accountants and clerks.
Want to know if your job is at risk of being taken by a Robot? BBC has an automated answer to your question here.
Should we try to stop our jobs from being automated? I say no. We want to continuously innovate for efficiency. If we were only concerned about full employment we would hire people to dig ditches with spoons. Inefficient, but lots of employment opportunities.
As we continue to be able to automate jobs or outsource them to computers or robots the career question we ask will change from “what do you want to do?” to “what problems do you want to solve?” Tasks (to do) can be automated but we will have problems for a very long time.
And which problems we need to tackle first is not necessarily a question that can be answered by looking at profit margins.
We Need to Focus on Risk and Morals Now More than Ever
Capitalism is focused on profits first, sometimes in spite of the risk to people’s safety, health, and life or the economy.
Here are just a couple of examples:
What we are developing today in the name of efficiency and innovation and evolution requires that we sometimes slow down and consider the risks and communicate to our “competitors” or risk annihilation. I am not kidding and this is not hyperbole.
The AI Revolution: The Road to Super Intelligence is a great article (long read) that thoroughly explains the realities of Artificial Intelligence. As you read through it, you may get excited about what we will be able to do in the near future. I mean we are going to be able to have answers to questions that have been out of reach for us to even ask such questions. We are going to have models to solving our most severe problems. Right now some basic Artificial Intelligence is already being used for creating more profit (see Investors Turn to Artificial Intelligence.)
So, Artifical Intelligence not only can provide answers that enable more profit but can also automate more jobs leading to cost savings of overhead (while putting people out of a job.)
But this is the most important message in that long article, The AI Revolution.
…if the global rush to develop AI reaches the ASI takeoff point before the science of how to ensure AI safety is developed, it’s very likely that an Unfriendly ASI like Turry emerges as the singleton and we’ll be treated to an existential catastrophe.
As for where the winds are pulling, there’s a lot more money to be made funding innovative new AI technology than there is in funding AI safety research…
What that means is there is a rush to develop AI for profit without regard to safety. Historically, we know what that has resulted in; deaths, severe market crashes, ecological disasters. With something like AI the result is the end of humanity, quickly, and perhaps by accident. Think Nuclear Bomb, but less stable, harder to control.
So we need new values besides money. We need a way to contribute and learn and evolve and share without it being based on wealth. What does that look like? I don’t know. But I do believe that our survivor and growth depends on it.
You can find me at www.sherryheyl.com