Money for nothing

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Technological development — in particular techniques relating to Artificial Intelligence and data analysis — has been producing innovations expected to substantially transform the job market profile in the coming decades. Occupations once considered “untouchable” are already being deemed endangered as a result.

In 2014, two MIT researchers published the book The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. In it, Erik Brynjolfsson and Andrew McAfee argue that, with current technological breakthroughs, increasingly sophisticated tasks can be executed by machines.

How many of us could ever have predicted that the ability to drive in major urban centers would no longer be the prerogative of humans? Or that legally binding contracts would be drafted by machines? Or that we would simply enter a store, pick up a selection of goods and leave without the need of interaction due to a fully automated billing process?

As we discussed last week, the reverberations of these advances in the job market are compelling, putting the term “technological unemployment” back on the agenda of debates on the evolution of macro- and microeconomic processes. With the potential drop in available jobs, individuals would likely cut back expenses, potentially creating a deflationary spiral and, consequently, hitting production lines for many goods hard. If there is no paid work available for all — even for highly-qualified laborers — the outlook for society is worrying on several fronts.

The debate may seem premature, as it is not yet possible to tell if automation will in fact eradicate jobs or simply alter the job market profile (as it was the case throughout History). And even if jobs cease to exist, this process will probably take at least a few generations. However, this has not stopped the rise in proponents of a “universal basic income” among some economists and a number of members of the innovation industry — maybe because they know their inventions are bound to wipe out a reasonable number of jobs.

English philosopher Thomas More, author of Utopia (1516), and his friend, Spanish humanist Juan Luis Vives, one of the founding fathers of modern psychology, were possibly the first ones to record and establish the framework for a universal basic income. This theory has evolved over time, reaching its current form: in short, an annual income paid to all local citizens, regardless of any other factor. Those in favor of such practice argue it would provide a more comprehensive access to education and innovation; resources for parents to invest in their children; the possibility of finding true fulfillment, even if the chosen activity is unpaid; and a widespread perception of social justice. In other words, it would lead to considerable improvements in the standards of living and in people’s general sentiment.

But choosing an unconditional, outright payment for all is a path with its own relevant risks — and these risks will be our topic for next week. See you then.