#4 Time to Rebuild Our Moral Economy? Tech May Be Key.

Hi from Punta Cana’s Bavaro Beach, Readers — check out the fourth post in my five-part Medium.com blog series exploring tech’s impact on global risk; it builds on my past HuffPost blog series explaining the ongoing global legitimacy crisis. It is inspired in part by discussions with my NYU grad students and key ideas in my award-winning political comic book, The Global Kid.

Punta Cana: feeling nostalgic in beautiful Bavaro Beach where I last holidayed with my late brother Abid. #workingholiday #digitalnomad #feelinginspired #professor #blogger #risk #technology

The US-China trade war is clearly on and could be the greatest risk to the global economy — in fact tech billionaire Jack Ma warns it could last two decades. But the reality is the global economic status quo has been challenged for years, as globalization has recurrently clashed with populism. Are we prepared for what’s next? It’s unclear. What is clear is that the moral economy is breaking. Theorists have historically used moral economy rhetoric to explain rural movements where protesters felt their right to a basic subsistence was being threatened by elites. Today, many citizens globally challenge their governments over economic conditions which haven’t met their expectation; effectively an informal contract has weakened between governments and citizens involving citizens’ right to a basic subsistence — however they define it. The looming tech cloud of automation unemployment has only created more anxiety. Is it time to rebuild our moral economy? Tech may be key.

Let’s investigate:

First, the global economic status quo has been challenged for awhile, steadily weakening the moral economy. Yes, many world leaders, including China’s Xi Jinping at Davos, and international institutions like the IMF, still defend globalization. But globalization has been challenged for years. Citizens who felt excluded from globalization’s expected benefits launched movements like the Battle Against Seattle and Carnival against Capitalism in 1999, while protests recurred at other WTO, G7 and G20 meetings in the years since. And governments themselves in the last decade have responded to these frustrated citizens by promoting an anti-globalization agenda rooted in populism, from the EU to Latin America and the US. The economic status quo of globalization is clearly under threat. The problem is the proposed alternative of populism may not necessarily deliver what citizens expect either. Look for citizen frustration at both ends of the spectrum — protests will recur against globalization but ultimately may also surface against populism, as governments struggle to meet expectation.

Second, tech is exacerbating this challenge to the global economic status quo as automation unemployment looms large, further weakening the moral economy. Yes, digital skills may be key for our future economy and the Fourth Industrial Revolution may even create new jobs. But where does that leave those who for whatever reason may not be able to adapt to these new tech-focused jobs? As Ma put it, automation will create “more pain than happiness in the next 30 years”. Are we prepared for what’s next? It seems unlikely at the moment. The uncertainty and related anxiety around tech-induced unemployment will likely lead to more precariats — the growing global class with “no occupational identity or narrative to give to their lives”, as economist Guy Standing explains it. These individuals felt excluded from globalization and may ultimately feel excluded from a tech economy too. Look for more citizen frustration as tech-dominant economies leave some behind, while governments struggle further to meet expectation.

Third, it may be time to rebuild our moral economy — a moral tech economy where citizen expectations are redefined. Yes, automation unemployment is coming but how are governments preparing citizens, especially precariats, for this? There doesn’t appear to be a clear policy strategy so far. Certain tech billionaires (e.g. Bill Gates) have chimed in with policy suggestions like Universal Basic Income (UBI) — basically give everyone a monthly stipend in case they lose their jobs to robots. But this is likely unaffordable for most governments and wait — will everyone necessarily need this stipend? Other tech billionaires (e.g. Richard Branson) argue that part of the “extreme wealth” of AI firms can fund UBI, while others (e.g. Sam Altman) have even tested UBI’s viability in pilot programs. Experts call for UBI to be paid via a cryptocurrency running on blockchain or offered by tech firms in exchange for the data citizens give them. Clearly, it is still worth exploring creative and tech-linked ways to fund UBI – or at least a basic income for those hit by automation-linked unemployment – for the long-term. But what about the near-term? Governments must be aggressive in engaging with citizens about what might be coming and what citizen expectations might be in a tech economy. How many citizens will lose jobs and when? Will automation mean their expectations of a basic subsistence will not be met? The expectations embedded in a moral tech economy, involving the government and citizen (and perhaps the tech firm as well), need to be defined now to reduce instability in the future.