The Great Shift

Running through campus, Adam stumbled into the new semester adorned with beads of sweat. “It’s always the same” he cursed himself “haven’t I learned anything? Why do I still have to come here anyway!?” he added, slightly enraged.

He fell into his VR chair and slung on his headset to boot into the seminar room. It was buzzing with babbling students exchanging stories of their semester break adventures. It took them a moment and half to realize that his avatar had just materialized in front of them.

Written in plain font on the wall beside him, appeared the title of his history seminar:

“The transformation of the global economy during the ‘Great Shift’ between 2025–2045”

With a subtle “ahem” the chatter subsided.

“Welcome back, fellow learners! I trust you had a relaxing break and perhaps took the time to learn something else! My name is Adam Niewie. I am a new addition to the department of contemporary history here at Henry George University. Hopefully, we’ll be able to expand each other’s knowledge on a short, but fascinating period of human history that you all know as the ‘Great Shift’. During this course I would like you to keep two things in mind: fruitful discussion is always encouraged, and history is not static. This resulted in some damped murmurs. “What exactly do you mean by that?” one of them asked. “Well, I hope this isn’t new information for you, but no matter how advanced the recording and media systems get, we always only get a fragmented picture that’s usually skewed by the perspective of the more powerful and influential. I know there is a strong belief in the democratization of information, but this doesn’t mean that everybody is engaged to the same degree. Hierarchies build up through action and engagement. As Matthew King used to say, ‘If you don’t say nothing, ain’t nobody gonna hear you.’” Some of them laughed, and Adam continued.

“So let me give you a quick recap of the events that preceded the ‘Great Shift’.

The beginning of the 21st century was shaped by major disruptions as the capitalist world system was maturing and entering its mid-life crisis. Widespread automatization had been delayed and avoided by multinational companies by fleeing from highly developed parts of the world to low-wage countries. Step by step, the low wage-train shuffled around the global economy, industrializing new nations, binding them tightly to the global system, developing their workforce until it became too expensive, and moving on to the next destination. China was followed by Southeast Asia, India, Sub-Saharan African and Central Asia. But many countries were stuck in a semi-developed state since their wages were too high to attract labor-intensive industry, while their economy hadn’t ever reached maturity and therefore couldn’t produce the consumer-based demand it needed to continue growing. In short, the inherent problems of capitalism — the need for market expansion and cheap labor, to produce cheap products for a society of mass consumption — didn’t disappear. So after all other options were exhausted, the final push for the automatization of manual labor became unavoidable. Some countries, like China, started this earlier than others since they realized they wouldn’t gain anything in the long run by relocating local production to cheaper countries. Obviously, there were other pushing factors that led up to the Great Shift, but the depletion of our planet’s resources and environmental destruction were mere symptoms, and not causes, of a system that was out of control.” Adam paused for a second and asked, “I hope that so far I didn’t tell anyone here anything new, or else you might be in the wrong class! Jokes aside, any questions from your side?”

“Yes, you in front here! Could you all please activate your name tags? That would be really helpful!”

“Thanks, Mr. Niewie, my name is Ann-You Kim. Some of us had questions about the outline of the seminar. There was nothing to be found online!”

“Oh yeah, maybe I wanted to forget about that. Sorry, I didn’t upload anything yet. My position was confirmed on really short notice. Thanks for reminding me, anyway!”

Bureaucratic nonsense was Adam’s least cherished aspect of the university system. At least AI support had made it slightly more bearable. But even AI’s can’t work on thin air.

The one-minute warning signal beeped.

“Well, I guess that’s your usual first lesson. So, your next mission is to read the section from Qin Gao’s book ‘Basic income in the 21st century’ on the implications of UBI on low-income communities. See you next week!”

While most students vanished instantaneously, the student that had started the whole distraction shyly approached him. “Hello again! Sorry for that, but many students are still in scouting mode, checking out different lectures, and trying to decide where they will stay.”

“No worries Ms. Kim. I should know how it works. It’s just that I am quite excited about the topic, so I wanted to get going with it.”

“Yeah it’s fascinating! I’m considering writing my Master’s thesis on it.”

“Well, there’s a lot to research. In fact, it’s the subject of my habilitation. I just started my post-doc here and am still looking for student assistants. I almost feel like they are harder to find since students are missing the financial ‘incentives’.”

“On the upside, you only get the ones that are genuinely interested. Many use their free time wisely, but an equal amount seems to waste it on their Eternal Being. I would definitely be interested in an assistant position.”

“Great! I have to run now, but why don’t you come to my office later today and then we can talk about it.”

“Yeah”

“What time-window are you at?”

“We have 3–19 here, and you are at 7–23 right?”

“It’s 10 o’clock right now so let’s say 16?”

“Sounds good!”

“Bring along some ideas for your thesis!”

“I will. Thanks!”

They both logged out, and with them, the seminar room disappeared.

Adam posted a clip of his introduction speech on YEBO[1] and checked his personalized feed. After squandering a few minutes, a soothing, androgynous voice interrupted him. “Perhaps you can focus on your next paper? You wanted to finish the research portion by next Friday.”

“You’re right, Nebi, like always!” Adam agreed and shuffled through his desktop with staccato hand gestures. The database contained primary sources from the shift period. Most were e-mails, digital diaries, and social media posts; but it also included some old-school handwritten sources, digitized of course. The latter were especially impressive to him since the elderly people during the shift era tended to have slightly controversial viewpoints, at least by today’s standards.

One of them was from Sam McAlister, a former truck driver that left behind memoirs of that period of his life.

“I had been one of the lucky ones. When the first automated truck hit the market in 2021, I was 63. I had planned to retire two years later anyways, so the wave of layoffs that swept over the country in the following years didn’t affect me all too much. But there were 3.5 million truckers in the US, and they surely didn’t accept these changes with open arms. Some inner-city jobs were harder to replace, and other companies just stayed behind out of tradition or decency. But in the long run, they either followed or went out of business. It’s a reckless industry you know? Just imagine, by now (2032) 70% of us have lost their jobs. This crazily rapid dehumanization of our economy enflamed an uncontrollable rage within our community. And believe me, we are not famous for playing it soft. The majority of us were carrying folks, and we were many with little to lose. I engaged myself in anti-automatization activism. We called ourselves TARA Truckers Against Robotization and Aiployment. We didn’t want to give in to the bullshit that politicians shat out of their breath-hole: ‘There is no alternative’ and ‘You can’t stop the future’. Well, we tried our best… We formed the strongest union in the US at the time. But who gives a fuck about a union with workers that nobody wants to keep anyways? In hindsight, it just gave them another reason to get rid of us. We were seen as nothing but an annoyance in the ‘smooth’ running of the economy. Some of us became militant. I never supported those hotheads, but I understood them. They had been robbed of their future, and there was no savior on the horizon. They were young folks, and in that state of the American economy, there wasn’t much employment for young people without a proper education. And it wasn’t even only the truckers. Oil workers and the remnants of the coal industry joined in since their future didn’t look very bright either.

You know, looking at these developments, maybe socialism wasn’t such a bad idea after all. At least they made sure that everyone had a job, some purpose in life, a role to play in society. This is just a huge mess, and the cleanup will be done by the robots because humans, well they ain’t cleaning no more! What’s gonna happen if this sweeps over to the white collar people? At some point, no one will be needed anymore. And then? Jesus, or whoever is listening, this is insane and inhumane! You can’t deprive humans of a purpose in life! There is just nothing left for us to do…”

“He clearly didn’t see the whole picture of the changes happening around him,” Adam thought “and he didn’t grow old enough to see a completely different future come to reality.” “Great analysis Captain Hindsight” he bantered to himself and zoomed into the next document. It had been written a good ten years later by a bank executive, an e-mail to a member of parliament trying to influence some policy on the banking sector.

“Dear George,

I just watched the Presidential Cup and realized that our last match has been far too long ago. I hope you and your family are well. There are certain issues on my mind that I would like to discuss over another round of golf, but I know that you are busy with campaigning right now.

I am sure you are aware of the upcoming vote on the breakthrough policy for deregulating AI in the financial sector. We have come far in this regard, and I understand why the government feels like they have to push the issue. I write to you as a friend and representative of Slitherman&Gods and the Financial Services Roundtable. You know that we have always supported deregulation in the past, but we think that the time has not yet come when we can trust these subjects of utmost delicacy to an artificial mind, and it might never come. I hope you and your fellow MP’s are aware of the damage it would cause to the relationship between the government and the financial world. There is no negotiating with an AI. You have seen the consequences on the Federal Reserve in the past. The White House basically lost its influence on the Federal Funds Rate, and therefore an important tool for political leverage. Automating the executive part of the financial sector will result in a further loss of control by humans over their own destiny. Nobody could want that! As a Congressman of New York, the last thing you want is another ‘Trucker Crisis’ on your hands. This time, the people concerned with the matter will not be — excuse my language — rednecks and dimwits, but the social and financial backbone of our precious city. Take into consideration that this is not about power; it is about what humanity wants to be in the future. Do we want a market that roams free based on human interaction and personal freedom, or one overtaken and controlled by a potentially dangerous computer program without the necessary compassion to make humane decisions?

We always stood by each other, but if this legislation goes through no one can predict what will happen… “

Adam swiped away the e-mail thinking “Those sleazy pricks had it coming! Humane decisions? That’s almost good satire!” he chuckled silently. “Nebi, do you know about the influence corporate lobbyists used to have before AI’s took over most of the administration work? I mean, it will never be eradicated completely unless humans are out of the equation.”

“That’s right… But I think humans will never allow for that to happen. Even though it might be a way to create true democracy. AI could govern for the people by reflecting the will of the people using data collected through their daily input. An interesting thought for sure!”

“But a dangerous one as well!”

“Well, it’s time for your exercise routine Adam! You are sitting in that chair for too long already. Get on moving, I will join you here. What kind of training do you want today?”

“Calisthenics like usual, but mix some animal movement in there!”

Afterwards, Adam took a quick shower, ate lunch, and hurried back to work. Nebi offered him the next piece which It had classified as valuable for Adam’s research.

“What do we have here?”

“It’s a group discussion on WeChat, the old Chinese social media platform. I think it might be of interest. You can sit in personally if you want to?”

“Yes, let’s do that!”

And with that, a digital chatroom with five serious looking Asian avatars appeared in front of him.

伊隆·马斯克: “由于自动化，我们最终将获得普遍的基本收入或类似的收益.”

“How about English, Nebi? My Chinese isn’t great, and you know it!”

“Sorry Adam, I thought maybe you might enjoy the challenge. It’s often worth the extra effort even if it’s slower.”

“Yeah, yeah, you keep saying that, but I don’t have time for that now!“

“Don’t say time if you mean lazy, Adam.”

“Nebi! Let’s get going, please.”

Mrs. Cheng: Dear colleagues, welcome to the discussion! Let’s dive right in. I assume most of you have seen President Ling’s announcement at the 23rd Communist Party Congress about the implementation of a nationwide Basic Income starting from February 2038? I further assume you are familiar with the policy paper that was published with it? I’d like to hear your thoughts and proposals. Yes, go ahead Mrs. Zhang!

Mrs. Zhang: This is a day of joy here at the Beijing Institute for Social Innovation. We worked long hours for this to happen and we finally have the opportunity for a truly new way of organizing our society. We expect an environment that will foster social and economic innovation and further advance our species towards a brighter futu…

Mr. Weng: You’ll have to excuse me, but this sounds like idealistic hogwash. This is a dangerous social experiment, and no one can be sure about the outcome. And you know what the economy hates the most? Uncertainty! For me, a business owner, this will have dire consequences! How am I supposed to find workers willing to endure even the smallest amount of hardship if there’s no need to? And don’t even get me started on the pilot studies in the Pearl River Delta. They can’t possibly be comparable with the whole nation!

Prof. Fang: I think that you should not dismiss our studies so easily, nor people’s willingness to work. The actual problem with limited pilot studies is that people and companies can flee the location of the study if they don’t like the effect. But, you’re right that cities selected for pilot studies are the ones that provide the best environment for their implementation. They help us identify what is necessary to make a policy implementation more successful, ensuring a smoother transfer to the national level. You know as well as anyone that this has been the practice of the party since Deng Xiaoping and that its success is undeniable.

Mr. Weng: Right, but this is not a transfer away from a failing socialist system but from free-market capitalism that has proven to be the only functional system humanity has arrived at after millions of years. Without the market forces to control the labor market, what would keep supply and demand in check? And how does the party plan to finance these programs if not by taxing the producers? It is going to destroy our international competitiveness.

Mrs. Zhang: An assertion like that can only come from someone that is so blinded by self-interest and profit that he isn’t willing to see the truth that not only our nation but our species encounters every day. Don’t misunderstand me, I recognize your concerns and I agree that it is a risky step to take and that a society has to be prepared to take it, but — and this is a big but — there comes a time when risky steps are the only steps to take if you don’t want to stumble and end up in the biggest crash in the history of human civilization. And our proud nation HAS prepared for this. It may not be perfect, but in the face of accelerating automatization and Aiployment, there just aren’t enough jobs for everyone, at least not in the traditional sense, while there are surely enough resources to provide for all of us. The Green Revolution 2.0 needs to be accompanied by a social one that elevates our society onto a new level. If not, we end up in a dystopia worthy of a science-fiction book! There is an unfulfilled need for social balance, and basic income is the only viable step I see to reestablish it. We believe that it will enable humans to access their true potential and therefore create new forms of attractive employment and occupation that don’t necessarily have to be profitable but advance us as a species.

Prof. Fang: Regarding Mr. Weng’s other question, you should know that the funding of UBI is well-founded. If you had read the policy paper, you would know that there are various tax sources named. First of all, a ‘financial transaction tax’ that will also help stabilize the financial markets by reducing harmful speculation. Secondly, a ‘progressive profit tax’ bound to the profit/revenue ratio. And most importantly, a ‘corporate income tax’ based on the level of automatization of a company, measured by productivity per employee. And I know your next argument. Where’s the incentive to increase productivity? Well, a UBI will create a counterbalance as it increases the cost of labor, especially for unattractive jobs. We just need to be careful to not overtax in order to keep the automated plants in China.

Mr. Jing: Let me say a word or two about this whole process. We at the ACFTU (All-China Federation of Trade Unions) are not completely opposed to UBI, but we think that this policy will funnel too many resources towards a field that is of minor importance. We believe that the easiest way out of our unemployment crisis is to create jobs for the people who need them. And that can only be accomplished by counteracting, and maybe even reversing, the advancement of automatization. Where are new jobs supposed to come from? There’s a limit up to which it is beneficial for a society to trust in machines and it has been surpassed long ago. The recent crisis is a clear symptom of that, and I don’t think we should advance policies that simply try to cure the symptoms, but ones that eradicate the cause!

Mr. Weng: Seriously? You think that’s a solution? Regulations like that would render our economy completely unable to compete internationally. National regulations are useless in a global market where companies can simply shift production to other nations and import from there. Sure, you could create protective tariffs but that would just create a tariff war with other nations, and that would spell the end of our manufacturing industry! I can’t help but assume that many of you don’t understand the basic ramifications of an integrated global economy.

Prof. Fang: I completely agree with that statement, Mr. Weng, we indeed have to take the global economic impact into account. Let me assure you that UBI will not hurt our international competitiveness! It will only affect the few remaining jobs in low-wage service industries and agriculture industry which can’t be outsourced to other countries. Instead, it will force us to pay them more fairly to create an incentive to work at all, and that’s exactly the goal of this policy. We’ll certainly have a significant amount of inflation until a new balance is gained, but that is, if anything, a competitive advantage. I strongly believe that we will be the pioneers of a global trend. We are not the only ones experimenting with basic income, and I’m convinced that other nations will follow.

Mr. Jing: But don’t you understand that our nation is only in this situation because we are pioneering in widespread automatization and implementation of AI in every sector of the economy? Other nations, especially in Europe, have much stricter regulations towards these new technologies, maintaining a growth of new jobs that stay ahead of the losses due to automatization! It’s not a law of nature that it has to advance at this speed, we just allowed it to!

Mr. Weng: And that is exactly why we were able to maintain our position as the biggest manufacturing country in the world. If we hadn’t done this, we would have lost to low-wage countries or those that aren’t afraid of future technologies!

The discussion went on, but Adam didn’t stick around to witness the series of repetitive arguments. “Thanks, that’s enough for now, ” and he found himself back at his digital desktop. “It’s quite astounding that it took the US almost two decades to follow in the footsteps of these innovators. Isn’t it Nebi?”

“Only if you ignore the ideological and systemic path dependencies of the former USA. One has to acknowledge though, that most researchers at the time wouldn’t have put their money on China to make the first step. There is an interesting essay by Fred Sack on the subject: ‘Why China? The Basic Income revolution during the Great Shift’. Would you be interested in a glimpse?”

“Sure, shoot! Sounds relevant.”

“The Great Shift period is a prime example of how late development can be an advantage in adapting to shifting trends in the global economy. Path dependencies limit the adaptability of a system, and therefore more pressure is necessary to facilitate change. When it comes to Obviouism, most researchers of that time expected Scandinavian countries to lead the way; but they held on to the traditional way of social welfare much longer, disregarding UBI. It’s difficult to reform a reasonably functioning system without an undeniable need to do so. Only once artificial intelligence started pushing deeper into the realms of more complex human tasks, such as analysis and consulting, did the service industries of the west begin to feel the pressure, forcing social-democratic nations to adapt as well. As for the US, it appears as if the ideological gap was simply too vast to cross. Libertarianism was too strongly engraved in its DNA and people didn’t accept policies that were seen as anti-competitive, socialist, and egalitarian. The tipping point came with the infamous Ivy Riots when even the majority of the most educated people couldn’t find work anymore.

But why did China lead the way with a social innovation that has been adapted all over the globe? Like always, there are multiple reasons.

(1) First of all, it was still governed by a so-called Socialist Party, and state interference was not generally seen as something negative. It allowed the leadership to easily create a narrative for a more comprehensive welfare system based on taxation. (2) Second of all, it was an authoritarian regime and therefore able to implement major reforms more easily. The (3) third, and perhaps most important reason, lies in China’s economic development at the time. Late industrializers that ‘grow up’ with new technologies are faced with much less resistance by old systems that already fulfill a role that a new technology aims to improve upon. The most famous example might be the advancement from telegraphy to landlines to mobile internet. No modern country would build a telegraph system before upgrading to a landline, and many regions skipped landlines altogether. This principle allows late industrializers to adapt new technologies earlier and more systematically than the more mature economic systems of early industrializers. Besides, industrial labor wasn’t as relevant anymore in Western nations, while China still heavily relied on its manufacturing sector. The Chinese leadership basically had two choices. Let most of the manufacturing industry migrate towards nations with lower wages or embrace robotization to keep more of the added value within their own borders. Sure, robotization didn’t move quickly enough to keep all the jobs, but they made a decisive push that ensured a technological advantage. Here the benefit of a heavily centralized government and an authoritarian attitude helped in overcoming internal resistance.

When it comes to AI, the picture becomes much more unclear. Western nations defended their labor markets against the wave of Aiployment while China embraced AI driven automatization quicker and to a higher degree. So why did China divert here again? While it is disputed why the party leadership embraced this, I argue that they did it to increase the power of the higher levels of government. The first positions affected by Aiployment were within corporate and state bureaucracies; or more precisely, the positions that concerned administrative work. The simpler a task was, the quicker it was automated. But you should keep in mind that state bureaucracies in particular command a decisive amount of power and follow their own agendas that can oppose the leadership’s interests. Even in an authoritarian system, they make it decisively harder to implement radical reforms if they are deemed to have negative effects on the bureaucracy. By automating much of the bureaucratic process, political, as well as economic, leaders gained an amount of control unimaginable before the rise of artificial bureaucrats. For obvious reasons, this is attractive to any leadership, but authoritarian regimes had a higher incentive and an easier time implementing policies to push for this kind of change.

This simultaneously created a formerly powerful group of unemployed citizens, which was especially dangerous to a regime like China, whose legitimization was heavily based on steady growth of the economy and wealth of the population. To suspend the effects of Aiployment they were forced to innovate socially, becoming the unlikely candidate to implement the first UBI on a national level. …”

“Sorry to interrupt. It’s time for your appointment with Ms. Ann-You Kim, Adam.”

“Right, I think I was done with this anyway. Thanks, it was a great input!”

Adam entered his virtual office, and Ann-You’s avatar appeared in front of him.

“Welcome back!”

“Hello Mr. Niewie, thanks again for inviting me!”

“No worries! I hope you brought along some ideas! ”

“I mean, the whole Shift is just fascinating. There has been loads written about the technological advancements that were necessary for such a transformation, but it also completely changed the way humans live together. I want to focus on how our social organization, coexistence, and cooperation transformed in an environment without experiences of individual scarcity.”

“Yes, but don’t forget the social transformations that predated and accompanied the implementation of UBI and made it successful. You can’t underestimate the impact of educational programs, especially regarding scarcity. When humanity turned its back on the destructive mass production that was facilitated by an unchecked capitalist system, there was no longer an inherent systematical need for mass consumption. But change came gradually, and people were still conditioned by the old system, so a huge effort was necessary to mediate consumption and steer it in a less destructive direction. Some people denounced it as propaganda, but they seem to forget that everything is propaganda of some sort, and I would argue that advertising was the worst form of it.”

“Hmm, the effects of re-education programs sounds like an enticing subject, but I would prefer to ignore the pre-UBI reforms and focus on the change of cooperative action due to UBI.”

“It will be difficult to look at the isolated effect of UBI, but I understand what you mean. What do you think is the biggest change in that regard?

“In my opinion, the fact that cooperation was no longer enforced by economic necessity enabled people to create new forms of institutional organization. Hierarchies became more fluent and based on skill rather than entitlement through social capital or time spent in an organization. People didn’t need to put up with horrible bosses or jobs they didn’t enjoy, which changed the culture inside of companies. It also enabled people to experiment with new forms of communal living which recreated local communities that took responsibility for their environment. I think that in general, it democratized the parts of society that resisted any such attempts during capitalist rule.

“… and created accountability, especially for major corporations and governing bodies. Alright, so to narrow it down, maybe you should try a methodological design of process tracing of the causal link between UBI and the democratization of the economy. That will be more than enough for a thesis, don’t worry.”

“The only thing that worries me is that I come to the conclusion that all of this would have been possible much earlier in human history, saving billions of people unnecessary suffering. Maybe we didn’t need the technological innovations to create social ones, but people were just too busy doing business…”

I have no idea where this is going. It was written for a writing contest on Universal Basic income… But I pressed too many things in it to meet the word limit. Needs quite some rework to actually meet my ideas about it.

[1] Your Eternal Being Online: The one social network and VR world dominating the global net.