Automation, productivity, and the Jobless Recovery

Many news outlets lately have been running stories on the mystery of the jobless recovery of the economy. That is, most economic indicators are rising, but the economy isn’t adding jobs, and unemployment is still high. In economic terms, this means that productivity has increased, and is probably still increasing. Economists describe productivity as the amount of economic product per worker. If the GDP goes up, but unemployment stays high, that means that productivity has increased. Increased productivity is supposed to be a sign of economic strength, but you have to wonder what the point of such strength is if it’s not producing more jobs. The assumption is that increased productivity will lead to growth, which will lead to more hiring. But what if it doesn’t? Suppose the new productivity we’re seeing is the payoff from all the investment in information technology and automation during the tech boom. Now that corporate leaders are seeing this increased productivity, are they more likely to spend their shareholders’ money hiring people, or investing in more automation? Back during the tech boom my brother predicted that we hadn’t even begun to see the productivity increases as a result of info tech and automation. Suppose he was right? How will society deal with these increases in productivity? Is there a way to turn the productivity increases in society’s favor? AI researchers have a duty to at least consider these questions.

Some might say that a goal of AI is to create machines that can do the work of humans. Perfect achievement of this goal would be equivalent to increasing productivity to infinity. I.e. we produce all our economic product without any human work or workers. In this light, the question becomes whether it’s possible to create a society that supports humans’ pursuit of happiness, but that is not dependent on human work. A collegue of mine has a vision of a kind of Athenian utopia, where machine-slaves do all our grunt work, and humans are freed to lie around eating grapes and chocolate bars and thinking about math and philosophy and stuff. The problem with this vision for me has always been: where do the grapes and chocolate bars come from? How do they get into the hands of the noble, yet indolent, citizens? One possibility is a soviet-style centrally-controlled economy, but central control of an economy the size of the United States seems likely to be highly inefficient. Would it be possible to retain an efficient, if not 100% free, market economy in such situations?

One clue of how to do this comes from agriculture. Thanks to technology, agricultural productivity in the US is so high that we no longer need all of our farms. Of course, the farm owners still need to eat. The solution? Take tax money and pay farmers not to plant or grow anything. Now suppose we apply this to all workers in all jobs, not just farmers and agriculture? The result, take tax money and pay people not to work. Since nobody would have any income, all tax revenue would have to come from the companies that own the machines that produce everything, which would be taken as taxes, and redistributed back to the non-working populace, who would live out their lives a happy consumers, tourists, artisans, philosphers, and dilettantes, spending their money as they see fit.

What I’m describing, of course, is welfare. Unlike some European countries, the U.S. with it’s protestant work ethic has been generally opposed to large amounts of welfare, and the Clinton-backed welfare reforms of the 90’s were intended to decrease, not increase, the number of people on welfare, demanding that people try and find work. But this can only work when the economy has lots of jobs. Imagine productivity keeps rising indefinitely. Who can say how 170 million unemployed workers would vote?

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