Machines in a world of abundance

Will the intelligent machines ease us out of work as we understand it?

Where will all the workers go?

The pace of technological and scientific change is both rapid and accelerating. Robots with powerful computers have invaded the factory floor and the warehouses and distribution centres with great effectiveness. The number of workers employed in them have accordingly shrunk. Transistors, sensors and cameras will soon combine to eliminate the need for someone in the driver’s or pilot’s seat, and move us faster and more safely than now.

A common modern refrain in response to the challenge of the robots is where will all the workers go? Will it be into other jobs or into unemployment? And if the cohort of the unemployed is to become a much larger one for want of employment opportunity, how will society cope with the assumed failure of an economy to employ most of those who seek work?

Replacing workers with machines is not something new. Smashing the hand loom machines was not helpful

The advance of knowledge and its application to production – so improving the ratio of output to inputs of resources – of land, labour and capital is not something new. Economic progress, scientific advances accompanied, sometimes led, by the invention of ever more powerful machines, has been more or less continuous since the 17th century. The east, that once so lagged behind the west in economic and military prowess, is rapidly catching up in the economic and scientific stakes, applying much of the same proven recipe for economic progress.

The increased production of goods and services enhanced by ever more productive machinery of all kinds (medical equipment included) has been accompanied by consistent advances in the average standard of living and life expectancies and a rapid growth in population. The population of the world has more than doubled since 1970, increasing from 3 billion to more than 7 billion today. On average we are better supported today by higher levels of production of the essentials for life: food, shelter and medical care. And we are provided for with more of the luxuries of life, including more time off work.

We choose more leisure – not working – when we can afford to do so

A preference for more leisure has been exercised in greater volume as the average hours per week worked has declined. Leisure is a desired form of consumption for which income and other forms of consumption have been willingly sacrificed. Choices made by those who can afford to reduce hours at work, and some of the drudgery and dangers of work, have been eliminated with the aid of machines, helping to make work more pleasurable and less onerous. Nice work – if you can get it.

This growth in population has been accompanied by a rapid (more or less) increase in the numbers employed (that is in the work force). The greater number of humans surviving and employed today has also been accompanied by a large reduction (billions fewer) of those who survive despite absolute poverty. Absolute poverty is conventionally defined as those earning or consuming the equivalent of US$2 per day. Most would describe these developments as progress even if happiness – whatever this means – may be as elusive as ever.

These increases in incomes and output represent impressive and consistent economic progress (compounding growth in output and incomes) made over the past 300 years. Yet there is more to be done to raise average living standards to the levels now realised by those in the upper quintiles of the distribution of incomes in the most economically developed economies. Surely this is an economic state to be preferred and aspired to by all who lack this degree of material comfort and the choices it brings with it – including time spent not toiling? And if past performance is anything to go by, it is a realistic prospect. After all, incomes double every 20 years if they grow at 3% a year.

Only the (few) well off in their comfort zones would wish to halt economic progress

There is therefore every reason out of concern for our fellow humans to encourage the scientific revolution that will make humans and the machines who complement their efforts, ever more productive. The capabilities of the robots are bound to improve with developments in artificial intelligence (AI) that will make the machines less dependent on their human supervisors. The numbers of workers employed designing, building, servicing and operating each robotically enhanced unit of equipment, will also decline, also aided in their efforts by AI and digitilisation. The robots, with enough enhanced artificial intelligence at their disposal, may be able to write their own operating instructions. Therefore fewer writers of code for them will be called for.

Output per person employed will rise accordingly with the application and utilisation of these new wondrous machines. Economists describe this process as an increase in the ratio of capital to labour in the production process. It rose in the past when machines first replaced animal and human power and production became mechanised before being automated to an ever greater degree. Production – the output of goods and services produced with the aid of capital equipment – including what we now describe as robots of one kind or another, will grow as it has in the past, aided by ever more superior equipment. And perhaps the output of goods and services produced, with the aid of capital, will increase even more rapidly than before.

Will machines become substitutes for, rather than complements to, human action?

But will the pace of change now leave many more behind? Unable to find useful work and so effectively replaced by the machines, rather than able to earn more, because of the equipment they work with, the less skilled today may be more vulnerable than they have proved to be in the past, less able to compete directly with the robots, for robotic type work, which may be all many humans undertake and are capable of.

And the same displaced workers may be unable, for want of relevant skills, to find alternative employment, building and servicing the ever more numerous robots. Or capable of providing service to those earning higher incomes from owning, designing, managing, building and maintaining the robots.

All may not be about to be lost by human agents in the competition with machines. I am informed that while a modern computer can now always beat a chess grand master. The master chess player accompanied by a computer will beat the computer unaided. The highest incomes in the years to come may be earned by those best able to work with the robots.

Those who thrive with the help of robots are likely to choose more leisure and the services that accompany time off work. Empathetic humans may have great advantages, compared to inhuman robots, when supplying the services that accompany leisure including, walking the dogs and looking after the cats and birds of the affluent. Particularly should alternative employment and income earning opportunities in the production of goods (rather than services accompanying leisure) be lacking. Humans may try harder to serve and so help keep the robots at bay.

Humans, as we are well aware, are highly adaptable to changing circumstances. This is why we have become the pre-eminent species and there are so many more of us commanding the planet. We may have enough time to adapt to the competition from robots and the opportunities they open up, including becoming more skilled teachers, with the aid of robots. Computers may (at last) be productive in adding to the skills of their students as they have done for chess players. So improving their own skills, productivity and employment prospects as they improve the skills and employment prospects for their students.

The scope for redistributing what is produced more abundantly will increase

But empathetic humans can do more than compete more effectively. A growing volume of output made possible by science, technology and robots provides more opportunity to take from the more productive to give to the less productive, including the unemployed and those without capacity to contribute much to the output of the economy. The past tells us that as GDP increases, so does the size of government and the share of incomes (output or GDP) that is taxed and redistributed by governments exercising their power to do so. This is a process that is strongly encouraged by the less economically advantaged and to which their elected representatives will respond. The ability to respond to the collective will and impulse, will be governed by the growth in the economy. The more that is produced the more that can be redistributed.

The relatively poor and the unemployed too will thus continue to look to an improved standard of living if the society is productive enough and the tax base large enough to make more welfare spending feasible. We can expect more of this compulsory taking and giving should our economies become more productive and not all share equally in its advance, as is bound to be the case. This is if fast exponential growth continues over many years because the incentives to innovate and invent, the true drivers of economic progress, are encouraged enough by economic policy.

The interdependence of welfare and work – and of employment benefits and employment opportunities – and of income and its growth

Such generous welfare will have some of the consequences we can already observe. The better the state – that is other people – provide for the unemployed – those willing and able to work –the greater has to be the employment benefits that make choosing work – sacrificing leisure – a sensible decision. And the less skilled are less likely to command rewards from work that exceeds improved benefits available to them when not working. Their reservation wage – the employment benefits that make sense working for – may be too high for some to choose work. For them, without the skills that command higher more attractive rewards from employers, leisure is the rational alternative to work. They will choose more of it if employment prospects deteriorate.

Thus welfare benefits of all kinds will tend to reduce the supply of potential workers and, perhaps unintentionally, increase the employment benefits of those in work. Decent work is likely to become ever more decent as the economy grows and welfare becomes more generous to the relatively poor. But as these employment benefits improve and the cost of hiring rises, employers will be encouraged to further substitute machines (capital) for labour. In doing so they perhaps leave a greater proportion of the adult population not working or even seeking work. They choose leisure – because in a sense they can afford it.

A productive society may well be able to afford to support the relatively poor and the unemployed generously. But will it do so generously enough to avoid resentment of the better off? Resentment that given political consequences may well lead to policies that disrupt the economy and its progress. The process of economic growth depends on society accepting – at least to some degree – unequal rewards for unequal contributions. Is not acceptance of those forces of invention and innovation that will drive the development of robots and AI essential to the purpose of economic progress? Invention and innovation and risk taking generally are the true source of economic progress and need to be given the right encouragement. The economic problem of not enough to go around is only resolved by permitting a degree of unequal rewards for unequal effort and outcomes. Inhibiting the rewards for economic success may well prevent it occurring.

People not working on a larger scale because the society can afford to support their leisure – given a lack of skills and adaptability – may create a whole set of problems for the more or less permanently non-working. Society may be required to find ways to make not working psychologically meaningful and acceptable to the tax payers. Compulsory work, perhaps by helping less fortunate humans and work improving the environment, in exchange for welfare, may become a component of the adjustment to growing affluence made possible by the robots (robots it might be added who can help avoid the drudgery and danger of many kinds of work that workers do not regard as any more than a means to the end of consumption).

What if the robots delivered true economic abundance and solved the economic problem for us?

But what if we took the advance of the robots to its full logical conclusion? An imaginary state of the world when robots aided by superior AI completely replaced all humans in the work place¹. The robots with enough AI may completely replace their human managers and collaborators. They may be able to manage themselves with a single minded purpose (programmed originally by humans) to produce more goods and services for humans to consume, and for whom the robots are the servants (perhaps better described as slaves) with no preferences of their own.

If robots replaced all workers the only income earned would be earned owning robots who produced all the goods and services supplied to an economy, that is to the people who make up the society. And there would be an overwhelming abundance of goods and services for humans to consume. It should be recognised that if and when the robots take over, all the work the economic problem of scarcity will have been resolved. The difficulty of society having to determine what should be produced and who should benefit from the production would have been overcome by the advance of the robots. Trade-offs between who produces and who benefits from production will no longer be relevant. The perhaps unimaginably productive robots will be providing more than enough goods and services so that no person will be short of anything to accompany their leisure.

Since there would be no work for humans to engage in there would be no income from work to be sacrificed for leisure or to be saved to be consumed in the future. The only source of capital to replace and produce new and better robots would then be the savings made out of income received owning robots.

Abundance solves not only poverty but inequality of incomes as well

Given that there is no economic problem, the inequality problem (derived increasingly over time by owning robots in unequal amounts) would be solved by expropriating and nationalising the primary means of production – the super productive robots. The collective will take over from the individual without any of the usual dire consequences when the economic problem exists and demands resolution.

The now all embracing collective, the state as owner of all the abundant means of production – the robots – would spread the equivalent of the abundant free cash flow generated by the robot owning state-owned firms equally to all the population. That is the state as owner would spread equally all the surplus (cash) around that has been generated by the productive robots, after capital reinvested in new and better robots and in the social infrastructure that supports the leisure of all not working.

For example, the supply of roads and swimming pools and sports stadiums has to be determined and the balance distributed as income to the population. Intelligent robots will manage the state-owned companies and issue the tenders and welfare checks in response to the instructions of the politicians, elected by the people at leisure

It should be understood that in these circumstances of robot-supplied abundance, the robots would be programmed (by other robots) only to meet the full and satiable demands of the leisure class – that is the entire population. These robots will not require any of the incentives that are now necessary to get humans to work well by appealing to their self-interest.

Adam Smith’s hidden hand that turns private interest into public benefits will have done its work. The unequal rewards that we now have to offer to talented humans so that they will deliver the goods will have become redundant. Self-interest becomes irrelevant in the midst of abundance: everybody has more than enough of everything and have only to decide how to allocate their time. Hence owning anything will make no sense and protecting rights of ownership (property rights) will have served their function.

Robots will just do what other robots programmed by robots tell them to do and they will produce more than enough to keep us at comfortable leisure and out of work. They will be productive slaves without any preferences of their own to get in the way of maximising output. AI therefore will have replaced intelligent humans in the production of everything – produced abundantly by robots for all humans to consume in as much quantity as they might desire. There would be no differential rewards to breed resentment. Full equality of incomes is a logical consequence of super abundance.

A different world would mean the evolution of a different species

That some people have a (natural) human capacity for greater enjoyment of leisure than others may then become a problem that will have to be addressed by the political process. Legislation against unequal utility might be called for, with the required dose of pharmaceuticals (or implanting of genes) to make sure that all are rendered equal in consumption and happiness.

The economic logic of robot-supplied abundance that demands no sacrifices from humans in the form of work or saving, would be a very different world. It would be essentially inhuman as far as we understand the human condition. That is the harsh one we inhabit that demands sacrifice (work and savings) and the acceptance (very difficult for many particularly intellectuals and academics whose rewards are no well correlated with their IQs) of unequal rewards for unequal effort and sacrifice.

Abundance would require that humans evolve as a very different species. Humans would be back in the Garden of Eden, perhaps then as the first time having to start all over again learning about the necessity of work and sacrifice. Perhaps abundance is a frightening prospect to many. But even if it is, would it be wise to stop the advance of the robots that promises to eliminate poverty and so even work itself? Choosing abundance (or rejecting it) will be a collective one made by those in the way of the marching robots. 19 March 2018