Liberalism, conservatism, and obsolete economic thinking
Endless political debate goes into what economic policies are needed to create more and better jobs. Most people rely on labor, not invested capital, to produce the income they need to buy housing, food, health care, and transportation, so these are important debates. But they may be missing the point. Most of today’s jobs will be obsolete within a few decades. We need to start redefining the way we determine how humans obtain basic necessities, and how they can “earn” luxuries like cars, indoor plumbing, vacation cruises, jewelry, and Internet access so they can read read articles like this one.
Machines replace more humans every day
- When I visited India earlier this year, local newspapers were running articles about Calcutta’s decision to start using street-sweeping machines because they were less expensive than human streetsweepers.
- Retail checkout is becoming increasingly automated; the next step is automated shelf-stocking — and that’s starting to be developed
- Factory production is moving toward total automation, with its move to low-wage countries like China merely an interim measure on the road toward zero labor cost.
- Self-diagnosis is becoming more common in computers and machines of all types
- We don’t have automatic software-writing software yet, but….
And this isn’t all. With exact figures on what goods are selling where and software that can determine the best sources of supply for each item, we need fewer wholesale-level salespeople, and fewer managers to make decisions about what goods their companies should purchase or resell. In the medical field, automated diagnosis (and prescribing) for most illnesses is only a matter of time. Most new mass-transit systems rely more on automatic controls than on human operators (and ticket-takers). Housing construction is moving toward a model where components (like walls and roofs) are made in increasingly-automated factories and merely assembled on site. Orange plantation owners in Florida are working on automated picking systems even though migrant farm laborers are just about the cheapest workers in the U.S., and once the Floridians have these machines going, it’s a sure bet that Argentine and other orange growers will adopt them, too — except their versions will probably come from Korean companies that build them in Chinese factories.
Within a generation, barring political resistance, we can expect most of today’s “jobs” to be automated out of existence.
Most people aren’t rocket scientists. Or poets.
By freeing humans from tedious work, we can expect an outpouring of creativity. We will see new art forms and technological advances. Life will be wonderful as we move into a future where machines do all the drudge work.
Sounds good to me. I’m ready to let machines do all the drudge work while I harness my full creative potential. And how will my mortgage get paid? I didn’t do as good a job of parent-picking as George W. Bush and his most ardent supporters, and I have spent most of my working life in occupations that were not at the top of the earning scale. So for me and my children and step-children, no work means no food and no place to live.
Oh, this sounds so Luddite…
I know that as basic functions are automated, new occupations will appear, like fingernail decorating and hair-braiding. As doctors are less-needed for routine disease treatment. new diseases and syndromes will be discovered, much as kids who were once considered brats — and got spanked when they misbehaved — now have “Attention Deficit Disorder” and get both drugs and therapy.
Come to think of it, therapy is a field that can expand nearly forever, and one that probably can’t be automated effectively. Much therapy is called religious counseling, but it amounts to the same thing. Churches that show the most growth (suburban “non-denominational” mega-Churches) have many layers and types of ministry that would have made a 19th Century minister shake his head in bewilderment.
How about geriatric sex therapy? You don’t hear much about this today, but I bet you will in 10 or 20 years. A whole new job classification, there for the filling!
There will no doubt be many new “jobs” created we can’t even imagine now. How in the world could I have predicted, in high school in the late 1960s, that in my mid-40s I’d start making my living on the Internet?
The only problem is, most people aren’t getting jobs doing Internet work, aren’t likely to become geriatric sex therapists, and don’t have the mental capacity to do scientific research or write great poetry. We used to joke, back when I drove cabs, that half our drivers considered the cab business a no-brain getover, and the other half considered it a mental challenge. This was true. Most people (and most cab drivers) have trouble reading maps, which is why automated, GPS-based navigation tools are becoming so popular. But when you eliminate the skill from an occupation through technology, it soon becomes a generic job anyone can do. And in a market-based economy that means it’s not worth a whole lot.
What is a job worth?
Let’s make up a hypothetical person, Al Average of Asheville. Good churchgoer in his late 20s, strong family values, Army veteran, married to Andrea Average, with one child — 5-year-old Alice, with the cutest gap-toothed smile you ever saw — and another kid possibly on the way. Andrea’s going to go to Wal-Mart later today and get a home pregnancy test kit to find out. They want another child, so they hope the test is positive. The only problem is that Al just got laid off again. He was doing fine at the furniture factory where he took a job after he got out of the Army, but it closed in 2002. After four months out of work he got on as a carpenter with a construction company building an apartment complex, but the job ended last month, and every time Al applies for another one he’s one of 200 guys filling out an application.
Andrea’s been working evenings and some weekends at a local convenience store but that’s only a little bit of money. They have health insurance for another month, but unless Al finds another job they won’t be able to pay the $420 monthly premium after that. They’ve been paying for their own health insurance since Al got laid off from the furniture factory; the construction job didn’t offer any. Now the health insurance would take all of Andrea’s part-time pay, leaving them nothing but Al’s unemployment to live on, and it’s not nearly enough to pay their bills.
So they go to church and pray, and Al spends almost all of every day looking for a job. So far, the best lead he’s got is a possible full-time graveyard shift opening at another store in the chain Andrea works for, but that would only pay $1 over minimum wage and wouldn’t offer health insurance until he’d been there a year — and even then would only pay half the premium.
Another possibility is moving to Florida. One of Al’s cousins is doing construction in Charlotte County and says there’s plenty of work. The pay there isn’t high, but they can sell their little house in Asheville — the one they bought when Al got out of the Army — and stay in Andrea’s parents’ motor home, the use of which was freely offered — in Florida until they find a permanent place there. Or Al can go back in the Army. They’d happily take him.
Note that Al isn’t discussing a new career in calligraphy or physical therapy. He’s looking for a job like the ones he’s done in the past. This is the kind of work he knows, and that everyone he knows has always done. Al is a nice guy, a great neighbor to have when your car is stuck in the mud or you need help cutting undergrowth, but let’s face it: He’s not the smartest guy in the world. He got through high school okay, but probably passed Algebra because the math teacher also coached football, and Al was a decent fullback. Not college scholarship material, but he played hard and was enthusiastic, not a super-jock but just a guy who liked football and was willing to practice hard and give everything he had to give on game day.
Al is competing directly with laborers in China. And with machines. There isn’t a single thing he can do that millions of others can’t do just as well. He’s got his computer figured out well enough that he can log onto AOL, but that’s it. Andrea’s a little better there; she knows enough to use their computer to make and print out a neighborhood newsletter, but not well enough to make that newsletter two columns and get the stories to fit in the columns.
Bottom line: in a world where only high education and high skills are prized, Al and Andrea are job market losers. Without some great stroke of luck, like winning a lottery or inheriting a sudden fortune from a distant relative, they will spend their whole lives earning less than the average income in this country, competing with overseas workers and new immigrants for jobs. Their safety net is the Army, one that is not available to most people in their situation, and chances are that the Army is going to be Al’s career for the forseeable future even though he hated it while he was in, and feels that it is not fair to his wife or children for him to go back to a soldier’s life.
But with another child possibly coming, what choice is there? Once Al’s back in the Army, worries about medical bills for another pregnancy and birth go away. His family will eat regularly and have a decent place to live. He will have a secure place in a rough but reasonably fair society where hard work and attention to detail, combined with a willingness to follow orders, will be rewarded better than they have been in civilian life. In return, he will give up most of the liberties most Americans take for granted, in accordance with an old saying that goes, “The Army takes away all your rights — and gives back some of them as privileges.”
All solutions are painful
Talking piously about the free market and the evils of regulating wages is fine for people who aren’t faced with quandaries like Al’s. Note that his best choice, in an economic sense, is to give up almost all of the personal liberties most Americans take for granted — and to go on the government’s payroll, at that. Worse, don’t forget that most people in that situation don’t have the Army option. Indeed, many might be choosing whether to abort a wanted pregnancy or face bankruptcy even if they manage to find work, since most low-end jobs now have significant waiting times before an employee is eligible for health coverage — and often don’t cover pre-existing conditions for a year or more.
At the same time, the furniture manufacturer that closed its Asheville plant did what was in its owners’ best interests by ceasing operations in what has become an expensive place to do business by current world standards.The construction companies, retailers, and remaining factories that are Al’s potential civilian employers can claim, quite rightly, that they are merely following sound business practice by paying too little for Al to support his family.
So what should we do? So far, talk about private charities taking up the slack have been just that: Talk. There has been no great outpouring of funds to charities as tax cuts have taken effect; the net increase in charitable contributions between 2002 and 2003 was apparently around 0.5%, with totals now approaching year 2000 levels. There has, interestingly, been a noticeable increase in bequest giving in the last few years — about 10% — but the Congressional Budget Office expects the long-term effect of estate tax cessation to be a significant decrease in bequest giving since it will no longer offer any tax advantage.
In any case, if we assume some sort of organized social safety net is a good thing, charitable giving levels in the U.S. — which have never been more than 2.3% of GNP — are insignificant compared to need. If we assume there should be no social safety net, we face the eventual possibility of whole families begging at every city stoplight, rather like Mexico City today.
In the end, we will probably move away from today’s “free market uber alles” political mantrum despite cries about socialism and anti-business government actions. According to our Constitution, one of our government’s responsibilities is to “promote the general welfare.” Assuming we take that phrase — in the Constitution’s preamble — seriously, we can’t effectively abandon large numbers of our fellow citizens. And with increased automation and increased global labor competition, the number of displaced workers in our county is going to grow. Despite all the new job categories we are so busily creating (pet psychotherapists; media deregulation apologists; contact lense color advisors; personal tanning consultants), in 10 or 20 years we may end up with as many as half of our fellow Americans scraping the bottom of the job market as hard as Al and Andrea Average already are.
Now comes the big question: In light of all this, how do we go about promoting the general welfare? We have a rough consensus in this country that endless support payments for people who don’t work doesn’t help. We are also seeing that once the Free Market (praise be to Rand and to Friedman, her holy prophet) has global reach, American workers may need some sort of support payments in order to have even the most basic food, housing, and medical care.
“They who would give up an essential liberty for temporary security, deserve neither liberty or security” is a fine statement when you’re writing a book full of pithy quotes, but over and over again throughout history humans have chosen the temporary security of kings and dictatorships over the ideal of freedom as soon as their children’s bellies start rumbling with hunger.
I am not personally afraid of the free market; I expect that I will always manage to earn a decent living one way or another, and I am not a big spender in any case. But I am absolutely terrified of potential future reactions to free market excesses and accumulations of inherited wealth and power, which may include civil wars, mass executions, and onerous repression in the name of “the people.” I would far rather make some gentle compromises today, including paying taxes that help my less fortunate fellow citizens live decently, than expose my country to a future that could easily include bands of armed thugs roaming our streets, confiscating money at gunpoint in the name of “the revolution.”
So what should we do? Assuming the old solutions won’t work, what new ones should we work toward?
Or should we just put our heads in the sand, spout the same old party lines, and hope everything will work out for the best? (I hope not.)