This week, as part of our Spirited Discussion series, we sat down with Benji Smith to discuss work, automation, and society. If you like what you read, check out more spirited discussions here. This discussion is brought to you by Bullet Bourbon. Enjoy!
On automation and offshoring
Benji Smith: I think that an interesting parallel between the impacts of automation on work and offshoring. In both cases, be it by a machine or by foreign workers, why are our workers replaced? Because there are cheaper alternatives. If we build machines that augment workers and double their productivity that’s a good thing. That’s the long-term driver of economic growth. But if we build machines that replace humans, the impact is very similar to a job going overseas where you have someone make the product for extremely cheap and then just import it back to the US.
Joe Schuman: That’s interesting because I think that a large part of the current populist moment is driven by the perception that American jobs have gone overseas, which many have. But an equally important driver in my view has been automation.
BS: Interestingly, the US has never produced more in manufacturing, in dollar terms, then it produces today.
JS: How meaningful is that statistic? Couldn’t that just be because we have more people and our economy is larger than it has ever been?
BS: It’s because of productivity. We actually have fewer people in manufacturing than we used to. So it’s a function of the fact that we have become that much better at using machines to make us more productive.
On whether “this time is different”
BS: Capitalism is built off a process of creative destruction. The question this time around is whether the process of creative destruction will continue because we are no longer solely augmenting work. We are replacing work.
JS: I think this is the central question. At least right now, for the foreseeable future, I do not think that jobs that require uniquely human skills such as collaboration, creativity, and creation are not at risk. The jobs at risk are repetitive work that machines can easily reproduce at scale and speed. And this is easy for me to say, as a well-educated and reasonably well off urban millennial, but I think that the overall utility of the human race could be increased by this change. The people doing these jobs probably don’t love them. They do them for sustenance. So if we could find a way to meet their basic needs, then perhaps our species would benefit as a whole.
BS: I am not sure. I think jobs are such a central part of our identity. I wonder about the impacts there. Also, as you mention, these negative impacts will be very concentrated and severe for the laborers you are talking about. For the rest of us, sure, the cost of our goods go down. Perhaps it is good for society writ large. Again, in this sense, it is quite similar to international trade. So the question remains, if there are winners and losers, what do with those who don’t win?
BS: For me, I think that it is critical that the winners should pay the government money, via taxes, to retrain workers who have lost their jobs. Right now, retraining is rare and, if it is happening, workers are being retrained into jobs that are paying them less than they were making previously. Additionally, I like the idea of retraining, especially if you are 35 and have 30 years left in your career. But if you are 55 or 60, I think retraining misses the mark. And that’s something we also have to consider.
JS: I remember watching an episode of Parts Unknown by Anthony Bourdain where he visited a poor coal mining community in West Virginia. He discussed retraining with these workers and he asked the audience where we would employ them. The top employer in the state of West Virginia for most of the 21st century has been Walmart. And I think this is something that too frequently gets lost in this conversation. Retraining is a first step. But in the case of some sort of mass societal retraining, someone would need to map out where all of these people are going to work. When people talk about retraining coal workers into computer scientists, I always get a little skeptical. There are huge cultural barriers there. You bring up a great point about the number of years retrained workers have to work. All of this to say, I think people are too hand-wavy about retraining.
On the “human touch”
BS: Even if we can automate certain jobs, I think there might be reasons why individuals continue to spend money on the interpersonal aspects of service. I, for one, don’t want to go to a coffee shop and click on a screen. I want to order from a barista. I suspect that you and I are both going to want to order at a restaurant from a human. I bet that desire for interpersonal interaction will never go away completely.
JS: For me that depends on the situation. If I am taking an Uber in the morning, I’d prefer the car to be driving autonomously, since I don’t want talk to anyone in the morning anyways. You’ve probably also seen fellow Uber passengers with headphones in, I’m sure. So I’m not alone … What your comment does trigger for me of is whether something like the “Made in America” movement will come into existence. I wonder if there will be something like an “Employ Humans” movement. I’ve actually heard of people going to grocery stores and not using the self-check out lanes because they believe they are taking jobs from grocers. Something like that.
On general artificial intelligence and leisure
JS: Recognizing that certain jobs will take more time to automate, especially jobs that require these “uniquely” human qualities, what will happen once artificial intelligence achieves a capacity for these things too? Some AI is already starting to be able to create artwork and write books. If that trend continues, then we are all out of work. What would all of us do then?
BS: Interestingly, John Maynard Keynes predicted in the mid-twentieth century that by now we would all be working fifteen, twenty hour work weeks. His expectation was that our societal response to increased productivity would be more leisure. Although, obviously, this theory has yet to be proven correct.
JS: I enjoy leisure time as much as the next guy. But what I will also say is that—to your earlier point about the dignity in work and work as identity—if you’ve ever been unemployed for a few months, as I was after graduation, you actually end up really wanting to work. I don’t know how much of that is driven by societal norms and expectations but there is something to be said about doing a job, having something to do, and getting out of your house. Plus, for those of us who are fortunate enough, you might even work on an issue you care about or for an organization with a mission that you believe in. I don’t actually think I would enjoy living without working.
BS: I’m in agreement. But I suspect if I worked ten less hours per week, I could use that time for hobbies. Things that will help me achieve a sense of identity, perhaps enhance it. I guess this is my way of saying people should develop hobbies.
On universal basic income
JS: Universal basic income. Thoughts?
BS: I gravitate to towards the idea of universal basic income (UBI), actually. As an aspiring economist on the center-Right, I am happy to inform you that Milton Friedman actually came up with the idea of a negative income tax. I see something like that or UBI as an improvement on our current massive administrative state. We have a patchwork of programs dedicated towards alleviating poverty. There are many oddities and inverse incentives that come with this. For example, welfare cliffs where you might be eligible for a program if you make $19,999 but not ineligible if you make $20,000. Plus there is the administration of these programs, which cost billions of dollars per year. And I’m not one to say that the people running these programs are bad at these jobs. But the question I ask is what is the most efficient way to accomplish this goal? I believe it is to give people money directly.
JS: Let me throw some stones at you as someone who doesn’t support universal basic income. First, I am glad to hear that you are talking about UBI as a replacement of existing welfare programs. A lot of people, particularly on Left, propose UBI in addition to existing welfare programs, which we simply cannot afford given our current $20 trillion federal debt and yearly federal budget deficits in the hundreds of billions.
BS: Correct. We can’t afford that.
JS: Well, great, we can agree on that … Okay, so let me interrogate the word “universal.” Universal would mean everyone in the United States gets, say, a thousand dollars per month. Is this program means tested? If it is truly universal, then the middle and even upper classes would receive this payment. Do you think someone making over $100,000 should you receive UBI?
BS: That’s an interesting question. I think the best analogy to make is Social Security, which is not means tested. Jeff Bezos will be paid social security when he retires. But Social Security is an incredibly successful program—successful in the sense that it is a political third rail, something that no one wants to touch—and I think that is because everyone gets the benefit. So I think there’s an argument to be made there.
JS: Okay, my next critique of UBI. The numbers that I have seen tossed around come out to payments of about one thousand dollars per month per citizen. I don’t think that $12,000 per year is enough to live on by itself. And if you’ve gone and gotten rid of all the social safety net programs, what happens to those who can’t submit on this amount?
BS: I agree with your point, in DC. But I don’t think that’s true in every part of America.
JS: Fair enough. Purchasing power parity is a real thing. I have the same critique of the Fight for $15 minimum wage movement. Fifteen dollars per hour in Washington, DC is very different than fifteen dollars per hour in Kansas. The same is true for UBI in my view. $12,000 is different depending on where you are.
BS: Okay, so what would you do then?
JS: To be honest, I am not completely sure. Maybe we need to tax the top wealth earners in this country a bit more. Maybe it means retraining programs for some workers. Maybe it means universal access to employment so if you are willing and able to work, the government will put you to work doing something productive for society. Then again, our economy is at full employment currently, so I think we have some time to figure it out.
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