AI and The End of Work
With technical advancements more can be produced in less time, and less labor is required to do it. Just think about what computers and calculators have done for us. But is there a point where technology advances so far that time and labor become inconsequential? Is Artificial Intelligence that point?
If there is no labor, there are no wages. The potential elimination of the demand for labor creates a problem for society not yet solved or addressed. Luckily there is a silver-lining in that the disappearance of wages doesn’t have to mean disappearance of that money. As long as an effective plan is present, the end of wages only has to be a reduction in prime cost. In other words, what used to be wages would just become part of an increased net income.
We will use the software industry because its fate is tied to AI. If all non-executive coding related jobs became extinct because of Artificial Intelligence, and those firms, as a result, improved their productivity while eliminating wage costs, they could only realize those greater profits if there is consumer demand. On pace for $659 billion in revenue this year (Software — Worldwide | Statista Market Forecast), software is a massive industry. Large industries conventionally employ a lot of people, paying them, and therefore creating that demand. But software going from employing a vast amount of people to close to none, equates to a lot of people having a lot less money.
The demand curve becomes very shallow when large swathes of the population are without wages. Prices, and everything related to them, like stock prices, collapse. The economy needs customers. But if there is no demand for labor, there is no way for people to earn wages and consume. We could stop AI’s advancement to handicap productivity and keep humanity employable. Therefore admitting we’re in a paradox where we either continue to advance and end humanity’s value, or stop being human. But that is only a surface mirage as our intelligence also continues to evolve in humanistic disciplines like politics and economics that can solve problems created by progress in technical areas.
The other more human option is to create customers. It is not realistic or desirable to give handouts to everyone. The financial creation should take place in the industry where the demand for labor has been marginalized. A replacement income would go to the casualties of AI. But what makes and categorizes a casualty would have to be defined. For example in terms of categorization, a person with entry-level licenses or certifications would get a different replacement income than another with advanced qualifications. Phd and Master’s candidates specializing in AI-conquered fields would have to be provided an income in line with their level. Along with upperclassmen who have invested a lot in their education and are directly affected by career opportunities disappearing to productivity gains. However underclassmen have time to change majors and reposition their careers.
If you choose to depart onto a professional path that has already been eliminated by AI, that has to be treated the same as choosing to be unemployed. Supporting those who choose to be victims is wasteful and costs are already high. Former employees of the respective industry, those active in the job market with proven aptitude, upperclassmen, and graduate students would all be financed to save them, their families, and the economy.
Other than financing the income of the casualties of technological progress, things should be capitalist as usual. The only thing is, profits in labor-less industries can’t grow until after those made useless are paid in relation to their former value. So college seniors who graduate into a replacement entry-level income will remain at that salary for the rest of their lives unless they do something to add value to themselves.
This is a drastic plan, but our evolution beyond labor has big consequences worth preparing for. It is just as important to wonder what will be the social impact of working being a consequence instead of a goal?
