There have been a lot of alarmist discussions on the technology and economics forums about robots and the Artificial Intelligence (AI) liberating people from the need to work. Hardly anyone could argue that the people thus liberated would get somewhat inconvenienced, if they suffer a catastrophic loss of income as a result.
Indeed, the first four chapters of the online book Manna, by Marshal Brain, describe the dire life of the “liberated” people quite succinctly.
There, the destitute unemployed are housed out of sight in huge brown warehouse-like buildings, where rooms have no windows. In the beginning the standards seem to be reasonable, if somewhat Spartan – and indeed many today would envy the living conditions described. A single person is given a clean room with a bed and a TV. All meals are provided in a canteen and laundry and cleaning are taken care of by robots. There are shared toilets and showers; so it is like a budget hotel. A safety net for people left destitute. Except, if residents stray too far from their building they are politely turned back by robots. Those who refuse to obey are injected with tranquilizer and wake up back in their rooms. As more and more jobs are lost to robotization, the government decides to house two people per room… The book does not mention how families are housed, but drugs are added to drink to curb fertility.
Some might think this is fine, as they believe it will never affect them personally. Morality of such position is not within the scope of this paper, however. In any case with the unemployment rate projected to rise to 99% and above, it would not be just the lazy, stupid, criminally-minded and generally under-class who would end up being “warehoused”, but most of us. In the book “Manna” was a management software package that first eliminated middle management…
This happened well-before there were robots that can replace manual laborers… This process has started already and is well under way today. If one were to search the Internet, there are articles about software replacing lawyers (para-legal assistants in any case).
Software has outperformed humans at examining lab samples. It stands to reason that a system like IBM Watson will eliminate quite a few medical jobs. Personnel performance monitoring software is a great help for managers, but it also makes it possible to have less managers…
Autopilot software today is capable of flying aircraft and landing it safely. Today is technically feasible to fly any plane with no pilots.
There are driverless trains on some London Underground lines.
Clearly the trend to automate highly skilled jobs is well underway. It is logical there will be more automation in the future. More jobs will be gone.
So far only a few middle class jobs have been affected: middle managers, junior lawyers, lab technicians. The people, who lost jobs so far have been well-educated and motivated. There have not been too many of them. Most of them have successfully adapted to the changes and found other jobs.
But when autonomous road vehicles make their entry sometime in this decade, job losses will be in millions…
In the book Manna, budget hostels for destitute unemployed eventually evolve into concentration camps that imprison the vast majority. With robotic security any protest or escape is impossible. And anyway, what a penniless destitute person would do had they escaped? The government can remove voting rights from such people with impunity. It could do to them anything it desires, anything whatsoever (1). This kind of future is very plausible.
The four last chapters of Manna describe Utopian society created in Australia.
What can be done today to avoid the first scenario?
A solution is the Universal Citizen’s Dividend – an automatic payment to each and every legal citizen regardless of their income or age.
Here in the UK, we have the Child Benefit. For two children it is worth £1752.40 per year. In Alaska there is the Permanent Fund Dividend that in 2005 paid $845.76 to every eligible Alaskan resident (including their children). These are two modern examples of Universal Citizen’s Dividend.
For some time now technology-minded thinkers have been proposing to replace welfare system with Citizen’s Dividend, usually termed as Guaranteed Citizen’s Income. The main question is – can the country afford it? I looked at the UK budget and made some calculations.
In 2013 the UK welfare budget is set at £117 billion. If we divide this by 60m people, we get £1950 per person per year. Unemployment handouts in the UK are on average £7-10 thousand p.a. Most of this is made up by the “Housing Benefit” – a payment that covers rent or mortgage interest payments. Obviously £1950 is significantly less than £7 000. Perhaps with a handout of £1950 a person could survive by camping out, living in a shanty town or lockup garage. It would prevent imminent starvation, but not much more than that.
But these figures only apply to a single person with no children. A family of 4 would receive £7800. This is still not enough for any kind of decent life. It would be enough money to survive in a single room of a shared house, or in a trailer park. Still this is not a decent way to live.
It must be pointed out that health care in the UK is free.
So, from the above examples it appears that Citizen’s Dividend would not be a popular proposition. But can we find more money in the existing UK budget?
Yes we can! There are whooping £138.1 billion allocated to the State Pension fund. If we add this money to the Citizen’s Dividend fund we get a much more decent allowance of £4251 per person, per annum, or £17004 for a family of four. And this sum is tax free, because the original welfare handouts and state pensions are un-taxable.
Now, this is a much better proposition. A lot of working-class families in the UK do not make this amount of money – a full time shop assistant only brings home £10 000 p.a. after taxes and even many lower-middle class employees bring home no more than £15-20 t p.a. Then there are commuting expenses and shoes and business clothes being worn out.
Yes, for many it would be a leaner life, and unfair for pensioners whose state pension would be reduced. On a positive note those bone-idle persons who had never worked in their lives would not be able to go touring the world on cruise ships as they do now (2).
But the calculation still goes to prove that Universal Citizen’s Dividend is theoretically possible in the UK today. No doubt still more money can be shaved from other parts of the budget –Defense budget for example. There is absolutely no reason to go invading far-away third world countries like Iraq, Afghanistan, Libya or Syria. The only people who benefit from these wars are the weapon manufacturers. It is taxpayer’s money that is being siphoned off to be spent on overpriced weapons.
The figures above are a bare minimum possible today. Further savings could be made by abolishing the department for Work and Pensions, and allocating the moneys thus saved to increase Citizen’s Dividend. Also the 60 m population is a total figure, including millions of illegal immigrants. So the actual amount of Citizen’s Dividend would be significantly higher. For a family of 4 this could be as much as £20 000 per annum tax free. Tens of millions of people in EU and the US now can only dream of such income.
Everybody would be receiving Universal Citizen’s Dividend (UCD), from a newborn baby to an elderly retired person. From a billionaire, to a homeless sleeping under a bridge. The administration costs would be virtually zero. Buildings occupied by the JobCenters and redundant government offices could be rented out, or sold and money invested into a UCD trust fund; the income from which would further enhance the UCD budget.
Once again, I would like to point out that £17004 for a family of four is an absolute minimum that is available today. The people who find themselves unemployed usually have savings and investments that bring in interest income (3). They may work temporarily or part-time. They can run businesses, for example buying and selling things on EBay. They can rent out spare rooms in their homes to lodgers. Many people have private pensions and insurance.
Unemployment, as it currently stands ,is not meant to be a permanent condition for an individual. People are expected to try and find another job, retraining if necessary. The current system of welfare in the UK discourages the unemployed from taking low-paid, seasonal or temporary jobs. If an unemployed person works part time, almost everything they earn would be taken away from them in a form of reduced welfare payments. If an unemployed person is caught working without declaring this to welfare authorities they are prosecuted. The same applies if a person has savings over £3000 or so. This war on fraud is sometimes quite farcical. Imagine two colleagues working in the same office, earning similar salaries.
Mr Cicada goes clubbing every weekend, smokes, drinks, drives a flashy car, likes to eat out, and wears designer clothes. He buys ready-made sandwiches during lunch break. He has no savings and is often in debt.
Ms Ant likes to read books, goes out rarely, does not smoke, hardly ever drinks, drives a cheap but sturdy second-hand car, makes her lunch at home and brings it to work. She buys most of her clothes in second-hand shops or when there is sale. Both are made redundant. Mr Cicada signs up on the welfare and receives it. Ms Ant also signs up on welfare, but is later caught with tens of thousands of pounds in a bank account, prosecuted (her bank account emptied of life savings), and also gets a criminal record. Her crime is being thrifty and not declaring it. Under the current regime a wastrel Mr Cicada is a paragon of virtue, and Ms Ant a criminal...
If an unemployed person is caught working in the UK, or if they are caught with undeclared savings everything that had been “unlawfully” paid to them is taken away, plus 30% fine. (4) They are also vilified in popular press as greedy thieves.
The current welfare system in the UK is also aimed at discouraging family life – a single person receives £71.00 a week jobseekers allowance. A couple receive £111.45. A similar pattern is repeated for state pension: £107.45 per week a single person. £64.40 a married person, if they are using their partners National Insurance contributions. This is usually women who have been housewives instead of going to work. But if she leaves her husband of 40 years, she too will receive £107.45 per week. Clearly there is an incentive not to be a couple. State officials are encouraged to pry into people’s private life – “to weed out cheats”.
Replacing welfare and pension payments with uniform equitable Citizen’s Dividend would eliminate this unpleasant state of affairs. Millions of pounds spend on spying on citizens and prosecuting them could be added to the UCD fund.
Currently only illegal immigrants work in low-paid jobs. No citizen in their right mind would want to work for £9k a year, minus tax, when they can receive a £10 k handout tax-free for doing absolutely nothing.
Replacing welfare and pension payments with uniform equitable Universal Citizen’s Dividend would eliminate reason de entre for illegal immigration, because a person receiving £5000 a year allowance would seek to get extra income, and would be willing to take low-paid, temporary jobs that are now being done mostly by the illegals.
So in theory it is possibly to have Citizen’s Dividend in the UK right now, today. And it would be a win/win arrangement. In theory it could be done overnight – just replace welfare payments with the UCD for the current unemployed first, then roll it out to the rest of the population. But in reality the economy is an unpredictable, chaotic beast, similar to weather, and there can be unforeseen consequences. Therefore to avoid socio-economic upheavals, the UCD should be introduced gradually. For example we could start with an automatic payment of just £10 a year to each legal citizen– timed for arrive in their accounts for Christmas. The money would come from the Welfare and Pension budgets. Year on year this payment could be increased and the welfare and pension handouts reduced. The effect this will have on the economy is likely to be positive – it is generally believed by the economists that more money in the hands of people equals more purchasing power, leading to more economic activity.
An argument that if you give people a sizable allowance then nobody will work is a misconceived example of faulty logic. If I were given such an allowance I would continue to write articles and software as I do now. I will simply have more money in my account, so I may decide to work less on paid contracts and more on open-source software projects and unpaid journalism. When the AI can do these two tasks better than I can, I would still continue to do those things, although purely for the fun of it. Or maybe I will write poetry and paint sunsets.
I cannot imagine many people thinking – “Oh, if I were to receive 20 thousand a year tax-free, I will simply watch daytime TV, play computer games, stop showering and brushing teeth, eat junk food all day, start taking drugs, and then go out to commit random acts of violence”. There are such people of course – they are not working already.
The GDP is expected to grow exponentially as a result of increased automation, and the UCD payments should also increase. This allowance can be increased until we have a society where working for a living is optional – pretty much as it had always been for the moneyed aristocracy throughout the ages, but this time it will be for everyone.
The current perception of the unemployed is obviously negative. This is easily understood, as their percentage is generally in the single digits or lower double digits. They are a minority; they are different from the rest of us because most of them have lower education, aptitudes, IQ and aspirations. The working people view them with pity and contempt – after all they live from our taxes. But there is another minority that does not need to work for a living – aristocracy.
When the majority of work is done by robots, most people will be unemployed. When all of the work is done by robots – all people will be unemployed. If they are made destitute the market economy will collapse. The Universal Citizen’s Dividend is one possible way the capitalist system can continue to function. To avoid upheavals we, should start implementing it now. In robotic future we all can live like aristocracy – educated, lacking for nothing and free from chores – enjoying our life on permanent vacation. Or we can be locked in warehouse-like housing projects with robotic prison guards, no voting rights and no possibility to escape. The choice is ours to make and it must be made today.
(1) The railroad baron Jay Gould once said "I could hire half of the working class to kill the other half."
(2) I have met such persons personally. Generally, long-term unemployed in the UK drive quality cars and have one foreign vacation every year.
(3) If they don’t have savings, investments and private pensions they ought to!
(4) I was present in court during prosecutions of people for welfare fraud, where the only crime was not declaring their savings. It was heart-breaking to watch.