back to article Basic income after automation? That’s not how capitalism works

Philosophers, economists and other academics have long discussed the idea of “basic income” – an unconditional monthly check from the government to every citizen, in an amount at least high enough to cover all basic necessities. Recently, this idea has gained more political traction: Even conservative parties consider it, and …

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  1. noboard

    Errrm

    If a shoe factory buys new machines that get the work done in half the time, the factory lays off half the shoe making workforce. Unless they can't keep up with demand.

    I must admit I gave up reading the article after that example as it was so bad.

    1. Anonymous Coward
      Anonymous Coward

      Re: Errrm

      I guess that's economists for you: they probably never heard of such trivial things as market saturation.

      1. This post has been deleted by its author

      2. GruntyMcPugh Silver badge

        Re: Errrm

        Seems shoe manufacturers haven't either. In my town, we appear to approaching the shoe shop event horizon.

      3. Mycho Silver badge

        @I guess that's economists for you

        The author is a philosophy major.

        1. Rich 11 Silver badge

          Re: @I guess that's economists for you

          The author is a philosophy major.

          It shows:

          3.Those of us who are laid off are not entitled to any of the gains that the new technology produces. The owner of the new technology alone is entitled to its proceeds, while all of our fellow citizens are now responsible to pay for our living (through taxes that fund basic income).

          Which is why we have things like corporation tax, which effectively takes a slice off the profits of the owners of the means of production. Well, once the tax management specialists have all been put up against the wall and shot...

          1. Pompous Git Silver badge

            Re: @I guess that's economists for you

            The author is a philosophy major.

            It shows:

            Really? When The Git was in Big School, logic was taught by a philosophy major. Unsurprising really since logic has been an important part of philosophy since at least Aristotle's day over 2,000 years ago. There were quite a few computer science and mathematics students in that class. Perhaps when you get to go to Big School you will learn about such things.

            1. h4rm0ny

              Re: @I guess that's economists for you

              >>"Really? When The Git was in Big School, logic was taught by a philosophy major."

              If I were to list the number of occasions I had seen someone assume that because they understood logic and had decent reasoning skills, they could make pronouncements in any field by abstracting a few gross principles and finding a pleasing conclusion, we would be here for a very long time.

              >>"Unsurprising really since logic has been an important part of philosophy since at least Aristotle's day over 2,000 years ago"

              Case in point, Aristotle loved his idea of his five elements to explain matter. And justified it with assumptions and logic based upon them because the conclusion seemed elegant to him.

              The arrogance of someone who thinks their logic skills from Philosophy classes allow them to dabble usefully in a field as complex of economics is staggering. Reminds me of a manger who used to do some coding and thus gets the basic principles. You'd think it would be good but it's so long since they did it and their understanding is so rudimentary that all it really leads to is someone thinking they understand it when they're really just making loose generalisations that elide a lot of complexity. Much like this article.

              1. Pompous Git Silver badge

                Re: @I guess that's economists for you

                If I were to list the number of occasions I had seen someone assume that because they understood logic and had decent reasoning skills, they could make pronouncements in any field by abstracting a few gross principles and finding a pleasing conclusion, we would be here for a very long time.

                In that case why don't you justify your argument for not using logic and reasoning skills? Presumably you have everyone join hands and sing Koombaya.

                Case in point, Aristotle loved his idea of his five elements to explain matter. And justified it with assumptions and logic based upon them because the conclusion seemed elegant to him.

                The strong compulsion people have to rubbish Aristotle has always mystified me. Apart from inventing logic, the metaphysical stuff of mathematics that allows computers to work, and his contributions to marine biology that needed 2,000 years to confirm, he also proposed an amendment to Empedocles' four elements (earth, water, air and fire, or solid, liquid gas and plasma in modern parlance). The fifth element he named aether and until the 20th C was considered essential in physics. After a brief period of no being needed, it would appear to have snuck back by John Wheeler under the name quantum foam.

                "The arrogance of someone who thinks" they understand Aristotle without reading him is "staggering".

                My comment was aimed at the comment, not the article. The article was rubbish and had nothing whatsoever to do with the author majoring in philosophy. It is entirely possible to major in philosophy in the 21st C without any understanding of logic, though it was not always so.

                1. Mycho Silver badge

                  Re: @I guess that's economists for you

                  In that case why don't you justify your argument for not using logic and reasoning skills? Presumably you have everyone join hands and sing Koombaya.

                  If you're going to straw man try to use clean straw. That stuff stinks of obvious bullshit.

                  But if it needs saying, what you describe as an argument against using logic and reasoning skills is actually an argument that logic and reasoning skills are not enough if you don't also have knowledge about what the fuck you are talking about. Logic, reasoning and knowledge of the subject are the best option, but regurgitated book knowledge is a fair second over making it up as you go.

                  1. Pompous Git Silver badge

                    Re: @I guess that's economists for you

                    if you don't also have knowledge about what the fuck you are talking about

                    You really do need to read Aristotle before condemning him...

    2. Anonymous Coward
      Anonymous Coward

      Re: Errrm

      It was meant to be a simple example to illustrate the point; reality is never that simple. I work in a manufacturing firm and your pessimistic - and just as simple - example is also not quite true. Often, in cases such as this ( where increased automation leads to greater productivity), we redeploy workforce to other positions; extra capacity leads to driving sales to monetise that ability to manufacture more. In my time with my current firm (seven years) no one has been laid off because of increased automation - in fact I can think of at least one line that has seen standard operators up-skilled to become accredited technicians for the new equipment.

      Perhaps you should be less cynical and actually read opinions that challenge your blinkered point of view.

      1. kyndair

        Re: Errrm

        Yes while no-one in your firm has been laid off another firm would have to scale back or go out of business as your firm took their business, while economics isn't a zero sum game it's not an infinite game either. Their is only so much growth and so much elasticity that economic players can take advantage of before someone has to lose.

        1. AMBxx Silver badge
          Boffin

          Re: Errrm

          The new technologies result in new work that hadn't previously been envisaged. How many of the people reading this have a job that even existed 100 years ago?

          1. kyndair

            Re: Errrm

            Yes but car manufacturing was putting the horse tack manufactures out of business it was people that were being employed, when agriculture was being mechanised many people were required for work in the factories producing the machines (even then there was massive upheaval and shockwaves through society), with this next wave it is ai's that will be doing the work and humans need not apply https://www.youtube.com/watch?v=7Pq-S557XQU

            All in all it's a big difference to many previous changes and will have consequences that people need try and predict and make plans for.

            1. Anonymous Coward
              Anonymous Coward

              Re: Errrm

              But there are many more cars now than there were horse carts then; partly through increased population but mainly through increased wealth and decreased manufacturing (and running) costs making them more affordable. Many more jobs - and indeed industrial sectors - have been created by the automobile than were lost as horse transport declined. as we get wealthier we get more stuff; how many TVs are in your house now compared to when you were a kid growing up?

              1. This post has been deleted by its author

              2. Doctor Syntax Silver badge

                Re: Errrm

                "But there are many more cars now than there were horse carts then"

                If you see early films of London the streets were just as crowded as they are now but with horse drawn traffic. I suppose, however, that London itself is bigger.

                1. Brewster's Angle Grinder Silver badge

                  @Doctor Syntax

                  "If you see early films of London the streets were just as crowded as they are now but with horse drawn traffic. I suppose, however, that London itself is bigger."

                  There were 300,000 horses in London c.1900 and there are 2.6million cars registered in London today. In that time the human population has only increase by about a third (Wikipedia says from 6.6E6 to 8.6E6).

                  I reckon the horses produced more pollution, too.

                  1. John Brown (no body) Silver badge
                    Coat

                    Re: @Doctor Syntax

                    "I reckon the horses produced more pollution, too."

                    Yeah, but the rhubarb and roses were better then!

                  2. Archtech Silver badge

                    Re: @Doctor Syntax

                    "I reckon the horses produced more pollution, too".

                    That's an interesting one. It seems to me the horses produced more obvious, visible, possibly smellable pollution. Pollution you could (and very likely did) step in and swear at. But cars produce invisible pollution that attacks your lungs and gets insidiously into your blood. Healthwise, I think the horse manure was probably a great deal less harmful.

                    1. Pompous Git Silver badge

                      Re: @Doctor Syntax

                      Healthwise, I think the horse manure was probably a great deal less harmful.

                      It was the basis of the French Intensive market gardening system.

              3. Mage Silver badge
                Windows

                Re: Errrm

                How many of those cars are made in UK?

                How many TVs are made in Europe now.

                Large scale automation was common in the 1930s, though it started in the late 18th century.

                There is eventually saturation and eventually a situation where very few people are employed. They are developing the technology to restock shelves and already have self service checkouts in some shops.

                There will be no overnight change. However there are no "jobs for life" any more, except maybe in some Civil Services. We are a long way from having to make this decision, it could be another 150 years. It seems likely though there will be a slowly increasing number of people that never get jobs.

                It's really a lie about retirement age being raised. It's the age to start getting a government pension that is being raised. If you are over 49, then you are more likely to be made redundant and if over 59 unlikely to to find a job if you are unemployed. Businesses have not raised retirement age, quite the reverse. It's obvious without an age, the approximate age of the person on a CV.

                It's a dishonestly written article, typical of the propaganda from "The Conversation"

                1. Vendicar Decarian1

                  Re: Errrm

                  The author presumes that future economies must be Capitalist ones and then continues on that basis.

                  Pro Corporate Propagandists always do that.

                  Society need not be so constrained.

                  1. John Brown (no body) Silver badge

                    Re: Errrm

                    The author presumes that future economies must be Capitalist ones and then continues on that basis.

                    Society need not be so constrained.

                    Yes, that's more or less what I took from this story too. Capitalism as currently practised is broken and unsustainable. We seem to be heading back to the time of the robber barons trying to buy up sovereign governments. It'll take a strong leader to do to them what was done to Carnegie, Rothschild et al. Bank of America, Bank of China, Deutsche Bank have fingers in many pies but the ones we most see lobbying and influencing governments seem to be the tech titans of Apple, Google, MS, Amazon etc though Samsung seem relatively quiet on that front despite being the only tech titan in the top 10 most valuable companies list (5 are banks, 2 are big oil)

                    And as for the authors derision of "basic income", most of the civilised world pretty much has done that for many years, the USA (her apparent place of residence) being a notable exception. Dole, social security, whatever you want to call it, is not exactly a new experiment and gets tweaked and twisted on a regular basis in most of the countries which operate a form of unemployment benefits, sometimes to decent levels, sometimes to bare subsistence levels. The biggest problem with living on benefits for someone previously employed isn't the income and expenditure to survive, it's servicing the debts built up in the hope they'd always have a job (and the current pressures to cut budgets by governments)

                    1. Pompous Git Silver badge

                      Re: Errrm

                      The author presumes that future economies must be Capitalist ones and then continues on that basis.

                      Society need not be so constrained.

                      Capitalism is the organisation of the wealth of a number of individuals to create infrastructure that no individual can create alone. For example hospitals, railways, airlines and sewage farms. If you believe such infrastructure can be created by individual wealth, please provide examples.

                2. David Paul Morgan
                  Coat

                  Re: Errrm

                  there's a phrase in economics - something called 'inferior' goods?

                  anyway, certain products become so inexpensive to make, that, theoretically, at zero 'cost' goods should tend to 'infinite consumption'. clearly, if bread is 'zero' there's only so much you can 'consume'.

                  For TV's, as an example, the key here was the technology and the patents. When europe switched to colour, Philips, Thorn et.al. kept hold of the PAL patents, allowing Europe to keep its manufacturing base. Hence, Philips, Ferguson (Thomson, JVC [J2T]) and (yes!) Sony TV's made in europe. (at one time, Sony near Bridgend made most of their Trinitrons for the euro market here). However, come flatscreen and HD, all the TV's are made in China and Korea.

                  Once a 'good' becomes a commodity, then yes, you can own 2, 3 or 4 at low cost, but they quickly reach saturation point. But, 'robots', to quote Henry Ford, don't buy cars - people do.

                  I've forgotten my point now...

              4. Vendicar Decarian1

                Re: Errrm

                "how many TVs are in your house now compared to when you were a kid growing up?"

                When I was growing up there was 1 TV in my house. Today I own zero tv's.

                1. This post has been deleted by its author

              5. Gritzwally Philbin

                Re: Errrm

                Still zero TV's in my home.. computer displays picked from the town dump and off of roadsides however...

          2. Brewster's Angle Grinder Silver badge

            Re: Errrm

            "The new technologies result in new work that hadn't previously been envisaged. How many of the people reading this have a job that even existed 100 years ago?"

            In the 19th Century (~100 years ago) there were over 3 million horses in the UK and they were mainly working animals. Today there are about a million, mainly in leisure and sports. We haven't been able to redeploy all the horses because they're not up to doing the jobs we have. That's the danger of robots and AI -- that not everybody is up to doing the jobs for which, yes, there might be a huge demand.

            1. Brewster's Angle Grinder Silver badge

              Re: Errrm

              For an example of people not being ale to do replacements jobs, look at supermarkets replacing cashiers with delivery drivers. Not every cashier can drive. And not everybody who can drive can load and unload create of foods.

            2. Anonymous Coward
              Anonymous Coward

              Re: Errrm

              In the 19th Century (~100 years ago) there were over 3 million horses in the UK and they were mainly working animals. Today there are about a million, mainly in leisure and sports. We haven't been able to redeploy all the horses because they're not up to doing the jobs we have.

              Would you want to redeploy them?

              Those are some very old horses.

          3. Vendicar Decarian1

            Re: Errrm

            "The new technologies result in new work that hadn't previously been envisaged."

            Sometimes. Can you point me to a proof in any economic theory that the number of new jobs gained must be equal to or better in terms of pay compared to the ones lost?

            Worker wages in the U.S. have been stagnant in real terms for decades even though worker productivity and corporate profits have increased tremendously.

            This was claimed to be impossible by the apologists of Capitalism as stated 30 years ago and earlier.

            Why were they wrong?

            1. h4rm0ny

              Re: Errrm

              >>"Why were they wrong?"

              In short and simplistic terms, they underestimated the degree to which governments could alter the behaviour of the population to limit competition and free movement of labour.

            2. I ain't Spartacus Gold badge

              Re: Errrm

              The author presumes that future economies must be Capitalist ones and then continues on that basis.

              Pro Corporate Propagandists always do that.

              Society need not be so constrained.

              Vendicar Decarian1,

              I don't think any society that isn't free market capitalist has ever risen above what we now call "middle income" level.

              Of course I'm generalising horribly here, as there aren't many purely capitalist systems out there. But all the world's rich countries are free market mixed economies. Many countries did their catch-up growth under less free-market systems, but liberalised more as they got richer.

              China is going to be an interesting case study. There's a lot of discussion as to whether they'll get caught in the "middle income trap", Only about ten countries have managed to make the leap from middle income to rich since WWII. The worst performing bit of the Chinese economy is now the state owned bit, and that's what's looking to drag them down at the moment and causing their huge credit spike. They've done the "easy" catch-up growth, and now need to transition to a more mature economy where you need more innovation. If you want long-term investment you need the rule of law, so the local Party bosses can't just take your stuff/company.

              So no, capitalism isn't the only answer. In fact it's not the answer at all, as most successful econmies have a mix of state, cooperative, private and share ownership.

              But no state that's tried to run the whole economy has ever succeeded (apart from maybe the UK in WWII) - and it's unlikely to ever happen because it's too difficult. So increasing cooperative ownership might well work if you want less inequality, plus maybe a bit more nationalisation - but if you start seizing assets from the rich and giving them to the poor, the rich bugger off as fast as their little legs will carry them, nobody will invest, and everyone ends up poorer. And the more you redistribute via taxation the more you end up trying to run the economy, and relying on the government's ability to do it competently.

              Free markets are best of anything we've tried so far, requiring much regulation from government and a legal system to keep everyone as honest as possible - and mixed economies with a large capitalist element also. Though who owns stuff (capitalism) is less important than free markets.

              As for your comment about US wages, that isn't true. US wages didn't stagnate until a few years before the recession. What is true is profit has been taking a bigger share of the pie than wages in the US, UK and large chunks of Europe - but the pie has been growing for both until just before the recession. Also I seem to remember from looking at stats that average wages in the US have grown slower than housing and medical costs since the mid 90s - so people have felt poorer - although consumer goods also got massively better and cheaper in that period so it's not all been one-way traffic. Plus all the stuff you can get on the internet for free, that's only been around for 15 years, but doesn't really hit GDP calculations.

              In the UK real wages stopped going up in about 2003 - and housing costs have been rising even more ridiculously since the 90s - which obviously makes everyone who's not got a house feel much poorer.

              On the other hand, while large chunks of the West stood still for a few years, billions in Asia, South America and now Africa became massively richer, in the largest rise in living standards in human history. So globalisation has helped companies to make more profit, and hopefully we can rebalance this back to wages in the next few years, but the upside is still pretty huge for the millions of people who didn't starve to death, the hundreds of millions who didn't die of preventable diseases and the couple of billion who now live much more comfortable and longer lives.

              We could have managed things better, but it's hard to predict the future and globalisation has still been a good thing.

              1. Anonymous Coward
                Anonymous Coward

                Re: Errrm

                " US wages didn't stagnate until a few years before the recession"

                WOW!!! And we need to win in Vietnam!!

                This simply isn't true. I think it was about 1979 when corporations decided to cut wage increases for the 99%. Maybe early 1980. I still remember the way I felt believing the lies about keeping America competitive requires patience..wtf was I thinking? Ask anyone who manages a local bank, or works under that manager, or the people who feed them on lunch or even the people who physically built the bank ...ask them how their wages fair to wages 40 years gone.

              2. Anonymous Coward
                Anonymous Coward

                Re: Errrm - lack of upvotes for your comment really exemplifies the hypocrisy of us westerners

                Very rarely do i ever read anything in any article about technology, globalisation, free markets/capitalism versus socialism etc etc about how really we are just moaning about how bad it's been for us westerners ... and even that's relative ... the poorest in most western societies are sooo much better off than most of the general poor in other parts of the world. No, we're all moaning 'cos someone in india can bash about a bit of bog standard coding cheaper or someone here. So more upvotes to the OP for pointing this out .. the last 30-40 years have seen the biggest, faster uplift of people out of poverty in history. So the system is working ... just not in a way that's that great for complacent westerners. But even we are still massively better off than we in say, the 70s. I earn about the same now as i did 20yrs ago but my quality of life in many ways is better with cheaper computational devices and the internet etc

            3. James Wilson

              Re: Errrm

              They weren't. US wages have increased broadly in line with productivity.

              1. Anonymous Coward
                Anonymous Coward

                Re: Errrm

                They weren't. US wages have increased broadly in line with productivity.

                Oh, a jokester!

          4. h4rm0ny

            Re: Errrm

            >>"How many of the people reading this have a job that even existed 100 years ago?"

            Lots of us. However, unlike a hundred years ago, we had to spend the first 23 years of our life just preparing to do those jobs. In 1916, you could walk out of school at the age of twelve and find some sort of employment. A few years later it was raised to 14 years of age but still the point holds. The level of training and complexity required to compete with automated or semi-automated industry rises every year. This article chooses to reference history when convenient to its argument and disregard it when it isn't. You'll need to spend a quarter of a century on this planet soon before you can get a decent job. Maybe you already do.

            One might think this means more work for teachers and professors, but actually modern technology is altering teaching too. You can learn from online training packages and book a slot to talk to a tutor who lives a hundred miles from you and services a hundred or more students. Universities with good reputations are using those reputations to look into delivering their product - education and degrees (which I class as separate items) - world wide, ultimately driving out local competitors.

            So where is the tipping point? We are heading towards a future where there are only two jobs: being a celebrity or being the person who presses the button that makes everything happen. I imagine looking back at this article in twenty years time and having a very good laugh. Assuming I can afford the Internet connection and my licence for using the Internet.

            1. James Wilson

              Re: Errrm

              Everything that needs to be done will be (by the machines) so you won't need a job as, well, everything will be done for you.

          5. P. Lee Silver badge

            >How many of the people reading this have a job that even existed 100 years ago?

            Let's go back further, how common was involuntary unemployment two hundred years ago?

            I don't know, but I'd hazard a guess at, "lower than today.'

            The problem is not automation per se, its the disruption caused while adapting to the new environment. That isn't to say we should try to stop the tech, but we should, as a society, be prepared to help those less fortunate than ourselves. A sixty-year-old postman laid off because email has reduced the volume of letters probably won't become a software engineer. For all the unpleasantness of the printing industry unions in the 80's, those type-setter's families still had to live with the loss of income. I'll bet the tech was a bit of a surprise to them. Sure, the jobs (and the workers' attitudes) had to go, but the pain was not limited to the bolshy people on the picket lines.

          6. Archtech Silver badge

            Re: Errrm

            How many of the people reading this have a job?

            1. Pompous Git Silver badge

              Re: Errrm

              How many of the people reading this have a job?

              Not me :-) I'm retired and it's kewl...

          7. Marshalltown

            Re: Errrm

            "The new technologies result in new work that hadn't previously been envisaged. ..."

            That is true, barely, but irrelevant to the point of being political spin. If you automate 1,000 autoworkers jobs off shore, the automakers are out their jobs indefinitely. There is no guarantee that they will (or can) be trained in some form of "new work." Especially new work that will actually pay a salary or wage comparable on an annual basis withe their old job. Otherwise how do they pay for the house and car they owe the bank a significant chunk of their income for the next 15 to 30 years for under the fractional reserve system which permits banks to print money and then point to the government as the culprit. The basic assumption of capitalism is that markets are efficient at redistributing wealth and generating new wealth. But we do not HAVE a capitalist system, nor a Marxist one for that matter. The wealthiest sectors - that one percent - dread real capitalism more than they do socialism. They can afford socialism but capitalism has a genuine potential to level the financial field in ways the socialist merely dreams of. Instead we have corporate welfare. Profits are privatized while losses are distributed socially. The vanishing middle class and manner in which wealth is becoming increasingly concentrated in the hands of a very, very few, is the problem, it is not a problem with capitalism or with socialism. It derives from oligarchic and kleptocratic patterns that are merely labeled as "capitalism."

        2. Anonymous Coward
          Anonymous Coward

          Re: Errrm

          Yes and no; with increasing technological innovation and consumer wealth, my company makes products that have never been offered in our marketplace before, driving new demand. In many cases we're creating new business areas. Granted, there's not room for infinite growth, but it would be incorrect to assume that every product we make is at the cost of one of our competitors.

          1. kyndair

            Re: Errrm

            >>but it would be incorrect to assume that every product we make is at the cost of one of our competitors.

            In general if you are growing faster than your industry then you are getting business from someone else, that means they need less work to be done so someone is feeling the hurt.

            Yes it can occasionally be that one business gets all/most of the growth and the other business stagnate or get little growth but that often leads to the point where other business are then not able to invest in upgrades to push themselves back into growth/relevance so they end up becoming niche or exiting a market so in the end someone gets the short end of the shit stick.

            >> But there are many more cars

            Yes but that is the past/current economy, one without general purpose robots and ai's to do the work far more cheaply than humans. If you have no job and no pay how many tv's and cars can you buy in the future?

        3. Casapaz

          Re: Errrm

          The best reason for implementing basic income is so that we can abolish minimum wage and manufacturing shoes can actually be a competitive business here. Why should a business that makes shoes stay in the country if they can ship the jobs to Asia where they can make shoes for much less than the minimum wage? (This is just an example, but you get the idea. And I don't believe we should abolish min wage yet)

          Sorry, communisim plus capitalism won. Look at China. Democracy is failing because people still think that UBI is some sort of dirty welfare scheme that gives everyone a free pass to retire tommorow.

        4. Jaybus

          Re: Errrm

          Not infinite, but certainly the upper limit is dynamic and not fixed. When compensation goes up, spending goes up. Put simply, there is no end to human wants and desires. Do your really believe that a woman with 40 pairs of shoes would not buy 40 more if she could afford them?

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