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Finland Will Give Some Unemployed Citizens a Basic Income (theoutline.com)
Next month, the Finnish government is going to try something completely different to help its unemployed citizens: give them free money. From a report on The Outline: On Jan. 9, 2017, a randomly selected group of 2,000 unemployed citizens in Finland will receive a check for 560 euros (about $585) with no strings attached. They'll continue to receive that check every month for two years straight, even if they find a job or continue to remain unemployed. This is part of an experiment to see what happens to people's participation in the labor market after they've been guaranteed a certain amount of money.
I suspect this thread like the last will have a lot of misunderstandings about BI.
The biggest misunderstanding for the general principle is that you take the existing system as-is and simply give everyone 10k per year or something. The numbers are clearly absurd so that causes people to dismiss it.
That's not how it works.
Basically what you do is modify (increase) the tax so in most cases, people get net more or less what they do now. That way the numbers come out more or less the same as they are now but in practice on the low end people do get extra money. Most people won't see much of a change.
SJW n. One who posts facts.
They'll continue to receive that check every month for two years straight, even if they find a job or continue to remain unemployed.
The people that work should pay more so that they pay their fair share.
People dont just want handouts. They want to be able to prosper and live with dignity, do meaningful work, and contribute to their country. You need stimulus plans, loans for entrepreneurs, competitiveness. You could use the money for that.
>> give random 2000 unemployed cash
We have the same thing in the US - we call it the lottery. Winning still doesn't seem to correct bad choices. YMMV.
Ad infinitum. Its not that even a blind study. Its a form of national lottery where you win every month for a few years.
I've generally talked about a Universal Social Security (a type of UBI) in its potential to create broad market effects. That's not possible in these small experiments, so you get incomplete information.
Imagine being a landlord. If an average of 10% of your theoretical rent revenue is lost to evictions and empty units, what happens? You have 10 units that must rent for $250/month to make your profit margin, yet you face a risk of $25/month per unit. Well, to retain the same profit margin, you have to charge $275/month--and what if your tenants can only afford $260/month? You can't rent these units. Mind, your tenants will more likely only be able to stably afford $260/month, meaning they have $275/month but have a good chance of sometimes having only $260, and so that $25/month needs to be higher to cover that risk, and now you've got to charge them $285/month, and it's even worse now.
You can't profit in that market.
Now imagine we change things around. Instead of your tenants being underemployed, part-time workers who can lose hours, jobs, or welfare (unemployment insurance) with the season or just bad luck, they have a guaranteed income. Your tenants will have enough money for food, clothing, personal care, utilities, and a steady $260/month. You have 10 units with a base rent of $250/month to hit your viable profit margin, and now they're only facing a 4% risk. You can charge your tenants $260/month to cover this, and they're stable at that rent: you'll lose money to evictions and empty units at an amortized cost of $10/month, on average, thus still hitting your profit margin.
Do you think landlords will gradually test the waters, then start building out rental properties and attracting low-income tenants, when that stable income is going away in 2 years, or 5 years, or 10 years? It's going to take a while to get ROI.
Financial stabilization brings economic stabilization. When people can't go below a livable income, ever, for any reason, then the supply of a basic service can't be interrupted by a sudden collapse of the demand market. That's central for a market-driven welfare system like any form of basic income.
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If you're looking for the point behind this little "experiment", they'll increase this by 17 cents a week in order to define an acceptable floor for UBI, otherwise known as the bare minimum it takes to satiate the average pleb.
As I've always said, UBI will be nothing more than Welfare 2.0, and not a damn penny more. The greedy elite will lobby to guarantee it.
Death to the Dream. Long live Greed, for it will always Leech and Prosper.
Somebody has to WORK in order to provide UBI
Or is WORK now a dirty four letter word?
"randomly selected group of 2,000 unemployed citizens"
I'm assuming that Finland already has some type of unemployment assistance?
(their current unemployment rate is hovering above 8.5%; https://ycharts.com/indicators...)
Does this reflect people that only apply for unemployment assistance? Their labor force participation rate is 64%;
(http://www.tradingeconomics.com/finland/labor-force-participation-rate)
What I'm wondering is if any of those 2,000 "random" people will be folks who are retired and wouldn't have any other source of income anyways.
If you post as Anonymous Coward, don't expect a reply.
My older brother was out of work for two years (2009-10) and collected 99 weeks of unemployment. He committed perjury by stating that he was actively looking for work when he signed the unemployment form every two weeks. He used his unemployment benefits to start a landscaping design business. Now he's self-employed fulltime. Crony capitalism at work.
Sometimes it's better to say on vs taking any job as you can make less them unemployment.
And finally the social "safety net" becomes a hammock
What changes to existing types of 3D Printers be made to provide the required assistance that these folks need?
About time, too.
I wouldn't go that far. Their reasoning is arguably legitimate, BUT they don't directly admit to the unpleasant or complex consequences of their system.
It's essentially a modified Social Darwinism (SD) argument: to keep our citizens competitive we have to cull the herd by letting the sick and lazy wither or die, with some caveats given later.
Some citizens have to be the sacrificial lambs to keep US citizens strong and competitive.
It's a legitimate perspective, but they don't WANT to fully tell you the plan because it's embarrassing to admit to; similar to how many didn't tell pollsters that they were voting for T: he's says nutty and shameful things.
I should point out that some will claim, and perhaps even believe, that if you lower taxes and reduce regulations enough, the economy will be unleashed and "float all boats" such that there is minimal human suffering by even the laziest or sickest. Therefore, if you "do conservatism right", the down-sides of SD are minimal, and therefore GOP are not really the iron-hearted human breeders that pure SD requires.
The problem is that trickle-down has been failing in practice for several decades. It doesn't work, but they won't admit it, saying you merely "are not trying hard enough" (like you hear with many IT and project management fads).
Also, they believe churches can and will help out for the sick and afflicted. While true in many cases, it fails during deep recessions, which overwhelm churches due to both the volume and reduced donations.
And it could result in atheists, Muslims, etc. being discriminated against for having the "wrong" beliefs. The biggest churches will have the most control and influence over care. Progressives view such as an evangelical "sales" gimmick: we'll feed you if you listen to our religious spam. If you as an evangelical believe your religion is the right religion, you are okay with this lopsided influence because God is on your side and wants the system to promote The Correct religious system.
Thus, conservatives and libertarians have a valid perspective, given certain assumptions, but are usually not straight-forward about the assumptions and trade-offs of their reasoning system. Most know it's an ugly sell, not foo far off from Nazism, and try to dress it up with fluff and distraction.
Table-ized A.I.
This is a definitely good practice, and one of the cornerstones of socialism. However, socialism comes with a price: for every able person who choose not to work, there have to be taxpayers willing to work for that person's welfare. That means Finland's experiment will be not applicable elsewhere simply because there is no other society like that one somewhere else. Any socialist who thinks that a good will alone can build a socialist state anywhere should revisit history of socialist countries like USSR and China. Simple solutions for social inequality work only on paper.
I'm guessing you spent your UBI money on booze today.
systemd is Roko's Basilisk.
https://www.thenation.com/arti...
Are you going to be the one fanning, feeding and blowing the guy in the hammock? Or are you going to be the guy in the hammock expecting someone else to service him?
Generally people don't "participate in the labor market" because there is an insufficient supply of suitable jobs. BIG is unlikely to increase supply much, though some recipients may be enabled to become self-employed.
An alternative program is to guarantee jobs to anyone who wants one. Bill Mitchell compares the two ideas here.
I for one am glad Finland is doing this. It will save my country from being this generation's lab rat. It seem very couple of decades we need to relearn that price fixing doesn't work. I would have hoped the Venezuelans spectacular meltdown would have been enough, but it guess not.
Economics is all about whats happening at the margins. The marginal utility of going from $0->$5 per day in income is much greater than from from $200->$205. By giving everyone (this study is only starting with a few) a guaranteed fixed income you've just hugely reduced the utility of a working a low paying job. If you're getting nothing a job that pays $30,000 is a huge improvement because you have lots of time and no money. If you're getting $20,000 UBI you have lots of time and some money, the value of going from $20,000 to $50,000 won't be worth it to some people. In order for the low paying job to have that same marginal utility it's going to need to pay a lot more. Which raises the price of everything, which means that $20,000 doesn't go as far. Yay inflation! The market will readjust, and keep readjusting, until you relearn that price fixing doesn't work.
...and blowing the guy in the hammock?
Some people are into that, don't judge ;)
I think that's how most UBI money would be spent.
Of course the average American believes that he is the only person on the planet with a work ethic, and everyone else is a lazy bastard. Dunning Kruger much.
The only thing worse than a Democrat is a Republican.
You can't call this basic income, when there's at least one string attached - unemployment. This is basic welfare.
No, it's not, it's "a study". They're studying how a UBI of specific amount affects behavior in a specific group of people. More studies will need to be done, of course, including selecting a random group of people without regard to their income/asset levels, and varying the amount received per month, but this is a first step.
This isn't about some means tested program which requires a large amount of administration. You just need to modify the tax brackets so more people get a credit from their federal taxes and that's it. Maybe an extra $50 million or so to manage sending checks / direct deposits. Probably less than one hundredth of one percent of the money would get eaten up by administration costs.
We would spend more money tracking the effectiveness of the program than we would administering it.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
I'm happy Finland is going down this route. They'll be way ahead of other countries when basically everyone of normal intelligence is unemployed due to automation. The US is going to get very ugly before anything like this happens, and if it did there would be a conservative uprising that I think would cause another civil war.
It makes perfect sense to anyone willing to see beyond themselves and the immediate future:
-Increased entrepreneurship and new initiatives - Mid career professionals who have responsibilities aren't going to give up income from a job to go out and try some new business. People who have been thrown out of the workforce due to ageism after 40 might do this, but a lot don't have the basic skills or personality needed (I know I don't!) Basic income might encourage some of the more courageous to jump off the cliff and try something new.
Increased late-career field changes and education -- Not many people in their 40s/50s can just jump out of the workforce for 4 years to learn a new skill, nor can they afford to start at a new grad wage in most cases. Having something to fall back on might encourage people to dump the job they hate and try something else.
Allowing slackers to slack and workers to work - I work in big companies, and personally know so many people who are absolute dead wood. Some are just waiting to be found out and hoping they can make it to retirement. Others make the workplace toxic by complaining loudly about every single little thing. Getting these people out of jobs they hate and into something more suitable could be a function of the basic income. Theoretically you'd only be left with productive people who want to be there because they could walk whenever they felt like it.
Curbing employee abuse - Another thing I see a lot is people who are absolutely stuck in their jobs because they can't live without an income. Employers use this leverage to exploit their workers.
I do think something has to be done. Factory jobs and paper movement jobs are disappearing quickly. One of the biggest social security disability insurance applicant pools are all the people in their 40s and 50s who can't find work. Rather than make them convince some doctor they're disabled, just give them the money they need to survive.
Nonsensical comment about 3-D houses. You think morticians apply mortar?
Or do you think that people will be buried in 3-D houses?
There is still a great shortage of skilled electricians, plumbers, etc. Do you own a house in a built-up part of the US? If not, you don't understand the situation.
And finally the social "safety net" becomes a hammock
Take off the "all welfare is bad" hat for a moment and hear me out.
1) $585/month is not a lot of money, equates to less than 2.50$/hour assuming full time. In 99% of the US that wouldn't buy you even a shitty a place to live*, barely seems to define the idea of a "basic income". (*I have pulled this number directly out of my ass, but I'm guessing I'm not too far off)
2) I'd be willing to bet that most people would find additional work to supplement this basic income
3) For the people that don't seek out additional employment, as an employer I don't think I'd be wanting this kind of person working for me and would be happy to see them removed from the applicant pool.
where can i find this bananna hammock?
There is very little excuse for the many able bodied people abusing the welfare system here in New Zealand to come off it and find a job. This is because the hourly wage here is not a big enough incentive to make these people work. When factoring in fuel and travel costs, it seems to many people that it is better to find excuses not to work and stay on the welfare system.
not likely.
my recent experience was that if I got a job that paid full time minimum wage I would have lost my house (and other stuff) because the benefits from UI would have gone away, but there was no way that $400/wk was going to cover my needs.
The system is broken.
I really have no clue how to fix it, but it is broken.
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Why would you need servicing on a hammock? You have 2 ends tied to 2 trees, and you just have to twist and turn in it. Why would anyone else have to do anything?
The Soviet Union called. They want their idea back.
Guaranteed jobs. Sure. Like we have in our prisons. Amirite?
The US has already been giving a subset of citizens BI for years - and the result is horrific. American Indians receive basic income, free health care, free housing, and free education if they choose it - the result is the most impoverished areas in the United States.
And finally the social "safety net" becomes a hammock
I used to always be against social safety nets becoming hammocks, but I seriously don't know anymore. B/w automation and offshoring, a huge percentage of our jobs are gone, so it's not exactly an unwillingness to work that's driving unemployment numbers. Which is why a universal basic income like this Finnish experiment may not be such a bad idea. Give everybody the money they need to cover rent and food, and leave it up to them to decide whether they want to get more money to buy bigger things, such as a car, a house or whatever other toys they'd like.
On this Finnish experiment, it's not such a bad one. Yeah, there may be slackers who just wanna sit home and eat/sleep, for whom this would do wonders. And then others would join the work force, w/o feeling under threat of unemployment, so would probably perform better. One of the biggest benefits of this is that parents will be able to spend quality time w/ their kids, and maybe limit the amount of time they have on their phones or playstations. That alone would be worth all this money spent on a universal basic income
...if they risked being out on the street.
4) You ain't buy no hoes fo' dat little green.
No, it lasts two years. RTFA, idiot.
They are going to find 2000 people who don't do shit
Lets see. Once their income is stabilized, it may stabilize other things. They should add mandatory education though. Must be enrolled with a high gpa. Force them to get a little smarter. If the government started performing their own tech work, they could force them to work too. Then just the real mental disorder people get put on the shelf.
Except the cost of everything would go up because there'd be more money to go around.
This works if we ignore supply/demand and the free market.
It's funny how this UBI discussion causes so much heated debate and varied opinions by people all over the political spectrum.
I think that's because there are so many different ways to imagine how the process of handing out some free money might work.
As a libertarian, I'm not necessarily opposed to a UBI, far enough into the future. (Yes, that's despite someone above who felt the need to slam libertarians because we're completely against such a thing.) From my point of view though, a UBI becomes really viable only in a "post Capitalist" society. I don't see why there's any reason Capitalism will last indefinitely? IMO, it's simply the most equitable and effective way to run things at this time. Capitalism becomes outdated in a society where resource scarcity is no longer a real issue. I don't know if and when we'll ever develop technologies like the replicator of Star Trek, but that's certainly a "game changer" of the highest order. Perhaps more realistically though? I can see us getting to the point where we could grow and harvest all of the food we'd ever need or want, and prepare/serve all of it with pure automation. At the same time, there's a possibility of creating plentiful energy for all takers with a very low cost of operation/maintenance. If you've got those two areas covered, you're taking care of a BIG chunk of the bills people are pretty much required to pay today, just to survive. With energy at extremely low cost, that means cheap forms of transportation follow -- and it's a fair assumption that by the time we'd have this, we'd ALSO have automated pretty much all of the driving on roads, ships and rail systems too.)
When people speak of wanting to see a UBI *today* though? I think it's either A) really a thinly veiled push towards more Socialism, or B) an experiment in a simplified or alternate way to handle an existing welfare system. In America, as it stands today -- you could almost pay straight cash instead of food stamps and you'd be right there, trying a form of UBI. (Many people on food stamps find ways and means to resell them, to convert them into cash, anyway. May not be legal and "above board", but it happens all the time. Some of the bodegas in NYC got investigated for aiding in this, a few years ago. They'd just take the food stamps, ring up fake receipts for food supposedly bought with them, and then pay cash back to the customer, minus their percentage fee for doing the "conversion".)
Now personally? I think a strong case can be made that the rise of the welfare system in the 1960's and beyond did a lot of harm in America, creating generations of people who grew dependent on the system. There's a book that was just recently published by an African American man who even makes the argument that blacks in America would be much further along towards true equality today if it wasn't for the Federal government interfering in the natural course of things. (He explains, for example, that despite racism in America, blacks were still slowly bettering themselves and were often quite integrated in smaller towns in the U.S. Then came all the integration programs that pushed people together against their will and encouraged taking advantage of social welfare programs to overcome financial struggles - which to an extent were exacerbated by said integration.) So in the "grand scheme" of thing? Yeah... I'd like to see a lot more restrictions on welfare programs at the Federal level. (And at the same time, I'd suggest less government "red tape" making it legally risky or difficult for grocers or restaurants to give away any "day old" food or drinks. Enough food goes wasted that it could solve most of our hunger program just by efficiently redirecting it to those in need, rather than throwing it out!)
But a limited UBI setup that doesn't cost taxpayers any more than the existing system does, accomplished by simplifying the food stamp program and cutting down on administrative costs? I'd have to view that as at least a small improvement over what we're doing now.
Another interesting project I have seen was Lump Sum Welfare.
It gave people with noticeable drive and dreams their entire years worth of welfare all at once.
Basically every one of those people set up businesses and are no longer on welfare. Nice local businesses doing well, filling a niche most times. (a few of them were local events planning in various styles)
As you know, not all business ventures go well, even for the smartest of people/companies.
I would like to see more of this happen, because you know what banks are like with their shitfits over risk.
Banks have created more unemployed people than anything in the history of finance.
Credit limits this, Credit Score that. Credit Score hits are some of the most bullshit reasons as well, some of them don't make a single bit of sense. Ohhh you made a wee late payment here did you laddy? FUCK YOU, NO LOAN, YOU TERRORIST.
Half the damn time they ignore credit scores. If someone even remotely looks unkempt or aren't wearing 5 suits and ties all at once, they are dropped off a cliff in to depression-ville. Great one.
And that, my friends, is why pure, unregulated Capitalism is bad.
More like a different form of unemployment insurance. But yes, this has nothing to do with Universal Basic Income. In particular, the participants were already working; if they really want to see the result they should give it to a random cross-section of the population, including those who are not working and those who are above the median income. And they should tell the participants that it's guaranteed for the rest of their lives rather than just a couple of years. I don't see how this study can reveal anything about people's behavior.
my recent experience was that if I got a job that paid full time minimum wage I would have lost my house (and other stuff) because the benefits from UI would have gone away
Eh? The whole point of U[B]I is that it doesn't go away.
systemd is Roko's Basilisk.
Many jobs now I seem to have gone part time, making it difficult to achieve full time hours and pay off a house etc. this idea is a great way for people to boost the total income back to a reasonable level and also pay a useful amount of tax if successful.
I live in a country where if unemployed people get about 10 hours part time work they will generally lose quite a lot. this is a tragic dis-incentive for finding part-time work, because you lose so much of it, which is such a shame because that is the very type of work they are most likely to get, and this is probably an increasingly prevalent work paradigm in the future.
This is not basic income, this is socialized unemployment assurance. All European countries have this, although it may be shorter, or comes with conditions (age, duration of previous employment) or even strings (like showing you actually search for a job).
The only people eligible for these payments are unemployed people, employed people get to pay taxes to cover the payments.
Described another way, the moment you become unemployed, the government will reward you with $14,000US paid over the next 24 months - find a job, don't find a job, it makes no difference, you'll keep getting taxpayer money for two years because, well, the government is curious if free money inspires you to make more money or try and figure out how to live on $585US/month...
Ken
See them daily. You can bet most of them are getting some sort of "welfare", and then stand on the corner for a few hours a day hoping to get some bucks. It's basically "a job" that they get cash, no taxes taken out. Since it's all under the table, any money some fool gives them, won't work against what "free" money the government gives them. In the summer, at a major intersection overpass with a major interstate highway, you'll see a group of them sitting under a tree, smoking whatever, drinking whatever, and you'll see one of them come up, grab the sign from someone standing, then that person goes and sits down. It's like shift work for these bums.
2000 people with a trust fund that runs out in a couple years does nothing to the economy. The real issue with UBI is what it does to an economy when *everybody* has it.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
The most expensive eurocountry where "others" get nearly 1000 euros of regular benefits means that with that amount of money those 2000 people HAVE TO work.
And then the experiment is a "great success" according to the current right-wing goverment and voila....
Then just the real mental disorder people get put on the shelf.
Eugenics will take care of that. Even back in the day the proponents of Eugenics weren't killing the weak or infirm, mostly. In civilized countries, they involuntarily sterilized women with "undesirable traits" and is where we get such charming words as Idiot, and Moron. Anyway, now that we have a higher tech level, we need not use even such crude methods of forced sterilization. All we'd need is make breeding contingent on approval by one government bureaucracy or another, some heavy handed policing to wash it down and voila, we're on our way to eliminating the White race, and for good!
the government is curious if free money inspires you to make more money or try and figure out how to live on $585US/month...
If they really want to find out, they need to make it longer than 2 years. Most people aren't going to restructure their life for something that is only 2 years. Make it lifetime and then watch those individuals. They could even do it without spending any real money. Many places have lotteries already in place that have million dollar plus payouts. Take a look at these people. Many pay out over 20 years and/or lump sum. A slight restructuring would make it even better. Make the payout 10k for life or 20k for life. My guess is that there are enough lotteries that someone has already done this. 10k for life would only be around a 250k jackpot so that's small as lotteries go. See what people do when they have a guaranteed income for life. That would make a good approximation of UBI.
Oh, and make sure that the person can't sell or borrow against their future earnings or your UBI goes up in flames as now people have sold off their future earnings before they received them and are back in the same boat.
I don't mean for govt to provide more civil worker jobs that are hard to reduce in the long run. They could have a bucket of part time jobs that could be filled by the unexpectedly unemployed. Even if the job is as medial as sitting at a desk answering calls or whatever. That job can pay the UBI as a salary. That way the person stays in the mindset of being productive.
In reply to your post about having spent it on booze to the GP's post about staying on the dole rather than getting a job.
If you're someone that has a life based on a higher income and that goes away, the UBI isn't going to make it better (less bad, but not better) if you lose a job.
I agree that UBI is better then Unemployment Insurance, just that the likelihood of it being blown on crap if someone is staying on vs getting a job because of loss of bennies is attacking a straw-man.
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But you were previously talking about getting a job and losing a house as a consequence, not losing a job... so I'm confused.
systemd is Roko's Basilisk.
You have a better chance of getting murdered by a drone in WWIII than you do of ever getting anything close to UBI.
When robots replace your job you will be left to die, period. When you use the last of your energy to rise up, you will be killed. The end.
Getting a low income job can cause a loss of benefit greater than the income the job provides (under the current system).
I was speaking from a position of someone who had recently entered the unemployed pool, not someone who had been living on benefits for a long time.
The root of the reply being that I don't think the "spent on booze" is all that common in people who desire to work, but can't because of the way our current system is biased & that I don't foresee a change in that just because UI was supplanted by UBI.
I also didn't take too much time in wording my reply, so that it appears muddy is quite justified.
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But those creaming off the most off other people's backs might. Or might not.
And for the wealthiest, the money isn't what motivates them, its the relative power of the wealth in the political system that matters. Dunking everyone there down a notch doesn't make any difference, because they all lose out. And at the bottom of the wealthy, they're not motivated by the cash as it is.
Since the CEO never makes a single one of the product,he'll be rounded up and sterilised or removed from life entirely.
I say, you have a deal.
Sooner or later UBI will have to happen. Automation is going to remake the working world as profoundly as the Industrial Revolution did.
The Industrial Revolution caused a massive increase in standards of living, and in employment (there are more humans employed today than at any time in history).
Both of these effects made it possible to increase the robustness of the social safety net, while at the same time reducing the proportion of people whose existence depends on said net.
Therefore the continuous trend toward more automation has no downside, and certainly doesn't portend a need for a UBI.
That that is is that that that that is not is not.
With automation taking more and more jobs...
Incorrect premise. Throughout history, new technologies have been net creators of jobs. Moderately disruptive new technologies caused net creation of a moderate number of jobs. Massively disruptive new technologies caused net creation of a massive number of new jobs.
And every time, there were Luddites who feared net job losses -- the opposite of what came to pass.
the consumer-class will collapse, taking away customers from a vast variety of corporations and causing them to collapse
How does this get modded +5? When a corporation reduces its workforce as a result of introducing additional automation, its costs decrease. This is a beneficial, first-order effect. A temporary reduction in sales (to its former employees who have not yet found other employment) is, at best, a third-order effect.
Labor-saving devices put a multiplier on the amount of work one employee can accomplish. Wood was once carved by hand; later it was carved with power tools, and the resulting economic growth caused a net increase in employment. Another multiplier will be applied when each employee can maintain multiple wood-carving robots. If this were truly a net negative, you ought to advocate the elimination of all labor-saving devices: no more power tools. Not even a scythe. We must harvest all grain by hand.
Please don't: if all labor-saving devices were to disappear, then we would truly see a genuine economic collapse.
Milton Friedman recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being dug. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: "You don't understand. This is a jobs program." To which Milton replied: "Oh, I thought you were trying to dig a canal. If it's jobs you want, you should take away their shovels and give them spoons."
This is an almost perfect anecdote. Its one deficiency: some people are not smart enough to figure out all the proper conclusions that should be drawn from it, including that a policy of shunning labor-saving devices (e.g., giving them spoons)
- would benefit only a very narrow interest -- people who like to do manual labor with ill-suited tools
- is not in the general interest, because it would a net destroyer of jobs.
That that is is that that that that is not is not.
Low-skiled workers across the board will be replaced by machinery and automation, leading to an increase in unemployment... automation also creates some jobs, but always less than it takes away.
You are completely fabricating an assertion that flies in the face of all historical evidence.
I'll throw out just one of many possible counterexamples. At one time over 90% of American workers were employed in agriculture. Those low-skilled jobs were replaced by machinery and automation, and now less than 2% are employed in agriculture. Yes, an "entire field of employment" has virtually disappeared. And good riddance. Food is far more affordable now; money that families don't have to spend on food is now spent on other things. Not only did this massive disruption not cause "an increase in unemployment," it (along with other new technologies) caused a massive net increase in employment, in an incredibly diverse number of fields that could not have been imagined back when agriculture was the monolithic employer. There are more people employed today than at any other time in history. And no, to accomplish that feat, it was not necessary for former ag workers to retrain into highly cerebral fields.
In 2016, economic activity is already highly automated. If your assertion were correct, the amount of automation in place today would have already caused an economic collapse. Instead, there are more people employed today than at any other time in history. You simply couldn't be more wrong. This is like having a conversation with someone who stares at the sun and says, "it's so dark."
Despite the certainty that employment will increase in the future, we will always have disabled people, or people with such poor social skills that no one wants to hire them. In developed countries, the social safety net provides those people with food, housing and medical care. Continued economic growth means that the safety net can be made more robust, but it should not be transformed into a scheme where able-bodied people can live comfortably while contributing nothing. How good could things get? Imagine a woman who spends two hours per week lubricating robots; the rest of the week is her leisure time. That's fine. She is contributing if she does that. (The concept of a "standard 40-hour workweek" needs to be discarded, and fast.) The robots she maintains will vastly outproduce a guy who insists on spending 40 hours per week working with 20th-century tools. Were I her employer, I would want her salary to reflect that fact. (And therefore the "guy" with 20th-century work habits is hypothetical; the number of people like him will diminish quickly, by choice.) As the multiplier on what one employee can accomplish grows ever bigger, so does the number of employed people. This is a paradox only to those who have their eyes closed to the entirety of history. When Roman aqueducts began to deliver water, it was one more step away from a subsistence lifestyle -- people no longer needed to be occupied with long walks to fetch water from a distant source. And quite unparadoxically, another net increase in employment arose.
Still, for as long as resources are finite, we will need an economy that allocates resources efficiently. That is to say, we will always need an economy that allocates resources efficiently -- because even when the cost of goods and services drops to 1/1000 of what they cost today, resources will still be finite. Paying able-bodied people to do nothing is anathema to the concept of an "economy." Pay them more to do less? Sure; that's progress. If wages are expressed in Euros per hour, wages by definition go up when the denominator -- number of hours that need to be worked to get a job done -- goes down. (That is another almost magical thing about new technologies and automation; not only have they created more jobs than existed at any other time in history, the purchasing power of employed humans' wages has skyrocketed. The percentage of workers who
That that is is that that that that is not is not.