Robots are our problem, and taxing them may be the solution.   America is in economic crisis both current and looming.    The congress and the fed are taking unprecedented moves to shore up failing financial institutions.  The conventional wisdom is the sub-prime mortgage crisis is the root.  But is it really the root, or simply the fruit of the poisonous tree.  Has the American social and economic model failed?  

 

Watch international news and you will  quickly realize that our problems are just the American face on a world wide catastrophic trend,  In Australia the news is the countless middle class people who are moving into trailer parks because they can no longer afford more traditional housing.  In China the government fears that if the economy stops growing there will be riots.  In Indonesia the middle class are taking over the institutions of power, because the feel that the poor are favored.  European governments are funneling hundreds of billions of dollars to stabilize their banking systems.   While the pundits and recent political campaigns imply that the sub-prime mortgage crisis was caused by American deadbeats, and greedy financial wizards.  But the fact that the problem is impacting on all countries of the world, raises the suspicion that the problem is not American deadbeats who scammed the banking industry, but instead a fundamental problem in the world economy.  

 

When we take a quick look at the problem of the mortgage crisis the easy answer is to blame the banks, or blame the borrowers, and there is enough blame and self recriminations to go around for all concerned.   However, when we look more deeply at why these people have been unwilling or unable to meet these mortgages, we find at the root the economics of life not just in America but around the world.  More and more responsible skilled people are living on the financial edge. Financially over-stretched people are unemployed, underemployed, or fully employed but fearful of the ax.  With little or no cushion from a rapid devolution from a cherished lifestyle, for kids, wives and pets.  Prudent people have worked out tight budgets to live a full and convenient life and maintain solid credit.   But when prices suddenly shoot up like the recent gas crisis.  Budgets crash into a new reality.   Fractious quality of life decisions, about cable and cell phones, and special expense, must be made and consensus reached within families, and often the mortgage lacks a lobbyist.  When this phenomena is combined with the fact that we have been convinced to overpay for the basics of life through credit cards, it doesn't take much to send many families into foreclosure.

 

 

Why, are so many people around the world struggling to make ends meet?  Of course we could blame the rising middle classes around the world, who are beginning to compete with more established affluent populations for goods and services.   We could blame modern marketing, and the philosophies of western governments to promote democracy and freedom around the world to increase the customer base for multinational firms.   And yet neither of these significant phenomena can account for the steadily increasing gap between the "good life" and the reality of the working citizen. 

 

The culprit may be our heroic reverence for automation.   Robots, software solutions, automation, or efficiency enhancements all make our lives easier, if not simpler.  But are they slowly eroding our disposable income and therefore our quality of life.  We all love our email, and our cell phones, remote controllers, washing machines and our automated movie rental systems.   But too few of us consider that each of these devices have both positive and negative effects on world economies.  When I look at old movies where when the poor family fell on hard times, the mother would concede that she would have to take in more of the rich people's wash to make ends meet.   The widespread acceptance of the automatic washing machine put an end to that cherished source of emergency income not just in Mississippi, but in India, in China, and all countries of the world where it penetrates.   We respond to such losses with the platitudes of better education, and wider availability of risk capital as the solutions.  However, it is not just the poor who are being displaced by automation.   The popular DVD kiosks where you can rent a movie, for a deceptively low price, take away a significant number of starter jobs for middle class youth, and management jobs for middle class adults.   Sure the argument in defense is that it saves people money, and that it creates jobs for engineers, designers, technicians, and administrators, while also increasing the exposure of the public to creative materials.   And this is all true, however the jobs lost is 10-100 for every job gained.  And you can not have a society where only the brilliant can make a good living. Everybody doesn't want to be an engineer, or a boss, a lot of people are most capable of repetitive social or mechanical tasks. And yet they still like to live and eat like engineers, and designers.

 

The amount of meaningful work that is available to growing populations is shrinking due to automation!   It's easy to point to endless of examples of these phenomena, which has been forecast by creative products from Woody Allen, and Aldous Huxley.  All around the globe people with excellent skills and experience are being forced in to underemployment by the lack of work in their chosen area caused either directly or indirectly by automation.  There is now an seemingly endless cycle of re-training for the new jobs, lawyers, carpenters, and factory workers trying to become computer experts.  In a couple of years perhaps everyone will try to learn robot repair, then what?  And is this the best use of human potential?

 

To paraphrase an old proverb "when the robot ATMs replaced the bank tellers, I said nothing because I was not a bank teller, when the  self check robot came for the cashiers, I said nothing because I wasn't a cashier...But when the robot took my job, there was no one left to say "hey he needs a paycheck to survive".   Accountants are being replaced by quick-books, lawyers are being replaced by automated document grinders, the doctors are being replaced by artificial intelligence based diagnostic software.   Who is next?  Of course those who automate their businesses make fortunes, while in the national statistics it's called productivity gains, the result is a rising imbalance of rich and the struggling.

 

As in most cases, our hands are not clean, and our feet are of clay.  We love the low prices and convenience that automation brings to our lives, my Romba is bumping around in the room above me even as I write this piece.   But I do try my best to favor the human cashier at the supermarket over the self check out machines.  At my local grocery I have seen people lined up for the self-check machines, while the human cashiers stand idle, probably thinking about how to get a new job.  Of course automation is indefatigable.  It will make our lives easier, probably longer, and in many ways better.  But what, if anything can be done to combat the erosion of base amount of work that exists in human society.

 

If incomes continue to erode due to automation, we will feel the pain most when the marginal benefits such as lower prices, and easier lives drops below our ability to afford these luxuries.  At some point the basic nature of work will have to be reexamined.  Work is more than income, work is a part of the way we define ourselves as individuals.   Work is the way we judge our goodness and worth in most western societies, and under the context of the Abrahamic religions.  The erosion of useful work will tear at the very fabric of society. Will we all become endless job seekers, watching the good life pass us by?

 

What are the broad consequences of this phenomena, and what if anything can be done?  From the personal income perspective, I think that the models of oil rich countries, who provide most essential services such as health care, housing and education is one that could work.   Unemployment payments would begin automatically at age 18, and only stop if you find suitable employment.  Perhaps, if people are left to turn there efforts to excellence rather than survival a new culture can take root over generations and become and acceptable lifestyle for mankind.   Some care will be required to providing sufficient challenges to a population to foster this excellence, but the western celebrity culture may prove as least partially effective in generating productive dreams.

 

Where will the money come from to support this new utopia?   One method would be to begin forcing robots to pay taxes.   These taxes could be generated in the form of a government surcharge every-time you rent a DVD from a robot, use the automated check out, or get your car washed by a robot.  While the industrial robots that replace manufacturing jobs would be charged based upon their output, and this would be added to the price of the products they produce.  These robots could fund local, state, and even federal governments world wide.  And if the surcharges made the prices of the products better reflect the costs to society of employing them, then those "advances" which have actual negative impacts on human life would be marginalized.

 

A robot tax...something to think about.

 

Gare Henderson

Gravitational Systems, LLC.

Chairman of the Singapore alternative energy conference.