There are more workers than jobs and with the growing population that reality grows with no prospects for returning to the paid labor force and jobs matching.
Robots do more work and will do more in the future; from computers to 3D production by computers, goods and services will be delivered without the hands of humans. The future work is in inventing, maintaining, and operating robots.
Capitalism is better than feudalism but it does not meet the needs of modern economic reality.
So, what comes next in the evolution of work?
I understand your points as I was in business for myself for many years prior to completing my education. My point is that a modest estimate is that 50% of all small/self employment businesses fail here in the US shortly after initiation. The reasons are legion. that means that for every 2 entering into self employment, one ends up in financial ruin usually. I am not saying that self employment is bad, or that it isn't an appropriate choice for some people. I come from a long line of such people and spent decades self employed. I am saying that it isn't a model for an overall economy. By the way, most of those guys with signs on their trucks and tools in the back, they are living at subsistence level incomes. The 12 billion is relevant because that means twice the population competing for the same dwindling pool of resources which does represent the overall economy in which the self employed must exist and succeed.
I have noticed over the years that those who are successfully self employed tend to have a world view that says in one doesn't succeed it is because they are somehow lacking in either drive or vision. They seem to often forget that most successful startups are directly dependent on the greater overall, non-self employed economy and the role of pure luck in their success. All of which usually doesn't apply to the average citizen.Most people never even get a chance to make a decision to try let alone succeed.
Taxes? There is a huge tax load not based on income involved with any business that has a large overhead, materials cost, safety costs, infrastructure costs, business licensing, property taxes, social security taxes, and yes, insurance is a huge drain. . All of which drain profits that are vital to startup survival.
At one time, our culture expected people to start businesses. We were a nation of shopkeepers. My grandfather Ladislaw took his apprenticeship in Prague, came here as a journeyman, and retired the proud owner of a shop in our town.
Now we have consolidation, which brings efficiency of scale in consumer cost, but leaves people behind as capital (i.e. production) moves around the world. The people left behind, raised to seek jobs and educated to follow directions, lose direction when the jobs go away.
If all the left-behinds started something themselves, and half failed, then the other half would be sitting pretty. Being independent, even at subsistence level, is better than giving up. It also gives you the power to build up.
We would have a new economic model in which people would be able to prosper even if no global corp. was granting jobs in their area. Individuals would be in charge again. And yes, with an ownership mindset, individuals might be more willing to move to get jobs, if that's what they need to do. And young people might be more hopeful about their prospects even if there are no jobs in their community, because they would believe they could make their own damn jobs.
I see your downside and raise you the future.
I share your dislike for big business and what it does in demeaning human wealth.
But, as an evolutionary biologist studying population variation I cannot help but see human populations in reality, not in ideal. We were a nation of shopkeepers once, True enough. But we had a population that could be measured in thousands then, not millions and certainly not in billions. Since the late 1700's we have been largely a nation of workers in the United States. In Europe just about everyone, except a very few elite and a small shopkeeper class, worked for someone else since pre-Roman times. We were mostly a nation of shop keepers here in America for a very brief historical period. That period was possible because the nation was continually expanding and producing new needs and services to be had from a limited pool of providers with, at the time, under a practically limitless natural resource base. Those conditions and the shopkeeper nation hasn't existed since colonial and expansionist period in the USA, let alone elsewhere.
I also question whether or not we were truly a "nation" of shopkeepers. Seems to me that even though big business didn't impinge upon everyone's daily life back then, that shopkeepers were still few in number compared to the general worker population. Those were agrarian times when the bulk of the population bent its back in fields as workers for agriculture. Usually working for a land owner, not themselves.
Today you have to be assuming an unlimited resource pool for all those current billions to offer up as their shop's product. Won't work, though I am also certain the big business model won't be sustainable either. Can't work unless you are willing to live in a cut throat competitive life where discredited social Darwinism rules the day. Better competitors get it all, everyone else starves because they didn't compete well?
Mainly, as a student of populations, I see that all people are definitively NOT created equal. We have equal rights to be sure, for the most part. But we vary hugely in talent intellect, ability, focus, drive, interest, you name it.
That doesn't fit the total self employment model either unless we are willing to just discard those sectors of our populations that don't fit the mold. Frankly most people in the population simply are not capable, for one reason or another, of making a go at being self employed. It's a nice ideal, but would be a disaster on a national or global scale in reality. To use a cliche' the proof's in the pudding. Since most people profess to wanting to be their own boss, why aren't they? Because it just isn't that simple with all due respect.
Economically there is no upside to the future as long as we assume an open ended, limitless resource base. The only thing on earth for which a truly open ended system exists is plant photosynthesis. There just isn't enough economic pie to go round for everyone to be self employed.
I admit, like you , I wish there was. However, catch phrases like "see you the future" , and individual histories are meaningless in context of , and non-explanatory for, the overall grand scale. Like it or not, economics are global now. The shop keeper model became obsolete in the early 1800s.
Thank you for your thoughtful reply. I see your points too. But I don't see an alternative. Global capital is flowing to China and staying there. This story came out today:
NXP is huge in my industry. They are selling their bread and butter to a Chinese investment group so they can concentrate on new designs.
At some point, the USA is going to lose much or all of its international business, and global-corp jobs. If that really happens, there will be no money for social programs or public works projects. Capitalism will still work but all the global capital will be elsewhere.
What are we going to do then if not bootstrap?
I agree that things aren't stable as is. Unfortunately even though I see the problems, I have no solutions. As individuals we will of course pick up the pieces of what ever is available and go on. Boot strap to use your phrase (in bio-statistics bootstrap means to randomly draw from a data set and use it to reiterate some simulation thousands of times to see if the random really differs from the random simulation). We are still a nation of survivors, I hope. Though truthfully I see less and less evidence for that everyday. We adapt and go on what ever the situation. I am very concerned as to the exact nature of that future situation. I fear it won't be pretty for most people.
What about the so-called "sharing economy," subject of DRShow's second hour today?
Uber may be a transformative technology, or a scab uninsured cab company. I hear they are delivering packages for Amazon now, and have read that they are investing in autonomous driving technology.
Uber aside, the Internet from Craigslist to Atheist Nexus brings people together like never before. Will we use it to sell Amway to each other, or to build new ways to become truly independent economically?
A long time ago I opined that the age of unskilled labor was coming to an end. That hasn't quite happened, though a great number of "grunt-work" jobs and some highly skilled jobs (welding comes to mind) have been supplanted by automation. The kind of work which may be automation-proof are those which lean on creativity and innovation, on organizational skills which are not easily penetrable by a microprocessor, and service, both customer and technical, where human contact and in-person analysis is essential for the resolution of a situation.
There can be no argument but that computer processing, automated production techniques and the advent of Artificial Intelligence has the capacity to obviate a great number of those tasks currently done by humans ... and humans would do well to anticipate the coming of that day.
> the age of unskilled labor was coming to an end
Absolutely, unless we take a page out of Dune and outlaw machines that think.
> humans would do well to anticipate the coming of that day.
Do you have anything in mind? Do you see us all returning to subsistence farming, throwing out labor laws so we can undercut the robots, or what?
AI and automation will free humanity from the mundane so some of us can weave new layers of creativity atop the stuff that the computers do. I think I'll be ok, and only have to make it another couple decades anyway.
But what about the unskilled and uneducated, or even the average-skilled and average-educated?
This came up on an entrepeneurship site that is not too superficial:
The author refers to this article in the Economist:
Proponents of a basic income underestimate how disruptive it would be
I'll try to read both in detail tonight, but they looked at first glance like reasonable perspectives on this subject.
I like this analysis, Larry. I remember in 1974 at the World Fair there were incredible displays of what the future life would be. There were movies of cars flying between giant multi-storied buildings, fast rail from city to city or rural to city. The farm would be robotized, further reducing the numbers of jobs in agriculture. The videos showed changes in health care delivery to a whole new way of diagnosing and treating illness. Family life would be richer, children smarter, and chores easier. I wondered, then, how would the distribution of wealth, work, and leisure occur?
This article confirms what I feared. Thanks, Larry for this site.
Debate: "there is a very high probability that large degrees of automation WILL eventually come about. Huge displacement of workers WILL take place due to such automation. Given that, eventuality, are we facing Utopia or Dystopia?
"Utopia: Universal Basic Income is extraordinarily expensive. If 1% of a 10 billion world population “works” and “earns”, then 99% has to be put on welfare. At $10k a year, that is close to a thousand trillion dollar budget. How on earth will society become rich enough to afford that? I don’t see it.
"Dystopia: this notion of infinite leisure is a flawed vision of utopia. Human beings are in a much healthier mental state when they work. Waking up in the morning is easier when a structured day is planned ahead, and not left to your own imagination on an ongoing basis. Few people are creative enough not to default to doing nothing, watching television, and becoming zombies. Zombies without meaning and purpose tend not be in great mental health either. Depression is common among people who are bored. Identity tends to be more robust around work and striving for something, than anything else."
"So the Utopia based on Universal Basic Income is not financially viable. And even if it were, it would turn our species into vegetables. Not my idea of utopia.
"The more likely dystopian scenario is one of rampant inequality, social unrest, and possibly a Darwinian conclusion."
Have you seen "Idiocracy"? That film scared me more than I would admit out loud. Not much of a comedy at a deep level for an evolutionary biologist! I suspect their perspective on the future dystopia cut a little close to the bone.
This is what I'm talking about, from an admittedly biased source:
Nationwide, more than half of Americans either own or work for a small company. Each year, small businesses create roughly two out of every three new jobs.
It was a mistake on my part to start arguing for universal self employment. Some people win in business and employ others. My best customers are all companies with <100 people. Maybe what I should be saying is that we need more of this.