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Post details: Paging Adam Smith

Paging Adam Smith

The job situation is not getting better by the hour. And worse, experts don't expect it to improve any time soon. Due to technological advances, machines are consuming larger and larger slice of the available labor cake. Yes, that cake that we are trying to eat and have at the same time.

Labor-free production is slowly taking over our economy: automatic ticket dispensers and teller machines, robotic assembly lines, fully mechanized hydroponic growing plants, software based financial expert systems - just look around. Unfortunately, the distribution of the resulting profits is heavily slanted towards the upper part of the spectrum. Engineers who devise the machinery may get a one time fee, a payoff whose size is limited by fierce competition from other teams, but those who own the production lines will get a life long stream of spectacular returns. Clearly, an equalizing force is called for.

For centuries the law of capitalism was such force. Its internal workings provided a natural way of balancing the powers of capital and labor by finding a mutually acceptable equilibrium. But even Adam Smith could not have foreseen the magnitude of the present onslaught on labor. Without a significant and well thought out upgrade, we'll end up in an extreme situation where the ownership of the larger economy is so concentrated that all the profits end up on the books of a very small fraction of the population. Underneath the narrow elite layer there will be a small class of technocrats and specialists maintaining and servicing the manufacturing process, and the remaining 99% will be relegated to lives in poor ghettos or to a matrix like artificial reality with minimal physical and spiritual subsistence - think intravenous lines combined with 24/7 streaming TV channels.

You might argue that this upward flow will be mitigated by servicing the needs of the ultra-rich production owners. The Emperor's New Jobs, so to speak. But I would have two objections to it. First, while the riches do trickle down, they do not necessarily land in areas where humankind can make best use of them. I mean how many yacht builders, posh hotel caterers, or exotic manicure specialists do we really need? Second, such order would only solidify the incipient economic hierarchy into a nearly permanent financial stratification of human race. I thought we had overcome the paradigm of rulers and servants centuries ago. We deserve a bit more than bunch of crumbs fallen down from the table of the Masters of the Universe. But we won't get it until we ask for it loud and clear.

The attack on the well entrenched income inequality should be waged along two major front lines.

1. Local

When it comes to redistributing money the centralized governments can be a bit heavy handed. There is a reason former Speaker of the House, Tip O'Neill, coined the phrase "All politics is local". There is a definite advantage in knowing your neighbors in person. Smaller communities - say the size of an average midwestern town - have better odds of managing their resources efficiently than huge and largely anonymous urban centers. Each community would get a share of the money according to the size and local representative bodies would then decide whether to take care of the elderly, support crafts and arts, help educating the children, or just clean up streets and make the public spaces more pleasing to the eye. Grants distributed with the knowledge of local conditions could represent a large part of the eventual spoils of robotics.

2. Global

Certain problems that mankind will face in the coming decades are too big for governments to address and too risky for private enterprises to delve into. In short, our ecosystem is becoming a bit overwhelmed with 7 billion busy bees. Sure, nations have their own scientific programs with global impact and private enterprises are already tooling up for sending well-heeled adventurers onto the celestial joy ride. But those are only small potatoes. I am afraid that our ailing planet hurts for some truly supranational and concerted efforts. We need to assess and possibly ameliorate the effects of global warming. We should stop plundering the natural resources as if we were the last generation on Earth. We also have to find ways to protect ourselves from rare cosmic intruders, otherwise we'll follow dinosaurs into the Universal Hall of Shame. And while on the subject of the Universe, exploring and eventually colonizing the outer space might not be a bad idea either. In other words, these is no shortage of noble tasks that need our collective attention and wherewithal.

But let's be real. People are not selfless angels who would gather around the fire one night and start planning for better future while singing Kumbayah. There was once a system - fittingly called communism - which kind of operated in this way, but its progressive nature and bottomless optimism turned out to be rather hollow. On the surface it looked impressive: strapping workers got up every day with songs on their lips and, hand in hand with farmers, managers, artists, shop-keepers and engineers, toiled from dawn to dusk in order to build a new classless society, ostentatiously driven only by concern for the common good. But underneath this veneer oozed ugly gunk of reality: bureaucratic waste, disorder, lies, incompetence, graft and ubiquitous corruption. This great social experiment not only failed miserably but in the process of rotting also proved that overtaxing the producers and spending the money through inorganic centralized structures is not the way to go.

And that is where the new Adam Smith comes in. He or she (Eve Smith anyone?) will have to find a natural and efficient procedure which will take the tremendous bounty generated by fully automated multinational corporations and redistribute it for the benefit of the whole global community. They'll have to find a self-regulating feedback loop that will bring about that elusive social equilibrium, the narrow path that winds its way alongside a slippery ridge with two deep abysses on either side. On the one hand, we do not want a world where virtually all aspects of economy are controlled by a few who happen to own the means of production (often through efforts of their parents or grandparents) and whose increasing wealth may or may not trickle down through random acts of charity, but we also do not want a society where efforts of individual entrepreneurs are dragged down by the inefficiencies of a bloated government. There is a tremendous potential waiting to be unleashed in all of us but finding an appropriate channel for it will be one of the finest balancing acts humanity every faced.

Well, Adam and Eve, wherever you are, you have your work cut out for you.

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