Increased productivity is good, right?

Published 3:03 pm Tuesday, January 28, 2020

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know its fashionable to say that “technology is disruptive”, but I think that is one of those understatements on par with “heroin can be habit-forming” or “my wife enjoys shopping.” 

 The invention of the movable type printing press ultimately led to upheaval in both religious and political thinking. In 1800, 80% of the US population was farmers; today that figure is just above 1%.  The continued expansion of internet capabilities has retail stores under siege, publishers of printed materials retreating, travel agents looking for business, and even postal workers wondering about their future.

And what about the development of self-driven vehicles? What will the three and half million truck drivers in the US do when distributors realize they don’t want to deal with driving-hour regulations, benefits, unions, and HR issues? Or four hundred thousand taxi drivers?  Self-guided vehicles aren’t only a job threat to transit drivers; vehicle automation could potentially displace another million more warehouse workers.

What are people going to do as the need for jobs that do not require education beyond high school continue to disappear? The conventional wisdom appears to be that over the long haul, high paying jobs will be those which require human creativity, and everyone else will be employed in the service economy. But service economy jobs do not have a reputation for paying the level of wage that allows a worker to raise a family, buy a house, and send kids to college. By many different statistics dealing with both income and wealth, the income disparity gap in this country is growing over time.  No economic model that I am aware of predicts that as an economy expands, the purchasing power of real wages remain stagnate, which is what is happening today.

From those difficult observations, ideas which at first seem radical, begin having some reason, even if the math is unproven. Universal Basic Income is coming up in conversation far more often than I am comfortable with, both among politicians as well as a surprising number of millennials. The young people I talk to are growing impatient with status quo politicians being content to blame important social problems on red state-blue state polarization.

And these 30-year-olds do not think the issue is about macro-economic policy, or the virtues of capitalism as self-regulating system. They are asking if Bill Gates personally contributed $110 billion worth of value to our society, or more broadly, whether the richest 1% of the US population should control 40% ($25 trillion dollars) of the wealth.

We know communism doesn’t work. Pure socialism has never been viable either. But it is also possible that twenty-first century capitalism has evolved beyond the wisdom of Adam Smith and is in need of a course correction which has yet to be defined. I am grounded in economics enough that the phrase “redistribution of wealth” causes me to shudder involuntarily, but I am grounded in humanity enough that the phrase “civil war” causes me to shudder as well. 

These are big issues. We need creative, continued dialogue.