The Northern Territory news Wed 8 Mar 2017
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News Corp Australia
32 BUSINESS WEDNESDAY MARCH 8 2017 NTNE01Z01MA - V1 BUSINESS SPECTATOR Rethink welfare if robots take our jobs ALAN KOHLER IT seems pretty clear that the spread of automation is going to require some kind of Universal Basic Income, funded by taxes on robots. This is not the forecast of a distant science fiction future in which someone named Elon Zuckerberg is president governments around the world are already beginning to experiment with the idea and even the Australian parliamentary library has produced a paper on it. In Australia, politicians on both sides need to move on from arguing about cuts to weekend penalties and Family Tax Benefits A and B, and get their heads around a complete restructuring of the way work and welfare operate, so that those displaced by robots and artificial intelligence wont be thrown into idleness, poverty and rebellion. And it simply wont cut it to say that the first Industrial Revolution turned out OK that the Luddites worried too much. The common line that economic growth in the 19th century meant that those who were displaced by mechanical looms and steam power eventually got jobs is rubbish. They just died poor and young, mostly from the lack of sanitary and medical technology. Real wages fell 10 per cent between 1770 and 1840, and took 60-70 years to sustainably rise again. Per capita consumption rose only 22 per cent from 1760 to 1830 a growth rate of 0.28 per cent per annum. The result was a massive widening of inequality and aggregations of colossal wealth in a few oligopolies and monopolies. And the result of it was Karl Marx, Friedrich Engels and The Communist Manifesto of 1848. Marxs ideas, expressed more fully in Capital, came directly from the Industrial Revolution. Exactly a century and a half after the publication of the first volume of Capital, we are still dealing with the horrific legacy of Marx today. His ideas led to the Russian Revolution and the miseries of the Soviet Union, Chinas Cultural Revolution and economic collapse, the horrors of the Khmer Rouge and possibly the rise of fascism and the wars of the 20th century. In fact, its not too hard to mount an argument that the Industrial Revolution was a disaster from which the world is only now just recovering, 200 years later. Not that the technology was the problem, just the response to it or lack of one. Technology and invention rep l a c i n g h u m a n labour is an inevit a b l e part of c i v i l i s ation and humanity, and it seems to happen in waves, or what we call revolutions. The problem with the wave that happened around the beginning of the 19th century is that there was no safety net for the losers, it was every man and woman for themselves. With the current wave we have unemployment benefits and pensions, but society is still built around having a job. Politics and economic theory are entirely focused on employment jobs and growth (note the order of the words) and the maintenance of living standards through wages and income taxes. The dole is limited and you have to be old or disabled to get a pension. As the Australian Parliamentary Librarys paper on the Universal Basic Income, published in November, pointed out: In most developed countries, the welfare system is designed around the labour market. The ideal is that every working age household will be support ed primarily by income from paid work. The framework assumes that most working-age individuals will be able to find full-time, full-year work. While some individuals may combine part-time or intermittent work with income support, the expectation is that reliance on income support payments will be temporary. But what if thats not the way things are turning out? For example, apart from gobbling up retail sales and causing stores to close through online retailing, Amazon is now opening stores that have no checkouts. Uber and Google are testing driverless cars. Google, Amazon, Apple, Facebook and Microsoft are racing to develop intelligent digital assistants that you talk to, for everything. How many jobs do those technologies tick off? Most of them. Driving and retail are the largest employers of humans; finding stuff out ac counts for a few more. Manufacturing and mining are already finished as largescale employers through the use of robots; 3D printing will soon take whatever is left. There is now a debate getting started about whether automation and artificial intelligence really will lead to mass unemployment, and therefore require a fundamental restructuring of the welfare system and societys approach to the idea of work itself. Its a bit like the debate about climate change, only less tangible. For many people global warming is a long way off and hard to pin down so they dont want to take expensive steps now to deal with it, but at least with climate change there is a scientific consensus. About the impact of technology there is nothing but conjecture and worried predictions from Silicon Valley entrepreneurs and futurists who are profiting from the technology. Central bankers arent talking about it and economists who engage in the subject at all tend to argue that it wont lead to a jobless future at all because, well, because it didnt in the past. For example, a recent paper for the OECD argued that only 9 per cent of American jobs are at risk of computerisation. And as with climate change, the cost and difficulty of action now to deal with this unquantifiable future problem is very high. But given the 25-year record of climate change failure, can we have any confidence that political leaders especially in this country have it in them to take out insurance against a future in which automation renders half the workforce idle? Alan Kohler is publisher of The Constant Investor. www.theconstantinvestor.com This column first appeared in The Australian.
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