Our language has many peculiarities that shape thought in hidden ways. One example is the phrase "make money."
Strictly speaking, nobody "makes money" in this country except the mint. Money is legal tender, and neither private individuals nor corporations are authorized to "make" it. To do so is a felony. When we say that someone "makes money," what we really mean is that the person takes money: he persuades other people to give him money in exchange for something else, be it goods, services, promises, or deception. No money is actually made in these transactions, by which I mean that the overall money supply does not increase; what money the person who is "making" it gains, his customers lose in an exact one-for-one correspondence. Of course, that's not necessarily a bad thing for the customers, since money also has no intrinsic value whatsoever; it gains value only in exchange for other things that DO have intrinsic value, and the only reason anyone is willing to take intrinsically worthless money in exchange for intrinsically valuable things is because the money so acquired can then be given away to someone else in exchange for other things of value. Money is at root a confidence game in the literal sense of requiring a faith in the system of government that backs it and a confidence that it can be exchanged for items of value, even though it has no value of its own, and because of this disconnect, this one-off between the medium of exchange and the items of actual value, it can also be a confidence game in the figurative sense.
Really it all comes down, not to money, but to stuff: goods, services, promises, or deception. Money is not wealth. Goods and services are wealth; money is only a token exchangeable for wealth. One cannot "make money," but one can make wealth, by making goods or performing services. Ideally, that is how a person or a corporation "makes money" -- by making wealth, and exchanging the wealth for money, which can then be re-exchanged for more wealth. The amount of money doesn't increase, but the amount of wealth does. As a straightforward exchange, there is nothing objectionable about this. But the fact that we employ money rather than barter -- the fact that we exchange wealth not for wealth but for tokens exchangeable for wealth -- means that the potential for abuse, and for confidence games in the figurative sense, creeps in.
Start with the fact that goods and services are, almost without exception, produced collectively, not individually. That is, their creation requires the cooperative effort of more than one person. Most of the people who work to create the wealth have no ownership interest in it (as I explored in an earlier post) and must accept (or reject) a payment in money for helping to create it according to the terms that the owner (usually a corporation) is willing to offer. The potential for abuse in that transaction is of course well known to anyone who has studied the history of the labor movement.
Then there's the fact that money can be exchanged not just for real wealth, but for potential wealth. This is called "investing." Money is paid not for goods or services, but for the potential of being repaid more money than one paid out in the future, which can then be re-exchanged for real wealth. Investments, however, don't always pay off. Sometimes an investor loses money instead of gaining it. This means that a person or a corporation can "make" (or take) money by attracting investors rather than by offering wealth in exchange. To make things more wonderfully and woefully complex still, the person "selling" the investment can then turn around and re-invest the money so gained himself in the hopes that it will pay off more than he ends up paying back to the original investor. And so on, in a tangle of investment and reinvestment. There are whole industries built around this sort of thing, producing no wealth whatsoever but "making" lots of money.
Now the justification for this sort of financial goings-on is that at least some of the money is ultimately used to fund the production of wealth, which, under the rules of our economic game, requires money in order to be done. But it doesn't have to be done that way. All that's really necessary in order for an investment scheme to "make money" is that people who have money be convinced to invest it. A financier can "make money" all day long without producing a damned thing, merely by moving around intrinsically worthless tokens, taking money from others in exchange for promises or, in some cases, for deception.
Even when the money that is being "made" is acquired in the more straightforward fashion, by producing actual wealth and selling it, there is still plenty of room for practices that are anything but straightforward. British Petroleum, for example, is certainly producing wealth (or it intended to anyway) from its deep-water oil well in the Gulf of Mexico. But it acquired ownership of the oil it hoped to pump through a process of leasing the mineral rights from the government that involves a highly questionable exchange of value. Arguably, since the land in question is government property, it belongs to the people of the United States, yet the people get precious little return for it; if BP had to buy the rights for something approximating their real value, that could fund a lot in the way of public services, tax cuts, and/or deficit reduction. On the other end, as what actually happened with that well demonstrates, the law requires the people to pay to clean up any messes that result, after the corporation pays out an amount of money limited by law and, in the instant case, only a tiny fraction of the actual damages. In this particular case, due to the publicity involved and the magnitude of the disaster, BP may find itself unable to make use of that sweetheart deal, but the Gulf oil leak is only a larger-scale version of similar environmental accidents that happen all the time, and other damage that isn't accidental at all.
Running through our economy are rules and practices that twist and warp what should be a straightforward process of producing wealth and distributing it to people into one sort or another of theft. Theft of people's earnings, their savings, their livelihoods, their hopes and dreams, their health, and their lives. And yet, because of the peculiarities of the language we speak, we call all of that "making money."
A curious thing, I say.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Wednesday, June 16, 2010
Sunday, April 4, 2010
Profit Is Theft
One of my purposes in writing this blog is to encourage radical thinking. Not necessarily radical action (although radical thinking does radicalize action to a degree), but thinking that cuts through the false assumptions and intellectual ruts at the roots of a lot of habitual thought in politics, economics, religion, and art. If we can think radically, possibilities open to our consideration that we would never even imagine otherwise.
This week, I want to discuss two concepts that are crucial to any capitalist economy, and that are older than civilization, but much younger than the human race: the private ownership of capital property, and the related concept of profit. These were, for their times, radical ideas. Today, pointing out that they are not inevitable or natural ideas has itself become radical, and so doing that has become necessary.
Property ownership in some forms is as old as the human race, or somewhat older. But the property that our precivilized ancestors owned was all personal property, not capital property. Individuals owned things that they planned to use and enjoy themselves: clothing, tools, weapons, food stores, maybe a tent or a place in the communal dwelling. But no individual owned the land from which all these things came. An individual hunter could own the meat from his own kill, but not the hunting ground. The same hunter could own the spear he used to kill his prey, but not the flint quarry that its spearhead came from. Land was different from other types of property in that it was used to make wealth, rather than being wealth itself. In precivilzed society, it was the property of the band or the tribe, not of any individual. Any property that a person owned, he owned because his own work had made it, or because he had traded something produced by his own work for the product of someone else’s work.
Let’s look a bit more closely at that paradigm of property, because it contrasts greatly with what obtains today.
The source of wealth (the land) is owned communally.
The land is available to anyone in the band or tribe that is capable of making wealth from it.
If a person makes something, then (subject to tribal rules about sharing food and other necessities to make sure no one goes hungry or otherwise suffers unnecessarily) that person owns it. Labor defines ownership.
Private ownership of capital property was introduced with civilization. It created a very different paradigm of property ownership that worked like this.
The source of wealth (the land, and later on industrial plant and sometimes intellectual property) is owned by individuals.
The land and other capital property are only available to make wealth from with the permission of its owner.
If a person makes something, then (subject to laws which take a portion in taxes to cover public expense) it belongs to the owner of the capital property from which it is made. Labor does not define ownership. Ownership of capital property, and nothing else, defines ownership of the wealth produced from it.
Note the difference? When capital property was communally owned, it was labor that defined the ownership of wealth. Each person owned what he worked to produce. But since capital property has become privately owned, that ownership is now what defines ownership of the wealth produced from it. Today, no one owns what he works to produce, at least not because he works to produce it. Ownership is defined by ownership itself. To own capital property is to own what is produced from it, whether you do the work to produce it or someone else does. If you own capital property, that entitles you not only to the fruits of your own labor applied to that property, but also to the fruits of other people’s labor applied to the same. If you do not own capital property, then you are not entitled even to the fruits of your own labor.
This may be counter-intuitive, so let me go into a little more detail. Some may respond: aren’t people paid for their work? Don’t they own the fruits of their labor in the form of their wages or salaries?
No. They do own their wages or salaries of course, but that is NOT the product of their labor. That is the fee paid them for doing the work even though someone else owns the product of their labor. The product of a person’s labor is the goods or services produced by it, and that belongs not to the worker, but to the owner of the capital property the worker used to produce it. What’s more, it is always worth more in sale value than the wages paid those who produce it. As an employee, you are paid only a portion of the value of what your work produces – as small a portion as your employer can pay and still get you to do the job, and certainly never equal to the full value.
This brings us to the related concept of profit. What is profit? It’s defined as the revenues generated by a business minus its expenses. It may also be regarded as the net share of wealth going to the owner of capital property. Or, less even-handedly, it is that portion of the total wealth of an enterprise that the owner skims from the labor of others.
To make this clear, I’m going to exercise a bit of author privilege, or linguistic irresponsibility, and slightly redefine the word. (I have no shame. It’s true. Ask anyone.) For purposes of this writing, “profit” applies only to that portion of a business’ net revenue that is not produced with the owner’s own labor. This means that if you are the sole proprietor of a business with no employees, your business makes no “profits” in this sense, because your labor and no one else’s has generated the goods or services which have been sold to generate revenue. I’m doing this because I want to illustrate something about the great majority of business profits in our economy, which is however not true of situations such as I just described.
Profit, then, as I am using the word, is wealth amassed through other people’s work.
It is in this sense of the word “profit” – although I must emphasize that the vast majority of what accountants call “profit” does meet this definition – that profit is theft. It is the producing of wealth through the labor of other people, who are paid less than the value of the goods and services their labor produces. The owners of capital property – property which, in the natural state that our ancestors occupied for over a hundred thousand years, many times the duration of civilized life so far, was owned communally and not the property of any one individual – are taking wealth that other people have produced, and that in a natural society would belong to the people who produce it. And that is stealing.
But this act of theft is perpetrated by almost all owners of capital property without a shred of guilt, with even less shame than I feel in redefining a word here and there, because it has become endemic in our society and perceived as the natural order of things, no matter how unnatural it actually is. And it is completely unnatural, in two ways. Not only have we redistributed capital property, which in our original, natural societies was held in common, into private ownership, but we have also changed the rules about who owns what is produced from it, so that ownership rather than labor determines ownership. In natural, precivilized societies, capital property was owned by the society, but the society did not own the wealth that was produced from it. The individual that did the work owned the product of his work. (Subject, of course, to rules distributing food to the hungry and such, but that’s functionally equivalent to taxes today, and is a footnote to the process not the main description.) So not only have we gone from an arrangement in which capital property is publicly owned to one in which it’s privately owned, but at the same time we’ve gone from a system in which labor defines ownership to one in which ownership defines ownership. We have done this, obviously, to benefit the owners of capital property, who enjoy enormous privileges both economic and political in a modern society.
As noted above in the first paragraph, I’m not proposing any particular action here. We are long past the time when we could restore communal ownership of capital property, or at least I can’t think of any way to make that work in a modern industrial economy. Then again, perhaps there is a way and I simply haven’t thought of it. Certainly it’s a millennia-old Gordian knot of privilege and power, not easily undone. But the mind is as sharp an implement as Alexander’s sword, and merely to recognize the reality of what is and why serves by itself to put things into a new perspective. Also, there are some consequence of this recognition that all for-hire workers are being systematically plundered by a system designed to create and reward privilege which will be explored in future posts. At very least, this perspective will hopefully give many people the idea that things which have been taken for granted should be changed, which is a prerequisite to the consideration of exactly what they should be changed into.
Next week: slavery, serfdom, and wage work, or, the forms of coercion.
http://www.smashwords.com/books/view/8357
This week, I want to discuss two concepts that are crucial to any capitalist economy, and that are older than civilization, but much younger than the human race: the private ownership of capital property, and the related concept of profit. These were, for their times, radical ideas. Today, pointing out that they are not inevitable or natural ideas has itself become radical, and so doing that has become necessary.
Property ownership in some forms is as old as the human race, or somewhat older. But the property that our precivilized ancestors owned was all personal property, not capital property. Individuals owned things that they planned to use and enjoy themselves: clothing, tools, weapons, food stores, maybe a tent or a place in the communal dwelling. But no individual owned the land from which all these things came. An individual hunter could own the meat from his own kill, but not the hunting ground. The same hunter could own the spear he used to kill his prey, but not the flint quarry that its spearhead came from. Land was different from other types of property in that it was used to make wealth, rather than being wealth itself. In precivilzed society, it was the property of the band or the tribe, not of any individual. Any property that a person owned, he owned because his own work had made it, or because he had traded something produced by his own work for the product of someone else’s work.
Let’s look a bit more closely at that paradigm of property, because it contrasts greatly with what obtains today.
The source of wealth (the land) is owned communally.
The land is available to anyone in the band or tribe that is capable of making wealth from it.
If a person makes something, then (subject to tribal rules about sharing food and other necessities to make sure no one goes hungry or otherwise suffers unnecessarily) that person owns it. Labor defines ownership.
Private ownership of capital property was introduced with civilization. It created a very different paradigm of property ownership that worked like this.
The source of wealth (the land, and later on industrial plant and sometimes intellectual property) is owned by individuals.
The land and other capital property are only available to make wealth from with the permission of its owner.
If a person makes something, then (subject to laws which take a portion in taxes to cover public expense) it belongs to the owner of the capital property from which it is made. Labor does not define ownership. Ownership of capital property, and nothing else, defines ownership of the wealth produced from it.
Note the difference? When capital property was communally owned, it was labor that defined the ownership of wealth. Each person owned what he worked to produce. But since capital property has become privately owned, that ownership is now what defines ownership of the wealth produced from it. Today, no one owns what he works to produce, at least not because he works to produce it. Ownership is defined by ownership itself. To own capital property is to own what is produced from it, whether you do the work to produce it or someone else does. If you own capital property, that entitles you not only to the fruits of your own labor applied to that property, but also to the fruits of other people’s labor applied to the same. If you do not own capital property, then you are not entitled even to the fruits of your own labor.
This may be counter-intuitive, so let me go into a little more detail. Some may respond: aren’t people paid for their work? Don’t they own the fruits of their labor in the form of their wages or salaries?
No. They do own their wages or salaries of course, but that is NOT the product of their labor. That is the fee paid them for doing the work even though someone else owns the product of their labor. The product of a person’s labor is the goods or services produced by it, and that belongs not to the worker, but to the owner of the capital property the worker used to produce it. What’s more, it is always worth more in sale value than the wages paid those who produce it. As an employee, you are paid only a portion of the value of what your work produces – as small a portion as your employer can pay and still get you to do the job, and certainly never equal to the full value.
This brings us to the related concept of profit. What is profit? It’s defined as the revenues generated by a business minus its expenses. It may also be regarded as the net share of wealth going to the owner of capital property. Or, less even-handedly, it is that portion of the total wealth of an enterprise that the owner skims from the labor of others.
To make this clear, I’m going to exercise a bit of author privilege, or linguistic irresponsibility, and slightly redefine the word. (I have no shame. It’s true. Ask anyone.) For purposes of this writing, “profit” applies only to that portion of a business’ net revenue that is not produced with the owner’s own labor. This means that if you are the sole proprietor of a business with no employees, your business makes no “profits” in this sense, because your labor and no one else’s has generated the goods or services which have been sold to generate revenue. I’m doing this because I want to illustrate something about the great majority of business profits in our economy, which is however not true of situations such as I just described.
Profit, then, as I am using the word, is wealth amassed through other people’s work.
It is in this sense of the word “profit” – although I must emphasize that the vast majority of what accountants call “profit” does meet this definition – that profit is theft. It is the producing of wealth through the labor of other people, who are paid less than the value of the goods and services their labor produces. The owners of capital property – property which, in the natural state that our ancestors occupied for over a hundred thousand years, many times the duration of civilized life so far, was owned communally and not the property of any one individual – are taking wealth that other people have produced, and that in a natural society would belong to the people who produce it. And that is stealing.
But this act of theft is perpetrated by almost all owners of capital property without a shred of guilt, with even less shame than I feel in redefining a word here and there, because it has become endemic in our society and perceived as the natural order of things, no matter how unnatural it actually is. And it is completely unnatural, in two ways. Not only have we redistributed capital property, which in our original, natural societies was held in common, into private ownership, but we have also changed the rules about who owns what is produced from it, so that ownership rather than labor determines ownership. In natural, precivilized societies, capital property was owned by the society, but the society did not own the wealth that was produced from it. The individual that did the work owned the product of his work. (Subject, of course, to rules distributing food to the hungry and such, but that’s functionally equivalent to taxes today, and is a footnote to the process not the main description.) So not only have we gone from an arrangement in which capital property is publicly owned to one in which it’s privately owned, but at the same time we’ve gone from a system in which labor defines ownership to one in which ownership defines ownership. We have done this, obviously, to benefit the owners of capital property, who enjoy enormous privileges both economic and political in a modern society.
As noted above in the first paragraph, I’m not proposing any particular action here. We are long past the time when we could restore communal ownership of capital property, or at least I can’t think of any way to make that work in a modern industrial economy. Then again, perhaps there is a way and I simply haven’t thought of it. Certainly it’s a millennia-old Gordian knot of privilege and power, not easily undone. But the mind is as sharp an implement as Alexander’s sword, and merely to recognize the reality of what is and why serves by itself to put things into a new perspective. Also, there are some consequence of this recognition that all for-hire workers are being systematically plundered by a system designed to create and reward privilege which will be explored in future posts. At very least, this perspective will hopefully give many people the idea that things which have been taken for granted should be changed, which is a prerequisite to the consideration of exactly what they should be changed into.
Next week: slavery, serfdom, and wage work, or, the forms of coercion.
http://www.smashwords.com/books/view/8357
Sunday, March 28, 2010
This Is No Time For Compromise
Can we now dispense with the word “bipartisanship” now?
We are in a Crisis era, a Fourth Turning. Roughly once a lifetime, we go through a period of civic upheaval in which our national institutions (political and economic) have, for one reason or another, become dysfunctional. The last time this happened was in the 1930s-40s with the Great Depression followed by World War II. The time before that was in the 1860s-70s with secession, the Civil War, and Reconstruction. The time before that was in the 1770s-80s with the American Revolutionary War and the framing of the Constitution. You can find out more about the concept at this web site: http://www.fourthturning.com/. But what I want to write about today is not the overall concept of the generational cycle and the Fourth Turning. I want to talk about a specific characteristic that all Fourth Turnings have, this one (so far) included. That characteristic is divisiveness. It’s something that is often decried, but it is in fact a good thing – indeed, an absolutely necessary thing.
A Crisis era (such as this one) is a decisive time. It’s a time when much-needed reforms are put in place, reforms that have been neglected for decades. It is not a time for compromise or soft talk or middle courses. It’s a time when consensus cannot be achieved, when conflict arises between those who see a need for the new and those who would preserve the old, however dysfunctional it may be. It is the nature of such a conflict that it cannot be resolved through agreement. There must be a victory, and there must be a defeat. Consider the three Crisis eras from our nation’s past, beginning with the American Revolution.
In 1773, tensions had been rising between England and the American colonies for decades. The expensive conclusion of the Seven Years War (or French and Indian War to Americans) moved the British government to try to get the colonies to contribute financially to their own defense. A reasonable request, of course, but it ran head-first into the colonists’ conviction that they had come to America in the first place in search of self-rule, and that Crown and Parliament had no proper sovereign authority over America. London’s position was diametrically opposed: the British government insisted on its right to govern all British territory, including the colonies in America.
This impasse had grown over time. Prior to the French and Indian War, the British government didn’t really make any attempt to govern the colonies. Britain used America as a convenient dumping ground for condemned criminals (as she would later use Australia), a source of raw materials, and a market for manufactured goods, but otherwise left the colonists to their own devices. Thought in Britain had always held that the Crown and Parliament held sovereignty and the right to govern, but why bother? As American society became more developed and sophisticated, though, as population grew, and as the war with France forced Great Britain to take an interest in (and spend more money on) America’s defense, the attitude of the British government and that of the Americans approached collision.
A number of taxes were imposed on the colonists in the years following the end of the war, provoking a storm of protest. The government backed down and repealed most of these taxes by the early 1770s, retaining only a token duty on imported tea.
Was the tea tax onerous, an unconscionable burden threatening to reduce Americans to abject poverty? Certainly not. It was barely a tax at all. It would fall short of paying for the French and Indian War by millions of pounds. Most Americans would likely shrug their shoulders, pay the duty, and hardly notice. But the Tea Act, if allowed to stand, set the precedent that Parliament had the authority to tax the colonists and to legislate in other ways. Rather than accept this, a radical group led by Samuel Adams engaged in a bit of guerrilla theater, nonviolent civil disobedience, and applied vandalism, and destroyed a cargo of tea in Boston harbor.
This was not a move intended or calculated to provoke compromise. In response, the British government didn’t compromise, either. It imposed a series of Punitive Acts (or “Intolerable Acts” as the Americans called them) which further roused the Americans’ ire. Americans began forming militias and stockpiling arms and ammunition. The Crown dispatched reinforcements to America and negotiated with the German principality of Hesse for mercenary troops. The Americans formed a provisional government and appointed George Washington commander of its newly created army, which set about besieging the British forces in Boston. Battles were fought. Washington’s forces outmaneuvered the British at Boston and forced them to withdraw. The British thereafter returned the favor at New York City and nearly (but not quite) destroyed the Continental Army. The Congress passed a motion to declare independence from Great Britain. From that point on, the lines were drawn and no compromise was possible. Either America would become fully independent of Great Britain, or the colonies would submit to British rule, but the prior condition of loyal but self-governing colonies would cease to exist, one way or another.
Does this begin to sound familiar in terms of our current situation?
We can also compare it to what happened in the 1860s. Tensions had been building over issues related to industrialization of the country, particularly slavery, for many years. The territories acquired during the U.S.-Mexican War were a focus for much of the argument, since they would eventually become states and their representatives in Congress would weigh in on one side of the divide or the other. The newly-formed Republican Party represented the interests of the northern capitalists and of the abolitionists (who were in agreement over the specific issue of slavery; both opposed it although for different reasons). A moderate Republican, Abraham Lincoln, was nominated for president in 1860. Lincoln was not proposing to outlaw slavery, but did propose to keep it out of the new states formed from the western territories. This would, over time, result in an anti-slavery majority in Congress, and the planter interests saw the writing on the wall.
A true compromise on the issue of slavery would have resulted in gradual emancipation with compensation paid to the slave owners for loss of their property, but the hard-liners were not interested in that on either side. Southern fire-eaters saw an opportunity to provoke secession from the U.S. by states that permitted slavery. The strategy for this was to ensure a hard-line pro-slavery Democratic candidate in the election. Moderate Democrats held their own convention, with the result that the party split and nominated two competing presidential tickets, both of which lost (predictably enough) and Lincoln won with a plurality of the popular vote, exactly as the fire-eaters had intended. Seven states promptly seceded. Lincoln initially attempted a compromise solution and peaceful rejoining of the Union. The seceding states were having none of it. They formed a new central government with a Constitution modeled on the one they had abrogated (with a few appropriate changes) and, in a dispute over a federal fort within the borders of one of the seceding states, went to war.
Once again, an irreconcilable conflict existed. The southern planters wanted to preserve an antique way of life based on wealth generated by growing cash crops with slave labor. The northern commercial and industrial interests wanted to pursue an increasingly mechanized and industrialized future in which slaves would be replaced by machines and finance capital would dominate the entire economy, and the emancipationists, their temporary and ad-hoc allies, wished to free the slaves for moral reasons. A solution might have been found short of war, but it would have required the planters to accept defeat and seek the best compromise deal they could get. They were unwilling to do that. And so the lines were drawn once again, and the conflict fought to the finish.
The Great Depression was less violent, but no less uncompromising. A breakdown of the capitalist economic system with its governing philosophy of laissez-faire left some 25% of the workforce unemployed. Neither the breakdown nor dispute over that philosophy was new; the industrial economy put in place after the Civil War suffered periodic financial panics and depressions roughly every 20 years. The philosophy itself was opposed by labor union activists, anarchists, socialists, and Communists. Class conflict had been intensifying for decades. The Depression brought it all to a head. Herbert Hoover, the president when the economy tanked, was no laissez-faire purist, or so one would judge from his past. But he moved in that direction in the face of disaster, perhaps out of genuine conviction or perhaps because the Republican Party demanded it of him. The conflict this time was political and electoral and did not involve guns (which we may take as a sign of progress), but it was no less decisive. Over the years of Franklin Roosevelt’s presidency, laissez-faire was abandoned. The workplace was unionized, the government regulated the banks and other industries, and the first social welfare programs (Social Security and unemployment insurance) were put in place. By the time World War II was over, a new economy had been crafted, a mix of capitalist and socialist elements. This was not accomplished through bipartisan compromise any more than the changes of the American Revolution or the Civil War were. The divide was sharp and partisan, with the Democrats on one side of it and the Republicans on the other. The Democrats won, and the Republicans lost.
In the present time, we again face a situation similar to those three. The economy has again broken down, although not as severely as during the Great Depression. In addition, we face shortages of key raw materials and severe environmental dangers. The problems this time are global in scope. The global economy is beyond the power of any one national government to regulate – an international means of regulating it is required. One economic problem that was not present in the 1930s was a shortage of fuel; the U.S. was still a net exporter of oil then. Today, we are faced with the need to transform our energy economy away from its dependence on oil – no easy task. We cannot simply apply the same methods that worked in the Depression, despite a superficial similarity.
On all of these points, we do not find national unity. There are voices on the other side, claiming that the problems don’t exist, or that we can solve them without changing the way we do business. In many cases, these voices are cynical and insincere, acting not with genuine public concern but out of a desire to protect private profits. We saw how fiercely the lines were drawn over the health-care reform debate. This is the template for the next few elections. A compromise, “bipartisan” solution will, almost by definition, be an unworkable one. We must accept that the conflict exists. It’s too soon to broker a negotiated settlement. First, we must win. Then we can make peace.
I hope – and given the example of the Great Depression, I cautiously believe – that I speak of “winning” and of “peace” only in metaphor. Some violence, however, has already occurred. It remains to be seen whether those who are defeated at the polls (rather, some of their crazier supporters) will resort to the cartridge box instead of the ballot box. Let us pray not. Such efforts would of course be defeated, but in the course of it lives would be lost for the most futile of causes. In that sense, I hope that we have peace now, not after victory. But at the same time, we cannot let the danger of violence deter us from doing what must be done.
In any case, it’s time to jettison the search for “bipartisanship.” There will come a time later on, after the necessary reforms are in place and their opponents have accepted reality, when consensus may be sought once more. But that time is not now.
We are in a Crisis era, a Fourth Turning. Roughly once a lifetime, we go through a period of civic upheaval in which our national institutions (political and economic) have, for one reason or another, become dysfunctional. The last time this happened was in the 1930s-40s with the Great Depression followed by World War II. The time before that was in the 1860s-70s with secession, the Civil War, and Reconstruction. The time before that was in the 1770s-80s with the American Revolutionary War and the framing of the Constitution. You can find out more about the concept at this web site: http://www.fourthturning.com/. But what I want to write about today is not the overall concept of the generational cycle and the Fourth Turning. I want to talk about a specific characteristic that all Fourth Turnings have, this one (so far) included. That characteristic is divisiveness. It’s something that is often decried, but it is in fact a good thing – indeed, an absolutely necessary thing.
A Crisis era (such as this one) is a decisive time. It’s a time when much-needed reforms are put in place, reforms that have been neglected for decades. It is not a time for compromise or soft talk or middle courses. It’s a time when consensus cannot be achieved, when conflict arises between those who see a need for the new and those who would preserve the old, however dysfunctional it may be. It is the nature of such a conflict that it cannot be resolved through agreement. There must be a victory, and there must be a defeat. Consider the three Crisis eras from our nation’s past, beginning with the American Revolution.
In 1773, tensions had been rising between England and the American colonies for decades. The expensive conclusion of the Seven Years War (or French and Indian War to Americans) moved the British government to try to get the colonies to contribute financially to their own defense. A reasonable request, of course, but it ran head-first into the colonists’ conviction that they had come to America in the first place in search of self-rule, and that Crown and Parliament had no proper sovereign authority over America. London’s position was diametrically opposed: the British government insisted on its right to govern all British territory, including the colonies in America.
This impasse had grown over time. Prior to the French and Indian War, the British government didn’t really make any attempt to govern the colonies. Britain used America as a convenient dumping ground for condemned criminals (as she would later use Australia), a source of raw materials, and a market for manufactured goods, but otherwise left the colonists to their own devices. Thought in Britain had always held that the Crown and Parliament held sovereignty and the right to govern, but why bother? As American society became more developed and sophisticated, though, as population grew, and as the war with France forced Great Britain to take an interest in (and spend more money on) America’s defense, the attitude of the British government and that of the Americans approached collision.
A number of taxes were imposed on the colonists in the years following the end of the war, provoking a storm of protest. The government backed down and repealed most of these taxes by the early 1770s, retaining only a token duty on imported tea.
Was the tea tax onerous, an unconscionable burden threatening to reduce Americans to abject poverty? Certainly not. It was barely a tax at all. It would fall short of paying for the French and Indian War by millions of pounds. Most Americans would likely shrug their shoulders, pay the duty, and hardly notice. But the Tea Act, if allowed to stand, set the precedent that Parliament had the authority to tax the colonists and to legislate in other ways. Rather than accept this, a radical group led by Samuel Adams engaged in a bit of guerrilla theater, nonviolent civil disobedience, and applied vandalism, and destroyed a cargo of tea in Boston harbor.
This was not a move intended or calculated to provoke compromise. In response, the British government didn’t compromise, either. It imposed a series of Punitive Acts (or “Intolerable Acts” as the Americans called them) which further roused the Americans’ ire. Americans began forming militias and stockpiling arms and ammunition. The Crown dispatched reinforcements to America and negotiated with the German principality of Hesse for mercenary troops. The Americans formed a provisional government and appointed George Washington commander of its newly created army, which set about besieging the British forces in Boston. Battles were fought. Washington’s forces outmaneuvered the British at Boston and forced them to withdraw. The British thereafter returned the favor at New York City and nearly (but not quite) destroyed the Continental Army. The Congress passed a motion to declare independence from Great Britain. From that point on, the lines were drawn and no compromise was possible. Either America would become fully independent of Great Britain, or the colonies would submit to British rule, but the prior condition of loyal but self-governing colonies would cease to exist, one way or another.
Does this begin to sound familiar in terms of our current situation?
We can also compare it to what happened in the 1860s. Tensions had been building over issues related to industrialization of the country, particularly slavery, for many years. The territories acquired during the U.S.-Mexican War were a focus for much of the argument, since they would eventually become states and their representatives in Congress would weigh in on one side of the divide or the other. The newly-formed Republican Party represented the interests of the northern capitalists and of the abolitionists (who were in agreement over the specific issue of slavery; both opposed it although for different reasons). A moderate Republican, Abraham Lincoln, was nominated for president in 1860. Lincoln was not proposing to outlaw slavery, but did propose to keep it out of the new states formed from the western territories. This would, over time, result in an anti-slavery majority in Congress, and the planter interests saw the writing on the wall.
A true compromise on the issue of slavery would have resulted in gradual emancipation with compensation paid to the slave owners for loss of their property, but the hard-liners were not interested in that on either side. Southern fire-eaters saw an opportunity to provoke secession from the U.S. by states that permitted slavery. The strategy for this was to ensure a hard-line pro-slavery Democratic candidate in the election. Moderate Democrats held their own convention, with the result that the party split and nominated two competing presidential tickets, both of which lost (predictably enough) and Lincoln won with a plurality of the popular vote, exactly as the fire-eaters had intended. Seven states promptly seceded. Lincoln initially attempted a compromise solution and peaceful rejoining of the Union. The seceding states were having none of it. They formed a new central government with a Constitution modeled on the one they had abrogated (with a few appropriate changes) and, in a dispute over a federal fort within the borders of one of the seceding states, went to war.
Once again, an irreconcilable conflict existed. The southern planters wanted to preserve an antique way of life based on wealth generated by growing cash crops with slave labor. The northern commercial and industrial interests wanted to pursue an increasingly mechanized and industrialized future in which slaves would be replaced by machines and finance capital would dominate the entire economy, and the emancipationists, their temporary and ad-hoc allies, wished to free the slaves for moral reasons. A solution might have been found short of war, but it would have required the planters to accept defeat and seek the best compromise deal they could get. They were unwilling to do that. And so the lines were drawn once again, and the conflict fought to the finish.
The Great Depression was less violent, but no less uncompromising. A breakdown of the capitalist economic system with its governing philosophy of laissez-faire left some 25% of the workforce unemployed. Neither the breakdown nor dispute over that philosophy was new; the industrial economy put in place after the Civil War suffered periodic financial panics and depressions roughly every 20 years. The philosophy itself was opposed by labor union activists, anarchists, socialists, and Communists. Class conflict had been intensifying for decades. The Depression brought it all to a head. Herbert Hoover, the president when the economy tanked, was no laissez-faire purist, or so one would judge from his past. But he moved in that direction in the face of disaster, perhaps out of genuine conviction or perhaps because the Republican Party demanded it of him. The conflict this time was political and electoral and did not involve guns (which we may take as a sign of progress), but it was no less decisive. Over the years of Franklin Roosevelt’s presidency, laissez-faire was abandoned. The workplace was unionized, the government regulated the banks and other industries, and the first social welfare programs (Social Security and unemployment insurance) were put in place. By the time World War II was over, a new economy had been crafted, a mix of capitalist and socialist elements. This was not accomplished through bipartisan compromise any more than the changes of the American Revolution or the Civil War were. The divide was sharp and partisan, with the Democrats on one side of it and the Republicans on the other. The Democrats won, and the Republicans lost.
In the present time, we again face a situation similar to those three. The economy has again broken down, although not as severely as during the Great Depression. In addition, we face shortages of key raw materials and severe environmental dangers. The problems this time are global in scope. The global economy is beyond the power of any one national government to regulate – an international means of regulating it is required. One economic problem that was not present in the 1930s was a shortage of fuel; the U.S. was still a net exporter of oil then. Today, we are faced with the need to transform our energy economy away from its dependence on oil – no easy task. We cannot simply apply the same methods that worked in the Depression, despite a superficial similarity.
On all of these points, we do not find national unity. There are voices on the other side, claiming that the problems don’t exist, or that we can solve them without changing the way we do business. In many cases, these voices are cynical and insincere, acting not with genuine public concern but out of a desire to protect private profits. We saw how fiercely the lines were drawn over the health-care reform debate. This is the template for the next few elections. A compromise, “bipartisan” solution will, almost by definition, be an unworkable one. We must accept that the conflict exists. It’s too soon to broker a negotiated settlement. First, we must win. Then we can make peace.
I hope – and given the example of the Great Depression, I cautiously believe – that I speak of “winning” and of “peace” only in metaphor. Some violence, however, has already occurred. It remains to be seen whether those who are defeated at the polls (rather, some of their crazier supporters) will resort to the cartridge box instead of the ballot box. Let us pray not. Such efforts would of course be defeated, but in the course of it lives would be lost for the most futile of causes. In that sense, I hope that we have peace now, not after victory. But at the same time, we cannot let the danger of violence deter us from doing what must be done.
In any case, it’s time to jettison the search for “bipartisanship.” There will come a time later on, after the necessary reforms are in place and their opponents have accepted reality, when consensus may be sought once more. But that time is not now.
Saturday, March 6, 2010
The Advanced Civilized Paradigm I: Work
I’m going to be writing a series of blog articles about far-future changes. This is the first one. In writing these articles, I’m not going to be addressing current events or immediate problems (which means I may interrupt the series from time to time with something that needs more urgent attention), but rather considering long-term implications of advancing technology and the changes that it brings. I’m calling this series “The Advanced Civilized Paradigm.”
Here’s the basic idea behind the Advanced Civilized Paradigm. If we look at the way our precivilized ancestors lived from the first emergence of the human species, somewhere between 100,000 and 200,000 years in the past, until the development of agricultural communities around 10,000 years ago, we find a persistent pattern. People lived in small communities of mostly-related people. They had no formal government or organized religion. This pattern persisted all over the world wherever people lived by foraging and hunting, for tens of thousands of years. This kind of persistent pattern or template of society I’m calling a “paradigm,” and this original, very old one in particular I call the “Precivilized Paradigm.”
Over a few thousand years, the early agricultural communities developed into city-states, and as they did, another pattern emerged that was also found all over the world, and that lasted for a long time, although not nearly as long as the Precivilized Paradigm did. This pattern included hereditary monarchy, a hereditary warrior-aristocrat elite class, a class of slaves or serfs at the bottom of the heap who worked for the benefit of the elite under threat of force, formal state religion, subordination of women to men. This pattern can be seen all over the world wherever people lived in cities in agrarian communities, with only rare and partial exceptions. It lasted from the emergence of the first city-states in the fifth or sixth millennium BCE and endured until relatively modern times. I call this pattern the “Classical Civilized Paradigm.”
Starting in Europe in roughly the 16th century CE, this pattern began to morph into something different and we’re still in a transition stage. It’s not at all clear where we’re going, but we certainly haven’t achieved any stable form that is likely to endure for as long as the Classical Civilized Paradigm did, let alone the Precivilized Paradigm. Maybe there won’t be any. Maybe we’ll just continue in a progressive upheaval forever. Or maybe not; maybe there’s a practical limit on the advance of technology and the social changes that accompany it, beyond which we’ll continue to progress but more slowly, with refinements on what’s already been developed, but nothing revolutionary, the way the printing press was revolutionary, or the steam engine, or electricity, or radio, or the assembly line, or the robotic factory, or the Internet.
For purposes of this writing series, I’m going to assume the latter is the truth: that there’s a practical end to all this, however far we are from it at the moment. With that in mind, I’m going to explore some logical “end states” of visible developments.
What will the economy be like when there is no such thing as a job?
What will religion be like when there are no barriers of language or communication?
What will government be like when instantaneous voting becomes a reality?
What does human mean in a world of genetic engineering and artificial intelligence?
I will deal with the first of those today in this entry.
What An Economy Does
An economy is a social arrangement that produces and distributes wealth. By “wealth,” I mean goods and services. (Money is not wealth. Money is a medium of exchange whereby wealth is traded.) Note that this description has two functions: production and distribution. An economy produces goods and services and gets them to the people that need or want them. An economy that succeeds in doing this is successful. An economy that fails in either function breaks down and fails in both. You can’t distribute wealth that hasn’t been produced. If it has been produced and you fail to distribute it, the economy stops producing it, too.
There are of course many ways of producing and distributing wealth, of varying sophistication. But no matter how complex the economy, or how many layers of esoteric financial manipulation are constructed on top of it, in the end it comes down to those two things. Can the economy produce enough wealth for everyone? Can it spread that wealth around so everybody has enough? To the extent it answers both questions “yes,” it works.
Now let’s consider a specific economic transaction and how it serves both functions at once: wages for work. First, we have to understand that our society assigns “ownership” of the material resources necessary to produce wealth on the basis of history, going back to someone who, in the far past, was able to grab those resources and hold them by force. In America, that generally means a white person who seized them from Native Americans. In other parts of the world, it’s slightly different, but it always comes down to forcible seizure at some point along the way. (Of course, if you look at the Native American from whom the white person seized the resources in question, and trace ownership back from that point, you find that somewhere along the way a Native American seized the resources from another Native American by force, too. The point here is not that white people are more wicked than Native Americans, but that ownership ultimately derives from piracy.)
Since the initial seizure, the property may have been traded many times by more peaceful and voluntary means. The history of these transactions ascertains who owns the material resources that are necessary to produce wealth. By societal convention, all wealth produced is considered “owned” by the “owner” of the material resources necessary to produce it – that is, of the land, natural resources, factories and infrastructure by which wealth is produced – and not by the people who do the work to produce it. The people who do the work to produce it, since they don’t own the wealth being produced, and can’t be coerced into doing the work by main force, must be paid to do it. That’s how our society has set things up, and how wealth is both produced and shared. Wages motivate workers to work, thus facilitating the creation of wealth, and at the same time provide workers (which, please note, means most of the population – this is important) with money (tokens of exchange, remember) that they can exchange for wealth (goods and services). In that way, wages also facilitate the distribution of wealth. They are the mechanism by which the wealth our economy produces is put into the hands of most of the people who receive it.
With me so far? It’s easy to take all of this for granted and consider it an artifact of nature, but every bit of it is a societal convention. There’s no reason why we MUST assign ownership of material resources to individuals, or say that the wealth produced is owned by the people who own the resources used to make it, that’s just the way we’ve done things for a long, long time, and so we seldom question it. What we have is a system in which rich and privileged people buy the labor of almost everyone else and then sell them the goods and services that their labor produced, thus resulting in a distribution of wealth. In terms of economic function, that’s what’s going on. Money (tokens of exchange, remember, not wealth) goes in a circle. It goes from the rich and privileged to everyone else, then it goes back to the rich and privileged (allowing wealth to be shared out to most everyone in the process), and the whole cycle starts over. The flow of money is two-way and circular, but the flow of wealth is one-way and linear.
Let me note in passing (I’ll come back to it) that wages for work aren’t a terribly good or reliable way to distribute wealth. They’re better than nothing, but they tend to distribute wealth rather poorly, resulting in frequent breakdowns of the economy such as we are currently experiencing. Wages tend to drop below productivity, and have to be propped up with regulations and laws and unions and other measures that fight against this tendency, and that doesn’t always work, as in fact it’s not working now. Keep that in mind as I discuss a long-term trend and take it to its logical conclusion.
With any work that’s done for pay, it’s theoretically possible to replace human beings by machinery. As a practical matter, for the present it’s not possible to do this with all work, but it’s increasingly possible with more and more of it. A tiny fraction of people work in agriculture today as did 150 years ago. Manufacturing as well has been increasingly automated (except in some poor countries where labor is actually cheaper than machines). Some services have been automated, too. For example, if you call the customer service department of many a company, you will find yourself talking to a voice-recognizing computer program that fields your questions or complaints. Such programs cannot, at present, completely replace human beings in customer service, but they can do the simpler sorting tasks and answer the easy questions that used to be done by low-level CS operators, and pass the hard stuff to humans just as low-level clerks would once pass hard questions to their supervisors. In principle, there is no reason why a machine could not be made to do any and all service work whatsoever. Machines could, in principle, run businesses, conduct sales, do scientific research, give artistic performances, or even perform the services of the sex trade. Some of these things would require considerable advances in technology over what is available at this time, but none of them is demonstrably impossible.
Let’s take this to its logical conclusion. Imagine a world in which machines can do anything human beings can do as well as humans or better. Every company that needs labor for any purpose no longer hires people, it buys or leases machines. Not only does it not hire any workers for the factory floor or the secretarial pool, it doesn’t even hire executive officers. Forget today’s CEOs of mega-corporations getting multimillion dollar bonuses. They’re unemployed, too. In fact, everyone is unemployed, and the only people who can make any money are the stockholders of the corporations.
Only problem is, they can’t make any money, either. The goods and services the companies are producing can only be sold to people who are making money, and under that scenario that means only to the stockholders. And there aren’t enough big stockholders to buy enough to keep business profitable – so everyone goes broke, the economy fails, and everyone in the world starves to death, leaving a world populated by nothing but robots.
Well, of course it wouldn’t actually go that far, because as soon as things got bad enough to really tick people off, we’d have a revolution of some kind. As this system we have in which rich and privileged people buy the labor of everyone else and then sell them the goods and services their labor produced goes from sort-of-working to not-working-at-all, it will be replaced with something that works better. But what?
Remember the exception above to “nobody’s making any money”? Stockholders still have wealth to trade and can still buy stuff, at least until the whole economy collapses. So a system in which all the work is done by machines would work just fine as long as everyone is a significant stockholder. Or, to put it another way, in which everyone has an owner’s share of the wealth produced.
In the far future, I believe that’s what we will have. We’re still a long way from it, but it’s the way our descendants will live.
Here’s the basic idea behind the Advanced Civilized Paradigm. If we look at the way our precivilized ancestors lived from the first emergence of the human species, somewhere between 100,000 and 200,000 years in the past, until the development of agricultural communities around 10,000 years ago, we find a persistent pattern. People lived in small communities of mostly-related people. They had no formal government or organized religion. This pattern persisted all over the world wherever people lived by foraging and hunting, for tens of thousands of years. This kind of persistent pattern or template of society I’m calling a “paradigm,” and this original, very old one in particular I call the “Precivilized Paradigm.”
Over a few thousand years, the early agricultural communities developed into city-states, and as they did, another pattern emerged that was also found all over the world, and that lasted for a long time, although not nearly as long as the Precivilized Paradigm did. This pattern included hereditary monarchy, a hereditary warrior-aristocrat elite class, a class of slaves or serfs at the bottom of the heap who worked for the benefit of the elite under threat of force, formal state religion, subordination of women to men. This pattern can be seen all over the world wherever people lived in cities in agrarian communities, with only rare and partial exceptions. It lasted from the emergence of the first city-states in the fifth or sixth millennium BCE and endured until relatively modern times. I call this pattern the “Classical Civilized Paradigm.”
Starting in Europe in roughly the 16th century CE, this pattern began to morph into something different and we’re still in a transition stage. It’s not at all clear where we’re going, but we certainly haven’t achieved any stable form that is likely to endure for as long as the Classical Civilized Paradigm did, let alone the Precivilized Paradigm. Maybe there won’t be any. Maybe we’ll just continue in a progressive upheaval forever. Or maybe not; maybe there’s a practical limit on the advance of technology and the social changes that accompany it, beyond which we’ll continue to progress but more slowly, with refinements on what’s already been developed, but nothing revolutionary, the way the printing press was revolutionary, or the steam engine, or electricity, or radio, or the assembly line, or the robotic factory, or the Internet.
For purposes of this writing series, I’m going to assume the latter is the truth: that there’s a practical end to all this, however far we are from it at the moment. With that in mind, I’m going to explore some logical “end states” of visible developments.
What will the economy be like when there is no such thing as a job?
What will religion be like when there are no barriers of language or communication?
What will government be like when instantaneous voting becomes a reality?
What does human mean in a world of genetic engineering and artificial intelligence?
I will deal with the first of those today in this entry.
What An Economy Does
An economy is a social arrangement that produces and distributes wealth. By “wealth,” I mean goods and services. (Money is not wealth. Money is a medium of exchange whereby wealth is traded.) Note that this description has two functions: production and distribution. An economy produces goods and services and gets them to the people that need or want them. An economy that succeeds in doing this is successful. An economy that fails in either function breaks down and fails in both. You can’t distribute wealth that hasn’t been produced. If it has been produced and you fail to distribute it, the economy stops producing it, too.
There are of course many ways of producing and distributing wealth, of varying sophistication. But no matter how complex the economy, or how many layers of esoteric financial manipulation are constructed on top of it, in the end it comes down to those two things. Can the economy produce enough wealth for everyone? Can it spread that wealth around so everybody has enough? To the extent it answers both questions “yes,” it works.
Now let’s consider a specific economic transaction and how it serves both functions at once: wages for work. First, we have to understand that our society assigns “ownership” of the material resources necessary to produce wealth on the basis of history, going back to someone who, in the far past, was able to grab those resources and hold them by force. In America, that generally means a white person who seized them from Native Americans. In other parts of the world, it’s slightly different, but it always comes down to forcible seizure at some point along the way. (Of course, if you look at the Native American from whom the white person seized the resources in question, and trace ownership back from that point, you find that somewhere along the way a Native American seized the resources from another Native American by force, too. The point here is not that white people are more wicked than Native Americans, but that ownership ultimately derives from piracy.)
Since the initial seizure, the property may have been traded many times by more peaceful and voluntary means. The history of these transactions ascertains who owns the material resources that are necessary to produce wealth. By societal convention, all wealth produced is considered “owned” by the “owner” of the material resources necessary to produce it – that is, of the land, natural resources, factories and infrastructure by which wealth is produced – and not by the people who do the work to produce it. The people who do the work to produce it, since they don’t own the wealth being produced, and can’t be coerced into doing the work by main force, must be paid to do it. That’s how our society has set things up, and how wealth is both produced and shared. Wages motivate workers to work, thus facilitating the creation of wealth, and at the same time provide workers (which, please note, means most of the population – this is important) with money (tokens of exchange, remember) that they can exchange for wealth (goods and services). In that way, wages also facilitate the distribution of wealth. They are the mechanism by which the wealth our economy produces is put into the hands of most of the people who receive it.
With me so far? It’s easy to take all of this for granted and consider it an artifact of nature, but every bit of it is a societal convention. There’s no reason why we MUST assign ownership of material resources to individuals, or say that the wealth produced is owned by the people who own the resources used to make it, that’s just the way we’ve done things for a long, long time, and so we seldom question it. What we have is a system in which rich and privileged people buy the labor of almost everyone else and then sell them the goods and services that their labor produced, thus resulting in a distribution of wealth. In terms of economic function, that’s what’s going on. Money (tokens of exchange, remember, not wealth) goes in a circle. It goes from the rich and privileged to everyone else, then it goes back to the rich and privileged (allowing wealth to be shared out to most everyone in the process), and the whole cycle starts over. The flow of money is two-way and circular, but the flow of wealth is one-way and linear.
Let me note in passing (I’ll come back to it) that wages for work aren’t a terribly good or reliable way to distribute wealth. They’re better than nothing, but they tend to distribute wealth rather poorly, resulting in frequent breakdowns of the economy such as we are currently experiencing. Wages tend to drop below productivity, and have to be propped up with regulations and laws and unions and other measures that fight against this tendency, and that doesn’t always work, as in fact it’s not working now. Keep that in mind as I discuss a long-term trend and take it to its logical conclusion.
With any work that’s done for pay, it’s theoretically possible to replace human beings by machinery. As a practical matter, for the present it’s not possible to do this with all work, but it’s increasingly possible with more and more of it. A tiny fraction of people work in agriculture today as did 150 years ago. Manufacturing as well has been increasingly automated (except in some poor countries where labor is actually cheaper than machines). Some services have been automated, too. For example, if you call the customer service department of many a company, you will find yourself talking to a voice-recognizing computer program that fields your questions or complaints. Such programs cannot, at present, completely replace human beings in customer service, but they can do the simpler sorting tasks and answer the easy questions that used to be done by low-level CS operators, and pass the hard stuff to humans just as low-level clerks would once pass hard questions to their supervisors. In principle, there is no reason why a machine could not be made to do any and all service work whatsoever. Machines could, in principle, run businesses, conduct sales, do scientific research, give artistic performances, or even perform the services of the sex trade. Some of these things would require considerable advances in technology over what is available at this time, but none of them is demonstrably impossible.
Let’s take this to its logical conclusion. Imagine a world in which machines can do anything human beings can do as well as humans or better. Every company that needs labor for any purpose no longer hires people, it buys or leases machines. Not only does it not hire any workers for the factory floor or the secretarial pool, it doesn’t even hire executive officers. Forget today’s CEOs of mega-corporations getting multimillion dollar bonuses. They’re unemployed, too. In fact, everyone is unemployed, and the only people who can make any money are the stockholders of the corporations.
Only problem is, they can’t make any money, either. The goods and services the companies are producing can only be sold to people who are making money, and under that scenario that means only to the stockholders. And there aren’t enough big stockholders to buy enough to keep business profitable – so everyone goes broke, the economy fails, and everyone in the world starves to death, leaving a world populated by nothing but robots.
Well, of course it wouldn’t actually go that far, because as soon as things got bad enough to really tick people off, we’d have a revolution of some kind. As this system we have in which rich and privileged people buy the labor of everyone else and then sell them the goods and services their labor produced goes from sort-of-working to not-working-at-all, it will be replaced with something that works better. But what?
Remember the exception above to “nobody’s making any money”? Stockholders still have wealth to trade and can still buy stuff, at least until the whole economy collapses. So a system in which all the work is done by machines would work just fine as long as everyone is a significant stockholder. Or, to put it another way, in which everyone has an owner’s share of the wealth produced.
In the far future, I believe that’s what we will have. We’re still a long way from it, but it’s the way our descendants will live.
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