In my previous post The Robots are Coming for White Collar Jobs, I proposed a version of my favorite thought experiment.
When the day comes that robots can be used to produce everything that the human population needs so that nobody has to work, what will the society look like? Will everybody lead a fairly comfortable life with some sort of somewhat even distribution of wealth. Or will the robots produce just enough for the wealthy to have a good lifestyle while the rest of us are turned into beggars? What control do we have as to which way the society will turn?
The solution finally came to me. Remember in the debate about health care reform where many people, including me, wanted at least a single payer option? Some called for Medicare for all. Well, how about Social Security for all?
Don’t we already have Social Security for all? No, only people over a certain age (or some minors or people with disabilities) get Social Security benefits.
Right now the typical paradigm is that you work for enough years to build up a nest egg (including Social Security) that can support you in your retirement. Your ability to sock some money away while you are working presupposes that you are making more money than you need to live on, and you can afford to put some of the money aside for retirement use. I hope you can see that as robots get employed to do more and more stuff at cheaper and cheaper prices, there should be more excess earnings that can be saved for retirement. (There is no doubt the increasing excess will accrue to the economy as a whole. The question comes down to who will benefit from the excess?)
As time and automation progress, people should be able to save enough for retirement at earlier and earlier ages. Think of this as your inheritance from past generations. After all, children of very wealthy parents are born with enough money to retire at the moment of birth. What would happen if this capability were spread to more and more people?
How can this be spread without massive government interference in every aspect of the economy? We have had too many experiments with complete centralized control for us to feel very comfortable with such a prospect.
Interestingly enough, the way forward ties in with a Social Security investment strategy that I have been proposing for over a dozen years. (See my previous post The End of the Assault on Social Security and Medicare and its reference to the article Saving Social Security: A Better Approach.) The idea – most meticulously worked out by Modigliani, Muralidhar, et. al. – is for the Social Security Trust Fund investments start to be diversified away from sole dependence on special Treasury bonds to include stocks in public companies. Well run pensions systems of corporations, unions, professional organizations, universities, insurance companies, countries, states, and individuals have been doing this for hundreds of years.
For instance, Alaska has what amounts to a Sovereign Wealth fund that pays a substantial yearly dividend to every resident of Alaska. The dividend is not restricted to people who are retired.
So starting with the Social Security Trust Fund, we can see how a cooperative of the people can start to buy ownership of “private” enterprise in order to pay more generous Social Security benefits while collecting less in contributions from the eventual beneficiaries.
As the excess profits of future automation become larger and larger compared to investment needed from the population, we can see how the benefits of a “Social Security” system can be spread farther and farther to younger and younger people. Ultimately, the benefit can accrue to people starting at birth.
Of course I have left out all of the details that will need to be worked out. First, I want to get people to imagine the possibility. Then we can work on figuring out how to do it, and how to overcome any problems that will arise.