Labor Day 2028

robertreich:

In 1928, famed British economist
John Maynard Keynes predicted that technology would advance so far in a
hundred years – by 2028 – that it will replace all work, and no one will need
to worry about making money.

“For the first time since his
creation man will be faced with his real, his permanent problem – how to use
his freedom from pressing economic cares, how to occupy the leisure, which
science and compound interest will have won for him, to live wisely and
agreeably and well.”

We still have thirteen years to go
before we reach Keynes’ prophetic year, but we’re not exactly on the way to it. Americans
are working harder than ever.

Keynes may be proven right about
technological progress. We’re on the verge of 3-D printing, driverless cars,
delivery drones, and robots that can serve us coffee in the morning and make
our beds.

But he overlooked one big question:
How to redistribute the profits from these marvelous labor-saving inventions,
so we’ll have the money to buy the free time they provide?

Without such a mechanism, most of
us are condemned to work ever harder in order to compensate for lost earnings
due to the labor-replacing technologies.

Such technologies are even replacing
knowledge workers – a big reason why college degrees no longer deliver
steadily higher wages and larger shares of the economic pie.

Since 2000, the vast majority of
college graduates have seen little or no income gains.

The economic model that
predominated through most of the twentieth century was mass production by many,
for mass consumption by many.

But the model we’re rushing toward is unlimited production by a handful, for consumption by the few able
to afford it.

The ratio of employees to customers
is already dropping to mind-boggling lows.

When Facebook purchased the
messaging company WhatsApp for $19 billion last year, WhatsApp had fifty-five
employees serving 450 million customers.

When more and more can be done by
fewer and fewer people, profits go to an ever-smaller circle of executives and
owner-investors. WhatsApp’s young co-founder and CEO, Jan Koum, got $6.8
billion in the deal.

This in turn will leave the rest of
us with fewer well-paying jobs and less money to buy what can be produced, as we’re pushed into the low-paying personal service sector of the economy. 

Which will also mean fewer profits for
the handful of billionaire executives and owner-investors, because potential
consumers won’t be able to afford what they’re selling.

What to do? We might try to levy a
gigantic tax on the incomes of the billionaire winners and redistribute
their winnings to everyone else. But even if politically feasible, the winners will
be tempted to store their winnings abroad – or expatriate.

Suppose we look instead at the
patents and trademarks by which government protects all these new inventions.

Such government protections determine what these inventions are worth. If patents lasted only three years instead of
the current twenty, for example, What’sApp would be worth a small fraction of
$19 billion – because after three years anybody could reproduce its messaging technology
for free.  

Instead of shortening the
patent period, how about giving every citizen a share of the profits from all
patents and trademarks government protects? It would be a condition for
receiving such protection.

Say, for example, 20 percent of all
such profits were split equally among all citizens, starting the month they
turn eighteen.

In effect, this would be a basic
minimum income for everyone.

The sum would be enough to ensure
everyone a minimally decent standard of living – including money to buy the technologies
that would free them up from the necessity of working.

Anyone wishing to supplement their
basic minimum could of course choose to work – even though, as noted, most
jobs will pay modestly.

This outcome would also be good for the handful
of billionaire executives and owner-investors, because it would ensure they
have customers with enough money to buy their labor-saving gadgets.

Such a basic minimum would allow
people to pursue whatever arts or avocations provide them with meaning, thereby
enabling society to enjoy the fruits of such artistry or voluntary efforts.

We would thereby create the kind of
society John Maynard Keynes predicted we’d achieve by 2028  – an age of technological abundance in which
no one will need to work.

Happy Labor Day.