Hello from my iPhone.
It may be the middle of London, but apparently we are just fine without broadband Internet. No doubt thanks to some well intentioned construction crew, the local area must go without. For eight hours and counting.
My original Plan B for my trading portfolio, using a laptop at the local watering hole, has been scuppered by the area outage.
Note to self: lease virtual server space with better uptime. Move trading systems to the cloud. Access when needed.
Lesson learned.
After watching The House I Live In, which tracks the problems caused by the War on Drugs in the US, maybe the idea of a minimum guaranteed income isn’t such a long shot.
According to the Washington Post, US taxpayers spend around $30,000 per year for federal inmates. That includes a lot of folks being incarcerated for non-violent drug crime. According to the film above, perhaps one of the biggest causes for these offences is the lack of employment or other economic opportunity. So: in a world where a lot fewer people may have economic opportunity due to the hollowing-out effect of technological displacement, maybe guaranteeing minimum income of around $30,000 for folks not breaking the law isn’t such a stretch??
I just finished reading The Economist’s special report on technology and economic growth; synopsis here. In a nutshell, a ‘third industrial revolution’ brought upon by technological change has some serious consequences for economic development globally. Pain is here, and will come, for very many people employed in jobs which can be automated by intelligent computers (think teaching, diagnosing illness, driving/trucking, …). There aren’t obvious new roles for the folks displaced, as tech-heavy sectors need few people.
This leads to the ‘hollowing out’ of the workforce, to borrow The Economist’s words: high demand for the lowest-skilled and highest-skilled labourers, but not much demand for the middle majority of labour. Economic development may get stymied, as technology-intensive manufacturing means less need for low-skill, low-wage labourers in emerging economies; there’s no easy first step out of poverty. So what do we, as a society, do with those left out? Read the special section for The Economist’s take (subscription required….ugh); among their ideas are education, pro-business policy, and a guaranteed minimum annual income.
Regarding the education point: if the world really only needs 5% or so of the population to do the high-skilled stuff (engineering, managing, creative types), is it fair to prioritise 50%+ of kids to get a college degree? Sounds like a bad bet, unless in future we’ll need college degrees to perform hair cuts and cook food for others. And what does this do for inequality within countries? Can we get enough tax from the rich to pay for the hollowed-out class?
A related point: hedonic adaptation, or the hedonic treadmill. Keynes wrote in 1930 that in a hundred years we’d work 15 hours a week, due to all the wonderful efficiencies wrought from technology. Seeing as we’re still working around 40 hour weeks, what’s all the technology good for? Well, this free blog is one nice product, as is the smart phone and HD television I take for granted. Due to hedonic adaptation amongst us, I reckon we work a huge number of hours merely to sate newly-found ‘needs’ that have arisen over the years.
So maybe part of the ‘hollowing out’ problem can be reduced by the following:
End soapbox…
financialpiggy 