Home » Uncategorized » Political Movements Part 3

Political Movements Part 3

So let’s review.

In order to stay in business, companies who manufacture goods do everything they can to stimulate repeat consumption. Everything from iPod batteries that can’t be replaced to nylon stockings that rip and tear by design. ( http://www.economist.com/node/13354332 ). We use more resources in one year than the Earth can replenish. This is the environmental equivalent of spending more money in a month than you earn. You can do it for a little while, but it’s not a plan that can work long term.

The only way to reduce resource consumption and slow global warming is to scale back production. Doing so means lost jobs and economic decline. Sustainability and the form of Market Capitalism that currently exists in the Western World are mutually exclusive. They cannot coexist.

This leaves us with two difficult questions. “How do we scale back mass production while still creating enough goods and services to maintain our standard of living?” and “What happens to the people who lose their jobs when we make this transition.”

Let’s start with question one.

To create an environmentally sustainable society, we need to get as close as possible to production of goods on an “as needed” or “on demand” basis. That means we only produce a good when there is an established demand for that good. We repair and upgrade to the greatest degree possible. Products are built to last as long as possible.

Suppose, for the sake of argument, that we’re living in a city of two million people and roughly eighty percent of them (1.6 million) are old enough to have cell phones. Of those 1.6 million, 320 people damage their phones beyond repair. That means we produce 320 replacement phones and not one phone more. Sound like a pipe dream?

The good news is that the technology to do this already exists. It’s called 3D-printing. With the use of 3D-printers, we can fabricate just about any object of just about any shape.

“Okay, but those can only make solid objects. You couldn’t make something like a phone, could you?”

Indeed you can.

In the not-to-distant future, products will be created in your own home by machines that can print and assemble the parts. Any monetary transactions involved will likely involve you purchasing the raw materials and possibly paying a small royalty to the patent holder.

You can already see the problem. If the production of most material goods happens automatically in your own home, then what happens to all the people who worked in manufacturing. It actually gets worse than that because the retail industry – one of the largest employers in the western world – has just become obsolete. What’s the point of going to a store to buy something when your 3D-printer can just fabricate it? Say good-bye to all those retail jobs, and to the white-collar jobs for people who work at the head offices of retail companies.

Wait.

People will still need raw materials right? Maybe that will become a booming industry.

No, sorry. It won’t. Remember, that under this model, we’re deliberately scaling back production to reduce waste. That means we’ll be harvesting far fewer resources than we do today. (That’s the whole point, remember? To stop using more resources than the Earth can generate). So, while there will still be a resource extraction industry, it will be much smaller.

That doesn’t mean there will be absolutely no human labour. We’re still going to need doctors and teachers and researchers, scientists architects and civic planners and agriculture experts. We’ll also need content creators – people who design the products that get created and the media that get consumed. Not to mention law-enforcement and military.

Andrew McAfee, associate director of the Centre For Digital Business at MIT has given several talks on the numerous ways that technology will change the economic landscape in years to come. Machines are displaying skills that they’ve never had before. Computer algorithms can write documents with flawless prose; robots can stock shelves and organize products several times faster than their human counterparts. Cars can drive themselves. Translation apps can do in minutes that which used to require hours of human labour.

With these new innovations, work as we understand is going to change drastically. Some people fear a situation similar to what you see in WALL-E, with robots doing all the work while humans sit around doing nothing. That is not a very likely scenario. Humans will be doing work that requires creative problem solving. I’ve already given examples above.

This is actually very good news.

Machines doing the procedural, repetitive work means no more sweat shops, no more drudgery and toil. People are freed up to pursue more intellectually stimulating endeavours. However, work that is largely focused on creative problem solving requires us to rethink our understanding of compensation. When the job requires you to think creatively, financial incentives lead to a drop in productivity. The higher the incentive, the worse the employee’s performance?

Why?

Incentives have a tendency to narrow focus. I’ve already discussed the ways in which they change perceptions and incline people toward risky behaviour. They also make it harder to brainstorm and generate new ideas. People become focused on earning the incentive and not on solving the problems. When the task involves even the most rudimentary cognitive skill, incentives and rewards lead to poorer performance.

This flies in the face of most of our current economic logic. That’s why we need to rethink economics. So what works. The best way to get results is to take the issue of money off the table. In other words, you pay people enough that they don’t have to worry about money.

McAfee suggested that in the new technological economy, the best way to keep society functioning is to give all citizens a guaranteed minimum income which will keep them above the poverty line. Before anyone starts shouting “socialism,” you should know that some of the most hard-core, right-wing economists like Milton Friedman and Ludwig Von Mises agree with him. All citizens are guaranteed access to the basic necessities of life.

“But wait,” I hear you say, “if we give people a basic living income regardless of whether or not they’re employed, they’ll just sit around being lazy.” Would it surprise you to learn that this phenomenon has been studied, and that – once again – the conventional wisdom is wrong? Throughout the 1970s, experiments with guaranteed annual incomes were conducted in New Jersey, Pennsylvania, Indiana and most interestingly, in the small town of Dauphin, Manitoba.

Low-income families in Dauphin and other test sites were given a monthly stipend to keep them above the poverty line. These experiments did find a small drop in the number of people entering the work force – roughly 13% – however, the people choosing to forgo employment were mostly new mothers and teenagers who wanted to stay in school longer. The primary income earners in each household were mostly unaffected. Even with the guarantee of a living wage, people still wanted to be productive.

The case of Dauphin is interesting because thirty-five years after the experiment, economists from the University of Manitoba – including the unfortunately named Dr. Evelyn Forget – studied other effects on the population. They found an overall decrease in hospital visits, higher rates of high school graduation and college admission, and a noticeable drop in mental health problems.

Best of all, these positive social changes were spread across the entire population. Rich and poor alike benefited from the presence of a guaranteed annual income. To quote Dr. Forget, “We conceived the GAI as an insurance policy. In the same way that people who buy fire insurance on their houses perceive the policy to be beneficial even if they never collect, the GAI benefited everyone in the saturation site, including families that never collected payments under the scheme. The benefit to those who did collect payments is obvious, but those whose incomes exceeded the threshold and therefore did not qualify still benefited from the reduction of risk … The health and social benefits, including the willingness to encourage potentially useful adolescent children to stay in school rather than encouraging them to work, are dependent on perceived risk and not directly on whether the family qualified for support after the fact.”

You’ll find it on page 12 of the PDF I linked.

So let’s review.

In order to keep people employed, society produces an overabundance of goods. More goods than people can actually use. We need to reduce production and deal with the issues of employment by rethinking economics. I believe we need to go one step further. We need to ratify access to food, water, medicine and education as basic human rights. Every citizen living in Canada, the US, Europe and other First-World nations is guaranteed access to these basic necessities. No questions asked.

“Wait! We can’t possibly do that! Can we?”

Yes, we can.

At the moment, the combined efforts of every nation on this planet are producing enough food to feed a population of over ten billion people. There are only seven billion people on this planet. We have more than enough to go around. World hunger is caused by politics, not by scarcity.
More on that next week.

_______________

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