Can Everyone Be Rich?

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“The reward would be…”

“What?”

“Well, more wealth than you can imagine.”

“I don’t know — I can imagine quite a bit.” 

—Star Wars: Episode IV – A New Hope

 

Let’s say you’ve done very well and you have a six-figure income and, say, four million bucks in the bank. And you start to feel guilty: Should I really have this much money when so many people are struggling to feed themselves?

You could give it all away. Let’s assume there are four billion poor people on the planet, so divide that into your four million dollars, and each of them receives … excuse me while I whip out my calculator … [*click-click-click*] … one tenth of a penny per person.

Well, that’s not gonna help.

Wait, I know! What if, somehow, everyone could be rich? Could everyone have four million dollars?

Let’s find out. Take America as an example. In 2015, the total assets of U.S. citizens (real estate, stocks and bonds, cars, smartphones, PlayStation consoles) minus debt (mortgages, credit card balances, and the amount you still owe your bookie) was about $85 trillion dollars. Divide that by the 2015 U.S. population and you get a bit more than $265,000 per person.

So if you divvy it all up, every adult and child in America would be worth about a quarter mil. Not bad, but certainly not four million dollars apiece. So that won’t work.

Oh, wait, I got it! Maybe “rich” can be redefined so that more people fit the definition. Maybe $265,000 is rich by anyone’s standards.

Well, first off, you can’t live on it forever. It’ll run out after several years, even if you invest it. You’d need a cool million earning 8 percent just to have an income, after taxes and inflation, of around $30,000 per year. (Give or take. Your mileage may vary.) And thirty grand doesn’t get you anything fancy these days. But at least one person could survive on it indefinitely.

So every American would need at least four times as much money as is available today to be able to retire.

Of course, if everyone suddenly retired at this point in history, all the factories and gas stations and restaurants and bars would close, and nothing would be produced. We’d starve. Dang.

Okay, let’s start over. What, exactly, is “rich”? Dictionary.com defines it as: “having wealth or great possessions; abundantly supplied with resources, means, or funds . . . ” “Great possessions” and “abundantly supplied”: these suggest much more than is owned by the typical schmo. But if everyone got the same amount — say, one million dollars — that would become the new “average”, not “rich”. Hmm.

On the other hand, four million dollars? Now, that’s getting somewhere. Thus if you’re worth millions, you’re still not off the guilt hook. But I have one more idea that might help.

It involves purchasing power. The average American — and the average European, Japanese, South Korean, Taiwanese, Chilean, etc etc — has more wealth than nearly every other human who has ever walked the Earth. Compared to those others, today’s middle-class groups are fabulously rich, abundantly wealthy with great possessions.

A citizen in today’s industrialized countries can own things never dreamt of by the kings of yore. What seem normal to us — quick cheap flights to weekend vacation spots, streaming movies on high-def stereo TVs, instant chats with people in other countries — would have been impossible a century ago. Our average income thus has enormous purchasing power compared with the past. 

That purchasing power keeps growing, year after year, as technology improves. In the future, a mere $30,000 below-average income could have several times its current purchasing power. In effect, a future $30,000 would afford what a six-figure income buys today.

Eventually each of us will have so many resources available from our lil’ ol’ average incomes that we’ll find ourselves possessed of the luxury and leisure and ease that the wealthy have always enjoyed. Like the idle rich of old, we won’t even have to work anymore — not if we don’t want to. The machines we’re building today will do that work for us tomorrow.

So if you’re still feeling guilty about having more than others, you can do two things: (1) invest your wealth in businesses that hire workers to produce the wealthy future that’s looming just over the horizon; and (2) dedicate your own work efforts to building that future, one in which everyone will have more than they know what to do with, to the point where money will no longer be an issue — a future where people will be judged more on their creativity than their bank accounts.

If, on the other hand, you’re wishing you had enough money to feel guilty about, please note that nowadays the quickest way to obtain filthy lucre is much the same: work to build a wealthy future for everyone.

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Robots and Riots

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You do not see union workers holding benefits for robots. — Stephen Colbert

There’s a Doomsday scenario where machines take over all jobs and everyone becomes unemployed. Evictions, hunger, and illness ensue. Riots in the streets. Calls for a guaranteed national income. Legislation to prevent robots from being built at all. Political calamities. A real mess.

French police unleashed tear gas and water cannons on demonstrators Tuesday as tens of thousands packed the streets of Paris in an outpouring of opposition to the government’s anti-labor agenda. news item

If workers will riot over incremental changes to employment, imagine how berserk they’ll go if all the jobs disappear.

“But robots will never take every job!” Oh, yes they will. We humans are clever — we’ve invented countless labor-saving gadgets over the centuries, devices stronger or faster or more precise than people can be. We’re also clever enough to invent mechanical brainpower that’s stronger, faster, and more precise than our own. In fact, we’re developing this Superior Artificial Intelligence as we speak. Such an intellect will eclipse our own poor powers and take charge. Soon.

(Which would you rather buy, something dirt cheap but excellent from a machine, or something flawed and unreliable and expensive from a human? Hmm.)

This could easily become a bad thing, since people thrown out of work generally don’t have money for food, rent, gasoline, and doctor visits. Also, most of us derive meaning from our labors, and without a job — a way to contribute — people might find themselves existentially adrift. Combine a lack of purpose with a lack of cash, and you get street riots and the other disasters.

And it also could be a good thing … if the automata serve us faithfully and make us all wealthy. We’d have endless free time to pursue our interests, with no need to convert hobbies into jobs. In that world to come, what matters would no longer be how rich you are, but how interesting you are. I call it The Star Trek Future.

(Yes, I’m well aware that this very blog could be replaced by automation. I’d have to find some other way to amuse myself. Tennis, anyone?)

A solution that lately has gotten traction is a guaranteed national income — a stipend for every adult citizen. If all people were unemployed, only those who owned investments would have regular income. The corporations would need to donate money to the unemployed, or none of them would buy any products.

The problem with this plays out as follows: I own a store, and you come in to get a candy bar but don’t have any money. I give you a dollar, and you hand it back to me for the candy bar. Essentially, I’m performing a short ceremony with you, at the end of which I give you a free candy bar. At this rate, I’ll go broke.

Another idea involves a kind of fiscal land reform: the government confiscates corporate stock and hands it out to everyone. We’d all become owners of the robots that took our jobs. Automated production would go to our bottom line, and everything turns out fine.

Except this would basically destroy the market economy. Nobody would invest in companies anymore, lest their hard-won gains be taken from them abruptly in some similar, future upheaval.

But what people aren’t talking about and what’s getting my attention, is a forthcoming rapid demonetization of the cost of living. — Peter Diamandis

What to do, then? It turns out there’s a solution that will likely unfold as a natural consequence of total automation of jobs. It’s called demonetization, and it will cause most prices to plummet. After all, robots don’t take vacations; they don’t need healthcare for their kids; they don’t go on strike; and they perform their tasks vastly more efficiently than can humans. They work much better and much cheaper.

Thus, though we may all one day find ourselves unemployed, our expenses could decline by as much as 90 percent. A meal at a fast-food restaurant would cost 50 cents, and a ride in a driverless taxi would set us back about 30 cents per mile, less than half the cost of car ownership. Dirt-cheap housing will be built using 3-D printing. Meanwhile, online education already is basically free, and the smartphone in your pocket comes with a slew of products and services that 30 years ago would have cost hundreds of thousands of dollars.

Given a small stipend from the government and/or a small stake in the big corporations, people would have more than enough cash to pay for basic necessities even if they were out of work.

It’s also important to bear in mind that non-human employment will likely emerge over time and not all at once. Economic downturns in recent decades have tended to resolve themselves with “jobless recoveries” as businesses bought new software first and then hired real people. This hints at workforce automation building momentum slowly over several decades.

Instead of being eliminated, your job might merely get cut back, bit by bit: they’d offer to keep you on at reduced hours that drop even further over the coming months and years. Of course, your pay would decline, but meanwhile your personal expenses will have plummeted due to all that cheap automation everywhere in the economy. So who cares? You just got a bunch of extra hours away from work while retaining essentially the same lifestyle.

(If you’re worried this optimistic scenario won’t play out according to plan, there are a number of ways to adapt your work life to reduce or delay your risk of being replaced by a machine.)

If business and government can coordinate properly (and that’s a BIG “if”), automation might supplant us gradually, so we retain a declining level of employment while prices also decline. We could actually achieve a soft landing into a life of prosperous leisure.

That’s not Doomsday. That’s more like Paradise.

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UPDATE: Will we control AI?

UPDATE: Jobs are already disappearing as robots take over

UPDATE: Automation begins to clean out white-collar jobs

UPDATE: The rise of the useless class

UPDATE: How to get paid in the Age of Layoffs

UPDATE: David Byrne on eliminating humans

 

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Uber vs. the Taxis

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Taxicab companies want the world to stay exactly as it is, which is not actually good for anyone, to just say, ‘The way that we’re gonna run is the way that we were running in the 1950s, and that’s the way we’re gonna be running in 3000.’ — Reid Hoffman

How can Uber possibly survive? The private driving service, now a worldwide phenom, faces huge obstacles from taxi cartels, suspicious regulators and anxious voters who wonder: is Uber a good thing or some sort of business conspiracy to make a profit by disrupting the established transportation system?

Maybe it’s both.

Granted, Uber’s cheaper, quicker ride service — a car within five minutes and less than $2 per mile instead of roughly $5 for taxis — threatens government-approved taxi operators, who worked hard to obtain their medallions in a restricted market space. Granted, the news has now and then carried garish reports of Uber drivers attacking their passengers. Granted, it takes weeks to certify a taxi driver, while Uber drivers can accept passengers within days. Granted, Uber — and Lyft, Uber’s smaller competitor — threaten a unionized way of life by offering part-time, flex-time work opportunities. 

But Uber and Lyft provide a service that’s so compelling, it overcomes all objections:

• Per-mile costs are much cheaper than taxis. One driver I spoke with showed me a couple of typical fares he got, and they both worked out to about $1.50 per mile. Even if the average charge were $2.00 or $2.50 per mile, it would still cost half what an official taxi charges.

• Uber has a business incentive to process applicants efficiently, but its certification requirements are strict. Taxi drivers, meanwhile, must wait weeks because their unions aren’t in a hurry to add new drivers, who push down pay rates. Likewise, government accreditation bureaus rarely have a reason to hurry.

• Once on the job, Uber drivers are continuously rated by their passengers. Any driver whose rating drops below 4 out of 5 is subject to suspension. But the drivers also get to rate the passengers! A difficult Uber user will get bad marks and have trouble finding a ride. Thus everyone involved has an incentive to be polite and cooperative. Try getting that from a taxi service.

• Uber and Lyft offer cheap solutions to congestion, swarming quickly to where they’re needed while reducing the number of private vehicles parked on streets or clogging traffic. The service helps low-income, elderly and disabled users who can’t afford taxis. And passengers give it high marks. Local governments find all this irresistible. Taxi cartels keep losing the arguments.

• The ride-sharing market creates jobs. These days, with a staggering recession in the rear-view mirror and automation horning in on all sides, it’s harder and harder to get a steady full-time job. For the under-employed, Uber and Lyft step in and offer as many hours (or as few) as a worker can handle. The pay isn’t great, and there are no bennies, though with practice drivers can learn tricks of the trade and improve their take-home. But the service offers a flexible way to add to a driver’s bottom line, all the way up to full-time work. It’s hard for politicos to say no to that.

Any one of these makes a compelling argument in favor of the ride-sharing industry. All of them together make it seem unstoppable. 

Still, there are pitfalls. Unions and taxi cartels and governments may yet find ways to suppress this nascent marketplace, to pull its monkey wrench back out of the bureaucratic machine.

But the greatest danger may lie within the corporate offices of Uber itself. Its leaders have been accused of arrogance, of flouting the law, and of cutting driver net pay. Reid Hoffman, founder of LinkedIn and a high-tech venture capitalist, believes Uber should tone down its aggressive approach with regulators:

The company tends to be very combative. . . . [Regulators] may be slow to change, they may be risk-averse, but their goal is a mission of protecting society. And so you should interface with them on that channel more than on the ‘Just get out of my way, I’m innovating.’ — Reid Hoffman

Meanwhile, Uber and Lyft have checked off all three main requirements for a successful business in the modern age:

1. Great product — A cheap ride in five minutes!

2. Great marketing — Both Uber and Lyft have branded themselves ingeniously, the word-of-mouth is tremendous, and all the media attention gives ride-sharing tons of free publicity.

3. Great fulfillment — The app is easy to use, payment is handled automatically, and the cars are reliable and clean.

Uber may yet shoot itself in the foot and limp off into history. More likely, though, is that the ride-sharing company will be remembered as the front line in a phalanx of businesses — Airbnb, TaskRabbit, Angie’s List — that attack the limitations of an aging corporate infrastructure.

We may be witnessing the decline of the standard 40-hour job, replaced with work that adapts to workers’ schedules, responds quickly to changes in consumer demand, and automatically rewards excellence and civility.

The Uber/Lyft revolution is hurtling toward us like a fleet of rebellious vehicles, and in each car sits … the future.

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UPDATE: Consumers wrest control from government

UPDATE: How Uber got a city council to back off

UPDATE: Uber’s peaceful revolution

UPDATE: Driverless L.A. Taxis at 25c/mi

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