Old Dog, Old Trick, New Showtime

old dog new trick

Blockchain consultant and futurist Michael Spencer called it a conspiracy by the 0.01 percenters to enslave the rest of us for good.[1] A growing number of those 0.01 percenters have already supported it, but they’re not alone:  this poll conducted shortly after the 2016 election showed that half of Americans supported it as well. A parade of think tanks (here’s one) and other professional skeptics (more than I can cite with hyperlinks in a single sentence) have given it a thorough vetting and mostly concluded something along the lines of “yeah well okay maybe it’s worth a try.”

What is “it”? This idea:  give the poor what they lack — money. Ensure everyone a livable income while getting rid of the expensive and draconian welfare system. And just to be fair, go ahead and give everyone else money, too, even the billionaires.

The idea mostly goes by the name “universal basic income” (UBI). It’s rooted in the futuristic fear that technology will eventually put humans out of work. That’s not an old fear:  UBI is “far from a new idea,” says Martin Ford, another Silicon Valley entrepreneur and a popular TED talker, in his New York Times Bestselling Rise of the Robots: Technology and the Threat of a Jobless Future.

“In the context of the contemporary American political landscape… a guaranteed income is likely to be disparaged as ‘socialism’ and a massive expansion of the welfare state. The idea’s historical origins, however, suggest something quite different. While a basic income has been embraced by economists and intellectuals on both sides of the political spectrum, the idea has been advocated especially forcefully by conservatives and libertarians.

“Friedrich Hayek, who has become an iconic figure among today’s conservatives, was a strong proponent of the idea. In his three-volume work. Law, Legislation and  Liberty, published between 1973 and 1979, Hayek suggested that a guaranteed income would be a legitimate government policy designed to provide against adversity, and that the need for this type of safety net is the direct result of the transition to a more open and mobile society where many individuals can no longer rely on traditional support systems:

‘There is, however, yet another class of common risks with regard to which the need for government action has until recently not been generally admitted…. The problem here is chiefly the fate of those who for various reasons cannot make their living in the market… that is, all people suffering from adverse conditions which may affect anyone and against which most individuals cannot alone make adequate protection but in which a society that has reached a certain level of wealth can afford to provide for all.’”

LBJ foresaw the possibility of massive technological unemployment back in the 60’s, and appointed an “Ad Hoc Committee on the Triple Revolution” to study the topic. The Committee included co-Nobel Prize winners Friedrich Hayek and Swedish economist and sociologist Gunnar Myrdal.[2] Rise of the Robots describes the Committee’s findings:

‘Cybernation’ (or automation) would soon result in an economy where ‘potentially unlimited output can be achieved by systems of machines which will require little cooperation from human beings.’ The result would be massive unemployment, soaring inequality, and, ultimately, falling demand for goods and services as consumers increasingly lacked the purchasing power necessary to continue driving economic growth.

“The Ad Hoc Committee went on to propose a radical solution:  the eventual implementation of a guaranteed minimum income made possible by the ‘economy of abundance’ such widespread automation would create, and which would ‘take the place of the patchwork of welfare measures’ that were then in place to address poverty.

“The Triple Revolution report was released to the media and sent to President Johnson, the secretary of labor, and congressional leaders in March 1964. An accompanying cover letter warned ominously that if something akin to the report’s proposed solutions was not implemented, ‘the nation will be thrown into unprecedented economic and social disorder.’ A front-page story with extensive quotations from the report appeared in the next day’s New York Times, and numerous other newspapers and magazines ran stories and editorials (most of which were critical), in some cases even printing the entire text of the report.

“The Triple Revolution marked what was perhaps the crest of a wave of worry about the impact of automation that had arisen following World War II. The specter of mass joblessness as machines displaced workers had incited fear many times in the past — going all the way back to Britain’s Luddite uprising in 1812 — but in the 1950s the ‘60s, the concern was especially acute and was articulated by some of the United States’ most prominent and intellectually capable individuals.

“Four months after the Johnson administration received the Triple Revolution report, the president signed a bill creating the National Commission on Technology, Automation, and Economic Progress. In his remarks at the bills signing ceremony, Johnson said that ‘automation can be the ally of our prosperity if we will just look ahead, if we will understand what is to come, and if we will set our course wisely after  proper planning for the future.’ The newly formed Commission then … quickly faded into obscurity.”

A few years later, Richard Nixon introduced UBI legislation that he called “The most significant piece of social legislation in our nation’s history.” That legislation also faded into obscurity– more on that another time.

UBI is an old idea responding to an old fear:  how do we make a living if we can’t work for it? A half century after LBJ and Nixon, that fear is all too real, and lots of people think it might be time for the historical UBI solution to make its appearance.

But not everyone is jumping on the UBI bandwagon. The very thought that jobs might not be the source of our sustenance is the rallying cry of UBI’s most strident opponents.

More on UBI next time.

[1] Spencer followed with a similarly scathing assessment in this article.

[2] Myrdal’s study of race relations was influential in Brown v. Board of Education. He was also an architect of the Swedish social democratic welfare state. Hayek and Myrdal were jointly awarded the Nobel Prize in Economics in 1974.

On the Third Hand…

robot workerWill the machines eventually monopolize the workplace? Ask economists, and you won’t get the rational analysis that traditional economic theory insists upon. Instead, you’ll get opinions that gravitate toward competing ideologies, reflecting individual cognitive, emotional, and political biases.

That’s certainly been the experience of Martin Fordentrepreneur, TED talker, and New York Times bestselling author of Rise of the Robots: Technology and the Threat of a Jobless Future:

“In the field of economics the opinions all too often break cleanly along predefined political lines. Knowing the ideological predisposition of a particular economist is often a better predictor of what that individual is likely to say than anything contained in the data under examination. In other words, if you’re waiting for the economists to deliver some sort of definitive verdict on the impact that advancing technology is having on the economy, you may have a very long wait.”[1]


In this Psychology Today article, Dr. Karl Albrecht[2] offers a neurological explanation for polarized thinking:

“Recent research suggests that our brains may be pre-wired for dichotomized thinking. That’s a fancy name for thinking and perceiving in terms of two – and only two – opposing possibilities.

“These research findings might help explain how and why the public discourse of our culture has become so polarized and rancorous, and how we might be able to replace it with a more intelligent conversation.

“[O]ur brains can keep tabs on two tasks at a time, by sending each one to a different side of the brain. Apparently, we toggle back and forth, with one task being primary and the other on standby.

“Add a third task, however, and one of the others has to drop off the to-do list.

“Scans of brain activity during this task switching have led to the hypothesis that the brain actually likes handling things in pairs. Indeed, the brain itself is subdivided into two distinct half-brains, or hemispheres.

two sides of the brain

“Curiously, part of our cranial craving for two-ness might be related to our own physiology: the human body is bilaterally symmetrical. Draw an imaginary center line down through the front of a person and you see a lot of parts (not all, of course), that come in pairs: two eyes, two ears, two nostrils, matching teeth on left and right sides, two shoulders, two arms, two hands, two nipples, two legs, two knees, and two feet. Inside you’ll find two of some things and one of others.

“Some researchers are now extending this reasoning to suggest that the brain has a built-in tendency, when confronted by complex propositions, to selfishly reduce the set of choices to just two. Apparently it doesn’t like to work hard.

“Considering how quickly we make our choices and set our opinions, it’s unlikely that all of the options will even be identified, never mind carefully considered.

On the one hand this, on the other hand that, we like to say.  Lawyers perfect the art.  Politics and the press /thrive on dichotomy:

“Again, our common language encodes the effect of this anatomical self reference. “On the one hand, there is X. But on the other hand, we have Y.” Many people describe political views as being either “left” or “right.”

“The popular press routinely constructs “news” stories around conflicts and differences between pairs of opposing people, factions, and ideologies. Bipolar conflict is the very essence of most of the news.”

So, are robots and artificially intelligence going to trash the working world, or not?

Hmmm, there might be another option — several, actually. Dr. Albrecht urges us to find them:

“Seek the ‘third hand’ – and any other ‘hands’ you can discover. Ask yourself, and others, ‘Are there other options to be considered?'”

We’ll consider some third hand perspectives about the rise of the robots in the coming weeks.

[1] Martin Ford is also the consulting expert for Societe Generale’s new “Rise of the Robots” investment index, which focuses on companies that are “significant participants in the artificial intelligence and robotics revolution.”

[2] According to his website, Karl Albrecht is “is an executive management consultant, futurist, lecturer, and author of more than 20 books on professional achievement, organizational performance, and business strategy. He is also a leading authority on cognitive styles and the development of advanced thinking skills. The Mensa Society honored him with its lifetime achievement award, for significant contributions by a member to the understanding of intelligence. Originally a physicist, and having served as a military intelligence officer and business executive, he now consults, lectures, and writes about whatever he thinks would be fun.”

My Year in Economics: The New Divide

vw minibus

Fourteen months ago I shared an espresso with one of my daughters in Seoul, at a place called the Minibus Café because of the mint condition classic VW bus parked in front. (As you can see, the Asian version is more mini than the ones we see in the States). We talked about what she’s observed through her expat life as well as what was going on back home, covering topics such as globalization, disruptive technologies, the polarization of opinions and lack of public discourse, the “new economy” and its new paradigm job market, populist pushback political movements… all topics that have found their way into this blog series. I told her someone in her generation — maybe her — ought to go to grad school (probably in London, I guessed) and develop a fresh economic model capable of making sense of this bewildering avalanche of change.

“Maybe you should,” she replied.

And so I did, but minus grad school, London. and the fresh economic model. Instead, over the past year I became an economics autodidact, logging 30+ books and hundreds of online articles on economics, jobs, and technology (I get about 10 a day in my email feeds from all around the world). What I’ve learned hasn’t so much explained the world in economic terms, it has turned that world inside-out and upside-down.

Right away, I encountered two persistent themes, which I’ve mentioned before but will again:

  1. There is a dominant line of economic analysis taking place mostly in the rest of the world (and among sympathizers in U.S. academia) that is absent in the U.S. policy-making debate.

rise of the robots

As Silicon Valley entrepreneur, economics writer, and TED speaker Martin Ford writes in Rise of the Robots:  Technology and the Threat of a Jobless Future (2015), “In the field of economics the opinions all too often break cleanly along predefined political lines. Knowing the ideological predisposition of a particular economist is often a better predictor of what that individual is likely to say than anything contained in the data under examination.”

  1. Economic opinions are as hopelessly politically polarized as about everything else, so that any attempt to inject the worldwide analysis into the domestic conversation gets the instant “talk to the hand” response.

Instead of dialogue and inquiry, there’s a dominant “might makes right” and “if it ain’t broke don’t fix it” mentality among U.S. policymakers — in both government and business — that makes our public discourse (such as it is) either dismissive or blind to insights from the rest of the world.

I’ve come to call this insularity the “New Divide,” for reasons I explain below. It’s not difficult to understand where it comes from:  the USA is unquestionably the world’s dominant economic force, and we citizens, as a whole, are the beneficiaries of the highest personal income and net worth on the planet. In my former estate planning and family business succession law practice, I saw every single day how the free market of neoliberalism had prospered hard-working Americans.

This past year, though, I learned that this wasn’t because all my clients were specially gifted in finance and business (although some probably were), they were also riding a massive thirty-year worldwide economic growth trend. (While visiting my daughter in South Korea, I witnessed its “Miracle on the Han River” firsthand.) Still, although the post-WWII economic surge did indeed lift all economic boats around the world, it especially did so in America, and if you compare averages (always a dodgy business), the best the rest of the prosperous First World can boast is roughly 70% of the average wealth of the average American.

All of which makes it easy for Americans to think the Econ 101 supply and demand version of capitalism we learned in school is doing just fine. (Textbook guru Robert Samuelson said it’s probably the only economics any of us remember.) On the other hand, my reading and research over the past year has confirmed something else I noticed in the last years of my law practice:  the self-made, middle class, rags-to-riches millionaire-next-door has increasingly become an historic icon that shows little prospect of a reprise. Not only that, but economics commentators around the rest of the world rarely agree that our Econ 101 model ain’t broke — or that it’s even fixable.

It’s been like finding out that a friend I never see anymore hasn’t been doing so well, and that’s why:  I feel chagrined, like I might have asked, maybe sought them out. Econ 101 capitalism is a remarkably enduring concept that still gets the majority of air time, but was nowhere to be found in the course of my informal studies. Instead, certain disturbing trends — job dissatisfaction, meaning malaise, spiking suicide rates related to meaning malaise, income and wealth inequality, the newly stratified working class system, meaningless jobs, the breakdown in the historical link between productivity and higher earnings, chronic unemployment among young people — are not only worldwide, they’ve been going on long enough to become systemic and unlikely to self-correct.

Finding out about all of that has often left me with a heightened feeling of angst about the world my kids are growing up in (the same world I’m growing old in) that has sometimes made my year investigating the dismal science of economics feel dismal indeed. In that frame of mind, it seems unlikely the New Divide will be bridged any time soon, if ever, and the more we turn a blind eye and deaf ear to global opinions about economic welfare and functionality, the more likely it is that things can’t end well for us. (It’s been fascinating to see many of these economic themes emerging in the protests in Iran.)

Hence, the New Divide. I borrowed the term from a favorite song by a favorite band, Linkin Park — if you know the band, you know they’ve often expressed their own apocalyptic angst. The song came to mind particularly because of the lyric “give me reason to prove me wrong.” I’ve been looking to be proven wrong about what I’ve been learning, but haven’t found it. Instead, the New Divide and its revelations keep asserting themselves, demanding a fresh reckoning.

And reckon we will in the coming weeks and months of blog posts. Next time we’ll look at a consensus list of how our outlook on capitalism has been failing us, and the week after we’ll look at the mega-reality behind the list. Until then, you might take a moment for the song.

Linkin Park performed New Divide at the release party of — ironically — the movie Transformers. Watching the performance again was made more poignant for me by front man Chester Bennington’s suicide earlier this year. Here’s the video:

Linkin Park Transformers

And here are the lyrics:

I remember black skies
The lightning all around me
I remember each flash
As time began to blur
Like a startling sign
That fate had finally found me
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide

There was nothing inside
The memories left abandoned
There was nowhere to hide
The ashes fell like snow
And the ground caved in
Between where we were standing
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Across this new divide

In every loss in every lie
In every truth that you deny
And each regret and each goodbye
Was a mistake too great to hide
And your voice was all I heard
That I get what I deserve

So give me reason
To prove me wrong
To wash this memory clean
Let the floods cross
The distance in your eyes
Give me reason
To fill this hole
Connect this space between
Let it be enough to reach the truth that lies
Across this new divide
Across this new divide
Across this new divide

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