The Robot Tax And Basic Income
In my work to prepare for the Future of Labor conversation we had at NewCo Shift a few weeks ago, I talked to a number of experts who are studying job losses due to automation and thinking about what might be done about it. Two ideas that came up a number of times were the “robot tax” and the “basic income.”
The ideas are complementary and one might fund the other.
At its simplest, a “robot tax” is a tax on companies that choose to use automation to replace human jobs. There are obviously many variants of this idea and to my knowledge, no country or other taxing authority has implemented a robot tax yet.
A “basic income” is the idea that everyone receives enough money from the government to pay for their basic needs; housing, food, clothing so that as automation puts people out of work we don’t see millions of people being put out on the street.
What is interesting about these two ideas is that some of the biggest proponents of them are technology entrepreneurs and investors, the very people who are building and funding the automation technologies that have the potential to displace many jobs.
It is certainly true that we don’t know that automation will lead to a jobs crisis. Other technological revolutions like farming and factories produced as many new jobs as they wiped out and incomes increased from these changes. Automation could well do the same.
But smart people are wondering, both privately and publicly, if this time may be different. And so ideas like the robot tax and the basic income are getting traction and are being studied and promoted.
The latest proponent of a robot tax is Bill Gates who said this about it:
You ought to be willing to raise the tax level and even slow down the speed. That’s because the technology and business cases for replacing humans in a wide range of jobs are arriving simultaneously, and it’s important to be able to manage that displacement. You cross the threshold of job replacement of certain activities all sort of at once.
There is a lot of economic surplus that could come from automation. Let’s look at ride sharing. Today I pay something like $15 to go from my home to my office in the morning. Something like $10 of that ride is going to the driver. If the ride is automated, either the price goes to $5, saving me $10 a ride which then is surplus to me, or the profit that Uber is making goes up significantly, which is surplus to them. Some of both is likely to happen. This surplus could be taxed, either at the company level or the individual level, so that the cost of the ride doesn’t go down nearly as much and the driver can continue to compete with the robot or the driver can collect some basic income, funded by the robot tax, while they find a new line of work.
At least that is the idea.
I would not characterize myself as a proponent of a robot tax or a basic income. But I find these ideas interesting and worth studying, debating, discussing, and testing at a small scale to understand their impacts. We should absolutely be doing that.
Been following Gates thoughts on this as well.I simply don’t know but it’s heads up to me that we better think ahead of these massive changes in work and culture as they are surely coming,Have a great Sunday on the coast Fred.
Exactly. Time to study so we are prepared to act if need be
Joi Ito and Microsoft’s Head of AI cited in FT’s ‘Frankenstein fears hang over AI.’ I had the instinct this would be the outcome back in 2007/8. That’s why I stayed the course and invented a better system.* https://www.ft.com/content/…* https://uploads.disquscdn.c…Also, Kickstarter’ former VP of Data Science on ‘Mathswashing’ of data: “If you collect data incorrectly, no math can prevent you from making a bad or dangerous product.”* http://technical.ly/brookly…How will robot tax and basic income be calculated? What datasets will be used? Who are those data sets biasing against or for? Are they democratically representative? Fair? Moral?It’s likely previously collected data is ALL BIASED and has been collected in the wrong ways. Plus Deep Learning can’t help us model what good outcomes would be, such that we can audit trail its permutations and track its impact on the people involved — see Eric Horvitz of MS’ comments.Silicon Valley should have read Wall Street’s attempts to play with Deep Learning from before 2008 crisis:* http://www.nytimes.com/2008…AI folks think this is the culmination of Turing’s dream of 1950. No, it’s the end-game of Descartes’ scientific method from 1637 which fueled the Industrial Revolution and economic modeling. The ideas whereby the assumptions of human logic and rationality are absolute, resulting in today’s AI “separating mind from body from emotions” in its intelligence and decision-making (literally, Frankenstein’s Monster incapable of understanding human language, values and life).Well, fortunately, Descartes’ awful “intelligence by design” is fixable. So today’s bad data+AI+economics modeling are also fixable towards one that’s better for Human Evolution and Prosperity.:*).
One emerging imperative is the “augmented individual” – people improving their expertise with AI. The first inkling of this was after IBM’s Big Blue beat the reigning world champion in chess. But a combination of a few PCs working along with a few experts – can beat any super computer or combination of super computers. https://www.technologyrevie… . Elon Musk talks the same language when he says we all must become cyborgs in the future to stay relevant https://www.theguardian.com…
Elon Musk is my favorite founder. However … I disagree with him because…https://uploads.disquscdn.c…
We have accepted the manipulation of our brain and even thinking itself for quite some time now. We use medicines for ADHD, depression and an ever increasing range of drugs.Neural lace is a means of communicating directly with our brain. Like two computers connected to each other, in this instance, one node is a human brain. It is an experiment with extremely interesting possibilities.
Milton Huang, an MD and neuroscientist, presented to Bay Area AI last month. He pointed out that a lot of drugs are NOT sophisticated enough to target precisely. Rather, they are generalized over a local area.Moreover, the idea of neurons switching on (1) and off (0) is a fundamentally flawed and inefficient model that in no way represents the full diversity of how the human brain and its organic matter works.So the neural lace idea is based on insufficient (and potentially dangerous) science.
It is NOT like two computers connecting together.We are NOT machines and machines are not us.Neural lace idea is like saying a car is fast like a cheetah and so we should bolt a car and a cheetah together.
One thing is usually true in these major economic transitions is that it will get worse before it gets better
Such a massive cultural shift lies ahead. Changes like these have political and economic implications most politicians and people are unaware of or unwilling to consider. I don’t think you can slow roll it, as Gates suggests. It happens when it happens…and those jobs are gone. Bring factories back to USA? For sure; good idea. But that doesn’t mean same or same number of jobs <– I’m not sure current administration gets that. yes, I’m aware that my sentence structure implies that politicians are not people. Will leave it as is.
did you actually use a footnote to your comment?
Hat tip to @LE
But that doesn’t mean same or same number of jobs <– I’m not sure current administration gets that.For all of the talk about ‘it’s really robots it’s not offshore jobs’ it’s funny how the vast majority of things that are in my house and I am sure other people’s houses are things that are made overseas.  Let’s just put ass on table here. It’s all from ‘China’ where ‘China’ is the low cost country of the moment.
I’m not sure what your point is. Are you saying the stuff made in China isn’t made using robotics?…’cause I don’t think one can make that generalization.
Many goods in China are made with robots and automation. Of course. But the other labor and costs in China that are part of the production chain (whether working at that factory or a supplier) is paid vastly less than our labor here. Plus I am guessing that the labor protection is not anywhere near as great which also allows for much lower costs. Plus you have a workforce that is more eager to sit and do repetitive work (like parts of iphone assembly) than you could get here in the US to do the same work. (At least according to Tim Cook).
Let’s be specific here: I go to Asia often. They say first you outsource your business, then I learn your business, then I am your business.
As a kid I remember the meme (if you want to call it that) of the Japanese with cameras taking pictures of everything.This will sound racist I am sure but as a generalization I seem to remember, and maybe you can confirm, that Chinese or actually maybe asians (Japanese) are not super creative but they are good (as you point out) at copying things that others do and doing them better. Is this actually true or just an incorrect stereotype? Funny last week my wife had two mugs that she got as gifts from her nephew. The kid is 19. The mugs looked cheap and of course were stamped ‘made in China’ but when I saw the cheap box they came in it reminded me of the boxes I used to see in the 70’s from China at my Dad’s place that were really poorly made and contained crap product. I said to my wife ‘throw the mugs out’ this is the type of Chinese supplier that probably is producing dangerous mugs. Which I concluded soley by the cheapness of the box that they came in. Added to deflect people who are bothered by questions like this.
Foxconn replaced 60,000 employees with robots in 2016. By 2020, they want 30% of their 1.2 million jobs to be automated.Their plans for full automation are likely to affect as many as 1 million people:* https://futurism.com/apple-…Now, even if Trump was to be able to move Apple’s production back to US, how’s he going to prevent automation that reduces costs and keeps Apple profitable and contributing to wider economy of exporting American values and content?
I find this whole discussion fascinating.The interplay of technology, economics, philosophy, politics, psychology etc is wonderfully complex and nuanced.I like the frame Warren Buffett gave it on a recent panel he did with Bill Gates. Big picture, if we could replicate the entire output of the world with one guy pushing a button. It would be the most incredible thing. It would release hundreds of millions of people from labour and create incredible surplus. The issue is only one of distribution.I’m glad serious and progressive people are looking at this seriously and progressively.
My favorite comment of yours in a long time. Nicely framed!
Quite a statement! Simply because he writes some good comments 🙂
Big picture, if we could replicate the entire output of the world with one guy pushing a button. It would be the most incredible thingOne of those precocious (or is it avuncular?) things that he says. So ridiculous and especially coming from Warren Buffett who hasn’t had to work since before you were born but chooses to do so.If all the things that he thinks people will be able to do if they don’t ‘have to work’ are so great why is he spending his time working and not doing more of those things?
I think some folks including Warren, myself, and probably a lot of people here enjoy their work and are being paid to do what they like. But we have to make sure not to confuse our situation with many people who hate their jobs. A lot of people are largely (though not completely) indifferent to what they do as long as they are well compensated. http://www.vox.com/2014/6/2…
Many people hate their jobs because they have stupid, boring jobs. If we automate them, there’s at least a chance those people will find something more fulfilling to do. I don’t think most people are indifferent to their work. I think they just settle for whatever mediocre job they can because they need to support themselves.
A lot of folks who are indifferent to what they’re doing are not in mediocre jobs at all, they’re software developers, financial managers, lawyers etc. Many of the folks making six figures at Morgan Stanley have a lot more in common with the people making their burritos at Chipotle than they realize. All things being equal this group of people will take higher compensation over a position that they think better fits some kind of thing they might be passionate about (though many may not have found their passion yet). I think as part of our economic system there is huge upside to this (how do you increase diversity in a field? throw money at it). I am lucky that I found something to do that I’m passionate about, but I understand not everyone’s hearts are lit with fire. If someone hasn’t been lucky enough to discover their passion yet, the least we can do for them is provide a decent wage and good working conditions for whatever it is they end up doing that maybe they aren’t excited about, but is an important part of someone else’s vision.
I think I understand what you’re saying. Often people are disengaged as much because of their mindset or lack of passion for the job as much as because of the job itself. But I think a lot of it’s due to less than great management and company cultures. Not all jobs are going to get people excited, but we could do better at helping people find the intrinsic motivation in a job, even if it’s not their dream.
I don’t take the comment to mean that everyone should suddenly start enjoying leisure time. People would still want to work, but since all the current work is done by the button push, they would need to come up with new things to work on. Maybe many of them would create activities and entertainment for people to consume with all their free time. Others might create art. Perhaps some would go back to school. Others would become entrepreneurs.I think the main idea is that getting the same stuff done with less work is basically a good thing. Sure, people will have to find something new to do with their time, but that’s a second order effect compared to higher productivity.NB – I don’t think precocious or avuncular is right.
In that same panel there was a sentence by Bill Gates that I loved – “…This is a phenomenal time to be a curious person”.Absolutely.
I say it’s always a great time to be a curious person 🙂
I think it might have been a bit tougher 1000 years ago than it is today, but agreed, it is almost always a good time to be curious.
Curious people often dive deeper into the problem’s complexities and then they may invent simple solutions everyone can use.
Is this talk available anywhere online?
The UBI folks assume that the future is a tech monopoly with a Gates or Buffet or Bezos holding the button. Or they are like Varoufakis, who thinks the button-holder will be a socialist government. Either way this is a future I hope does not come to pass.
There’s been plenty of discussion (and experiments) around basic income, but I haven’t heard much about this idea of a robot tax. It’s hard to imagine how this would be implemented – should somebody who makes clothes with a sewing machine be taxed more than somebody who stitches them by hand? It’s effectively a tax on technological leverage.
Prices are supposed to fall enough to compensate for the job destruction. That prices are not falling enough is the primary line of questioning that will lead to meaningful answers, most which will not rely on increases in direct taxation or government stimulus.
Price were falling everywhere. The real cost of capital had plummeted to even negative for certain financial instruments. This trend has been arrested as economies go protectionist causing costs to go. There are natural checks – like oil prices are capped at a ceiling of around $60, because at above that price there is abundant shale oil that comes into the market. It just takes just one month for closed shale oil capacity to come on stream again.
How are we going to apply this tax retroactively to all the jobs that have already been replaced by existing technology? Surely Outlook and Word are together responsible for rendering obsolete many hundreds of thousands of typists and administrative assistants…What about Google’s impact on library staff and on firms that manufactured card catalogs? Or Amazon’s on retail workers at big box bookstores? (And I guess soon all other retail…)This services transformation is already happening, and has been for many years if not decades. So far it’s been more fearful in the indefinite abstract future than painful in the present – although the 2008 financial crisis and recession created a poorly timed increase in unemployment that for a moment perhaps looked attributable to technology if you squinted at it sideways.This time may be different – maybe it was easier to swallow when industrial machinery came for factory workers, or containerization and cranes came for longshoremen, or digital calculators came for human ones, than it will be when self-driving trucks come for truckers. But I’m not totally sure I understand why…
European parliament calls for robot law, rejects robot taxhttp://mobile.reuters.com/a…
reminded of a recent tweet: A sufficiently advanced AI would chose to fail the Turing Test.
I can certainly see the problem that we are trying to solve with these discussions, but history is littered with so many unintended consequences of progressive taxation that it terrifies me to think of how this will work. Taxpayers are always outsmarting tax laws and it won’t be long before we create monsters with all this.The fundamental challenge for me–as someone who would be more excited about basic government than basic income–is that the power will follow the money and now politics will play an even bigger role in our lives as the use of this money unfolds. I’d rather see Gates and Buffet and Zuckerberg and Thiel and Koch and Soros making the decisions about the use of wealth than I would some crooked government official.
Exactly. Before your comment I was going to say ‘if this happens I am going to become a lobbyist to be able to push for carveouts for my clients’. It will be a big industry.
It seems like you think government officials are inherently more crooked than private capitalists…I would suggest, at least in the USA, that is far from true.
You have understood my position exactly. I think they are far more crooked.
Uh huh. So tell me, what’s crooked about the operation of the Social Security Administration, or the post office, or NASA? Government is fallible, and regulatory capture and whatnot definitely happens, but I think you’re letting your priors get a little too broad. A plutocracy doesn’t solve the problems of government, it exacerbates them. An average bureaucrat who derives meaning from their job and tries to do it well may not do an excellent job, but they’re not usually villains either.
I didn’t say anything about gov’t workers, in whom I have a lot of confidence. I stated my thoughts about elected officials.
Ok, thanks for the clarification. My impression is that most of the operation of government on a day to day basis is a bureaucracy trying to accomplish administrative goals. Would you agree? If so, how much scope for corruption is there? I’m not particularly a fan of the universal basic income idea, but would it be more corrupt than Social Security? I would think probably less because it would be universal and would involve less discretion by government officials.
As it relates to the basic income, It always irks me when someone states that the “government” is going to give someone something. The government has nothing to give but the what it takes from its citizens.
or the corporations.
…who take it from the citizens who work for them or buy from them. 🙂
You say that like there is a difference. A corporation is just a group of people. All of “their” money comes from the people.
Technically a corporation is also a legal persona and what it pays out is from the value addition it creates as an entity. The persons within the corporation are transitory from employees to owners. A corporation has to be looked upon as a different kind of person.
“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” [and the taxes] – Henry Ford
That’s a great quote. See my comment above. I love this discussion and that is what it should be, not a yelling match, and that is what I love about this place is that it gets a little salty sometimes, but there is mostly good conversation, including your comment.
Shelly Palmer raised topic of universal wage, and is similarly encouraging all of us to spend some time thinking about the impending social changes that are swiftly approaching. Ironic to consider that critical thinking and analytic abilities which are currently highly valued, may be replaced with other values such as artistic and community values. It is important to consider Maslows needs hierarchy above basic needs for how we derive deeper satisfaction from meaningful and satisfying activities in the future. Perhaps publics works and philosophical plays as in earlier times… 🙂
Gotta think that having this discussion is a very sad example of living in a bubble, given the libertarian leanings of most of the tech world and the obvious political experience of the last 30 years.Taxes? Slow down “progress”? That’s just un-American job-killing stuff. Next you’ll say we should be like the Russians!
In all likelihood a substantial portion of the incremental profits from automation in the ride-hailing case will go to OEMs (as opposed to the networks), which, ironically, employ a lot more people to build the cars, even if they happen to be automated.
At its simplest, a “robot tax” is a tax on companies that choose to use automation to replace human jobs. There are obviously many variants of this idea and to my knowledge, no country or other taxing authority has implemented a robot tax yet.Basic income somewhat makes sense  and seems easy by comparison. Robot tax gets into an entire set of problems that are near impossible to solve, just like the spam problem. You have problems of definition “what is a robot? Do you really mean ‘computer aided'”. Then there is having to deal with legacy automation that is already here. And if anyone is talking about robots as in the type that you see in a car factory that’s not going to do jack squat to solve any problem. How many of those are/will actually be operating? What about robots overseas that aren’t taxed? What about a roomba that replaces a maid doing vacuuming at a hotel? Is that going to taxed? New or used as well? “please report if you are using robots and pay this tax”.  What about the existing roombas out there? As I mentioned in my other comment this is a great opportunity for lobbyists and they will be fighting over this until your grandkids are in college (and they aren’t born yet, right?).Let’s face it. The only way in the end that this problem gets solved is with higher taxes on people with money who are benefiting from all of the automation and disruption that is taking away jobs. It’s like having unions in a way. Giving people unearned money to keep them out of trouble. Excess labor where it’s not needed (see any road crew doing road repairs). Will work like the use tax works instead of sales tax. Doesn’t.
European countries use national VAT which has exemptions by category – e.g. financial services, insurance, food and strict definitions. There are also VAT refunds you get if you pay VAT to other VAT-registered companies. This sort of framework seems like it might work.
AI at its simplest: Mortals Evolving.
I’m not sure the robot tax is that hard. You could just reduce or eliminate the payroll tax and substitute a tax on capital expenditures. It would capture “non-robot” stuff, but I think that’s not a major problem. Or you could just eliminate taxes on labor like the payroll tax, or even subsidize labor, in order to bring it in line with the attractiveness of capital. I actually think the UBI is more problematic, similar to the performance of cash welfare in the past.
We’re in an accelerating productivity decline around the world including the US. Even as tech tools./benefits pile up. Greenspan attributes this to an aging workforce. Legit solutions will require a congress that is a lot more nimble and alert than we have now.
It’s 2017 and folks still have to wait around for 2.5 hour windows to have the Comcast person install or repair their Internet. Dealing with basic health insurance issues requires multiple phone calls and waiting when providing an Internet portal could let me get answers to my questions. I blame CEOs. Many of these companies are frozen in the ice of their indifference. When I have a customer service experience with Apple they give me a 10-20 minute window that I’ll call them in or go to the Genius Bar. These are solved problems.
I blame CEOs. Many of these companies are frozen in the ice of their indifference.Agree. I have concluded that this is the curse of the big picture thinker who would be more likely to have risen to be C level and really is not the type that thinks about the details or even is aware of the pain of their customers or users. They deal with ‘move the needle’ type problems not a large amount of small annoying things. Ironically this is what has allowed many startups to overtake legacy companies. It’s the same lack of attention to details and ease of use that happens at large companies.Case in point is Comcast and Brian Roberts and what he grown Comcast by not sweating the small annoying stuff. Ditto for Bill Gates and Microsoft. You might be to young to know or remember how sucky and annoying his operating systems were (created an entire industry to be able to help people brilliant move actually but I don’t think that was his idea..)
“frozen in the ice of their indifference” is wonderful phrase!
I like the idea of testing inside sandboxes in order to study the impact of changes within a confined area, before moving to larger deployments.
There have been some rumblings from various European countries about doing a UBI, but so far no one has done anything but a small trial program. I, too, am itching for some real-world data!
Switzerland was considering it, and IIRC, they recently voted against it. Not sure.
They were. 77% opposition though. They would be as good of a test case as any IMO. http://www.bbc.com/news/wor…
Got it, thanks.
Finland is experimenting.
what kind of sandbox is there for a national economics change in how the culture treats work and pay?curious how this can be done.
In the case of UBI, there are innumerable experiments being conducted across the world. http://basicincome.org/topi…In the case of taxing robots, the legal constructs needs to be worked out, which IMHO need not be too difficult.
Thanks for the link.Worth investigation.
I think I read somewhat recently on HN that YCombinator was doing a small pilot test on Basic Income somewhere, maybe in San Francisco. Didn’t read the article though at the time.
Could always change the depreciation schedule for investment in these technologies in the tax code.
That’s a very good idea. If a company migrated to robotics to generate cost-efficiencies, which mostly comes at the expense of manual labor, then perhaps they shouldn’t be allowed to depreciate the asset at all. Why should the gov’t give companies an added incentive to automate at the expense of jobs?
And the answer here is that such automation drives productivity gains which drive the real growth of economies and the living standards of all.That is why the government might want to encourage automation.
Foxconn is going to robots in iPhone city and their average hourly wage there is $1.90
A few random thoughts on this:1. “It is certainly true that we don’t know that automation will lead to a jobs crisis. “. More importantly though, we also don’t know that even if it happens, universal income and robot taxes are the answers to a job crisis.2. As your partner Albert argues, we are in a “World After Capital”. Therefore, if capital is no longer critical, why are we discussing “redistributing capital” and “taxing capital formation (be it the robots or their profits)?” Should we also be discussing the fact that Wealth is in itself progressive? (Meaning people who have twice as much don’t live twice as much, or can have access to twice as much education or know twice as much of the world etc… wealth is being transformed into a way of acquiring luxury mostly).3. Universal income and robot taxation seem to be the easy answers to the problems too.
Universal Basic Income is a distribution of Income not Capital in the form of Wealth. The difference is between the stock and flow concept of money. Albert Wenger in his evolving book only says that the cost of capital is reduced to zero and easily available. Since the scarcity of financial capital has reduced drastically, it is no longer a critical element and ranks after ‘Knowledge” as a factor of production. In economics the original factors of production were: Land, Labor and Capital. Over time, Capital came to be identified with “Financial Capital”. Financial Capital accelerated the release of the productive forces in technology and now Capital has evolved into Production capital ( factories,machines ),Financial Capital and Knowledge Capital (Technology).It is Knowledge Capital or technology that dominates.
On the jobs crisis, we can expect jobs to get replaced by vocations, professions or even “a calling” as a basic income moves people to jobs of their desire. Risk taking and consequentially people entering entrepreneurial activities could shoot up. The concept of an augmented artisan could take hold. Everybody is a potential artisan in some field or calling, full-time or part time.
Testing is the right thing to do. Robot tax and basic income should be neither a way to feed larger and larger crowds of unemployed people, nor a way to get rid of customized social protection. It should probably also be accompanied by a profound reflection on the role of work in society, the value of non-merchant activities (learning, teaching, volunteering, raising kids, grooming ecosystems, practicing and enjoying arts…) and the way we share those things as a society. It is a very long term thing. What we need is no rush, but thoughtful preparation to a new model of society so that automation benefits to all.
As long as humans have the ability to prosper in disproportionate manner it won’t allow for technology to remove the need for humans to work completely.
While the the need to work may disappear, the desire to achieve or contribute will persist.
It’s either universal basic income or a populist uprising.
Why do you feel the need to call it “populist”?
In the grand tradition of 1789 and 1917. We’re about due another one.
Ok… I totally get that… 🙂
Then make an exit plan :)Peter Thiel’s off to New Zealand. I might try Iceland.
You really think we can’t be more creative than that? UBI is basically welfare, which hasn’t worked out incredibly well in the past. I’m not necessarily opposed to welfare, but I think we could do better. I think subsidized jobs like the WPA would be preferable to straight welfare. Doing something arguably meaningful with your time is usually preferable to just getting a check to do nothing.
Welfare is a poverty trap. Basic income seems like the prospect of the exact opposite.
I’m not sure I follow. Because a UBI wouldn’t go away if you start making work income? If that’s what you’re saying, I agree in principle. In practice, a truly universal income would be too expensive, so I imagine we’d end up with a welfare-like model that gets phased out at some income level.
There is something to what you say, but on the other hand, a UBI can provide support for an individual to pursue activities that aren’t rewarded (yet) by society. Not sure where that would lead, but probably some good and bad in both views.
It will no doubt be the latter. Think it might already be in swing.
I’m vehemently against Basic Income. Two big problems: 1) Where does that income come from? Someone else of course. Its redistribution take to its extreme. 2) Humans need to work. If they don’t, they tend to slip into all sorts of bad behavior. BI (or socialism, or communism, or whatever other equivalent economic system name you want to put on it) doesn’t work.A robot tax, wow. You had to pay taxes to buy em, now you have to pay taxes to run em. Sort of takes the incentive for using them in the first place away.I’m surprised in a way by your interest in these ideas. I mean, these are progressive liberal ideas. Aren’t you a venture CAPITALIST? Why are you interested in government to solve whatever problems these two ideas address? Aren’t you supposed to be espousing “the market will take care of it?”
For 1) I think that’s how all taxes work, we’ve already settled the issue as a society that the people who have more assit those with less. E.g. Medicaid and Medicare and unemployment. So basic income doesn’t seem that at odds with what we already do in terms of redistribution.I think you raise a good point on 2 but people can get basic income and still work. That work just might not directly be tied to their income, which might be good or bad.
Unless of course you think those taxes are bad to begin with… 😉
I have never met someone who thought that all taxes were bad. (At the most libertarian point of view I have encountered, there is still some kind of border protection and contract enforcement, bit of which cost money and would be difficult to delegate to the private sector.)Do you?
Some taxes are necessary. We need the constitutionally defined roles of the govt to be funded. That’s mainly defense. Taxes are also necessary for things that the private sector can’t or won’t do, like roads and bridges or doing the expensive upfront research for things like space flight and new medicines in some cases, etc. The govt also has a regulatory role in a capitalistic structure, to meter industry (although that’s way out of hand now too).Its my opinion that wealth redistribution is not a function of the govt. Its programs that are pure redistribution, i.e. welfare, health care, SS, etc. that I have a problem with. Welfare provides the fish rather than teaching how to fish. It has a short term benefit but is detrimental long term. But whether there is benefit or not, its just not the role of the govt. imho.
“Some taxes are necessary. We need the constitutionally defined roles of the govt to be funded. That’s mainly defence.”Funny how all these definitions are conveniently massaged by ideological profit motives.Top-down defence form external threats is a big enough collective need that it warrants socialist collective financing of a governmentally operated socialist monopoly.But the same level of collective defence against internal bottom-up disease and health threats to the citizenry would be some kind of socialist travesty. This to spite the fact that it would put a solid floor of financial/health security/stability under every person, family, small business and large corporation in America.Why is that equally important internal collective health threat any less worthy of a governmentally operated socialist monopoly?Please don’t say it is all about quality. Quality is near zero without full healthcare coverage/access, not to mention America’s health outcomes are far down the list of international outcomes while consuming much higher per capita costs.
We have the greatest military the planet has ever seen and we certainly have not required a socialist system to attain that. Medical care is not defense. Its not about quality, its about using govt for those things that are appropriate and other societal structure for those that are not.
Is there no room in your mind for experimentation?
There has been plenty of experimentation. Those who do not learn from history are doomed to repeat it I guess.
Welfare is a well documented system. it results in the fears you express about basic income. traditional ’employee’ jobs will disappear fast. people need the conditions that will enable them to develop their own personal ways of creating value.
The idea behind UBI is that the income comes from a surplus generated by automation & technology.Think about how many people it used to take to farm enough food to support the town…and how many ‘people’ does it take now? Why does it take less now than it used to?If the machines & technology can both produce a surplus and do the ‘required’ work for us…we are left with the task of ‘distribution’ and free’ed up to focus on more of the ‘soft’ issues that interest us.Also it should be noted that most UBI approaches do not mean people won’t work…it just means they won’t *need* to work for the very basic of needs (core food, basic housing, basic clothing).But I think it’s a safe assumption that most people will want more than the very basics out of life, and so capitalism will survive (and continue to thrive)…and, at least in theory, more people will actually be free’ed up to participate in it in a meaningful way (vs. having to work 3 min. wage jobs just to live)
Robots are the fifth column of socialism !The historical march of technology is in fact the process of slowly imposing what you so quaintly/anachronistically call socialist but is in fact after you wipe away all the emotional ideological hysteria simply the unavoidable trajectory of the ever tighter interdependencies imposed on social organization by advancing technological reality/complexity.The social and economic interdependencies imposed on society by advancing automated network effects and AI do not equal the old simplistic concepts of socialism. You are conflating two completely different animals.Yes history is a basic guide but should not be a self-fulfilling metaphoric straight-jacket. There are clear historical break-point/phase-changes. You seem to neglect this component of history or alternatively you are making the case that that the emergence of AI automated and ubiquitously network effected everything does not meet that criteria?Causation pushing the use of your rear-view-mirror too far may flip it form being a useful tool into being a dangerous impediment !What is your alternative view of the automated future?The 1% automate everything and everyone else sits in the corner politely starving.Where does that leave the 1% !Robots are very poor consumers.Productivity that does not go around as “distributive purchasing power” cannot come around as sustainable profits. There in lies the true economic scarcity-challenge of our time “Distributive Purchasing Power”.PSYes humans need productive challenges/work but technological automation simple frees that natural human drive to participate in higher level creative endeavours.
We’re not anywhere even close to the robots doing everything for us. The need for humans to work en masse to sustain their survival is not going away anytime soon.
I agree with this. I am also surprised that the Uber example leads a VC (and one that’s invested in Lyft, no?!) to where it did… It should clearly lead to the ride costing $5, because Uber’s surplus would be competed away (and if there are no drivers, Uber’s network/monopoly effect should be severely diminished). Then, you have extra $10. yes, you can give it away to have a few people idle around (not sure you need gov’t as a go-between), but you can also spend it on new services you may want/need (hopefully provided by those same people). how a VC comes to view the first option as preferable is mind-boggling.
Capitalism has several failure points – this is not controversial, anybody the least familiar with the study of economic systems understands this.That doesn’t make Capitalism bad. It’s the best of all possible solutions we’ve discovered so far. Market dynamics are irreplaceable.At the same time Capitalism pushes externalities into the commons, which isn’t acceptable. That’s why we have laws against polluting streams, because factory owners won’t regulate their own actions to avoid harming others. This is just a simple example, there are many more.So far, UBI experimental results themselves are not generally available, but to the extent they exist, they indicate that the vast majority of recipients did not quit their jobs. I think it’s a fallacy to assume that people suddenly all decide to spend eternity on their couches.A UBI makes sense from many perspectives once you back away from rigid ideologies that conflate current experience with very different historical scenarios.I’m not saying I’m for or against it, but it could be rather suicidal not to explore it. If the people who believe automation will reduce labor demand tremendously are correct, history is quite clear that either goods will be redistributed, or there will be revolution and the death and upheaval and tyranny that inevitably accompanies it. It’s kind of ridiculous not to at least explore solutions to counter that eventuality.One would hope that UBI is never a necessity in that context, but it may also be a suitable replacement for the current social support system in some shape or form.
I agree completely capitalism pushes externalities to the commons, and I use your example often (it’s also why we need to level the global playing field as well (see working conditions and pollution in China firsthand. I have)Although I think people see this as a zero sum game. If the driver loses her job there is not something else she can do. I don’t believe in that. Look at all of the farmers that lost their jobs, look at what people had in the 1800’s versus now. (I live in an 1830’s house they didn’t have closets even though it was a five bedroom because people didn’t have that much stuff) Think about the work week.Now we can agree or disagree whether that stuff is good but I would say some is. I traveled 270k miles last year. Think about that for a moment just 50 years ago.But the one thing that I see when people cite UBI is they cite it in countries that are essentially homogeneous. See above for my travels. I can tell you when you cite places like Denmark you are smoking something pretty strong.The U.S. biggest strength? Diversity. Which is also it’s biggest weakness. See what UBI has done to inner cities here or rural communities like coal mining KY where jobs left…….hollowed them out much worse than you can imagine.
I agree jobs are not a zero sum game historically and may not be in the future, but given the scope of automation, I wouldn’t totally discount the possibility. Also agree living standards have increased markedly in the US, though in some places around the world it’s questionable.Am curious about your UBI comments though… it really has never been tried on any kind of extensive scale, so wondering about your comments homogeneous vs diverse… where does that perspective come from? Not sure how it might have anything at all to do with inner cities or rural communities? If you are trying to call welfare UBI, they operate very differently and likely yield different results, and I’d be very slow to draw any conclusions on that basis.To be fair, my perspective on globalization/automation is 25 years of watching jobs and know-how exported overseas from a front row seat. Communities being hollowed out has a long tradition in our country, but the current issues are seemingly beholden to those two drivers and the tech curve.
People cite Denmark: http://studyindenmark.dk/wh…I can tell you they are homogeneous no matter what they say. I will leave it at that, and that is nice.Social Security Disability is closest to UBI and is what people use.
I understand, don’t know enough to comment intelligently on it.I would question extrapolating SSD to UBI. I think the SSD pool is likely to be different than the UBI pool, but I understand that people look for the nearest parrallel. Thanks for the link!
You need to look at it. Here is government info. https://www.ssa.gov/oact/ST…It is very close to UBI. It is not welfare.
My aunt was on SSD… there was a reason for that, I can tell you she was in no way prepared to deal with real life. SSD/UBI or no, she would not have ever held a job. I suspect that’s true of a number of people on SSD. I think what may be more enlightening is how many people with jobs quit when UBI is available. I think it’s very few, on the order of 5%, but I’m working off of stuff I read some time ago.The charts you reference show increased applications after a bunch of people got laid off, which I would think speaks more to economic desperation than the desired employment condition of the applicants. A lot of people do have health issues that are disabling but they prefer to work, and so they do…. but in the advent of huge layoffs and nobody hiring, it makes a lot of sense to take advantage of your health issues to file. I’m sure some people were taking the easy way out, but the conditions are so unique that I wouldn’t care to try to extrapolate to UBI.
I am in no way demeaning many people on SSD. I can tell you it is very much abused.
I didn’t think you were; though I’ll note there is contention over the abuse statement – it seems to split mostly along partisan lines. The anecdotes should be investigated, but Congress has been known to engage in hyperbole.
Actually social security is not the closest that it has ever been and from the data that was collected from the experiment in manitoba it’s pretty clear most of your fears are simply for the most part non existant. You will note that Canada unlike parts of Europe is not homogenous http://gregorymason.ca/minc… . If you want to see the actual effects of basic income you should be looking at these results not the ones in social security which by the way not is at different levels for different people, but can literally be taken away if you make too much money. You can be penalized for having a job while on it which makes it subject to the welfare trap. This is actually one of the major problems with SSI disability in the first place and the amount at which that happens is pretty damn low.
The entire paradigm of 20th century education and work work needs to morph from one of “rote to creativity” from “duty/function to expression/creativity”
I don’t see, in those discussions, anyone talking about the fact that China is the country with the most automate-able jobs. At the scale of China! In one country!My prediction is the “communist” establishment in China will have no alternative (besides the guillotine) but be the first (appropriately / ironically enough) to implement basic income.And if they don’t do it – we all will be in deep shit.
I’m not a big fan of the robot tax. I feel that it could hinder startups from getting off the ground due to added expense when monetizing. Assuming the tax would only kick in upon monetization. This could increase the percentage of startup failure resulting in cheap acquisitions from the likes of large corporations. I also feel that it wouldn’t harm the already established larger companies as well as some have large cash reserves that they could access while discovering ways to off-set the tax.
The tax could be so calibrated that it is Pareto optimal on the lower bound but actually pushes the production possibility frontier outward. The society as a whole benefits.
True. This would definitely assist in balancing the playing field. My only fear is that of what history has taught us with taxation; a) once a tax is imposed it’s very difficult to renege if the tax is not working for some reason. b) if for some reason the larger corps do end up benefiting from the tax they have deep lobbying pockets that could alter the taxation to benefit themselves.
It could be a near perfect implementation, if a statutorily embedded chip monitors the contribution and productivity of each robot. I can also imagine a problem of illegal robots and Volkswagen type of software tampering. But I assume those instances are the outlier scenarios.
As much as I think that replacing all welfare with basic income is worth discussing, a robot/AI/automation tax is just a bad idea and impossible to implement effectively: it is an ‘equality of outcome’ argument, which always fail. A basic income approach is an equity of opportunity approach, which generally work.
What if we view a tax on robots as one way to fund a Basic Income implementation?
Isn’t it easier actually. Make it statutory policy to embed a chip which totally monitors their activities. Their effective contribution, productivity etc.
We basically have the opposite right now. Hiring people incurs payroll tax, buying capital equipment gives you a depreciation deduction. Before we even get to taxing robots, let’s work out a system that doesn’t penalize hiring people.
Income tax is itself regressive.
This is the best point I’ve seen in these comments!
The employee salaries are deductible in the periods they are incurred. Capital expenditures are generally not expensed and are depreciated over a useful life. Also, capital equipment often comes with sales tax. Payroll taxes are usually going to be greater than sales tax, but the capital situation isn’t the opposite as you described it.There are also federal and state job growth and R&D tax credits that can offset wage taxes. These credits aren’t a straight forward way of doing it but there is some effort to incentive employers to hire employees.
As you can see in my comment buried below I could not agree more. I have been saying this for years. I have employed over 3,000 years of people. Think of the amount payroll tax i’ve paid.But it’s even worse than you say! If I hire an programmer or worker from another country I can deduct the entire expense and not pay tax in the U.S.That’s why you have so much anger in the middle of the country. They’ve watched as people say technology and globalization are good for them. They have gutted their jobs. I have been saying this since 1999.Increase corporate taxes and give a credit for employing people at a livable wage.I am not being political but people don’t want to see you give them free shit, they just want to have good jobs.I have proposed $10k per year for jobs at more than $15/hr with benefits.You don’t need to tariff foreign goods, just don’t subsidize them.That would solve your minimum wage problem as well.
Exactly, I agree with you Kevin
I dont think its a good idea to plan the future using the past as the starting point. Machines have been taking human jobs for a long time. This is not something new. Trying to tax machines using a “human production factor” as the main component of the algorithm does not make sense and it would add an unnecessary complexity. Increasing taxes on revenue to finance basic income seems to be a better idea to me.I love the concept of basic income, unless it has some restrictions. In the last 60 years the world population more than tripled. A basic income without a birth control program in place would accelerate the population growth, which is bad for the environment.
What if a tax on robots is an imperative for a basic income program to get funded adequately? After all it is the robots that are creating the job losses. If the tax is calibrated carefully it can push the production possibility frontier outward, meaning everyone benefits. Or at worst be Pareto optimal.
Robots are near and dear to my heart.Here is my conference: http://www.wearablerobotics…Here is my brother last night on ABC: http://www.azfamily.com/sto…I think we need a carrot not a stick. $10k direct tax credit for each person you employ.
I left out http://www.springactive.com
Instead of paying arbitrary companies to employ underwater basket weavers why not just have the government use the money to blanket the country in fiber optic cable and fix our bridges and construct high speed rail?
A national fiber infrastructure project would be a tremendous advance for practically every enterprise, every institution large & small — and a legitimate use of government spending that helps the country as a whole.This would be a popular, easily explained, positive initiative welcomed by labor & business; every vested interest from academia to healthcare to government agencies themselves would benefit.
Those jobs would be done by people employed by private companies in the U.S. Government workers don’t do the tasks you describe.As a matter of fact the government does in fact do this for government because they require a high minimum wage for construction workers on government projects.I don’t disagree with you at all the surplus should go to making lives better just like it did when we went from agrarian to manufacturing.It confounds me you can’t get anywhere from for instance Richmond, VA to Boston effortlessly for almost free.
The key phrase BG used was how we manage the displacement. This really needs to be looked at from essentially two spectrums of workers – manual workers and knowledge workers. As Peter Drucker expressed – the former is about producing efficiency and the latter is about providing effectiveness (focused on the right things and generating the right results).Automation will replace the manual worker, so we really need more planning and preparation in developing knowledge workers (at higher levels). How do we properly equip people with the right skills so they can transition into the future? Education. In my opinion, a large part of our employment problems are deeply rooted in our education system, which continues to operate behind the times – setting the wrong standards to meet future goals.You can create whatever tax or subsidy you want, but then your simply scaling greater levels of inefficiency and economic displacement. The concept of basic income is intriguing but it’s really an inefficiency subsidy; do we really want to invest in any model of obsolescence…
The way AI capabilities are accelerating even non manual jobs, the cognitive jobs are getting automated away. Goldman Sachs recently replaced 600 equity traders with just two and some engineers running the automation programs. https://www.technologyrevie…
Thanks, great add! Raises the point, how do we redefine a knowledge worker in the future.
The ideas of a basic income and Robot tax as possible solutions to automation and AI that could result in significant jobs disappearing over time.My personal thoughts1. Lack of Jobs or limited Jobs would have a significant impact in Countries with young demographics. India would have close to 5 to 7 Million people who could be coming into Job market every year over the next decade. 2. Technology entrepreneurs and investors when they offer new solutions using AI and Automation – would they be addressing an exclusive select consumer segments only – B2B or HNI B2C. I state this because with basic income and no jobs, the majority of consumers in B2C may not be able to subscribe to some of solutions.3. It is good to understand from psychology and behavioral economics experts on how society could change in new context of minimal jobs and basic income context as compared to current scenario.
India has direct experience on the impact of an UBI. MNREGA is a form of UBI. An UBI pilot study was completed in 2010.
define ‘robot’.if a tax came along would it apply to physical machines only, or also to software, chatbots, AI apps, et.c.?
To the extent it is perceived or estimated to be labor replacing. This is where the suggestion to replace depreciation – which is a form of supporting capital investment is balanced with an incentivisation for using labor. Say a mark up above direct wage costs is allowed. This would in effect disincentivise labor replacing applications to some extent. Shadow wages and Social Welfare Cost Benefit Analysis type of approach.
On a tax on robots: If a corporation is an artificial legal entity with”a persona” and is taxed – how difficult is it to define a robot as another legal entity, with a persona equivalent to that of a worker and tax it on its marginal productivity?Other alternatives that exist are to tax ‘rentier’ incomes at a higher level. Extending that concept we can say let Universal Assets be a source of funding for a Universal Basic Income (UBI), So if one uses land, air or water, as an example, you pay tax depending on your usage.The underlying concept is as Fred Wilson pointed out,is, these are times of entities creating exponential surpluses on one side, as much as the acceleration of technology is what has caused job losses. Finding a way for these exponential surpluses to fund a safety net -the Basic Income concept, is a pure technical construct if we understand why it is a political imperative.UBI is not a socialistic concept. In contrast it allows the existing capitalistic framework to restructure itself -“before the pitch forks come out”. Ultimately as more people start to contribute at levels desired, it increases the base of entrepreneurs or ‘augmented artisans. It benefits everyone ultimately reducing structural “inequality’ which is poised to seize up economies in more ways than one.
With robots, it isn’t simply the cost to acquire, it’s the related costs that really get you… automation integration is expensive.If automation causes unemployment, which will lead to an economic slowdown, then corporations will slow CapEx on automated systems integration.Imagine automation pushing unemployment back up to 12% — and the subsequent stagnation in the economy…. companies will preserve precious cash reserves rather than investing dwindling cash into more automated systems.Let alone how cash-defensive companies will become if automation were to push unemployment into the Great Depression era 20-25% range.
Does not robot tax become the new corporate tax/cost of labor and companies set up factories where the robot tax is the least?I’ve always preferred accelerated income taxes on individuals when funds flow to them and getting rid of capital gains protection.
I support a UBI. Not sure what falls under the umbrella of “basic needs” though.Haven’t given much thought to taxing robots. This is worth a read (funny).http://kottke.org/17/01/the…
This is basically a corporate capital tax, right? Corporate income tax has led to a crazy distortion in behavior by large firms, where there is a massive incentive to hoard capital. Would a tax on capital make for healthier allocation decisions by corporations, or would it further distort and lead to mis-allocation?
What form the funding of UBI is still unclear, even its feasibility. It’s very early days still.
I think a robot tax is a dangerous solution because it makes me think that other innovation aspects can be taxed as well. For example, why don’t tax data and AI also? I think Google, Facebook et al has an advantage against other companies (instead a robot having an advantage against robots) because the concentrate a lot of unique information.This can sound exaggerated but could settle a precedent to tax innovation. I can even think of taxing the use of scripting languages because they automate the work of developers.
The closest corollaries we have to UBI, at least in the USA (where I live), are 1) the Alaska Permanent Fund and 2) casinos on Indian reservations. With the Alaska Permanent Fund, residents of Alaska receive a check every year, just for being citizens. Alaska has way more money (from oil) than they do citizens, so they just give it away. The citizens have a big party every year on the day the checks are distributed.On American Indian reservations that have casinos, they produce so much cash that they just distribute it out to members of the tribe, just for being members of the tribe. (I’m actually listening to an John Grisham audiobook with this as the context called The Whistler, about a whistle-blower when corruption sets in…interesting social dynamics because the whistle-blower is rocking the boat for all members of the tribe who are living on easy street and don’t want their boat to be rocked, regardless of corruption).I don’t know what real societal effects those have had (other than those found in works of fiction), but they would be good petri dishes to examine how it could impact broader society. It’s the same concept…something (oil money, casinos or automation) produces so much excess cash without needing commensurate workforce, that they just pay people to do nothing.
Hmm, it’s not just a robot tax right. It’s an automation or technology tax.The more efficient a business scales the greater its tax burden would become (this would affect a wide range of businesses). I’m not sure thats good for anyone.
If we adopt a smart machine tax (it won’t be simply robots that disrupt employment), it should go to help fund a dramatic re-vamping of the educational system. Otherwise, the workers won’t have the necessary technological background to be able to be re-trained for whatever support jobs are created. (Turning a burger flipper into an electrical engineer, much less a quantum physicist, will be a lot more work than making a blacksmith into a riveter.) The principal difference from the first industrial revolution is the pace of change wrought by supercomputers everywhere. And as with all exponential curves, you need to catch it early or it will out-accelerate any solution.
It’s a little ironic that billg wants to tax robots, in that it’s similar to saying you want to tax innovation ;> there will be a * huge * displacement problem, 50%–>80% by 2030-2040 impact on labor, and Piketty’s “r > g” thinking looms large with AIS/Robotics during this sea change. just not sure taxing: innovation, progress, productivity (non-human) is the best of all possible scenarios. good news, the debate is now open, and its on the: political, corporate, investment radar.
We are heading towards digital age an interesting article on this Robots takeover UK jobs
InterestingAnd yes I agree and as well dunnoIn some ways the only way artisanal can make sense is through automationThere is a muddy edge between efficiency and safetyAnd while I agree in my heart with you I know that somewhere in that huge spreadsheet of our businesses labor erodes margin at a living wageSo yes it is critical to ask those questions but the answers are both complex and convoluted I thinkThanks for this
Employing people is a choice. Pushing back on Wall Street’s endless hunger for more profits is a choice. The pressure for automation doesn’t come from people being intrinsically good, caring people, it’s to satisfy the transactional, reckless Wall Street mindset. Some automation is great–we love anything that reduces injury from work.Those ‘bad’ people have brought us a great deal of good things though. You have to factor that in to your thinking.And by the way it’s one thing for a company to start out small and decide to care about people (as you are implying that you do) and another thing for an existing large company with a wide range of financial interests to all of the sudden chuck the status quo and start to care about people.Lastly employing people or not is not a choice. You have competition and it’s against the law to even collude with the competition. If your competition is cutting corners and offering a lower cost product then the customer in any case of mass consumption (not talking about niche or luxury) is going to buy their product not yours, all else equal. And you know that is the case (en masse once again).Consequently as I have said before the onus for this falls squarely on the ordinary person making their buying decision not on the individual company deciding to produce a product that is competitive with their competition. Lower cost to produce one way or the other means more business or more profit or both.
Everyone benefits from automation. As the cost of making a good approaches zero more people can afford those goods. If those goods make people happy, then the aggregate happiness of the world goes up. If those goods make people more productive, productivity rises. If you can renew your license online instead of at the DMV you get two hours of your life back to spend time with your family. If a robot can help a doctor perform a better heart surgery lives are saved. Automation and innovation may well be capitalism’s greatest miracle.
One of the best comments in this thread – and I say this though I am a software guy (and I know you are or were too), whose job is at least partly to automate things.Said or implied somewhat the same, via the references I made a few times, earlier on this blog – with links, to  E. F. Schumacher’s work and  his book Small is Beautiful (I read his book when I was a teenager): https://en.wikipedia.org/wi… https://en.wikipedia.org/wi…From the Wikipedia article about him:[ Ernst Friedrich “Fritz” Schumacher (19 August 1911 – 4 September 1977) was an internationally influential economic thinker, statistician and economist in Britain, serving as Chief Economic Advisor to the UK National Coal Board for two decades. His ideas became popularised in much of the English-speaking world during the 1970s. He is best known for his critique of Western economies and his proposals for human-scale, decentralised and appropriate technologies.  https://en.wikipedia.org/wi…According to The Times Literary Supplement in 1995, his 1973 book Small Is Beautiful: a study of economics as if people mattered was among the 100 most influential books published since World War II. It was soon translated into many languages, bringing him international fame. Schumacher’s basic development theories have been summed up in the catch-phrases Intermediate Size and Intermediate Technology. ]
Survival is an imperative not a choice. In a competitive environment, profit making is an imperative for survival. Hence automation.
In some ways the only way artisanal can make sense is through automationSurely that renders the good non-artisanal?
>And by the way it’s one thing for a company to start out small and decide to care about people (as you are implying that you do) and another thing for an existing large company with a wide range of financial interests to all of the sudden chuck the status quo and start to care about people.>Lastly employing people or not is not a choice. You have competition and it’s against the law to even collude with the competition. If your competition is cutting corners and offering a lower cost product then the customer in any case of mass consumption (not talking about niche or luxury) is going to buy their product not yours, all else equal. And you know that is the case (en masse once again)[email protected]: Look up Five Whys.
In any dynamic competitive environment, growth is necessary for survival. Profit funds growth.
The question  was – HOW MUCH profit making is an imperative – or maybe that should be stated as – making HOW MUCH profit is an imperative – and is an imperative for WHOM – not whether profit making is an imperative at all – it obviously is, because money is the medium of exchange of goods and services, so we all need SOME or even a LOT of it – but not endlessly greater and greater amounts that are unsustainable as a country or a society or a world. This was Charlie’s original comment:> Pushing back on Wall Street’s endless hunger for more profits is a choice.
If an organisation is to survive endlessly then it has to target making “profits endlessly”- not necessarily “endless profits”. Hence the imperative of continuous increase in efficiency hence the need for automation now – before automation it was robotics and before that outsourcing and so on.
In a normative and in an intuitive sense its understandable . We assume that we do not need growth for survival.This is especially true for niche companies operating at the margin. Even then, that sense of inviolability will last only as long as one is pricing one’s products at the margin, so competitors are not inclined to enter. It is dangerous to price continuously at the margin. When a more competitive process is adopted by the competition means you need funds to finance new investments to remain competitive. A part of those funds has to come through retained profits. In a technologically dynamic scenario, competitive offerings will happen sooner than later. If it does not, well you are lucky.In a broad macroeconomic sense, for the economy as a whole, the economic model goes something like this: C+I= C+S ( where C= Consumption, I= Investment, S=Savings)So here if we knock out the C from both sides we get: I= S ( Investment = Savings).You need Savings to finance your Investments and savings comes from Profit.