Automation: challenges and solutions

Automation is a bless and a curse. On one hand it liberates humans from dangerous, monotonous and boring work, while on the other hand it takes jobs from people and hence their source of income. The latter is not without consequences.

Modern governments depend for their funding primarily on income tax. However, if people have less work and consequently less income, tax revenues will also decline. This will most likely result in decreased government spending, i.e. to cuts [1].

Secondly, less income equals less purchase power, and consequently less consumption. But this means that businesses will have to decrease their production, since no one is buying their stuff. As a result hereof we could get a vicious circle of economic despair.

A knee-jerk reaction would be to restrict or ban automation altogether. But that would also imply that we should forego all benefits of automation either. Another set of solutions should be sought.

Essentially two issues need to be solved. First, how to provide income for people? Second, how to fund the government?

When jobs become increasingly scarce, it might be an idea to reduce the work hours per worker. Instead of employing one person for 42 hours a week, employ two person for each 21 hours a week.  A reduced work week has several additional benefits, for instance people will have more time to care for their kids, sick relatives of friends.

In order to compensate those people who will have to reduce their work hours, a basic income guarantee should be implemented. This is a periodic payment of a lump sum of money to all citizens, without specific conditions.

A basic income guarantee should be at least sufficient to live from, though it would be a modest lifestyle. Consequently most serious poverty will be eliminated.

Since people will have a granted minimum income, it will become easier for people to get a loan to start their own business. With these loans creative people will be able to buy machines and produce goods and services. Alternatively, people could lease machines instead of purchasing them.

Of course, people could join forces by creating cooperatives.

A combination of a basic income and a 21-hour-work week will solve the first challenge posed by automation. What about the second one?

It will be clear that in increasingly automated economy, public funding cannot rely on the income tax. We would argue to replace the income tax all together with another source of public revenue.

Unlike Martin Ford, we do not see much in a “substitute” sales tax or VAT. Rather we would argue for a land value tax  or LVT [2], and land also includes radio frequencies aside area. Land will always be needed, as people has to live somewhere and businesses have to be located somewhere.

[1] This is actually not entirely true. As long as money is accepted by people, the state could fund its spending by printing (limited amounts of) money. According to proponents of modern monetary theory tax primarily serves to provide a certain base value to money, for a detailed discussion see here.

[2] In the context of space settlements the LVT is actually a type of land lease (legally an emphyteusis) as we propose that the government of a space settlement will remain the owner of all land within the settlement. Private parties will be allowed to lease land on the condition they will pay in talents.

9 thoughts on “Automation: challenges and solutions”

    1. Thanks for your appreciation! Well, I still intend to cover this in one single book, though if it wouldn’t fit more volumes will be added.

      Regarding the concepts, I have collected them from different sources, whilst my job being to merge them in a coherent world view.

  1. “Regarding the concepts, I have collected them from different sources, whilst my job being to merge them in a coherent world view.”
    I hope you are quick about it as my view of the world will soon be ending. As your book will probably be very long, it might just be the last one I will read. lol 🙂

    1. A large part is already written, in the form of the articles of this site, though they needed to edited in order to put in my book. [It’s not the intention my book will be just a bundle of essays, rather a comprehensive work.]

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