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March 21st, 2012 by Edward Miller

Sharing | Toban Black
Sharing | Toban Black
Technological progress is accelerating faster than ever before. Are robots going to “take our jobs?” Do we require a Basic Income to solve this? Let’s examine some basic principles.

Wages are determined by the margin of production. What this means is that a laborer’s bargaining power in the market is determined by their next best alternative to wage labor. Typically, that alternative, where available, has been homesteading.

That was the historic difference between the “New World” and the “Old World.” The New World was a land of opportunity because it had a lot of high quality land available for the taking. Not just for elites, but for any citizen who was willing and able.

In fact, in the United States the federal government didn’t require any income taxes for the first hundred years. Government was funded largely by the sale of federal lands (as well as tariffs). The rate of growth was astounding. Like China today, the growth rates were regularly reaching 10% per year.

As the land became increasingly homesteaded and auctioned off, the margin of production was reduced. By this I mean the quality of freely available land was diminished, and this reduced the bargaining power of labor.

Land is required for all production and even life itself. Without access to it, we die. Simple as that. Yet, there is no principle of justice by which one can legitimately claim sovereignty over locations on the Earth. It can and is accomplished with the sword or the barrel of a gun, but the principles of classical liberalism provide no basis for any exclusive claims over our common inheritance of nature.

“The land is the original inheritance of mankind. The usual, and by far the best argument for its appropriation by individuals is that private ownership gives the strongest motive for making the soil yield the greatest possible produce. But this argument is only valid for leaving to the owner the full enjoyment of whatever value he adds to the land by his own exertions and expenditure.” – John Stuart Mill

With the exception of Malthus, all the classical liberals recognized that land is there for everyone. With the exception of Malthus, the classicals saw the potential for an increasing pie of wealth to be enjoyed by all. The aristocratic Malthus, by contrast, was fixated on natural limits and overpopulation.

The idea of Technological Unemployment is a Malthusian concept (via Keynes) which teaches us to focus on scarcities, even though the scarcities are entirely artificial. Malthus didn’t believe we had a right to exist on the planet. He didn’t see people in their proper role as wealth-creators, but instead as resource consumers. And if the current owners of land decided to “make room” for more, that would just mean less food to go around.

All this raises an obvious question. What happens when there is no free land? The answer is that landless laborers become entirely dependent upon landowners simply for their right to exist on the surface of the planet. You get a scenario that looks very much like a Malthusian Trap, but in fact has nothing to do with natural scarcity.

When the free land is gone, and the bargaining power that comes with it, wages tend towards subsistence. The only reason subsistence wages are paid at all is because it would be unprofitable for the landlords to let their serfs starve to death. When they’re dead they stop paying rent. Landlessness is the essence of serfdom, and although the aesthetic trappings of feudalism are gone, serfdom has never left us.

The last chapters of Henry George’s book Protection or Free Trade were devoted to this topic, especially the one titled “The Robber Who Takes All That Is Left.” Here’s an excerpt:

“Labor may be likened to a man who as he carries home his earnings is waylaid by a series of robbers. One demands this much, and another that much, but last of all stands one who demands all that is left, save just enough to enable the victim to maintain life and come forth next day to work. So long as this last robber remains, what will it benefit such a man to drive off any or all of the other robbers?” – Henry George, Protection or Free Trade

Because of this, labor is placed into an artificial race to the bottom in wages. There is always some level of wages at which it is profitable to trade capital for labor. Furthermore, even if technology somehow progressed to a stage where robots really were better at every single task than humans, it would still make sense to employ humans because of the Law of Comparative Advantage.

If you want a vision of the future, imagine a child grinding away in a sweatshop… forever. That is, unless we awaken to the realities I just described.

The secret to raising the margin of production without the chaos of land redistribution or the economic damage of income taxation is to use Land Value Taxation.

“Men did not make the earth… it is the value of the improvement only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds.” – Thomas Paine, Agrarian Justice

One way to share the fruits of that rental value of the Commons is to simply distribute it as an equal Citizen’s Dividend.

How is this different than the Basic Income? The Basic Income is not tied to any funding mechanism, and as such would almost assuredly come out of taxes on labor, sales, or other productive activities. Thus, it leaves untouched the Robber Who Takes All That Is Left.

How does giving money help a serf whose existence is utterly dependent upon a landlord? The rents are not based on cost of production… because land is not produced! The landlord will just increase the rent by however much the Basic Income is, because he has all the bargaining power. It is like trying to fill a bucket with a hole in the bottom.

We can plug up that hole by taxing the rental value of land to the fullest extent possible, and provide not just a “basic” income, but a dividend that sustainably grows over time with the progress of civilization. The value of our birthright to the Earth increases with every passing year. Why limit ourselves to just a basic income?

The Basic Income is Dead. Long Live the Citizen’s Dividend!

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July 2nd, 2009 by Edward Miller

Cross-posted at Sentient Developments

The Internet by Sebastian Prooth
The Internet by Sebastian Prooth

There is a long list of crises that we need to face and I won’t waste time boring you by listing them. As our brightest minds admit they were wrong, I hope that I can say, without qualification, that big changes in our thinking are required. Unfortunately, we haven’t made that “Change” even though we now have some new faces in power, and a bunch of old faces out of business or in prison.

There is still an unquestioned belief in the need for major public transportation projects, global supply chains, large scale social programs, and economies of scale. These have become so integral to our way of life, that they are hardly ever questioned. Granted, Wal-Mart is often used as a public target for venting our frustrations at these things, but virtually all business nowadays is conducted using global supply chains, economies of scale, and so forth.

Thus, our political discourse usually revolves around ways to prop up these very systems, since these are the only ones we know. We believe we require trillions in “infrastructure” funding. We believe that we must “create jobs.” We believe we must become “competitive” in the international marketplace. All of these assumptions are echoed in academia, merely using fancy jargon as a substitute for insight.

Let me first say that I accept the logic of comparative advantage and economies of scale as it applies to the capitalist mode of production, and it can truly be the most “efficient” allocation of resources in a quantitative sense, though not always. Yet, as Peter Drucker once said, there is nothing so useless as doing efficiently that which should not be done at all. I do not accept that the inevitable centralization of power from this sort of production is a good thing. Centralized powers are able to create artificial scarcities, in order to inflate profits at the expense of everyone else. This invariably requires things like corporatism, regulatory capture, secrecy, and rent seeking.

None of these things are very amenable to true progress, which requires openness, peer review, constructive criticism, and creativity. The types of innovations that occur under these centralized systems, even if they take on a bourgeois bohemian quality and aren’t bland and soul-crushing, are incredibly stifling of progress. Open standards are shucked in favor of closed proprietary ones whenever a corporation can get away with it. Parts are never interchangeable. The production processes are so far removed from our daily lives that we have no idea about the processes involved in the creation of the product, and indeed breaking open the gizmo more likely than not voids the warranty… though I’m not sure you’d even want to open it up considering the high density of toxic crap trapped inside.

All of this has had corrosive effects on our culture, as well as our environment. Our hyper-consumerist culture encourages us to get the latest and greatest stuff. We follow a sequence of fads specialized to our exact niche market (hipster, redneck, emo, rock, punk, goth, anime, whatever). We indulge in enormous quantities of unsustainable, non-renewable, and disposable products. Even more discouragingly, many companies use engineered obsolescence to artificially increase output at the expense of the environment.

We are now lamenting the fact that none of us have a clue about what it actually takes to produce tangible, concrete things which improve our lives. We are too busy answering phones, producing ad campaigns, and writing paperwork. Thus, instead of becoming active participants in the production of our culture and economy, or even informed consumers, we have become totally and completely dependent upon forces far beyond our control. As the market swings out of control, so do our jobs, our homes, and our very lives.

Yet, a revolution has occurred right under our noses whose effects have yet to be fully explored, and most of us are completely unaware. Digital communications technologies, especially the Internet, have enabled new modes of production and organization, such as Open Source and P2P, which have never before been possible. If we can learn to harness the power of these systems, we can escape the path our current world is on where each labor-saving device seems only to cause us to work longer hours. Where social programs seem only to foster dependence. Instead of innovating in accordance with the logic of centralized power and artificial scarcity, we can innovate in accordance with human needs and wants.

Open Source Ecology
Open Source Ecology
We can collaboratively build all the necessary life support systems needed, but have it be on a self-contained and local scale. It cannot be known whether the shape this takes will favor truly scale invariant systems, like the hyper-local RepRap project which is allowing production right in your living room, or whether it ends up fostering a new urbanism where production takes place in vertical farms, factories, and community hackerspaces. Talk about vertical integration! It also cannot be known how it will reshape our communities, since each community would be redesigned in a participatory fashion by the members of the community itself. Some may opt for small scale pedestrian-friendly towns in harmony with nature, while others may opt for sustainable urban metropolises, and others may ditch both for self-sufficient mobile homes and yachts.

In each of these cases, the means of production will likely have been placed in the hands of individuals, and drudgery will be automated away much like how open source software projects collaboratively eliminate bugs and expose flaws in wiki articles. Considering all of this, it may be useful to begin talking again about incentivizing local production. “Import substitution,” has long been a naughty word among economists. It is the process of breaking free of foreign dependence by incentivizing local production. Usually via tariffs and other measures. However, this would be a misguided way of going about this.

We don’t need to incentivize local production of just any type. We need to incentivize open and collaborative production. For example, creating prizes for contributing to the Commons. In 2007 there was a proposed bill called the Medical Innovation Prize Act which sought to spur patent-free medical inventions. If only it was this sort of mentality that guided us for the past few decades, then we wouldn’t have ever had such a monstrosity of a healthcare system. The same mentality could guide any industry. A useful exercise would be to think how it could guide the industry you are currently involved in. Finally, the creation of new local credit systems could also incentivize collaborative local production. There are lots of new concepts along these lines.

I also suggest you check out some of my previous work on decentralization. It is this sort of thinking which is required for a peaceful transition to a new era for our civilization. It will allow us to become resilient to the converging threats which face us from ecological destruction to market failure to terrorism. Global supply chains have shown themselves to be exceedingly vulnerable to these shocks. I hope we can overcome these by localizing production by utilizing global knowledge sharing so we can all enjoy the type of future some of the previous guest bloggers have been talking about.

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February 3rd, 2009 by Edward Miller

Social Ecology is a philosophy which states that environmental, social, and economic problems all have the same root: namely, the way people treat each other. By this same logic, if we can establish new structures and norms by which to operate, we can alleviate many of these problems.

There are a few different ways to apply this in the real world. One way is to build communities which seek harmonious relationships between people and the environment. Based on similar thinking, thousands of “intentional communities” have sprung up. These include everything from eco-villages to religious communes to survivalist enclaves. There are even some more tech-based communities such as CyborgSociety.

Ecology of Freedom
Ecology of Freedom

Now, each of these communities believes that their mode of interacting with one another is the most sustainable and desirable, and perhaps there is room for all of these communities. Live and let live. Decentralized communities have a distinct advantage when it comes to resiliency. Much less information is needed to govern a small community than a large one, and having multiple models functioning simultaneously ensures all of our eggs aren’t in one basket. Nevertheless, it would be instructive to examine what a truly sustainable community would look like.

In the name of resiliency, clearly there must be some attention to self-sufficiency. Now, insular autarkies are notoriously unstable, but so are economies that are completely dependent upon foreign trade for basic necessities. The ideal situation is clearly somewhere in the middle between those extremes. What we need is largely self-sufficient communities which are at harmony with nature and engage in voluntary trade with neighbors.

This same way of living could be applied by individuals or families operating within the community, to further decentralize production. If individuals, including urbanites, were given the tools for automated growing of food and simple manufacturing, imagine the potential for automatic wealth generation. Not to mention the environmental benefits of local production.

RepRap is dedicated to building open source desktop fabrication machines which can make the majority of its own parts using local materials such as fermented organic matter. Their version 1.0, codenamed “Darwin,” is a working proof-of-concept, and version 2.0 is already in the works. As such machines become more mature and more efficient at self-replication, it could soon eliminate the necessity of wage labor for survival.

Using such techniques, communities are already forming. Factor e Farm is dedicated to building such communities for all sorts of productive purposes. They have already set up one self-sufficient community using alternative energy and processed rainwater, and they are interested in building many more decentralized communities with a high quality of life. On their website, they claim, “This quality of life is based on efficient operation, plus 100% voluntary lifestyle, based on transcendence of material constraints. When resource constraints become a non-issue through wise choice of technology, skill, and open source knowledge-enabled flexible production systems for self-sufficiency – then freedom and human creativity are unleashed.”

What is especially inspiring is the potential this has for eliminating poverty. As they say, give a man a fish and he can eat for a day, teach a man to fish and he can eat for the rest of his life. As the tools for local production continue to drop in price, we can likely enter into a post-scarcity world. As we speak, there is already more than enough food being produced to feed everyone on the planet. The problem is the logistics of distributing it to everyone. Capitalism as it is currently practiced distributes in an unequal fashion, and no matter how much philanthropy we do, it is not feasible to ship resources to remote regions. What we can do is provide the tools for people to produce locally.

We are just now witnessing the beginning of what is surely going to be a huge wave of self-sufficient communities, enabled by the new modes of production made possible by the Internet and communications technologies. The prospects for this are enormous for everyone, but especially those in poorest and most dependent places on Earth.

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February 19th, 2008 by Edward Miller

A majority of unskilled jobs are completely unnecessary even with current technology. We are already very much a Robotic Nation; ATM Machines, industrial robots, automated checkouts, e-commerce, computerized help desks, and vending machines have replaced millions of workers. The burden of most unskilled labor can and will be shifted to machines, and the same is true for even a great deal of skilled labor. Yet, currently, it is as if human beings are taking on the role of machines, grinding away day-in and day-out in dead end jobs, all the while, the middle class is shrinking and unemployment is growing. If something isn’t done, there will be some major class warfare.

Leisure is a good thing! Even for our economies it is a good thing. If it wasn’t for the norms and government regulations in our society that produce more leisure time such as weekends, holidays, child labor laws, minimum wage, overtime laws, and so forth, there wouldn’t be nearly as much demand to fuel the enormous industries surrounding music, art, sports, movies, entertainment, etc.

Couple in Hammock | Reuben Maltsberger
Couple in Hammock | Reuben Maltsberger
Unfortunately, we have been infected by the Protestant Ethic meme which sanctifies work. This sort of mentality is prevalent among most of society, from CEOs to workers’ unions. Unions fight for the “right to work” and are deeply fearful of their jobs becoming automated. Ironically, many of the policies they push for make human labor more expensive, which gives further incentive for automation. I argue that workers should rejoice at the possibilities created by human labor becoming obsolete. We should speed up the process. Screw the right to work, we need the Right to be Lazy!

Employment is only valuable if it is performing a necessary service. If we can get our basic needs taken care of sufficiently, unemployment could be a perfectly reasonable option. There are plenty of worse things in the world than doing nothing. Being a marketing executive or politician, for example.I would argue, though, that under conditions of abundance, we should seek to find joy in ways that benefit others as well. Volunteering one’s time to nonprofit charitable endeavors would certainly be one example. Creating art, music, comedy, poetry, movies, video games, and so forth would also be valid ways of contributing to the world.

Thus, as automation progresses, we should gradually and continually strengthen laws regarding overtime, retirement, minimum wage, welfare, universal healthcare, importation from sweat-shop-ridden countries, and so forth, all in the name of making human labor more expensive, and compensating for the displacement caused by mechanization of labor. We should consider simultaneously giving positive incentives, such as tax breaks, for businesses that make strides toward automation, and fund research in that area.

I would go so far to say that once a sufficient amount of our production of basic necessities is automated, unemployment would be a good thing. We shouldn’t just have welfare, but a Guaranteed Minimum Income system. (even Hayek would agree)

Once liberated from needless toil, we will be free to spend more time enjoying the fruits of our material abundance by creating art, playing sports, and loving one another. Maybe our GDP won’t be growing quite as quickly at first, but some things are more important than the quantity of stuff we produced this financial quarter. Feel free to share your thoughts. Is the End of Work near? If so, what should be done about it?

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