The Zero Economic Value Citizen

 

I have an article today in the Harvard Business Review, co-authored with legendary Silicon Valley marketer and venture capitalist Bill Davidow. It’s the first piece Bill and I have co-bylined since we wrote The Virtual Corporation twenty years ago. I don’t know if it will have the same impact as that book did, but it should.

In the article, Bill and I note that the current pace of technological change (though few people noticed, Moore’s Law basically went vertical in 2005), combined with the rise of artificial intelligence, robotics, and the Internet of Things, means that our machines are rapidly assuming an ever-greater role in our economic life. Henry Adams despaired in the 19th century that the rate of progress — about 2 percent — was almost too much for mankind to keep up with. We’re now running at 40 percent.

You’ve read the warnings from Elon Musk, Stephen Hawking and other forward-thinkers that AI poses a potential long-term existential threat to humanity. In fact, we don’t have to look that far. As a growing number of jobs — mostly manual labor, but increasingly blue-collar and soon white-collar— disappear to automation we are already creating what Bill and I call the Zero Economic Value Citizen: people for whom artificial intelligence has rendered their skills or jobs without value. We suspect that many of those millions who have already dropped out of the workforce are just such ‘ZEV’ citizens.

What is the solution? We’re not sure there is one. Government is too slow and stupid. Education, even if the unions weren’t resisting change, probably can’t keep up either. And as our machines get smarter they will continue capturing jobs ever further up the IQ scale.

Are we all destined to become ZEVs? A good question. And what do we do then? I’d like to hear your thoughts.

There are 124 comments.

Become a member to join the conversation. Or sign in if you're already a member.
  1. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Stop fighting “deflation”.

    If the machines produce and the humans consume, then allow the cost of consumption to drop along with the cost of production.

    • #1
  2. Mike H Coolidge
    Mike H
    @MikeH

    More things will become free. Humans will still produce things, it’ll just be what they want to do instead of what they are forced to do. I don’t buy that there are healthy humans of zero economic value. I buy that there are ones who can’t produce above the current welfare state.

    If human labor is ever replaced, it’ll be very important that you own land to generate wealth. It’s a good hedge against the singularity (which I’m still not convinced is going to take the form of pop futurism).

    • #2
  3. george.tobin@yahoo.com Moderator
    george.tobin@yahoo.com
    @OldBathos

    We are the products of about a billion years of necessity, compulsion and privation.  If machines did it all, engendered vast new wealth and made it possible for 5 billion philosopher kings and queens to live without the fear of poverty, would we be ready for a life of affirmation, creativity and self-chosen challenge? Probably not. We will instead program original sin into the global AI.

    The best-paying job of the future? Raiding supplies from the machines to support the resistance.

    • #3
  4. skipsul Member
    skipsul
    @skipsul

    Anyone in manufacturing could tell you stories of redundancy.  What my company makes in a week with just 4 people would have taken 20 people to do in a month just 20 years ago, with the same levels of capital equipment investment.  Where we are hiring is in engineering right now – need people to come up with new products and ideas.  Expect this trend to continue.

    • #4
  5. Pilli Member
    Pilli
    @Pilli

    One avenue for human economic growth is in the repair technician field.  Someone has to fix the machines.

    • #5
  6. user_86050 Member
    user_86050
    @KCMulville

    Funny. The impact of automation came up earlier today in a post by Richard Fullmer.  If knowledge-wealth is a result of participation in an entrepreneurial process, what will happen when the process is handled more and more by machines?

    Remember the Michael Crichton / “Ian Malcolm” quote:

    The problem with scientific power you’ve used is it require any discipline to attain it. You read others had done and you took the next step.  You didn’t earn the knowledge yourselves, so you don’t take the responsibility for it.

    
    						
    • #6
  7. Valiuth Inactive
    Valiuth
    @Valiuth

    We will work less. All we have to do is capture and distribute the wealth the machines create. Essentially we will become more socialized. Frankly if we can afford it isn’t such a bad thing, especially if we allow people to still earn more by finding other creative ways to make a living. So we may be able to afford to give everyone a very generous minimum standard of living thanks to our fast wealth, and then people can supplement that by doing jobs machines can’t or won’t do. Hello service and entertainment economy!

    • #7
  8. skipsul Member
    skipsul
    @skipsul

    Valiuth:We will work less. All we have to do is capture and distribute the wealth the machines create. Essentially we will become more socialized. Frankly if we can afford it isn’t such a bad thing, especially if we allow people to still earn more by finding other creative ways to make a living. So we may be able to afford to give everyone a very generous minimum standard of living thanks to our fast wealth, and then people can supplement that by doing jobs machines can’t or won’t do. Hello service and entertainment economy!

    I think that’s how we will go, one way or another.  Look back at Misthiocracy’s comment – cheap production leads to a natural deflation (assuming the idiots in charge don’t engage in short-sighted price fixing), which if unchecked will dislocate much than we’ve seen so far.

    Your remark about the “entertainment economy” has been showing signs of this for a good decade now, with the rise of easy social media, podcasting, youtube channels, etc.  Lots of people have created their own niche jobs in this field already, from Leo Laporte and TWIT, to BJ Harrison of the Classic Tales Podcast, to Dan Carlin, not to mention the proliferation of home-produced pornography.  When there is no need (or outlet) for you to produce physical or intellectual goods, the next outlet is to sell your talents in other areas – some licit, some less so.

    • #8
  9. Ross C Member
    Ross C
    @RossC

    Pray tell what is the “rate of progress” and how is it measured.  I am skeptical. Important things like flying in an airplane, preparing a meal, washing dishes, washing clothes, buying a house or getting to work have not improved in decades.

    • #9
  10. Ed G. Member
    Ed G.
    @EdG

    skipsul:Anyone in manufacturing could tell you stories of redundancy. What my company makes in a week with just 4 people would have taken 20 people to do in a month just 20 years ago, with the same levels of capital equipment investment. Where we are hiring is in engineering right now – need people to come up with new products and ideas. Expect this trend to continue.

    Skip, I could be operating with some unfair stereotypes, but engineers aren’t exactly known for their creativity; my own profession of accounting is the same way, Bob Newhart notwithstanding. Those outside of the typical mold are few and far between. I understand the demand for such a Randian figure, but I’d guess the supply isn’t ever going to be there to match. So what do the rest of the 70-90% of us do in the ZEV scenario?

    • #10
  11. Ed G. Member
    Ed G.
    @EdG

    Personally, I’m with Misthiocracy. There will be a point of equilibrium, assuming we manage to resist trying to adjust the adjustment period away, where the labor of us average folk will be both competitive with capital and able to provide a comfortable-enough life. After all, there’s not much use to production if no one can afford to consume it; if there are people around then they will need to consume and someone will produce to fill that need at a cost bearable by the purchaser.

    • #11
  12. Ed G. Member
    Ed G.
    @EdG

    Speaking of redundancy, it seems other comments have already rendered my own recent comments redundant. I’ll let you know how I adjust.

    • #12
  13. Marion Evans Member
    Marion Evans
    @MarionEvans

    So instead of replacing the $20 an hour American worker with the $2 an hour Chinese worker, we are replacing him with the $0.2 an hour robot. The scale of the change from $20 to $2 is ten times greater than from $2 to $0.2.

    I don’t think people want a robot to serve them coffee at Starbucks. One reason you go to Starbucks is to see other people. Otherwise, it is cheaper to make your own coffee at home.

    Most higher value added occupations, like law, media, finance, software will continue to require humans.

    • #13
  14. skipsul Member
    skipsul
    @skipsul

    Ed G.:

    skipsul:Anyone in manufacturing could tell you stories of redundancy. What my company makes in a week with just 4 people would have taken 20 people to do in a month just 20 years ago, with the same levels of capital equipment investment. Where we are hiring is in engineering right now – need people to come up with new products and ideas. Expect this trend to continue.

    Skip, I could be operating with some unfair stereotypes, but engineers aren’t exactly known for their creativity; my own profession of accounting is the same way, Bob Newhart notwithstanding. Those outside of the typical mold are few and far between. I understand the demand for such a Randian figure, but I’d guess the supply isn’t ever going to be there to match. So what do the rest of the 70-90% of us do in the ZEV scenario?

    There are different types of engineers – those who can improve or design existing products, and those who can invent new products and designs – I deal with both types all the time.  But you’d be surprised – in the right environment, even the most rigid of engineers can create amazing things.  Often our best products have grown from niche solutions to entirely new product families – if customer A has a problem, odds are good he’s not alone.

    I don’t have any idea of the long-term outlook though, other than to suggest that as old industries die and old problems are solved (or patched anyway), new problems will continue to arise.

    • #14
  15. Frozen Chosen Member
    Frozen Chosen
    @FrozenChosen

    Two thoughts;

    1. Government hiring at all levels is increasing while government’s efficiency is decreasing because bureaucrats have little incentive to be efficient.  This will be a fruitful field for the ZEVs until the scenario in my next point plays out.

    2. You are assuming that the sociological and political changes taking place in our society won’t cause our civilization to collapse before AI takes over.  I’m doubtful that this will be the case.

    • #15
  16. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Ross C:Pray tell what is the “rate of progress” and how is it measured. I am skeptical. Important things like flying in an airplane, preparing a meal, washing dishes, washing clothes, buying a house or getting to work have not improved in decades.

    Are you kidding?

    Air Travel: I can buy my plane tickets myself online, I have greater selection of different price points, airplanes are faster and safer and more fuel efficient, and I have free movies and even wifi on some flights.  Air travel’s way better if you pay for the top tiers, and way cheaper if you’re willing to settle for the cheapest tiers.

    Preparing a meal: The variety and quality of options at even the discount grocery stores has never been greater, not to mention the insane amount of variety and quality if one is willing to pay a little extra for specialty suppliers.

    Washing dishes: Pods, man. Pods.

    Washing clothes: Yeah, newer washing machines suck. You win this round.

    Buying a new house: Searching for properties on-line. Discount/no-frills real estate brokerages. More competition in mortgage brokerages. Etc.

    Getting to work: A 2015 automobile is a way more comfortable way to be stuck in traffic for hours than a 1995 automobile.

    • #16
  17. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Marion Evans: One reason you go to Starbucks is to see other people.

    This must be why I make coffee at home.

    ;-)

    • #17
  18. skipsul Member
    skipsul
    @skipsul

    One area for hope (I know, I know, “hope” is rather ambiguous) is that massive displacements tend to be limited to existing workers.  A 50-year-old machinist is going to be hard put to adapt to changes in automation at his stage in life, and re-training for a new career will be hard on many levels.  Yet his kids will have grown up in a different environment than him and likely find their own opportunities.  We saw this with the agricultural revolution, for instance, where the old family farms shrank and died off as the younger kids moved to the cities.  We saw this too in the latter industrial revolution as factory workers’ children moved into different jobs.  We’re not still dealing with the displaced workers from the textile industry, for instance, as those jobs went away 20 – 30 years ago.

    We do, however, have a problem with welfare programs that pay people to stay where the jobs once were.  Pittsburgh, Wheeling, and many other Appalachian steel towns are now sinks of welfare and dependency in no small part because those people remain on the dole there – they are paid to stay behind after the jobs have left.  If welfare were non-existent in those areas then they would become ghost towns as the people migrated to find work elsewhere.

    • #18
  19. skipsul Member
    skipsul
    @skipsul

    Misthiocracy: Getting to work: A 2015 automobile is a way more comfortable way to be stuck in traffic for hours than a 1995 automobile.

    Try a 1973 car – A carbureted 1973 car, which requires constant fiddling and tuning, and DOESN’T EVEN HAVE CUPHOLDERS!

    • #19
  20. skipsul Member
    skipsul
    @skipsul

    Ross C:Pray tell what is the “rate of progress” and how is it measured. I am skeptical. Important things like flying in an airplane, preparing a meal, washing dishes, washing clothes, buying a house or getting to work have not improved in decades.

    Tyler Cowen address this point back in The Great Stagnation, where he pointed out that improvements we see today are iterative – they are refinements on old tech, rather than revolutionary.  A refrigerator is still a refrigerator, a plane is still a plane, even if both things have gotten cheaper and more efficient.  It is a valid point to consider in all of this.

    • #20
  21. Seawriter Contributor
    Seawriter
    @Seawriter

    skipsul:

    Misthiocracy: Getting to work: A 2015 automobile is a way more comfortable way to be stuck in traffic for hours than a 1995 automobile.

    Try a 1973 car – A carbureted 1973 car, which requires constant fiddling and tuning, and DOESN’T EVEN HAVE CUPHOLDERS!

    Or aux jack so I can listen to my audiobooks on an MP3 player on my way to work.

    Seawriter

    • #21
  22. user_1030767 Member
    user_1030767
    @TheQuestion

    Mike H:More things will become free. Humans will still produce things, it’ll just be what they want to do instead of what they are forced to do. I don’t buy that there are healthy humans of zero economic value. I buy that there are ones who can’t produce above the current welfare state.

    If human labor is ever replaced, it’ll be very important that you own land to generate wealth. It’s a good hedge against the singularity (which I’m still not convinced is going to take the form of pop futurism).

    I agree.  Value is where you find it.  If the cost of living is so low you don’t need to work, you can work to produce things that you value.  It could be gardening or any number of things, since it would be up to you.

    • #22
  23. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    skipsul: Tyler Cowen address this point back in The Great Stagnation, where he pointed out that improvements we see today are iterative – they are refinements on old tech, rather than revolutionary. A refrigerator is still a refrigerator, a plane is still a plane, even if both things have gotten cheaper and more efficient. It is a valid point to consider in all of this.

    Not sure why a “lack of revolutions” is a bad thing.

    • #23
  24. Frank Soto Contributor
    Frank Soto
    @FrankSoto

    Pilli:One avenue for human economic growth is in the repair technician field. Someone has to fix the machines.

    Until the machines can fix the machines.

    • #24
  25. Gödel's Ghost Member
    Gödel's Ghost
    @GreatGhostofGodel

    Misthiocracy:Stop fighting “deflation”.

    If the machines produce and the humans consume, then allow the cost of consumption to drop along with the cost of production.

    You beat me to it.

    I’ll add one thing: allowing ourselves to become dependent upon others for food and a roof over our heads has been disastrous for society. Imagine how much easier life would be if you knew, without question, you could grow your own food (maybe with neighbors) and build your own adequate housing (maybe with neighbors). I remember being both struck and charmed when reading Stephen King’s brilliant The Stand, about a post-Apocalyptic America, in which a teen-aged girl is seen in a public library, reading the Foxfire books—books I distinctly recalled perusing as a teen at Viewpoint Books in my little Indiana hometown.

    We could do with a little more Foxfire-style self-sufficiency.

    • #25
  26. Seawriter Contributor
    Seawriter
    @Seawriter

    I cannot see myself becoming a ZEV citizen (at least until I become senile).  Maybe robots or AI will take over writing, but I doubt it. As long as I can remember there have been predictions of that happening.I remember a Harry Harrison SF story written in the where a comic book writer getting replaced by a robotic device, but it has not happened yet (although, admittedly comics have watched their appeal becoming more selective). I believe I can figure what appeals to humans better than an AI. After all, I know what I find as an appealing topic to read about.

    Similarly my neighbor down the street will never become a ZEV citizen because he can machine to a tolerance of 1000th of an inch, working from a set of fuzzy plans.  Yeah, a CNC machine can do the same thing, but by the time you program the thing my neighbor has it built.  He will not beat the CNC if you need 10,000 copies, but if you need a one-off or prototyping, he is the go-to guy.

    There is another guy in my neighborhood that does wood carving and cabinetry so exquisitely you think the angels came down from heaven to make it. Nor will the guy who fixes my HVAC system or the plumber I use ever become ZEV citizens.

    I admit there will be some who choose to become drones, once AI and robotics deal with the basics, but there will be others, and I believe many others, who will find the interstices where AI and robotics do not fit.  As the price of basic commodities drop, disposable income for niche goods grows.

    Seawriter

    • #26
  27. C. U. Douglas Thatcher
    C. U. Douglas
    @CUDouglas

    Misthiocracy:

    ….

    Washing clothes: Yeah, newer washing machines suck. You win this round.

    To be fair, washing machines suck because Government politicians, their lobbyist influencers, and government bureaucrats have got their filthy fingers involved.

    • #27
  28. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Robot Shortage

    • #28
  29. 1967mustangman Member
    1967mustangman
    @1967mustangman

    What will we do?  We don’t know.  200 years ago could my Great-Great-Great-Grandfather have imagined that his descendant would sit in a constantly lit room, staring a glowing “screen”, pushing down little plastic square, and tending to a room full of boxes with loud fans on them?  Of course not.  So why do we think we can predict what we will be doing in 200 years or even 20.

    • #29
  30. Valiuth Inactive
    Valiuth
    @Valiuth

    Misthiocracy:Robot Shortage

    I would say humans are very predictable. If you prick them do they not bleed, and if your wrong them do they not wish to  be avenged? Now Robots those things can truly act unpredictably when they fail. 404 your beverage could not be found…present identification…destroy all humans!

    • #30

Comments are closed because this post is more than six months old. Please write a new post if you would like to continue this conversation.