"Nobody states the obvious truth: that the marketplace has changed and there will never again be enough jobs for everyone who wants one -- no matter who [rules]"
Marco has forgotten that when AI does some of our present tasks, we will want to satisfy our greater needs (some of which we can only dream about having today), due to the reduced cost of the produce from these AI done jobs. Our needs are endless whilst we always try to satisfy them with the least effort.
I haven't forgotten that. When those other needs kick in, it will be because the basic ones are satisfied. And then, of course, needs != feasible, or sensible. We'll have to readjust, for sure. But one problem at a time.
suggestion: compare the conclusion of this post of mine " the main barriers to tackling with a different AI the real problems we have... is the huge persistence... of self-inflicted delusions"
The writers of this article have no idea of how our social system of macroeconomics works. But you don't need to stay in the dark about it, if you really want to know, because my research has converted all that past confusion into a true and almost exact science. UBI and AI are not connected, whilst macroeconomics badly needs to be properly understood without the confusion of it being a pseudo-science. Here is how it is possible for it to be a true and exact one:
Making Macroeconomics a Much More Exact Science
Today macroeconomics is treated inexactly within the humanities, because it appears to be a very complex and easily confused matter. But this does not give it fair justice, because we should be trying to find a viable approach to the topic and examine it in a way that avoids these problems, and for us to better understand of what it comprises and how it actually works. Suppose we ask ourselves the question: “how many different KINDS of financial (business) transaction occur within our society?”
The simple and direct answer shows that that only a limited number of them are possible or necessary. Although our sociological system comprises of many millions of participants, to properly answer this question we should be ready to consider the averages of the various kinds of activities (no matter who or what organization performs them), and simultaneously to idealize these activities so that they fall into a number of commonly shared operations. This approach uses some general terms for expressing the various types of these transactions, into what becomes a relatively small number. Here, each kind is found to apply between a particular pair of agents, (sectors or entities), each one of which has individual properties. Then to cover the whole sociological system of a country, it requires only 19 kinds of exchanges of the goods, services, access rights, taxes, credits, investments, valuable legal documents, etc., versus the mutual and opposing flows of money.
The argument that led to this initially unexpected result was prepared by the author. It may be found in his working paper (on the internet) as SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modelling”. In this model these double-flows of money versus goods, etc., necessarily pass between only 6 kinds of role-playing entities (or agents). Of course, there are a number of different configurations that are possible for this type of simplification, but if one tries to eliminate all the unnecessary complications and sticks to the more basic activities, then these particular quantities and flows provide the most concise yet fully comprehensive result, which is presentable in a seamless manner, for our whole social system and one that is suitable for its further analysis.
Surprisingly, past representation of our sociological system by this kind of an interpretation model has neither been properly derived nor formally presented before. Previously, other partial versions have been modelled (even using up to 4 agents, as by Professor Hudson), but they are inexact due to their being over-simplified. Alternatively, in the case of econometrics, the representations are far too complicated and almost impossible for students to follow. These two reasons of over-simplification and of complexity are why this pseudo or non-scientific confusion has been created by many economists, and it explains their failure to obtain a good understanding about how the whole system works.
The model being described here in this paper is unique, in being the first to include, along with some additional aspects, all the 3 factors of production, in Adam Smith's “Wealth of Nations” book of 1776. These factors are Land, Labour and Capital, along with their returns of Ground-Rent, Wages and Interest/Dividends, respectively. All of them are all included in the model, which as a diagram is included in the paper.
(Economics’ historians will recall, as originally explained by Adam Smith and David Ricardo, that there are prescribed independent functions of the landowners and the capitalists. The landowners speculate in the land-values and rent it to tenants, whilst the capitalists are actually the owners/managers of the durable capital goods used in industry. These items may be hired out for use. Regrettably, for political and commercial reasons, the concept of these 2 different functions were combined by John Bates Clark and company, about 1900, resulting in the later neglect of their different influences on our sociological system-- the terms landlord and capitalist becoming virtually synonymous along with the expression for property as real-estate.)
The diagram of this model is in my paper (noted above). A mention of the related teaching process is also provided in my short working paper SSRN 2600103 “A Mechanical Model for Teaching Macroeconomics”. With this model in an alternative form, the various parts and activities of the Big Picture of our sociological system can be properly identified and defined.
Subsequently by analysis, the way our sociological system works can then be properly seen, calculated and illustrated. This analysis is introduced by the mathematics and logic, which was devised by Nobel Laureate Wellesley W. Leontief, when he invented the important "Input-Output" matrix methodology (that he originally applied only to the production sector). This short-hand method of modelling the whole system replaces the above-mentioned block-and-flow diagram. It enables one to really get to grips with what is going-on within our sociological system. It is the topology of the matrix which actually provides the key to this.
The logic and math are not hard and are suitable for high-school students, who have been shown the basic properties of square-matrices and the notation of the calculus. By this technique it is comparatively easy to introduce any change to a pre-set sociological system that is theoretically in equilibrium (even though we know that this ideal is never actually attained--it simply being a convenient way to begin the study). This change creates an imbalance and we need to regain equilibrium again. Thus, sudden changes or policy decisions may be simulated and the effects of them determined, which will point the way to what policy is best. In my book about it, (see below) 3 changes associated with taxation are investigated in hand-worked numerical examples. In fact, when I first worked it out, the irrefutable logical results were a surprise, even to me!
Developments of these ideas about making our subject more truly scientific (thereby avoiding the past pseudo-science being taught at universities), may be found in my recent book: “Consequential Macroeconomics—Rationalizing About How Our Social System Works”.
Please write to me at chestdher@gmail.com for a free e-copy of this 310-page book and for any additional information.
"The writers of this article have no idea of how our social system of macroeconomics works."
I have a pretty solid idea, if not certainty, that, whatever our social system of macroeconomics is, it is NOT working, and must be pretty stupid. Solutions are welcome, so thanks for the pointer.
For those who claim to love their jobs...if someone gave you $10 million...would you still show up to work? Jobs are not fun, that's why you get paid to do them.
I am not convinced (yet) that AI is going to eliminate all of the jobs. Historically, progress has always created more jobs than it eliminated. But as you point out, a UBI or a citizen dividend is a good idea, regardless. Especially so if it replaces the complex and inherently unequal and unjust welfare system. The question is how can it be funded, as always, it should be funded by taxing economic rents: https://www.lianeon.org/p/just-tax-the-land
"I am not convinced (yet) that AI is going to eliminate all of the jobs. Historically, progress has always created more jobs than it eliminated".
What happened in the past, as well as how many jobs AI will actually create, does not matter, because of the SPEED of this particular transition. This is exactly the point of the "Lack of TIME" paragraph of the post, wasn't it clear?
Simplifying, let's assume that AI will eliminate 10 million jobs across Europe in the next 5 years, that is put 10M people in the streets without any income. What I say is that:
1, it's impossible that it creates at 10M or more jobs in the SAME time frame, because it would be used to SAVE money, not the opposite; but it's IRRELEVANT, because, even if it did, they would be surely very different jobs and therefore...
2, it's IMPOSSIBLE than more than 1 every 1000 of those 10M people left jobless could "upskill" themselves so much to get one of THOSE new jobs, as quickly as they'll need it, that is BEFORE they go to prison for debts, or lose their home, or can't feed their kids. The other 9,990,000 jobless people will go for pitchforks, because they couldn't and shouldn't care less whether there will be better jobs 30 years later, for kids they may never have. Again, timescales are THE problem here.
3, eventually, the total cost of upskilling the first 10K people + preventing the other 9,99M from rioting or filling hospitals would almost certainly be higher than just giving everybody UBI from the start.
About "how can it be funded": I am sure that, and say so explicitly in the post, that UBI is possible only as part and consequence of " of money and how it is managed, from creation to taxation." Personally, I have no opinion yet on what this should mean in practice, whether taxing economic rents or not. Hope to get one (opinion, I mean) soon.
Just found this:
"Nobody states the obvious truth: that the marketplace has changed and there will never again be enough jobs for everyone who wants one -- no matter who [rules]"
written TEN YEARS AGO: http://www.huffingtonpost.com/allan-sheahen/jobs-are-not-the-answer_b_3727048.html
Marco has forgotten that when AI does some of our present tasks, we will want to satisfy our greater needs (some of which we can only dream about having today), due to the reduced cost of the produce from these AI done jobs. Our needs are endless whilst we always try to satisfy them with the least effort.
(sorry for the late answer, I had the flu)
I haven't forgotten that. When those other needs kick in, it will be because the basic ones are satisfied. And then, of course, needs != feasible, or sensible. We'll have to readjust, for sure. But one problem at a time.
We absolutely need UBI if we are to have a future worth fighting for at all.
https://truespiritofamericaparty.blogspot.com/p/why-ubi.html
https://truespiritofamericaparty.blogspot.com/2024/03/objections-to-universal-basic-income.html
suggestion: compare the conclusion of this post of mine " the main barriers to tackling with a different AI the real problems we have... is the huge persistence... of self-inflicted delusions"
with "What keeps me up at night is our collective indifference to..." in https://slate.com/technology/2023/08/existential-risk-human-apathy.html
The writers of this article have no idea of how our social system of macroeconomics works. But you don't need to stay in the dark about it, if you really want to know, because my research has converted all that past confusion into a true and almost exact science. UBI and AI are not connected, whilst macroeconomics badly needs to be properly understood without the confusion of it being a pseudo-science. Here is how it is possible for it to be a true and exact one:
Making Macroeconomics a Much More Exact Science
Today macroeconomics is treated inexactly within the humanities, because it appears to be a very complex and easily confused matter. But this does not give it fair justice, because we should be trying to find a viable approach to the topic and examine it in a way that avoids these problems, and for us to better understand of what it comprises and how it actually works. Suppose we ask ourselves the question: “how many different KINDS of financial (business) transaction occur within our society?”
The simple and direct answer shows that that only a limited number of them are possible or necessary. Although our sociological system comprises of many millions of participants, to properly answer this question we should be ready to consider the averages of the various kinds of activities (no matter who or what organization performs them), and simultaneously to idealize these activities so that they fall into a number of commonly shared operations. This approach uses some general terms for expressing the various types of these transactions, into what becomes a relatively small number. Here, each kind is found to apply between a particular pair of agents, (sectors or entities), each one of which has individual properties. Then to cover the whole sociological system of a country, it requires only 19 kinds of exchanges of the goods, services, access rights, taxes, credits, investments, valuable legal documents, etc., versus the mutual and opposing flows of money.
The argument that led to this initially unexpected result was prepared by the author. It may be found in his working paper (on the internet) as SSRN 2865571 “Einstein’s Criterion Applied to Logical Macroeconomics Modelling”. In this model these double-flows of money versus goods, etc., necessarily pass between only 6 kinds of role-playing entities (or agents). Of course, there are a number of different configurations that are possible for this type of simplification, but if one tries to eliminate all the unnecessary complications and sticks to the more basic activities, then these particular quantities and flows provide the most concise yet fully comprehensive result, which is presentable in a seamless manner, for our whole social system and one that is suitable for its further analysis.
Surprisingly, past representation of our sociological system by this kind of an interpretation model has neither been properly derived nor formally presented before. Previously, other partial versions have been modelled (even using up to 4 agents, as by Professor Hudson), but they are inexact due to their being over-simplified. Alternatively, in the case of econometrics, the representations are far too complicated and almost impossible for students to follow. These two reasons of over-simplification and of complexity are why this pseudo or non-scientific confusion has been created by many economists, and it explains their failure to obtain a good understanding about how the whole system works.
The model being described here in this paper is unique, in being the first to include, along with some additional aspects, all the 3 factors of production, in Adam Smith's “Wealth of Nations” book of 1776. These factors are Land, Labour and Capital, along with their returns of Ground-Rent, Wages and Interest/Dividends, respectively. All of them are all included in the model, which as a diagram is included in the paper.
(Economics’ historians will recall, as originally explained by Adam Smith and David Ricardo, that there are prescribed independent functions of the landowners and the capitalists. The landowners speculate in the land-values and rent it to tenants, whilst the capitalists are actually the owners/managers of the durable capital goods used in industry. These items may be hired out for use. Regrettably, for political and commercial reasons, the concept of these 2 different functions were combined by John Bates Clark and company, about 1900, resulting in the later neglect of their different influences on our sociological system-- the terms landlord and capitalist becoming virtually synonymous along with the expression for property as real-estate.)
The diagram of this model is in my paper (noted above). A mention of the related teaching process is also provided in my short working paper SSRN 2600103 “A Mechanical Model for Teaching Macroeconomics”. With this model in an alternative form, the various parts and activities of the Big Picture of our sociological system can be properly identified and defined.
Subsequently by analysis, the way our sociological system works can then be properly seen, calculated and illustrated. This analysis is introduced by the mathematics and logic, which was devised by Nobel Laureate Wellesley W. Leontief, when he invented the important "Input-Output" matrix methodology (that he originally applied only to the production sector). This short-hand method of modelling the whole system replaces the above-mentioned block-and-flow diagram. It enables one to really get to grips with what is going-on within our sociological system. It is the topology of the matrix which actually provides the key to this.
The logic and math are not hard and are suitable for high-school students, who have been shown the basic properties of square-matrices and the notation of the calculus. By this technique it is comparatively easy to introduce any change to a pre-set sociological system that is theoretically in equilibrium (even though we know that this ideal is never actually attained--it simply being a convenient way to begin the study). This change creates an imbalance and we need to regain equilibrium again. Thus, sudden changes or policy decisions may be simulated and the effects of them determined, which will point the way to what policy is best. In my book about it, (see below) 3 changes associated with taxation are investigated in hand-worked numerical examples. In fact, when I first worked it out, the irrefutable logical results were a surprise, even to me!
Developments of these ideas about making our subject more truly scientific (thereby avoiding the past pseudo-science being taught at universities), may be found in my recent book: “Consequential Macroeconomics—Rationalizing About How Our Social System Works”.
Please write to me at chestdher@gmail.com for a free e-copy of this 310-page book and for any additional information.
(sorry for the late answer, I had the flu...)
"The writers of this article have no idea of how our social system of macroeconomics works."
I have a pretty solid idea, if not certainty, that, whatever our social system of macroeconomics is, it is NOT working, and must be pretty stupid. Solutions are welcome, so thanks for the pointer.
Well-said. Any future without UBI is probably no future at all, or at least not one worth living in.
For those who claim to love their jobs...if someone gave you $10 million...would you still show up to work? Jobs are not fun, that's why you get paid to do them.
I am not convinced (yet) that AI is going to eliminate all of the jobs. Historically, progress has always created more jobs than it eliminated. But as you point out, a UBI or a citizen dividend is a good idea, regardless. Especially so if it replaces the complex and inherently unequal and unjust welfare system. The question is how can it be funded, as always, it should be funded by taxing economic rents: https://www.lianeon.org/p/just-tax-the-land
Hi, and thanks for the comment. About this:
"I am not convinced (yet) that AI is going to eliminate all of the jobs. Historically, progress has always created more jobs than it eliminated".
What happened in the past, as well as how many jobs AI will actually create, does not matter, because of the SPEED of this particular transition. This is exactly the point of the "Lack of TIME" paragraph of the post, wasn't it clear?
Simplifying, let's assume that AI will eliminate 10 million jobs across Europe in the next 5 years, that is put 10M people in the streets without any income. What I say is that:
1, it's impossible that it creates at 10M or more jobs in the SAME time frame, because it would be used to SAVE money, not the opposite; but it's IRRELEVANT, because, even if it did, they would be surely very different jobs and therefore...
2, it's IMPOSSIBLE than more than 1 every 1000 of those 10M people left jobless could "upskill" themselves so much to get one of THOSE new jobs, as quickly as they'll need it, that is BEFORE they go to prison for debts, or lose their home, or can't feed their kids. The other 9,990,000 jobless people will go for pitchforks, because they couldn't and shouldn't care less whether there will be better jobs 30 years later, for kids they may never have. Again, timescales are THE problem here.
3, eventually, the total cost of upskilling the first 10K people + preventing the other 9,99M from rioting or filling hospitals would almost certainly be higher than just giving everybody UBI from the start.
About "how can it be funded": I am sure that, and say so explicitly in the post, that UBI is possible only as part and consequence of " of money and how it is managed, from creation to taxation." Personally, I have no opinion yet on what this should mean in practice, whether taxing economic rents or not. Hope to get one (opinion, I mean) soon.