Financial Inclusion 2070

> Posted by Joshua Goldstein aka Mr. Provocative

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Today, in 2070, with advanced robotization of jobs in all sectors, “work” has become a minority pursuit and financial inclusion is mostly understood to mean government cash transfers. Other financial products like loans are anachronisms of a bygone era. The government knows that such transfer programs like “unemployment benefits” are the only way to keep the anemic engine of demand alive for the goods and services that are now produced by a smaller and smaller sliver of the population who live in Byzantine splendor far removed from the humdrum circumstances of the vast majority. (Indeed in 2070, “unemployment” is a forgotten term from an era when “work” was a defining feature of life.) And the lack of work extends to what is today called “knowledge economy” occupations as well as almost every other category of white and blue collar work. Now, all humans enjoy a pension plan that goes into effect at birth and is more than enough to meet basic consumption needs. The benefit ends only with death by lethal injection at the mandatory termination age of 120.

Am I painting a scenario that seems wildly implausible? Perhaps.

But look where we are today, 55 years away from 2070. In Martin Ford’s new book Rise of the Robots, he proposes a guaranteed minimum income, anticipating a reduction in availability of employment. In Barbara Ehrenreich’s New York Times’ review of his book, she says that even “tasks that would seem to require a distinctively human capacity for nuance are increasingly assigned to algorithms, like the ones currently being introduced to grade essays on college exams… Wired magazine quotes an expert’s prediction that within about a decade 90 percent of news articles will be computer-­generated.” Or this, from a front page headline in the May 15 edition of The Washington Post, “New Machine Could One Day Replace Anesthesiologists.” The job scarcity of the future is already beginning to appear.

Ehrenreich writes that right now many highly educated young adults are in work limbo for years, going from temp job to temp job, with a secure future a fanciful dream. And we are not talking about those with no college degrees. Why? Because many companies decided that “‘ever-advancing information technology’ allows them to operate successfully without rehiring the people they had laid off. And there should be no doubt that technology is advancing in the direction of full unemployment.” Yes, full unemployment.

For more evidence of this likely trend, here is some sobering evidence from The New York Times’ excellent columnist Eduardo Porter, who chronicles the decline of wages in the U.S. in recent times. “Government transfers,” he writes, “have become a bigger source of income for working families in many industrialized nations, as earnings from the labor market have slowed. …In Canada, for example, labor market earnings for the bottom fourth of the income ladder grew by roughly $25 a year between 1979 and 2007. Government transfers increased by $78. For Canadian households one rung higher — between the 25th and the 50th percent of the earnings distribution — there were no increases in labor market compensation. All gains came from the government.”

So when I say that the most important pillar of financial inclusion in the future may be cash transfers, I am not exaggerating.

If we fast forward to 2070, what kind of world will we be living in? Freud once said that human fulfillment rested on satisfaction in two domains: love and work. For many of our descendants, the work component may be absent.

I believe that the time is now to enter into a global conversation on the meaning of a jobless future for humanity. Should we put legal limits on certain job eliminating technologies? For example, should we ban Google’s driverless cars to protect the jobs of millions of taxi drivers, truck drivers, and chauffeurs around the world?

The standard wisdom of economists for the last few centuries has been that the innovative whirlwind of capitalism leads to disruption of old industries and the jobs that characterize them, and that while this causes temporary hardship, ultimately these very same innovations lead to a new class of jobs and greater overall wealth and productivity. There is much truth to this.

But I do think it may be different with this job eviscerating disruption, and we rest comfortably in the received wisdom at our own peril.

Have you read?

Two Possible Futures for Persons With Disabilities

The Missing Men in International Development

Equal Pay for Equal Work: Are MFIs Paying Women Employees the Same as Men?

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