Robotic Nation
by Marshall Brain
I went to McDonald's this weekend with the kids. We go to McDonald's to eat about
once a week because it is a mile from the house and has an indoor play area. Our
normal routine is to walk in to McDonald's, stand in line, order, stand around waiting
for the order, sit down, eat and play.
On Sunday, this decades-old routine changed forever. When we walked in to
McDonald's, an attractive woman in a suit greeted us and said, "Are you planning to
visit the play area tonight?" The kids screamed, "Yeah!" "McDonald's has a new system
that you can use to order your food right in the play area. Would you like to try it?"
The kids screamed, "Yeah!"
The woman walks us over to a pair of kiosks in the play
area. She starts to show me how the kiosks work and
the kids scream, "We want to do it!" So I pull up a chair
and the kids stand on it while the (extremely patient)
woman in a suit walks the kids through the screens.
David ordered his food, Irena ordered her food, I
ordered my food. It's a simple system. Then it was time
to pay. Interestingly, the kiosk only took cash in the
form of bills. So I fed my bills into the machine. Then
you take a little plastic number to set on your table and
type the number in. The transaction is complete.
We sat down at a table. We put our number in the
See Also
About the Author
Robotic Nation
Robots in 2015
Robotic Freedom
Robotic Nation FAQ
Robotic Nation Evidence
Discard your body
Manna - the book
Science on the Brain
Interesting Videos
Careful Parents
Star Wars
Helpation
SadTech
center of the table and waited. In about 10 seconds the
kids screamed, "When is our food going to get here???"
I said, "Let's count." In less than two minutes a woman
in an apron put a tray with our food on the table,
handed us our change, took the plastic number and left.
You know what? It is a nice system. It works. It is much
nicer than standing in line. The only improvement I
would request is the ability to use a credit card.
As nice as this system is, however, I think that it
represents the tip of an iceberg that we do not
understand. This iceberg is going to change the
American economy in ways that are very hard to
imagine.
How to make a million dollars
Making money with web sites
The Teenager's Guide
Reviews
Salon
Wired
LiveScience
LATimes Editorial
Geek of the week
Thanks for visiting today,
The Iceberg
The iceberg looks like this. On that same day, I interacted with five different
automated systems like the kiosks in McDonald's:

I got money in the morning from the ATM.

I bought gas from an automated pump.

I bought groceries at BJ's (a warehouse club) using an extremely well-designed
self-service check out line.

I bought some stuff for the house at Home Depot using their not-as-well-

designed-as-BJ's self-service check out line.
I bought my food at McDonald's at the kiosk, as described above.
All of these systems are very easy-to-use from a customer standpoint, they are fast,
and they lower the cost of doing business and should therefore lead to lower prices. All
of that is good, so these automated systems will proliferate rapidly.
The problem is that these systems will also eliminate jobs in massive numbers. In fact,
we are about to see a seismic shift in the American workforce. As a nation, we have no
way to understand or handle the level of unemployment that we will see in our
economy over the next several decades.
These kiosks and self-service systems are the beginning of the robotic revolution.
When most people think about robots, they think about independent, autonomous,
talking robots like the ones we see in science fiction films. C-3PO and R2-D2 are
powerful robotic images that have been around for decades. Robots like these will
come into our lives much more quickly than we imagine -- self-service checkout
systems are the first primitive signs of the trend. Here is one view from the future to
show you where we are headed:
Automated retail systems like ATMs, kiosks and self-service checkout lines
marked the beginning of the robotic revolution. Over the course of fifteen years
starting in 2001, these systems proliferated and evolved until nearly every
retail transaction could be handled in an automated way. Five million jobs in the
retail sector were lost as a
result of these systems.
The Jobless Recovery
The "Jobless Recovery" that we are currently
experiencing in the U.S. is big news. See for
example The Mystery of the 'jobless recovery':
"Consider these facts: Employment growth at the
moment is the lowest for any recovery since the
government started keeping such statistics in
The next step was
autonomous, humanoid
robots. The mechanics of
walking were not simple, but
1939. The labor force shrank in July as
discouraged workers stopped seeking
employment. The number of people employed
has fallen by more than 1 million since the
"recovery" began in the fall of 2001." [ref]
Honda had proven that
those problems could be
solved with the creation of
its ASIMO robot at the turn
of the century. Sony and
other manufacturers
followed Honda's lead. Over
the course of two decades,
engineers refined this
hardware and the software
controlling it to the point
where they could create
humanoid bodyforms with
The Washington Post notes that we are now
witnessing, "the longest hiring downturn since
the Depression". [ref] The article also notes,
"The vast majority of the 2.7 million job losses
since the 2001 recession began were the result
of permanent changes in the U.S. economy and
are not coming back."
There is no mystery -- the jobless recovery is
exactly what you would expect in a robotic
nation. When automation and robots eliminate
jobs, they are gone for good. The economy then
has to invent new jobs. But it is much harder to
do that now because robots can quickly fill the
new jobs that get invented. See the FAQ for
additional information.
the grace and precision of a
ballerina or the mass and sheer strength of the Incredible Hulk.
Decades of research and development work on autonomous robotic intelligence
finally started to pay off. By 2025, the first machines that could see, hear,
move and manipulate objects at a level roughly equivalent to human beings
were making their way from research labs into the marketplace. These robots
could not "think" creatively like human beings, but that did not matter. Massive
AI systems evolved rapidly and allowed machines to perform in ways that
seemed very human.
Humanoid robots soon cost less than the average car, and prices kept falling. A
typical model had two arms, two legs and the normal human-type sensors like
vision, hearing and touch. Power came from small, easily recharged fuel cells.
The humanoid form was preferred, as opposed to something odd like R2-D2,
because a humanoid shape fit easily into an environment designed around the
human body. A humanoid robot could ride an escalator, climb stairs, drive a
car, and so on without any trouble.
Once the humanoid robot became a commodity item, robots began to move in
and replace humans in the workplace in a significant way. The first wave of
replacement began around 2030, starting with jobs in the fast food industry.
Robots also filled janitorial and housekeeping positions in hotels, motels, malls,
airports, amusement parks and so on.
The economics of one of these humanoid robots made the decision to buy them
almost automatic. In 2030 you could buy a humanoid robot for about $10,000.
That robot could clean bathrooms, take out trash, wipe down tables, mop
floors, sweep parking lots, mow grass and so on. One robot replaced three sixhour-a-day employees. The owner fired the three employees and in just four
months the owner recovered the cost of the robot. The robot would last for
many years and would happily work 24 hours a day. The robot also did a far
better job -- for example, the bathrooms were absolutely spotless. It was
impossible to pass up a deal like that, so corporations began buying armies of
humanoid robots to replace human employees.
The first completely robotic fast food restaurant opened in 2031. It had some
rough edges, but by 2035 the rough edges were gone and by 2040 most
restaurants were completely robotic. By 2055 the robots were everywhere. The
changeover was that fast. It was a startling, amazing transformation and the
whole thing happened in only 25 years or so starting in 2030.
In 2055 the nation hit a big milestone -- over half of the American workforce
was unemployed, and the number was still rising. Nearly every "normal" job
that had been filled by a human being in 2001 was filled by a robot instead. At
restaurants, robots did all the cooking, cleaning and order taking. At
construction sites, robots did everything -- Robots poured the concrete, laid
brick, built the home's frame, put in the windows and doors, sided the house,
roofed it, plumbed it, wired it, hung the drywall, painted it, etc. At the airport,
robots flew the planes, sold the tickets, moved the luggage, handled security,
kept the building clean and managed air traffic control. At the hospital robots
cared for the patients, cooked and delivered the food, cleaned everything and
handled many of the administrative tasks. At the mall, stores were stocked,
cleaned and clerked by robots. At the amusement park, hundreds of robots ran
the rides, cleaned the park and sold the concessions. On the roads, robots
drove all the cars and trucks. Companies like Fedex, UPS and the post office
had huge numbers of robots instead of people sorting packages, driving trucks
and making deliveries.
By 2055 robots had taken over the workplace and there was no turning back.
I know what you are thinking. You are thinking, "This is impossible -- there will not be
humanoid robots in 2055. It is a ridiculous suggestion." But they will be here.
Humanoid robots are as inevitable as airplanes.
Imagine this. Imagine that you could travel back in time to the year 1900. Imagine
that you stand on a soap box on a city street corner in 1900 and you say to the
gathering crowd, "By 1955, people will be flying at supersonic speeds in sleek aircraft
and traveling coast to coast in just a few hours." In 1900, it would have been insane
to suggest that. In 1900, airplanes did not even exist. Orville and Wilbur did not
make the first flight until 1903. The Model T Ford did not appear until 1909.
Yet, by 1947, Chuck Yeager flew the X1 at supersonic speeds. In 1954, the B-52
bomber made its maiden flight. It took only 51 years to go from a rickety wooden
airplane flying at 10 MPH, to a gigantic aluminum jet-powered Stratofortress carrying
70,000 pounds of bombs halfway around the world at 550 MPH. In 1958, Pan Am
started non-stop jet flights between New York and Paris in the Boeing 707. In 1969,
Americans set foot on the moon. It is unbelievable what engineers and corporations
can accomplish in 50 or 60 short years.
There were millions of people in 1900 who believed that humans would never fly. They
were completely wrong. However, I don't think anyone in 1900 could imagine the B-52
happening in 54 years.
Over the next 55 years, the same thing will happen to us with robots. In the process,
the entire employment landscape in America will change. Here is why that will happen.
Moore's Law
The Vision Thing
One of the key capabilities limiting robotic
expansion at the moment is image
processing -- the ability of robots to look at a
scene like a human does and detect all the
objects in the scene. Without general,
flexible vision algorthms, it is hard for a robot
to do much. For example, it is hard for a
blind robot to clean a bathroom or drive a
car. Part of the problem is raw CPU power,
but that problem will be solved over the next
20 to 30 years because of Moore's law. The
other part is a software problem. We don't
have really good algorithms yet. My
prediction is that we will see significant
progress in the image processing field over
the next 20 years.
Think about the changes that will take place
once basic research in image processing
yields the algorithms we need. Suddenly it
will be easy for robots to walk around and
manipulate objects in any human
environment.

Robotic cars and trucks are one





obvious application for vision
systems. There are more than
40,000 deaths in the U.S. every year
because of car accidents. Human
negligence causes most of these
accidents. With robots doing all the
driving, the number of accidents will
go way down and we will eliminate
one of the leading causes of death in
the U.S. Unfortunately, robotic
vehicles will also leave every taxi
driver, bus driver, truck driver, etc.
out of work.
Robots with vision systems will be
able to do all the cleaning in every
hotel, store, airport and restaurant.
Things will be spotless, but that will
unemploy perhaps five million
people.
Robots with vision can stack brick,
lay tile, paint and put on roofs all day
and all night. Five million more
people will be out of work.
Robots with vision can easily stock
shelves in stores. Think of all the
workers stocking shelves, restocking
merchandise, taking inventory,
directing customers and manning
cash resisters in places like WalMart, K-Mart, Target, Home Depot,
Lowes, BJ's, Sam's Club, Toys R
Us, Sears, J.C. Penny's, Barnes and
Noble, Borders, Best Buy, Circuit
City, Office Max, Staples, Office
Depot, Kroger's, Winn-Dixie, Pet
Depot and on and on and on. More
than 10 million employees will be on
the street.
Armies of robots with built-in night
vision will be able to provide security
and policing unlike anything we can
imagine today.
And so on.
A single research area -- computer vision -will have a tremendous impact once it
reaches its goal of general, flexible image
processing algorithms.
This is analogous to the development of
airplanes. Nothing happened in the field of
aviation until the Wright Brothers made the
breakthrough that got the first airplane off the
ground. 44 short years after the
breakthrough, supersonic flight was possible.
You have probably heard about Moore's Law.
Once robots have flexible, accurate vision
It says that CPU power doubles every 18 to 24 systems, the pace of change will be
unbelievably rapid and unstoppable. Tens of
months or so. History shows Moore's law very millions of people will become unemployed
clearly. You can see it, for example, by
over the course of just two to three decades.
charting the course of Intel microprocessor
If you think about it, robots are a very good
chips starting with Intel's first single-chip
thing. Human beings should not be driving
microprocessor in 1971:
trucks, flipping burgers or scrubbing toilets.
These activites represent a massive waste of
human potential. The question is: what will
 In 1971, Intel released the 4004
these tens of millions of people do to make a
microprocessor. It was a 4-bit chip
living when their tens of millions of jobs
running at 108 kilohertz. It had about evaporate? What will happen to the economy
2,300 transistors. By today's standards when the unemployment rate reaches 30%
or 40%?
it was extremely simple, but it was
powerful enough to make one of the first electronic calculators possible.

In 1981, IBM released the first IBM PC. The original PC was based on the Intel
8088 processor. The 8088 ran at 4.7 megahertz (43 times faster clock speed
than the 4004) and had nearly 30,000 transistors (10 times more).

In 1993, Intel released the first Pentium processor. This chip ran at 60
megahertz (13 times faster clock speed than the 8088) and had over three
million transistors (10 times more).

In 2000 the Pentium 4 appeared. It had a clock speed of 1.5 gigahertz (25
times faster clock speed than the Pentium) and it had 42 million transistors (13
times more). [ref]
You can see that there are two trends that combine to make computer chips more and
more powerful. First there is the increasing clock speed. If you take any chip and
double its clock speed, then it can perform twice as many operations per second. Then
there is the increasing number of transistors per chip. More transistors let you get
more done per clock cycle. For example, with the 8088 processor it took approximately
80 clock cycles to multiply two 16-bit integers together. Today you can multiply two
32-bit floating point numbers every clock cycle. Some chips today even allow you to
get more than one floating point operation done per clock cycle.
Taking Moore's law literally, you would expect processor power to increase by a factor
of 1,000 every 15 or 20 years. Between 1981 and 2001, that was definitely the case.
Clock speed improved by a factor of over 300 during that time, and the number of
transistors per chip increased by a factor of 1,400. A processor in 2002 is 10,000 times
faster than a processor in 1982 was. This trend has been in place for decades, and
there is nothing to indicate that it will slow down any time soon. Scientists and
engineers always get around the limitations that threaten Moore's law by developing
new technologies. [ref]
The same thing happens with RAM chips and hard disk space. A 10 megabyte hard disk
cost about $1,000 in 1982. Today you can buy a 250 gigabyte drive that is twice as
fast for $350. Today's drive is 25,000 times bigger and costs one-third the price of the
1982 model because of Moore's law. In the same time period -- 1982 to 2002 -standard RAM (Random Access Memory) available in a home machine has gone from
64 kilobytes to 128 megabytes -- it improved by of factor of 2,000.
What if we simply extrapolate out, taking the idea that every 20 years things improve
by a factor of 1,000 or 10,000? What we get is a machine in 2020 that has a processor
running at something like 10 trillion operations per second. It has a terabyte of RAM
and one or two petabytes of storage space (a petabyte is one quadrillion bytes). A
machine with this kind of power is nearly incomprehensible -- there are only two or
three machines on the planet with this kind of power today (the monstrous NEC Earth
Simulator, with 5,000 separate processor chips working together, is one example). In
2020, every kid will be running their video games on a $500 machine that has that
kind of power.
What if we extrapolate another 20 years after that, to 2040? A typical home machine
at that point will be 1,000 times faster than the 2020 machine. Human brains are
thought to be able to process at a rate of approximately one quadrillion operations per
second. A CPU in the 2040 time frame could have the processing power of a human
brain, and it will cost $1,000. It will have a petabyte (one quadrillion bytes) of RAM. It
will have one exabyte of storage space. An exabyte is 1,000 quadrillion bytes. That's
what Moore's law predicts.
Between 1981 and 2002, the processing power, hard disk space and RAM in a
typical desktop computer increased dramatically because of Moore's Law.
Extrapolating out to the years 2021 and 2041 shows a startling increase in
computer power. The point where small, inexpensive computers have power
approaching that of the human brain is just a few decades away.
The computer power we will have in a home machine around 2050 will be utterly
amazing. A typical home computer will have processing power and memory capacity
that exceeds that of a human brain. What we will have in 2100 is anyone's guess. The
power of a million human brains on the desktop? It is impossible to imagine, but not
unlikely.
We need to start thinking about that future today. People are talking optimistically
about fielding a team of humanoid robotic soccer players able to beat the best human
players in 2050. Imagine a team of C-3POs running and kicking as well as or better
than the best human soccer stars, but never getting tired or injured. Imagine that
same sort of robot taking 50% of America's jobs. This Honda ad for ASIMO, and the
fact that Honda is running it, are telling:
Honda ad from the back cover of Smithsonian magazine, January 2003
As the ad says, "ASIMO could be quite useful in some very important tasks." One of
those very important tasks will be to take your job. [For details on ASIMO and a video,
Click Here]
The point is simple. In the 2050 time frame, you can expect to buy a $1,000 home
computer that has the computing power and memory of the human brain.
Manufacturers will marry that computer with a humanoid robotic chassis like ASIMO, a
fuel cell and advanced AI software to create autonomous humanoid robots with
startling capabilities. It is not really hard to imagine that we will have robots like C3PO walking around and filling jobs as early as the 2030 time frame. What's missing
from robots right now is brainpower, and by 2030 we will start to have more silicon
brainpower than we know what to do with.
The New Employment Landscape
We have no way to understand what is coming or
how it will affect us. Keep this fact in mind: the
Who Will Be First?
workplace of today is not really that much
Who will be the first large group of
employees to be completely automated
different from the workplace of 100 years ago.
out of their jobs by robots? Chances are
Humans do almost all of the work today, just like that it will be pilots. There are already
they did in 1900. A restaurant today is nearly
robots in the cockpit: auto-pilots. We are
identical to a restaurant in 1900. An airport, hotel rapidly coming to the point where
airplanes can autonomously take off, fly
or amusement park today is nearly identical to
to their destinations and land without
any airport, hotel or amusement park seen
human intervention. Airplanes use radar
decades ago. Humans do nearly everything today for their vision systems, and radar has
been around for more than half a
in the workplace, just like they always have.
century. Pilots are prone to human error
That's because humans, unlike robots, can see,
and they are incredibly expensive for the
airlines. The elimination of pilots could
hear and understand language. Robots have
happen as early as 2015.
never really competed with humans for real jobs
because computers have never had the vision systems needed to drive cars, work in
restaurants or deliver packages. All that will change very quickly by the middle of the
21st century. As CPU chips and memory systems finally reach parity with the human
brain, and then surpass it, robots will be able to perform nearly any normal job that a
human performs today. The self-service checkout lines that are springing up
everywhere are the first sign of the trend. See Robots in 2015 for details.
The problem, of course, is that all of these robots will eliminate a huge portion of the
jobs currently held by human beings. For example, there are 3.5 million jobs in the
fast food industry alone. Many of those will be lost to kiosks. Many more will be lost to
robots that can flip burgers and clean bathrooms. Eventually they will all be lost. The
only people who will still have jobs in the fast food industry will be the senior
management team at corporate headquarters.
The same sort of thing will happen in retail stores, hotels, airports, factories,
construction sites, delivery companies and so on. All of these jobs will evaporate at
approximately the same time, leaving all of those workers unemployed. The Post
Office, FedEx and UPS together employed over a million workers in 2002. Once robots
can drive the trucks and deliver the packages at a much lower cost than human
workers can, those 1,000,000 or so employees will be out on the street.
If you look at the 2000 census figures, you can see the magnitude of the problem.
According to the census, there were 114 million employees working for 7 million
companies in 2000. The employees brought home almost $4 trillion in wages that year.
Here's the breakdown by industry:
U.S. jobs by industry according to the 2000 Census.
When you look at this chart, it is easy to understand that there will be huge job losses
by 2040 or 2050 as robots move into the workplace. For example:

Nearly every construction job will go to a robot. That's about 6 million jobs lost.

Nearly every manufacturing job will go to a robot. That's 16 million jobs lost.

Nearly every transportation job will go to a robot. That's 3 million jobs lost.

Many wholesale and retail jobs will go to robots. That's at least 15 million lost
jobs.

Nearly every hotel and restaurant job will go to a robot. That's 10 million jobs
lost.
If you add that all up, it's over 50 million jobs lost to robots. That is a conservative
estimate. By 2050 or so, it is very likely that over half the jobs in the United States will
be held by robots.
All the people who are holding jobs like those today will be unemployed.
American society has no way to deal with a situation where half of the workers are
unemployed. During the Great Depression at its very worst, 25% of the population was
unemployed. In the robotic future, where 50 million jobs are lost, there is the potential
for 50% unemployment. The conventional wisdom says that the economy will create
50 million new jobs to absorb all the unemployed people, but that raises two important
questions:

What will those new jobs be? They won't be in manufacturing -- robots will hold
all the manufacturing jobs. They won't be in the service sector (where most
new jobs are now) -- robots will work in all the restaurants and retail stores.
They won't be in transportation -- robots will be driving everything. They won't
be in security (robotic police, robotic firefighters), the military (robotic soldiers),
entertainment (robotic actors), medicine (robotic doctors, nurses, pharmacists,
counselors), construction (robotic construction workers), aviation (robotic
pilots, robotic air traffic controllers), office work (robotic receptionists, call
centers and managers), research (robotic scientists), education (robotic
teachers and computer-based training), programming or engineering
(outsourced to India at one-tenth the cost), farming (robotic agricultural
machinery), etc. We are assuming that the economy is going to invent an
entirely new category of employment that will absorb half of the working
population.

Why isn't the economy creating those new jobs now? Today there are millions
of unemployed people. There are also tens of millions of people who would
gladly abandon their minimum wage jobs scrubbing toilets, flipping burgers,
driving trucks and shelving inventory for something better. This imaginary new
category of employment does not hinge on technology -- it is going to employ
people, after all, in massive numbers -- it is going to employ half of today's
working population. Why don't we see any evidence of this new category of jobs
today?
Labor = Money
Right now, a majority of people in America trade their labor for money, and then they
use the money to participate in the economy. Our entire society is built around a
simple equation: labor = money. This equation explains why any new labor-saving
technology is disruptive -- it threatens a group of people with joblessness and welfare.
Autonomous humanoid robots will take disruption to a whole new level. Once fullyautonomous, general-purpose humanoid robots are as easy to buy as an automobile,
most people in the economy will not be able to make the labor = money trade
anymore. They will have no way to earn money, and that means they end up homeless
and on welfare.
With that many people on welfare, cost control becomes a big issue. We are already
seeing the first signs of it today. The January 20, 2003 issue of Time magazine notes
the trend:
"Cities have lost patience, concentrating on getting the homeless out of sight.
In New York City, where shelter space can't be created fast enough, Mayor Mike
Bloomberg has proposed using old cruise ships for housing."
This is not science fiction -- this is today's news. What we are talking about here are
massive, government-controlled welfare dormitories keeping everyone who is
unemployed "out of sight". Homelessness is increasing because millions of people are
living on the edge. Millions of working adults and families are trying to make a living
from millions of low-paying jobs at places like Wal-Mart and McDonald's. Most of those
low-paying jobs are about to evaporate.
This article from the NYTimes sums up our current situation with this quote:
Jobs have not followed growth, the committee wrote, because of increases in
workers' productivity. In fact, Ms. Reaser said, the unemployment rate is
unlikely to fall until the economy expands at an annual rate of 3.5 percent or 4
percent, the sort of pace attained in only two quarters since the recovery
supposedly began.
With productivity growing at more than 2 percent a year, and the labor force
growing about 1 percent a year, she said, the "hurdle rate" of growth for
increasing the share of Americans with jobs cannot be less than 3 percent.
The term "worker productivity" in this quote means "robots". We are seeing the tip of
the iceberg right now, because robotic replacement of human workers in every
employment sector is about to accelerate rapidly. Combine that with a powerful trend
pushing high-paying IT jobs to India. Combine it with the rapid loss of call-center jobs
to India. When the first wave of robots and offshore production cut in to the factory
workforce in the 20th century, the slack was picked up by service sector jobs. Now we
are about to see the combined loss of massive numbers of service-sector jobs, most of
the remaining jobs in factories, and many white collar jobs, all at the same time.
When a significant portion of the normal American population is permanently living in
government welfare dormitories because of unemployment, what we will have is a
third-world nation. These citizens will be imprisoned by unemployment in their own
society. If you are an adult in America and you do not have a job, you are flat out of
luck. That is how our economy is structured today -- you cannot live your life unless
you have a job. Many people -- perhaps a majority of Americans -- will find themselves
out of luck in the coming decades.
The arrival of humanoid robots should be a cause for celebration. With the robots
doing most of the work, it should be possible for everyone to go on perpetual vacation.
Instead, robots will displace millions of employees, leaving them unable to find work
and therefore destitute. I believe that it is time to start rethinking our economy and
understanding how we will allow people to live their lives in a robotic nation.
Robots in 2015
[Part 2 of the Robotic Nation series]
by Marshall Brain
Imagine that you have a time machine and you are able to travel back in
time to the year 1950:




If you walk into a restaurant, hotel
or store in 1950, it would be nearly
identical to a restaurant, hotel or
store today. People do everything in
both cases -- people stock the
shelves, prepare the food, serve the
food, help customers, man the cash
registers and sweep the floors in
2003 just like they did in 1950.
It's the same on any construction
site. In 1950, guys with circular
saws and hammers built houses.
Today it is guys with circular saws
and nail guns. No big difference.
An airport in 1950 and an airport
today are nearly identical. People
take your tickets, handle the
baggage, maintain the planes and
pilot them in both cases.
Coney island in 1950 looks like any
amusement park today, with people
operating the rides, selling the
concessions and keeping the park
clean.
See Also
About the Author
Robotic Nation
Robots in 2015
Robotic Freedom
Robotic Nation FAQ
Robotic Nation Evidence
Discard your body
Manna - the book
Science on the Brain
Interesting Videos
Careful Parents
Star Wars
Helpation
SadTech
How to make a million dollars
Making money with web sites
The Teenager's Guide
Reviews
Salon
Wired
LiveScience
LATimes Editorial
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Industries like these are, by and large,
completely untouched by automation
today. These people-powered industries
represent at least half of the jobs in the American job pool.
Now imagine the near-term future. In just a decade or two we begin to
approach a point where CPU power rivals that of the human brain. This CPU
power drives the creation of robots that take over all of these jobs. The
unemployment rate in the United States skyrockets as cheap robots push
expensive humans out of half the jobs that we see in our economy today.
The automated checkout lines and kiosks that are popping up in places like
Home Depot and McDonald's are the first messengers of this robotic
takeover.
When the robots start arriving in massive numbers to take half the jobs in
America, the effects will be profound. At this moment in history, we are
standing right on the edge of the transformation to a robotic nation. It is
fascinating to stand on this edge and think about what the robots will mean
to us as citizens of the United States.
Replacing all the Pilots
The Pace of Change
It is hard to believe but true that the
World Wide Web did not exist 10 years
ago. On November 11, 1993, version
1.0 of Mosaic, the first Web Browser,
became available on the Internet. The
Web was born on the day that Mosaic
appeared. Think about everything that
has changed in those 10 years. No
normal person had an Internet
connection in 1993. Today, more than
60 percent of U.S. households have an
Internet connection. No one shopped on
the Web, bought tickets on the Web,
read the news on the Web, hooked up
with dates on the Web, blogged on the
Web, participated in auctions on the
Web, looked up movie trailers or
reviews on the Web, traded or
purchased music on the Web, used
Instant Messaging on the Web, etc. in
1993. Today these activities are taken
completely for granted. A tiny handful of
people used email in 1993. Today email
is essential for both business and
personal communication, with trillions of
messages sent every year. And The
entire Internet Bubble came and went
on the stock market since 1993.
Hundreds of billions of dollars were
invested and lost in new Internet
companies. All in 10 years.
That pace of change seems fast, and it
is, but it is not unusual in America. Even
100 years ago things could change very
quickly. The first Model T Ford, for
example, was sold in the 1909 model
Robots in the workplace will be a very
popular idea because they will eliminate
labor costs. Pilots will be the first to go
because pilots are incredibly expensive and
their jobs are largely automated already.
Let's say that, in 2015, one airline decides
to completely automate the cockpit and
eliminate its pilots. Since pilots are
expensive, that airline will have a real price
advantage over its competitors. That airline
will also have far more scheduling flexibility
worry about crew availability.
year, and in that first year only 10,000
were manufactured. By 1912 there were
3,500 Ford dealers selling 300,000 cars
per year. Just a few years later, Ford
was selling 2 million cars per year and
there were over 100 companies
competing with Ford. Even a century
ago, a popular idea could catch on and
spread very quickly.
Robots will spread at the same
remarkable rate throughout the job
market.
because it will not have to
After that first airline makes the leap to the robotic cockpit, every airline
will do the same thing. Competitive pressure will leave the other airlines
with no choice. Southwest Airlines has shown us just how sensitive the
airline industry is to lower prices.
The complete elimination of pilots from the airline industry will take just a
few years. The 66,000 pilots in the Air Line Pilots Association will be out of
work. These pilots are people who have spent thousands and thousands of
hours training in their chosen profession. They have high salaries as well -up to $250,000 per year is not uncommon for a senior pilot flying
commercial aircraft.
The economy could weather the loss of those 66,000 jobs. With an
American workforce of over 100 million employees, 66,000 people is a drop
in the bucket. We will all feel sorry for the pilots for a few minutes, but then
we will get over it because ticket prices will go down. The pilots will all
adapt by getting jobs at Wal-Mart or Target or McDonald's. This sort of
thing happens all the time in any capitalistic society.
The question is, will all the unemployed pilots be able to get jobs at WalMart or Target or McDonald's? The answer to that question is where things
get uncomfortable.
Robots in Retailers
In 2015, at about the same time that the airlines are laying off all of their
pilots, Wal-Mart or Target or some other large retailer will be introducing a
totally automated inventory management system. Every shelf will be fitted
with RFID tags and bar codes, allowing a mobile pick-and-place robot to
find the exact shelf location of every product in the store. Every individual
product in the warehouse will also be fitted with an RFID tag and bar code,
so the robot will be able to pick up and identify every product that it needs
to shelve. A relatively simple computer vision system will allow the robot to
stack items on the shelves. These inventory management robots will
operate 24-hours-a-day shuttling merchandise from the back of the store
onto the shelves as items are sold. The robots will also constantly
straighten the shelves and re-shelve merchandise. All of the technology
needed to do this is nearly in place today.
By 2015, every big box retailer will be
Voice Recognition
using automated checkout lines. Robotic
help systems will guide shoppers in the
For a taste of just how good robotic
voice recognition has gotten, call (800)
stores. The automated inventory
555-1212 and ask for the listing for
management robots will allow the first
American Airlines or Delta Airlines. A
retailer to lay off a huge percentage of its
robotic system will give you the number.
employees. Competitive pressure will force Then call American or Delta and
navigate their voice-operating arrival
Wal-mart, K-Mart, Target, Home Depot,
and departure systems. In 10 years,
Lowes, BJ's, Sam's Club, Toys R Us, Sears, these systems will be flawless and they
will understand multiple languages with
J.C. Penny's, Barnes and Noble, Borders,
Best Buy, Circuit City, Office Max, Staples, ease. By 2015, big box retailers will
deploy voice-recognizing robots and
Office Depot, Kroger's, Winn-Dixie, Pet
kiosks throughout the store to help
Depot and so on to adopt the same robotic customers find the items they need.
inventory systems in their stores. The
entire transition will happen in just five years or so. Any company that does
not automate will be at such a pricing disadvantage that it will go out of
business. Ten million unemployed workers dumped onto the job market
over the course of five years will have a profound effect on the
unemployment statistics in the United States.
The problem is that this same sort of thing will be happening in every
sector of the economy at a very rapid pace, dumping millions more
unemployed workers onto the job market at the same time. See Robotic
Nation for details.
Creating New Jobs
Rationalizations
People who read Robotic Nation had a
variety of rationalizations to explain why
the coming wave of intelligent robots will
have no effect on employment in the
U.S. Here are some of the most
common rationalizations:





"We will never create robots
that have vision, touch and
hearing like humans do.
There will never be robots
working in McDonalds or WalMart." This is no different from
a person in 1900 saying
"humans will never fly".
"People will not go to stores
and restaurants staffed by
robots. People need human
interaction." ATMs have
replaced tellers for a majority of
banking transactions, and
automated gas pumps handle
most gasoline purchases now.
People love to use automated
systems. It is also easy to
imagine walking into a robotic
restaurant where the robots,
using facial recognition systems,
actually greet you when you
arrive, know exactly what you
like and do not like, etc. The
expreience in a robotic
restaurant is likely to be much
more personal and friendly than
most restaurants are today.
"Robots won't eliminate jobs,
they will create more jobs.
Backhoes and bulldozers
replaced all the people who
used to dig ditches, but then
those ditch diggers got jobs
building backhoes and were a
lot better off." This article
explains why that won't be the
case -- robots will be making the
robots, not people.
"Unemployed workers will
riot, destroying the robots
and taking back their jobs."
Part of the robotic nation will be
a pervasive and extremely
sensitive robot security force
that will remove the word "riot"
from our vocabulary.
"We will move to a 20 hour
work week and everyone will
be employed." If that's going to
happen, why doesn't it happen
today? We are moving in the
opposite direction right now,
When Ford started selling the Model T in
1909, the industrialized automotive
industry was born. This new industry
eventually created millions of new jobs.
Why won't all the new companies that are
making these robots create millions of new
jobs in 2015? Why won't these new jobs
absorb all of the unemployed pilots and
service-sector employees? Think about it:





with people in service sector
jobs making so little money that
they have to work two or three
jobs. There is no economic
reason for business owners to
raise pay or shorten hours when
tens of millions of people are
unemployed. Supply and
demand dictates that wages will
fall, not rise.
"Unemployed people will start
their own businesses in
massive numbers."
Unemployed people generally
do not have the capital to start
businesses, but even if they did
the odds are against them.
According to Robert Kiyosaki in
the bestselling Rich Dad, Poor
Dad, "The odds are against
success: Nine out of 10
companies fail in five years. Of
those that survive the first five
years, nine out of every ten of
those eventually fail, as well."
That's a 1% chance of long-term
success. If your business does
not succeed, you are
unemployed again.
Will these millions of new robots
create manufacturing jobs? Not in
the United States. Robots will be
assembling robots. Even if you
assume that some people will be
involved in assembling them, all of
the assembly will take place in places
like China, Mexico, Indonesia, Korea,
etc. where manufacturing costs are
far lower than they are in the U.S.
Will these millions of new robots
create programming and engineering
jobs? Not in the United States. U.S.
corporations are in the process of moving the bulk of all
programming and engineering jobs to places like India, Russia,
China, etc. where the programmers and engineers cost a tenth as
much as they do in the U.S.
Will the millions of new robots create jobs in sales? Not in the United
States. Corporations ordering new robots will purchase their robots
over the Web without any human intervention, in the same way that
you can order a Segway from Amazon today.
Will these millions of new robots create repair and servicing jobs? Not
in the United States. When a robot needs repair, another robot will
bundle it onto a pallet. A robotic forklift will place the pallet on a
truck. The truck will drive to a repair facility. The facility will repair
the robot with highly automated systems that require no human
intervention or supervision. Human beings will not be repairing
robots -- robots will.
The rise of the robotic nation will not create new jobs for people -- it will
create jobs for robots.
In the past, automation has not had this effect. For example, before there
were backhoes there were men with shovels. A backhoe replaced a hundred
men with shovels. But new businesses and factories sprang up to
manufacture the backhoes, and those companies hired people -- many of
them former ditch diggers. All of these new businesses and factories tended
to employ many of the workers displaced by technology. It has never been
a perfect system -- for example, the book The Grapes of Wrath chronicles
just how bad things can get when a large segment of workers in the
economy gets displaced. But, ignoring short-term displacements like that,
the economy has generally absorbed every unemployed worker in the new
businesses that get created by advances in technology.
The unusual thing about the robotic revolution is that the robots will come
and displace millions of workers throughout the economy, but the robot
industry will create very few new jobs. Millions will be unemployed in
America, but there will be nothing for them to do.
Conventional wisdom says that the economy will respond to all of these
unemployed workers by creating new jobs for them. But look at our
economy today. For the past 40 years, the economy has been generating
millions of low-paying service sector jobs that create a large class of
employees known as the working poor. 60% of the American workforce
makes less than $14 per hour today [ref]. If the economy is going to be
creating millions of high-paying, exciting, fulfilling jobs for all of these
displaced workers, it would be doing it now. Why can't all of the WalMart/Target/McDonald's/etc. employees who are going to get displaced in
2015 step into their new, exciting, higher-paying jobs right now, instead of
waiting? It's because the economy tends not create jobs like that in any
sort of volume.
At this moment, instead of creating exciting new jobs, the economy is
locked in a race to the bottom. This race is marked by a workplace that
continuously creates lower-paying jobs instead of higher-paying ones.
The Race to the Bottom
The fast food industry provides a perfect demonstration of how the race to
the bottom works. Almost every working American employed by the fast
food industry is paid hourly, makes minimum wage or close to it, receives
no benefits, no vacation time and no sick time. Employee hours are tracked
so that no hourly employee works more than 40 hours a week, thereby
avoiding overtime pay. Schedules can be extremely choppy, sometimes
requiring employees to come in to work, go home and come back again
during the same day. The pay of the nation's 3.5 million fast food workers
has been driven as close to zero as is legally allowed.
But that is not low enough. The fast food industry wants to drive worker
pay even lower. The only way to do that is to eliminate the minimum wage.
The book Fast Food Nation by Eric Schlosser describes the trend:
The fast food industry pays the minimum wage to a higher proportion
of its workers than any other American industry. Consequently, a low
minimum wage has long been a crucial part the fast food industry's
business plan. Between 1968 and 1990, the years when the fast food
chains expanded at their fastest rate, the real value of the U.S.
minimum wage fell by almost 40 percent. In the late 1990s, the real
value of the U.S. minimum wage still remained about 27 percent
lower than it was in the late 1960s. Nevertheless, the National
Restaurant Association (NRA) has vehemently opposed any rise in
the minimum wage at the federal, state or local level [minimum wage
has been $5.15 since 1997]. About 60 large fast food companies -including Jack in the Box, Wendy's, Chevy's, and Red Lobster -- have
backed Congressional legislation that would essentially eliminate the
federal minimum wage by allowing states to disregard it. Pete
Meersman, the president of the Colorado Restaurant Association,
advocates creating a federal guest worker program to import lowwage foodservice workers from overseas.
While the real value of the wages paid to restaurant workers has
declined for the past three decades, the earnings of restaurant
company executives have risen considerably. According to a 1997
survey in Nation's Restaurant News, the average corporate executive
bonus was $131,000, an increase of 20 percent over the previous
year. [ref]
In this brief passage, you can see four different techniques that
corporations use in their race to the bottom:



They hunt in packs.
They work closely with Congress to modify laws for their own benefit,
even when those modifications adversely affect millions of
employees.
They use multiple angles of attack. They prevent minimum wage
increases. They work on guest worker programs. And they work to
eliminate the minimum wage.

The upper echelon in these companies, while lowering the pay of
everyone else, raise their own pay.
Robots completely change the equation, because robots make the minimum
wage irrelevant. As robots become available, they will allow the fast food
industry to dump all the minimum wage workers. The executives will make
even more money, and who can blame them? We would all like to get
bigger paychecks. The goal of a business owner is to make more and more
money, not to create jobs or raise wages.
This is why robots will spread throughout the workforce with remarkable
speed. The same sensitivity to labor costs will cause the high-speed
replacement of employees in retail, construction, transportation,
entertainment, etc., all at approximately the same time. Over the next
decade or two, robots will begin releasing millions workers from their jobs.
The bad news is that there will be nowhere else for these workers to go.
In the first part of the 20th century, productivity gains translated into
higher pay and shorter hours for workers. In today's economy it is just the
opposite. Jobs at places like McDonald's and Wal-Mart, as well as places
like meat packing plants and factories, get fragmented into components
that can be performed by any warm body. "Any warm body" means a
minimum wage worker. This is what the race to the bottom is all about -the de-skilling of the workplace has been a fundamental theme of the
American job market for the last century. It allows the easy replacement of
low-skill workers (e.g. - turnover in the fast food industry is 300 to 400
percent), which means the lowest wages possible. So the U.S. economy is
creating millions of minimum wage jobs, and minimum wage jobs are
perfect for replacement by robots. The pace of that replacement will be
startling to all of us.
Where Do We Want to Go?
Our society, as it is structured today, works like this -- you must either own
a profitable business, or work for someone who owns a business, in order
to "make a living." You have no choice. You must earn money in order to
live your life. If you do not work and earn money, you are homeless.
Today, as in the past, the way that most people earn money is by getting a
job. This makes jobs incredibly important to the American economy. That is
why every U.S. President is focused on jobs and job creation. Right now we
are standing right on the edge of an era where the number of jobs in our
economy will be drastically reduced by robots. No Presidential speech or act
of Congress is going to change that.
Massive unemployment in America is good for no one. Unemployed people
will suffer tremendously, and so will businesses. The American economy
depends on a healthy base of consumers spending their money. Massive
unemployment causes a sharp downward spiral that hurts the entire
economy and the entire nation.
The questions that we are raising here are profound. How do we prevent
this downward spiral from happening? Are we smart enough to see the
robotic revolution that is coming and plan for it prior to the crisis? Can we
redesign the economy so that we enter the new era of robots smoothly?
With robots doing most of the work, can we actually create a society that
takes advantage of the leisure that robots can provide? Or will the tens of
millions of people displaced by the robots end up being homeless and
destitute, living in government welfare dormatories?
In other words: How do we want the robotic economy to work for the
citizens of this nation? We should consciously think about that question. We
should control our robotic future, rather than letting it happen randomly.
I believe that it is time to start rethinking our economy and understanding
how we will allow people to live their lives in a robotic nation. Instead of
"letting the robots happen to us" in a highly disruptive way, we should take
this opportunity to think about how we want the U.S. economy to work for
all of the citizens of the robotic nation. The time to be doing that thinking is
now. The discussion starts in Robotic Freedom.
Robotic Freedom
[Part 3 of the Robotic Nation series]
by Marshall Brain
If you have read the articles entitled Robotic Nation, Robots in 2015 and
Manna, and if you have looked at the many robotic news items on this
page, then you may be coming to a new realization. We are standing right
now on the threshold of the robotic era. Once robots start arriving in the
job market in significant numbers -- something that we will see happening
within a decade or so -- they have the potential to dramatically change the
world economy.
See Also
At least 50 percent of the people working in the
American job market today are working in
people-powered industries like fast-food
restaurants (McDonald's, Burger King, Wendy's,
etc.), retail stores (Wal-Mart, Home Depot,
Target, Toys "R" Us, etc.), delivery companies
(the post office, Fedex, UPS, etc.), construction,
airlines, amusement parks, hotels and motels,
warehousing and so on. All of these jobs are
prime targets for robotic replacement.
In 2003 we are seeing the deployment of
automated checkout lines in stores all across the
U.S. This is the leading edge of the robotic
revolution in retail. By 2015 we will start to see
voice-recognizing robots helping customers in
these stores, inventory-shelving robots putting
the products out, cleaning robots sweeping the
floors and the parking lots, cart robots bringing
the shopping carts back into the store.... Robots
will be moving in to make the completely
automated retail store a reality in a 2020 time
frame. [See Evidence for details.]
About the Author
Robotic Nation
Robots in 2015
Robotic Freedom
Robotic Nation FAQ
Robotic Nation Evidence
Discard your body
Manna - the book
Science on the Brain
Interesting Videos
Careful Parents
Star Wars
Helpation
SadTech
How to make a million dollars
Making money with web sites
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LATimes Editorial
Geek of the week
Thanks for visiting today,
Companies like Wal-mart, K-Mart, Target, Home
Depot, Lowes, BJ's, Sam's Club, Toys R Us,
Sears, J.C. Penny's, Barnes and Noble, Borders, Best Buy, Circuit City,
Office Max, Staples, Office Depot, Kroger's, Winn-Dixie, Pet Depot, etc. will
all switch to robots at approximately the same time. They will dump 10
million or so workers onto the unemployment rolls at approximately the
same time. Other industries like fast food, construction, transportation,
warehousing, etc. will be automating as well, dumping millions more. The
unemployment rate during this period of time could be remarkable.
Even if you assume that the economy reconfigures rapidly and creates new
jobs for all of these displaced workers, it will not do so instantaneously.
There will be a year or more of turmoil for each employee as the economy
invents the job and the employee retrains to fill it.
More likely, the economy will not be able to absorb all of these displaced
workers. The economy has been creating millions and millions of lowpaying, no-benefits, service-sector jobs for the last 40 years. These jobs
are perfect for robotic replacement. There is no reason to expect that the
economy will suddenly figure out a way to create high-paying, exciting,
fulfilling jobs for these tens of millions of people displaced by robots. If the
economy could do that, it would be
doing it now.
In other words, The first wave of
robots has the potential to make
things very uncomfortable for the
American economy. In the 2020 time
frame, the rate of economic change
will be startling. At the very least it
will be a time of intense flux and
employment turmoil.
The question that I would like to
pose in this article is a simple one:
How are we, as a society, going to
respond to this robotic revolution? If
we handle it properly, the arrival of
robots could be an incredibly
beneficial event for human beings. If
we do not handle it properly, we will
end up with millions of unemployed
people and a severe economic
downturn that will benefit no one.
Can we modify the American
economy now to prevent this
downturn? Are there things that we
can do today to smooth the
transition to the robotic nation?
The Jobless Recovery
The "Jobless Recovery" that we are currently
experiencing in the U.S. is big news. See for
example The Mystery of the 'jobless recovery':
"Consider these facts: Employment growth at the
moment is the lowest for any recovery since the
government started keeping such statistics in
1939. The labor force shrank in July as
discouraged workers stopped seeking
employment. The number of people employed
has fallen by more than 1 million since the
"recovery" began in the fall of 2001." [ref]
The Washington Post notes that we are now
witnessing, "the longest hiring downturn since
the Depression". [ref] The article also notes,
"The vast majority of the 2.7 million job losses
since the 2001 recession began were the result
of permanent changes in the U.S. economy and
are not coming back."
There is no mystery -- the jobless recovery is
exactly what you would expect in a robotic
nation. When automation and robots eliminate
jobs, they are gone for good. The economy then
has to invent new jobs. But it is much harder to
do that now because robots can quickly fill the
new jobs that get invented. See the FAQ for
additional information.
The Concentration of Wealth
If you look at our economy as a whole, you can understand why robots
have the potential to be so disruptive if we do not handle their arrival
properly. Here is a highly simplified view of a typical business, be it a fast
food restaurant, a retail chain, etc.:
This diagram shows that a corporation takes in raw materials from suppliers
on the left. Using its own assets (factories, stores, offices, equipment, etc.),
its employees and its executives, the corporation produces a product or a
service. The corporation sells its products and services either to retail
customers (people), or it acts as a supplier for other corporations. It then
pays its employees for the work they do and sends the profit to the
shareholders.
The thing that you notice in this diagram is how important people are to
this system. People are where all the money comes from and where all the
money goes. When money comes into a corporation, its original source
(even if it has passed through several corporations along the way) is a
person who spent money. When money leaves a corporation, eventually it
pays a person in the form of a wage, a dividend or a benefit.
One thing that has been happening in the economy for quite some time is a
concentration of wealth. To put the concentration of wealth into
perspective, you can look at a report like the Census Bureau's Money
Income in the United States. [ref] This report shows that:


80 percent of the households in America make 50.6 percent of all the
income in America.
The richest 20 percent of the households, on the other hand, make
49.4% of the income.
In other words, the richest 20% of the people in the United States get half
the income. The other 80% get the other half.
In the 1960s, the split was closer to 60/40, with 80% of the population
making 60% of the income, and the richest 20% of the population making
40%. [ref] Between 1960 and 2000, the income split has gone from 60/40
to 50/50.
In 1960, the wealthiest 20 percent of the U.S. population took home 40
percent of the nation's income. By 2000 the wealthiest 20 percent took home
50 percent. In the future the process accelerates.
We see the reason for this trend regularly in the news. CEO and executive
salaries are rising at a startling pace. The average CEO of a large
corporation now makes between $10 million and $20 million per year. Since
1980, CEO salaries have risen by a factor of 10, and that same trend is
increasing all executive compensation. William McDonough, president of the
New York Federal Reserve Bank, notes:
"I find nothing in economic theory that justifies this development... I
can assure you that we CEOs of today are not 10 times better than
those of 20 years ago." [ref, ref, ref]
At the same time, employee wages are stagnant. The minimum wage has
not risen since 1997. Since the minimum wage acts as a foundation on
which most other wage scales are based, we are all affected. As a result,
sixty percent of Americans make less than $14 per hour today. [ref] In her
book The Divine Right of Capital, Marjorie Kelly describes the situation this
way:
The wealthiest 10 percent of households own about half of all stock -so that minority has a virtual economic majority.... Because
corporate revenues represent a bulk of GDP, and the wealthiest own
the bulk of corporate equity, running corporations to serve
stockholders means running the economy to benefit the wealthy.
[ref]
You can see the level of economic power held by the wealthy in today's
society, and the reasons for wage stagnation for workers, in this brief
excerpt from the book Fast Food Nation by Eric Schlosser:
The fast food industry pays the minimum wage to a higher proportion
of its workers than any other American industry. Consequently, a low
minimum wage has long been a crucial part the fast food industry's
business plan. Between 1968 and 1990, the years when the fast food
chains expanded at their fastest rate, the real value of the U.S.
minimum wage fell by almost 40 percent. In the late 1990s, the real
value of the U.S. minimum wage still remained about 27 percent
lower than it was in the late 1960s. Nevertheless, the National
Restaurant Association (NRA) has vehemently opposed any rise in
the minimum wage at the federal, state or local level [minimum wage
has been $5.15 since 1997]. About 60 large fast food companies -including Jack in the Box, Wendy's, Chevy's, and Red Lobster -- have
backed Congressional legislation that would essentially eliminate the
federal minimum wage by allowing states to disregard it. Pete
Meersman, the president of the Colorado Restaurant Association,
advocates creating a federal guest worker program to import lowwage foodservice workers from overseas.
While the real value of the wages paid to restaurant workers has
declined for the past three decades, the earnings of restaurant
company executives have risen considerably. According to a 1997
survey in Nation's Restaurant News, the average corporate executive
bonus was $131,000, an increase of 20 percent over the previous
year.
[See Robots in 2015 for details]
With executive pay rising at a rapid rate and the
wages of everyone else stagnant, you can see
where we are heading. The wealth will continue
concentrating, moving toward 40/60 -- the richest
20% will make 60% of the income. The people in
the richest 20% will get more and more of the
income, while rank and file employees get less
and less. Then it will move toward 30/70.
CW Gallery
For dozens of articles
demonstrating the
Concentration of Wealth
in America today,
Click Here and here.
Robots will turbocharge the concentration of wealth. Let's take America's
largest corporation -- Wal-Mart -- as an example. Wal-Mart currently
employs over 1.3 million people. Imagine that Wal-Mart is able to deploy
robots over a relatively short period of time and eliminate one million of
those employees.
With most of the rank and file employees replaced by robots and eliminated
from the payroll, all of the money flowing into a large corporation has only
one place to go -- upward toward the executives and shareholders. The
concentration of wealth will be dramatic
when robots arrive.
How Concentrated?
In the August 18, 2003 issue of Time
magazine, the article They're Getting
Richer notes that, since the dividend tax
cut in June, 2003, more than 200 firms
have raised their dividends. Since
executives generally own lots of stock,
this means a huge pay increase for
them. How big are the increases? Here
are several examples:
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Robert Glickman of Corus
Bankshares saw his dividend
income rise from $1.3 million to
$5.8 million.
Sandy Weill of Citigroup saw his
dividend income rise from $11
million to $27 million.
Henry Paulson of Goldman
With the rank and file employees gone, all
of the money in the corporation flows
upward to the executives and shareholders.
The concentration of wealth will accelerate
dramatically because robots allow real
automation in the service sector for the
first time in history. The amount of money
paid to executives and shareholders will be
remarkable.
Meanwhile, the one million displaced
employees will flow into a job market that
is flooded by robotically-displaced workers.
Since all major corporations with large
numbers of employees will be doing the
same thing, it is difficult to imagine the
economy suddenly creating enough jobs to
absorb all of the displaced workers. If the
economy does not create new jobs for
them, they will be living in government
welfare dormitories.
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Sachs saw his dividend income
rise from $1.2 million to $3.4
million.
James Cayne of Bear Sterns
saw his dividend income rise
from $1.8 million to $3.3 million.
Bill Gates of Microsoft saw his
dividend income rise from $0 to
$82 million.
Sumner Redstone of Viacom
saw his dividend income rise
from $0 to $41 million.
This is just the dividend income of these
executives, and does not include their
salaries, annual bonuses, stock options,
restricted shares, forgivable loans, free
trips on corporate jets, benefit
packages, etc.
All of the money for these dividends
comes either from consumers in the
form of higher prices or from rank and
file workers in the form of lower wages.
The concentration of wealth accelerates.
See also the CW gallery.
A Question of Freedom
While discussing these questions of unemployment and wealth
concentration, we should ask a second type of question as well. The arrival
of robots should be an amazing time in human history. With robots doing
all the work, we should in theory be able to enter an era of incredible
human freedom and creativity. Instead of turmoil and massive
unemployment, robots could theoretically release us from work. A
significant portion of the population should be able to go on perpetual
vacation and achieve true freedom for the first time in human history. This
freedom would enable a period of creativity unlike anything that we have
seen in the past. Is there a way to design the economy so that this level of
creativity is possible?
Think about the era we are about to enter. Within 50 years in the likely
case, and without question within 100 years, robots will perform every task
essential to human survival. Robots will grow, package, transport and sell
all of the food we eat. Robots will build all of the housing we live in. Robots
will make, transport and sell all of the clothes we wear. Robots will
manufacture all consumer products, put them on the shelves and take the
money that we pay for them. And so on. Robots will displace the tens of
millions of employees who are doing all of this work now.
In our current economic system, all of these displaced workers will become
unemployed. If they are not able to find new employment quickly, they will
burn off their savings and they will become homeless. "If you don't work,
you don't eat" is a core philosophy of today's economy, and this rule could
make a rapid robotic takeover extremely uncomfortable for our society. See
Robotic Nation for details.
The question to ask here is simple but profound. Does the economy have to
work that way in a robotic nation? Is there a way to eliminate this
dependence on a job? With the robots doing all of the work, can we actually
eliminate our economy's requirement of employment? Can human beings,
in other words, actually achieve true freedom as the robots make this
freedom a possibility?
Harry Potter and the Economy
Chances are that you have heard of J. K. Rowling. Even if
you have not, you have heard of her work. J. K. Rowling is
the author of the Harry Potter books. Her story is
fascinating.
At the time she was writing the first Harry Potter book,
Rowling was a single mother. In a Publishers Weekly article
published on December 21, 1998, there are two important
pieces of information about Rowling:
"Lacking child care and unable to take a job without it, she [Rowling]
went on public assistance. In many ways, she says, it was one of the
lowest points of her life."
And:
"She found Christopher Little in 1995, in the Writers' & Artists'
Yearbook (the UK equivalent of Literary Market Place). He was the
second agent to see her book -- the first had sent it back "virtually
by return of post," with a form letter. In the year that followed, three
publishers declined the book on the grounds that it was too long for
children."
Obviously Rowling's original book, Harry Potter and the Sorcerer's Stone,
was a good book. It sold millions of copies. Her fourth book, Harry Potter
and the Goblet of Fire had a first press run of 3.8 million copies -- the
largest first press run in history. Over 30 million copies of the series have
been sold.
When you think about it, it is a miracle that any of us ever got to read
Harry Potter. Consider the fact that a book with this much potential was
written by a person on welfare. Think about how many other works -music, art, literature, engineering, science, invention -- have never seen
the light of day because of the same sorts of social problems (or because
the potential author/artist/inventor is working 12 hours a day scrubbing
toilets in two minimum wage jobs to make ends meet). Think about the
arrogance of the first three publishers who rejected the manuscript. Think
about how many valuable works have never seen the light of day because
of that same arrogance. Society as it is designed today wastes an
unbelievable amount of human potential through mechanisms just like
these.
At the very least, Rowling's story shows us that the economic theory
underpinning our world contains an element of dysfunction. It should not
be the case that highly creative people sitting on top of billion dollar ideas
have to go on welfare (and reach "one of the lowest points" in their lives by
doing so) in order to express themselves. By removing this dysfunction, we
could discover millions of Rowlings.
The Linux phenomenon specifically, and the open source phenomenon in
general, point in the same direction. Linux is one of the best operating
systems on the planet, and it is free. It has been created by thousands of
programmers who have donated their time and skills to the creation of
Linux. What if we create an economy that encourages the creation of things
like Linux? If people could make a living without being employees, we could
unlock an unimaginable ocean of human creativity and human potential.
Other parts of our economy are showing similar levels of dysfunction. For
example, in the U.S. today a growing number of baby boomers are headed
toward retirement age. They will all stop working and make the transition
to the social security system. However, the social security system is known
to be in big trouble. Estimates vary, but as early as a decade from now,
social security and its partner, Medicare, could collapse due to lack of
funds. We will find ourselves in a situation where we have no way to
support the growing elderly population. As medical science finds ways for
people to live longer and longer, we as a society find ourselves wishing that
the elderly would actually die sooner. That is dysfunctional.
The working poor represent another area of dysfunction. We have a large
segment of the American population -- tens of millions of people -- who are
playing by the rules. They are working hard. Many of them are working two
or three jobs -- they are some of the hardest working people in our
economy. Yet they cannot make ends meet because wages are so low.
We have been unable to raise the minimum wage since 1997 largely
because of the fear of an economic downturn. The fear is that an increase
in the minimum wage will force employers to cut their payrolls, or put even
more pressure on corporations to automate and shift jobs overseas. So we
have tens of millions of minimum wage (or near minimum wage) workers
employed by an economy which cannot raise their wages even though
productivity is rising. At the same time, that same economy is increasing
executive pay dramatically. That is dysfunctional. As discussed above,
robots will only increase the level of dysfunction in this area.
As a society, and as a nation, robots give us a choice. We are entering an
historic era that has the potential to completely change the human
condition. Yet we enter it with an economic system that is unable to spread
those robotic benefits to a large portion of the population. Our economic
system as it stands today stifles a great deal of creativity, has no way to
deal with the elderly and is unable to significantly raise wages for the
majority of its citizens. Robots allow us to remove these dysfunctional
elements from the capitalistic system.
Stating the Goals
Economic Goals
Goal #1 - For the strongest possible
economy, we need to create the largest
possible pool of consumers, and those
consumers need to have money to
spend.
Goal #2 - For the strongest possible
economy, we need maximum economic
stability. Every economic downturn has
occurred when people stop spending
money, either because they don't have
money to spend through unemployment,
or because they are afraid to let go of
their money for fear of future
unemployment. Consumers need to
have confidence in the economy, both
on the spending and the receiving ends
How do we make the most of the robotic
of the equation.
nation? How do we create an economy, and
Goal #3 - For the strongest possible
a society, that works for everyone?
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economy, we need to create the largest
possible pool of innovators -- people
who create innovative new businesses,
new inventions, new products, new art
(films, music, etc.) and new intellectual
property. Capitalism is strongest when
new ideas are maximized.
Should we ban robots from the
workplace? Probably not. Banning
technology from the workplace is the
path to economic stagnation. It also
means that people rather than robots
will be scrubbing toilets for the next Goal #4 - For the strongest possible
economy, we need for people to invest
millenium.
in these new ideas, both individually and
Should we significantly increase the
in groups. An idea is nothing unless it is
put into action. Without the money
minimum wage so that people
provided by investment, there can be no
working in minimum wage jobs can
new businesses and no new products.
actually make a living? Probably, but
it is unlikely to happen. And most
Goal #5 - For the strongest possible
economy, we need for people to have
minimum wage workers will still
become unemployed as robots arrive. maximum freedom. People need the
freedom to choose the products they
Should we reduce the work week,
want from an open marketplace of
say to 30 hours per week (then 20,
maximum size. They need to be free to
then 10), to decrease unemployment start businesses of their own. They need
to be free to work on their ideas and
and increase leisure time? It would
carry them as far as possible. At the
be outstanding if we could make this same time, people need to be free to
take time off and relax as they so
decision as a society, but all
indicators today point in the opposite choose. The notion that you have to
work 60 hours a week to make ends
direction. The working poor are
meet is the antithesis of freedom.
making so little money that they are
having to work 60 hours a week in two or three jobs. Many salaried
employees are compelled to work far more than 40 hours per week.
We would have to reverse a number of trends to move our society to
a 30 hour work week, and corporations will resist these changes
every step of the way.
Should we dramatically increase the welfare and unemployment
systems to accommodate all of the workers displaced by robots? That
is unlikely to happen. Besides, who wants to be on welfare?
Should the government hire all displaced workers in make-work jobs?
Probably not. Do we really want tens of millions of people employed
in meaningless jobs run by the government?
Should we tax robotic labor? We have never taxed any other form of
automation, so it is difficult to imagine this happening. For example,
a burglar alarm is a robot that replaces a security guard. Should we
tax all burglar alarms? And a traditional tax would go to the
government, which would then have to distribute the money through
something like the traditional welfare system -- a system that has
proven extremely uncomfortable to society in the past.
None of these "traditional solutions" are going to help the robotic nation. So
how are we going to solve this problem?
We start by stating our goals for the economy and then attempting to find a
solution that helps us to reach them. Five important goals are listed in the
sidebar on the right. If we can achieve these goals, in a context where
robots are dramatically increasing productivity and doing more and more of
the mindless work that wastes human potential, we will have an economy
whose strength and growth defies imagination.
How do we achieve these goals?
Capitalism Supersized
The following suggestion at first seems impractical because it is so simple:
What if we, as a society, simply give consumers money to spend in the
economy? In other words: What if the way to achieve the strongest
possible economy is to give every citizen more money to spend? For
example, what if we gave every citizen of the United States $25,000 to
spend? $25,000 sounds impossible the first time you hear it, but consider
the possibility.
Would this simple step -- giving money to every consumer -- accomplish
the five economic goals set forth in the previous section? Yes. It would be a
huge boost to the American economy:
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The economy would be strong because of all of the consumer
spending.
The economy would be stable because income (and therefore
spending) would be guaranteed.
With $25,000 per year to spend, innovators would no longer be
forced to work -- they could focus their energy on innovation, living
off of the $25K per year they receive. Inventors would have time to
invent, writers to write, entrepreneurs to breed new companies, etc.
They could devote all of their time to innovation.
There would be billions of dollars for people to invest, especially in
their own businesses. And investors would have a stable marketplace
into which to introduce new products.
Most importantly, it would create a nation where the citizens are truly free.
If every person had $25,000 per year in today's dollars to spend, they
would be able to live their lives even if they lost their jobs. If robots took
their jobs it would not be catastrophic. People would be able to weather the
robotic takeover, retrain and move into new careers.
Sources for the $25,000
The obvious question involves the $25,000. Where will it come from? That
is what is so interesting about this idea. We have never thought of our
economy in this way before. Once we start thinking in this way it is easy to
imagine numerous sources for the money. If we start today, we can begin
ramping up to reach the goal.
Here are several examples to help you understand the possibilities.
Example #1 - public advertising
There are approximately seven billion $1 bills circulating in the economy at
any given moment. What if we sold the backs of all these $1 bills as ad
space?
Assume each $1 bill passes between 100 people before it becomes so
tattered that it gets shredded by the treasury. According to this page, "The
average life of a dollar bill is eighteen months." That means that every
year, there are something like 500 billion ad impressions available on the
backs of $1 bills. What if we sold the ad space on all these $1 bills to
companies like Coke, Disney, Home Depot and Wal-Mart?
If we sold that ad space (along with all the ad space on the backs of $5,
$10, $20 and $50 bills) at the going rate for advertising, it could generate
something like $5 billion to $10 billion per year in revenue. That's a lot of
money. There are nearly 300 million people in America. Since this ad space
belongs to "We, The People", the ad revenue would get divided equally
among all the citizens of the United States and everyone would get a check
for something like $25 per year.
How would we distribute the money? It is easy to imagine a central
account. The billions of dollars in ad revenue would flow into this central
account, and the money in the account would get distributed on an equal
basis to every American citizen.
We would all get our $25 dollar checks from the central account, and what
would we do? We would spend the money. It would be just like getting a
tax rebate. The $25 that we each spend would stimulate the economy, and
the economy would grow.
$25 is a far cry from the $25,000 suggested above -- it's only 0.1% of the
goal. But it is a start. What you can see from this example is that:
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It is easy to imagine a system where every person in the country
gets a check.
It is easy to imagine a source of money for those checks that does
not necessarily involve taxation.
It is easy to imagine that, once everyone gets their checks, they will
spend the money and in so doing stimulate the economy.
It is also easy to imagine other sources of advertising income:
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Each time you drive on an interstate highway you pass underneath
bridges. We could sell the natural advertising space on those bridge
overpasses.
We could sell signage space along the side of the road.
For that matter, we could sell advertising space on the interstate
highways themselves. What if we painted ads right onto the asphalt?
If we want to be extreme about it, we could put ads on the side of
the Washington monument.
The point is, there are lots of places to put ads on publicly-owned
infrastructure and those ads would generate billions of dollars in revenue. If
all that revenue adds up to $100 billion per year flowing into the central
account, then each citizen of the United States gets a check for about $350
per year.
There are many other ways to generate revenue that can flow through the
central account to every American citizen, and every source of revenue
moves us closer to the goal of $25,000 per citizen per year. I have listed
several ideas below. I am not suggesting that these are all perfect ideas, or
that I agree with all of them. I am simply listing them to spark discussion
and get all of us thinking about the possibilities.
Example #2 - Natural resources
In Alaska, there is a central account like the one we are discussing here
already in operation. It is called The Alaska Permanent Fund. In 2002, each
man, woman and child in Alaska received a check for $1,500 from this
fund. The money came from oil reserves in Alaska -- a natural resource
that is the property of "We, The People".
$1,500 per man, woman and child per year is real money. There are all
sorts of natural resources in the U.S. that could provide money to the
central account in the same way: oil, natural gas, timber, precious metals,
water, etc. Instead of the revenue from the sale of these natural resources
going to "the government", the revenue would go to the central account
and be paid equally to every citizen of the United States. Alaska shows that
such a system will actually work and will provide real economic benefit to
the citizens of the United States.
Example #3 - Fines
When a corporation does something wrong,
it gets fined by the U.S. government. For
example, a dozen leading investment banks
were fined approximately $1.5 billion this
year for conflicts of interest during the
Internet bubble. The tobacco settlement is
another example -- a $300 billion or so fine
against tobacco companies ($300 billion
represents approximately $1,000 per
person in the U.S.).
Instead of going to "the government", the
revenue from all of these fines would go
into the central account, to be distributed
to every American citizen. American
citizens would get a check and they would
spend the money. In the process they
would stimulate the economy and the
economy would grow.
What would you do with
$25,000 per year?
Should we enact a $25,000 per year
stipend for every citizen of the United
States? The easiest way to answer that
question is to make it personal. Ask
yourself this question -- what would you
do if you, personally, received a $25,000
stipend per year?
There are a million things you would
likely do if you had the freedom provided
by $25,000 per year. If you have
children or grandchildren, you would
spend more time with them. If you have
always wanted to start your own
business or go back to college, you
would do that. If you have been wanting
to write your novel, start a new career or
research an invention, you would do
that.
You would use the freedom provided by
a $25,000 stipend to make your life
better. That is why we should enact the
$25,000 per year stipend. See the FAQ
for more information.
[In recent news there is this article:
Microsoft Fine Is $613 Million. That would
work out to about $200 per person in the
United States. There is also this: FCC
Proposes $9 Million Fine Against Qwest. If you type the word "fine" into
Goolgle News, you realize that just this example alone could yield billions of
dollars for the central account.]
Example #4 - Auctions
With all of the wireless devices now in use (wireless phones, wireless
networks, etc.), it is quite common for governments to auction off pieces of
the radio spectrum. There was an auction in the U.K. not so long ago that
brought in $35 billion ($35 billion represents about $100 per U.S. citizen).
The radio spectrum is the property of "We, The People", so the money from
spectrum auctions would flow to the central account to be distributed to
every American citizen. Each citizen would get a check from every
spectrum auction, each citizen would spend the money, and in the process
each citizen would stimulate the economy.
Example #5 - National Lottery
Most states in the U.S. now have state lotteries that flush money into state
treasuries. If we create a national lottery, the proceeds would go into the
central account and get distributed to every citizen of the United States.
Example #6 - Copyright Licensing
This is an esoteric idea, but still interesting to consider. Congress has
recently been granting copyright extensions so that companies like Disney
can maintain control of copyrighted works, including characters like Mickey
Mouse. This article discusses the case if you would like some background. If
congress had not acted, Mickey Mouse and many other works would now be
in the public domain.
An alternative to these blanket extensions would be to let copyrights
expire, but then allow companies like Disney to pay for an exclusive license
to continue using a property. The revenue from the license would flow into
the central account and be distributed to every citizen of the United States.
Each citizen would spend the money, and in the process each citizen would
stimulate the economy.
Example #7 - "Extreme Income" Taxes
As mentioned earlier in this article, executives in the U.S. are making more
and more money every year. Executive salaries have risen by a factor of 10
in the last 20 years. The average CEO now makes tens of millions of dollars
every year, and that trend pushes up all executive salaries as well.
Meanwhile, the wages of rank and file workers are stagnant. What if "We,
The People" vote for an "extreme income" tax, on these excessive salaries?
The President of the United States, after all, only makes $400,000 per year.
Someone making $10 million per year is clearly overpaid.
So we pick a number -- say $500,000 or $1 million -- and we heavily tax
income over that level. What is the justification for doing that? This
diagram explains it:
When an executive makes $20 million per year, the money does not
materialize out of thin air. It comes from consumers in the form of higher
prices that they pay for everything that they purchase.
For an executive to make $20 million per year, a company has to
overcharge consumers for the products they purchase from the company. It
is not as though the $20 million paid to the executive appears out of thin
air -- it comes from consumers in the form of higher prices. An "extreme
income" tax simply takes that excess compensation and returns it back to
consumers, where the money originally came from.
The same logic could apply to inheritance taxes. Imagine that an executive
who makes $20 million per year dies with $1 billion in assets. We heavily
tax "extreme assets" like that when the executive dies and return the
money back to the American people, where the money originally came
from. The money is distributed to each American citizen equally through
the central account, and the money stimulates the economy.
Example #8 - National Mutual Fund
The idea of a national mutual fund owned by all of the citizens of the United
States has been proposed by a number of different people. Such a mutual
fund would own shares of stock in every corporation in the United States
and give every citizen of the United States equal ownership in the mutual
fund.
The shares for this national mutual fund could come from a variety of
sources. Two possibilities include:
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Whenever any corporation is formed, some percentage of the
corporation's shares (e.g. 20%) would automatically become the
property of the national mutual fund. Existsing corporations would
contribute the same percentage of their shares as well.
Whenever a corporation declares retained earnings, the percentage
of shares represented by those retained earnings would become the
property of the national mutual fund. The logic: For the corporation
to have retained earnings, it had to overcharge consumers. Since the
money came from consumers, it is given back to consumers in the
form of shares.
Like the The Alaska Permanent Fund, this national mutual fund would pay
dividends every year, and these dividends would flow into the central
account for distribution.
Example #9 - Other Taxes
There are a wide variety of new taxes that we might create to pump money
into the central account. The difference between these new taxes and
"regular" taxes is that the revenue from the new taxes goes directly to
every citizen of the United States, rather than going to "the government"
and being subjected to the whims of the political system. American citizens
have the freedom to decide how they will spend the money, rather than
politicians. New taxes that we might consider include:
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A value added tax.
A national property tax.
A national sales tax.
A robotic income tax.
"Extreme income" taxes and inheritance taxes as described above.
And so on.
Any of these new taxes would act as levelers. The biggest problem with the
robotic nation is going to be the massive concentration of wealth that
robots allow. These taxes would affect the wealthy and corporations far
more than normal citizens, and would spread the concentrated wealth back
out to the general population, where the money came from. People in the
general population will spend the money that they receive. Just like a tax
rebate, this spending will stimulate and grow the economy, to the benefit of
everyone.
Example #10 - Punitive Damages
When a person sues a company and wins, there are normally two
components to the award: part is compensation for the damage done, and
part is punitive. For example, a person suing a cigarette company might
receive $5 million as compensation for injuries, as well as $3 billion to
punish the cigarette company and send a message. [ref]
That punitive damage award is uncomfortable. Millions of people have been
damaged by cigarettes -- why should one person get all of the money for
all of that damage?
Instead, we should send all punitive damage awards from lawsuits to the
central account for distribution to everyone.
Example #11 - Naming rights
This article discusses Los Angeles' plan to sell naming rights for the city,
and naming "official" beverages, cars, etc. like the Olympics does. We could
do the same thing for each state and the nation, and pour billions of dollars
into the central account.
Example #12 - Sin taxes
The government regularly taxes things like cigarettes and alcohol in order
to deter their consumption with higher prices. All sin taxes could go into the
central account instead of to the government.
Example #13 - Luxury Taxes
Luxury taxes have been applied to things like expensive cars and boats.
These taxes could be made permanent, and the revenue from them could
flow into the central account.
Example #14 - "Extreme Profit" taxes
There are a number of companies in the U.S. that now operate without any
real form of competition. In these cases, the checks and balances of the
market system break down, and the companies are able to take in
incredible amounts of profit at the expense of consumers.
Microsoft is one example of the phenomenon. If you look at Microsoft's
financial statements for 2003, you can see that the company took in $32
billion in total revenue and made a gross profit of $26 billion. Net income is
$10 billion (31% of revenue), or approximately $100 for every American
household.
How does Microsoft compare to a "normal company"? Wal-Mart is no slouch
as a company, and Wal-Mart concentrates wealth as fast as it can, but it
makes an interesting comparison to Microsoft. Wal-Mart takes in $246
billion in total revenue per year -- more than seven times as much revenue
as Microsoft. Yet Wal-Mart's gross profit is only twice that of Microsoft, and
Wal-Mart makes less in net income than Microsoft does ($8 billion, or 3% of
revenue).
In cases like Microsoft (as well as other examples like pharmaceutical
companies), where gross profit and net income are clearly out-of-bounds
because of a breakdown in a market system, these windfall profits can be
taxed away and returned to the place they came from -- consumers -through the central account.
Any other example of windfall profit (e.g. oil companies when gasoline
prices spike upward) can be taxed and depositied in the central account in
the same way.
As these unfair profits are returned to people through the central account,
the recipients will spend the money and the economy will grow.
Example #15 - Lexus Lanes
Many large cities have installed special traffic lanes on major thoroughfares
called HOV (High Occupancy Vehicle) lanes. The idea is to reward people
who carpool by giving them a way around congestion.
Lately, however, the trend is toward turning these lanes into toll lanes, so
that wealthy people can bypass traffic. This article discusses the trend.
If laws like this pass, the money that these new toll roads generate should
go into the central account for distribution. As pointed out by Rep. John
Douglas, R-Covington, in the article: "People already paid to build these
roads, and they pay to keep 'em up." Since that is the case, the people
should get the money generated by the tolls -- through the central account.
They will then spend that money and the economy will grow.
Example #16 - Email postage
In March of 2004, Bill Gates of Microsoft proposed a postage system for
email to deter spam. Email would no longer be free -- instead, everyone
would pay a few cents per email.
Trillions of emails are sent every year in the United States. If you assume
10 trillion emails per year at a penny per email, then email postage would
produce approximately $100 billion per year. All of the money generated by
this email postage fee should flow into the central account. As people
receive their checks from the central account, they will spend the money
and stimulate the economy.
The Advantages of Economic Security
Why do we give tax rebates in the United States? The idea behind a rebate
is to stimulate our capitalistic economy by giving consumers more money
to spend.
The proposal presented in this article is a simple extension of the tax
rebate concept. The idea is to stimulate the economy continuously through
monthly rebate checks to every citizen from a central account. We could
call this approach Turbo Capitalism. We will turbocharge the capitalistic
system by continuously giving consumers more money to spend in the
economy. Or we could call it an Economic Security System. We will give
every citizen the money he or she needs to be independently financially
secure. In a robotic nation, economic security is perhaps the most valuable
thing a human being can have.
Money flows into the central account from a variety of sources and then flows
equally to every American citizen. They spend the money and in the process
stimulate the economy -- turbo capitalism
The money that flows into this central account can come from a variety of
sources, several of which are mentioned above. The proceeds then get
distributed equally to every American citizen on a monthly basis.
The advantages of a system like this would be significant:
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Most importantly, an economic security system eliminates many of
the problems that will otherwise appear with the arrival of robots and
the robotic nation. As people become unemployed by robots, the
payments from the central account offer people an independent and
secure stream of income. Unlike welfare, there is no stigma attached
to the payments from the central account. Everyone gets an equal
payment, so the central account is completely fair to everyone. The
payments are not subject to the whims of politics, as they are with
welfare payments.
An economic security system solves the social security problem.
Since every citizen receives a check, we can dismantle social
security. Existing social security taxes can be redirected into the
central account.
An economic security system eliminates poverty. Under this system,
every citizen in the United States receives the money needed to live
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a middle class existence, regardless of whether or not they are
working. All of the money currently spent on poverty can be
redirected to the central account.
An economic security system provides a tremendous level of
economic stability. Since everyone has guaranteed income, they also
have guaranteed spending and this will largely eliminate significant
economic downturns.
An economic security system increases opportunity. For example:
o A person who wants to go to college will have the opportunity
to go at any point in life. This will help people retrain for new
careers, and also unlock people from life-long economic strata.
o A person who wants to start a business, large or small, knows
that the business is being started in a stable economy. The
person also has income to fall back on during the critical first
years when the business is working to become cashflow
positive.
An economic security system maximizes the economic freedom of
every citizen, and in the process maximizes the creativity of
inventors, authors, entrepreneurs, etc. If creative people have the
freedom to live their lives without being employees, we will unlock an
unimaginable ocean of human creativity and human potential. This
system gives the American people true economic freedom for the first
time in American history.
You, Personally, and the Robots
What about you, personally? Think about your situation. It does not matter
who you are or what you do for a living -- you are vulnerable:
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If you are working anywhere in the service sector -- fast food, retail
sales, hotels, airlines, delivery, transportation, etc. -- your job has
the potential to be replaced by a robot.
If you are in the upper middle class -- engineers, programmers,
airline pilots, teachers, professors, insurance adjusters, etc. -- your
job is vulnerable (either to robotic takeover or offshore outsourcing).
If you are in middle management, your job is vulnerable.
Even if you are in a position that today seems untouchable -doctors, lawyers, etc. -- your job is vulnerable.
In other words, like it or not, we are all highly vulnerable to job loss in the
robotic nation, and we are entering an era of unprecedented economic
change. When any one of us loses our job in the current economy, we are
completely naked. The government gives an unemployed person a tiny
payment for three or six months, and then you are on your own to pray
that your savings can hold out until you find a new job. Your home, your
belongings, your family -- they all hang in the balance.
Do you, personally, want to continue to live with that level of personal
economic vulnerability? Do we, as a society, want to continue to create an
economy and a society that is poised at any moment to swing drastically
downward based on a huge variety of rather tiny and uncontrollable
perturbances such as terrorist attacks, oil supply variations, stock market
bubbles, weather, etc.? Or would you like to see us begin putting in place a
system that provides each of us with some measure of personal economic
security?
Robots have the potential to do so much good for the world, because they
will finally free people from the requirement of human labor. The only way
for all of us to experience these benefits, however, is to create an economic
system that maximizes freedom and choice for everyone in the economy.
The proposal presented in this article shows that there are ways to enhance
the capitalistic system and in the process make life better for everyone. My
hope is that we begin discussing and then implementing systems that will
let our society and our economy get the most benefit from the new robotic
nation. We should use robots to give every citizen true economic freedom
for the first time in human history.