Robot economics

Yesterday I reread Isaac Asimov’s science fiction novel The Caves of Steel, which is about a murder mystery in a futuristic setting. According to the book, robots will begin to take both blue-collar and white-collar jobs, resulting in mass unemployment. Combined with overpopulation, this will create a huge economic crisis. Asimov believes that the solution is mass emigration to other planets, solving the population problem. In his later books, he describes how sparsely populated colonies on other planets can create a kind of feudal system, with each family owning an estate and enough robots to work it. 

However, as I described in a previous post, space travel might not be viable until long after this crisis occurs. This made think of the question: Is there any way that this crisis can be resolved without the colonization of other planets, i.e., in a “closed” system?

To do this, some manipulation of economics by the government is probably necessary. I have always believed that an economic system is at optimum efficiency when “Anything physically possible can be made financially possible.” (C.H. Douglas) Our current economic system is not even close to this state, and it is unlikely that it will be any better if/when this technological crisis occurs. Beyond that, though, there are a few options we can probably rule out:

Asimov’s feudal system can be eliminated right away. It requires a low-density population, which obviously does not exist on Earth. The only way to reduce Earth’s population would be to “eliminate” a large number of people by draconian means—not a very desirable solution.

Technological regression can also be eliminated. Though many people probably do not want robots integrated into society because of the effects on the labor pool, corporations would probably find them very desirable because of the decreased cost of labor. Because of this, it would be very difficult if not impossible to get rid of robots entirely.

So, what are we left with? I believe the answer is Social Credit. This economic system, designed by C.H. Douglas during WWI, was supposed to deal with the problem of overproduction in a closed system. In order to ensure the excess goods are consumed, Douglas recommends a government subsidy and a welfare check for everyone (to increase the net amount of purchasing power). In our robot scenario, it is reasonable to assume that there is a large amount of overproduction. Today the US suffers from chronic overproduction, but we resolve it by dumping foreign aid on African nations and selling goods below cost overseas. If robots are replacing jobs, it is likely that this overproduction has worsened (since both people and robots would be working if there were underproduction, except in unlikely circumstances). Thus, Social Credit is probably applicable.

But how would it be implemented? Almost definitely by the government; corporations are far too selfish to do it themselves (I’m not criticizing them; it is the nature and purpose of a company to be selfish—they must make money, after all). However, note that Douglas recommends that the money the government uses to pay for all this comes right of the printing presses with no gold or silver backing—fiat money. Wall Street will immediately label this as “inflationary” and “striking at the roots of our institution.” The government must persevere and go ahead with this—if Douglas is correct (which he probably is) this fiat money will not cause inflation at all. This is because this extra purchasing power is “needed” by the corporations (they do not want to waste goods) and by the people (they do not want to starve).

As time progresses, robots will probably become more prevalent, and as a result the nation dividend (welfare) must increase as well. If the system is balanced, the dividend will become enough for everyone to live on at exactly the same time that robots take over every job (thus creating communism). At this point the crisis has ended, and people will no longer have to work at all.

I suppose this is overly optimistic and highly unlikely. It is far more reasonable to assume that if this crisis occurs we will simply go into a worldwide depression, which we will not recover from until we have regressed technologically or thought of some other solution. If it does happen, though, I hope we will at least consider Social Credit—it may be the best and most desirable way out of this inevitable labor crunch.