Friday, 30 May 2014

The Robot Economy and the Crisis of Capitalism: Why We Need Universal Basic Income

The material prosperity that capitalism has wrought is the product of technology as well as markets (and social norms and state institutions). Markets enhance the efficiency of allocation of resources, such as human labour, between competing projects, while technological innovations enhance the productivity of our use of those resources, the capability to produce more with less. As Keynes prophesied in his famous essay, Economic Possibilities for our Grandchildren (1930), the seemingly relentless trend of rising productivity promises to finally end the ‘economic problem': the struggle to overcome scarcity that has characterised the human condition since our beginning. Finally, we can turn as a society to considering what our enormous wealth can do for us, rather than what we must do to get it.

Yet this is not a time for complacency. Unless we intervene, the same economic system that has produced this astonishing prosperity will return us to the Dickensian world of winners and losers that characterised the beginning of capitalism. Or worse. The problem is this, how will ordinary people earn a claim on the material prosperity of the capitalist economy if that economy doesn't need our labour anymore?