Artificial Intelligence, Automation and Poverty

This is the text of an email I sent to Sam Altman at Ycombinator, and I wanted to share on Linkedin and see if you had any thoughts. It's an update on my thinking in the area of helping displaced workers, taking into account recent research on the expected impact of artificial intelligence and automation, and several areas of opportunity on a global level of options to respond to those long-term and medium-term impacts, including "basic universal income", an experiment in some circles to suggest a new twist on the idea of providing a financial safety net.

The discussion also takes into account my own research, especially the journey I've gone on in proposing and working on the idea of a non-profit stock exchange (www.rgbexchange.org). If you'd like more attribution or references on anything mentioned in this article, please feel free to email me at [email address removed] and I'll dig up and add.

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If you'd care to comment, I had a realization, and I'd be interested if you think I'm missing anything.

After seeing recent data, I am now more convinced that the rise of AI/automation will result in reduced employment and widening the wealth gap, sooner or later. In the discussion I've seen, it's really a matter of when, not if.

So unless I'm missing something, I see three options, and perhaps the only real way to have a significant impact is to find a way for these three options to work together.

1) Guaranteed Basic Income - I appreciate the experiment, but I don't see how it could be sustainable, unless enough momentum were spearheaded in silicon valley, and willing socialist governments in Europe tried it. I feel like there's a political parallel in drug legalization, where for example, Portgual has tried full legalization, there's hard data on the value of treating people like victims rather than criminals. And then within the U.S., California and other states represent pockets of experimentation, yet in both cases, are surrounded by strong counterweights. Yet with guaranteed basic income, it still seems like it would have to amount to a form of tax, and only has limited potential, because of the strength of independent populism.

2) Alternative Employment - some of the commentary I see reminds me of those who support free trade, but the question of taking care of workers who are displaced by free trade or globalism never seems to get answered. In my own journey, at first I felt that the answer to extend safety nets was in the private sector, but I was challenged by the statistic that 95% of lifting people out of poverty has been through employment, and only 5% through charity. But the commentary about "the market working itself out" with workers displaced by free trade, globalism or AI/automation, seems more like wishful thinking than a reality -- because the trending seems to point for a lot of people being out of work, period. So long-term, even building up developing economies seems to have limits, because it appears that inasmuch as economies develop towards being technologically empowered, they will be subject to the trending in AI and automation.

3) Private Safety Nets - I've come full circle on this. To me the only way to extend safety nets in a sustainable, scalable way would be if private citizens gained increased interest and confidence in voluntarily supporting non-profit organizations. To me, this is a "third alternative" to the deadlock between people who want strength in business, less taxation, smaller government, and those who want bigger government to provide safety nets through increased taxation. I felt that a market based system could help, treating donations like an investment, and using vehicles like a symbolic share value, to represent impact, as a way to help donors gain confidence in seeing their donations are having impact. The statistic about 95% of people being lifted out of poverty by employment rattled my confidence, but because of the limitations of business to sustain employment in light of AI/automation, private safety nets seem to come back into the fore for me. But - case in point, even though I think a market based system could have a huge impact, I've faced continual challenges in finding funding, and I've abandoned seeking it, currently turning to try and find ways to make money through business, to fund the idea. So as with the first two options, there seem to be limitations.

In the end, it seems like the only way to really solve things would be for individual citizens, businesses, NGOs to work together, and partner with governments, but not to rely on governments to necessarily "Come together". In other words, if we are stronger as a united community, then to a certain extent it seems like it will have to develop momentum outside of, and alongside of government, because of the conflicts currently going on, ideologically and otherwise.

So those are my tentative conclusions, and my suggested solution for blending all three would simply be to set the goal of full employment for all, and to fund any shortfall in funds based on "real" currency, with virtual currency, and to establish a parallel system for trading that currency based on barter, so that it is not tied to any fixed scarcity, but instead is based on the value of individuals, and contributions they can make to the world economy. To me, tying valuation to the individual and using a barter platform would be the only sustainable, scalable way to make a virtual currency universally "fungible", which as I understand is the essential principle of money, that is, that a currency can be exchanged.

In a simplified scenario, to reference the three options above, I'm suggesting that a universal basic income be attained with alternative employment, by offering full employment for all, with "real" jobs and currency where possible, supplemented by "virtual" jobs and currency, where people are paid with virtual currency to help non-profits, and thereby strengthen private safety nets. And the reason I suggest a barter-based currency is that barter represents the most basic form of economic exchange, and is not reliant on traditional currency, so I think it can be a complement, and supplement, and therefore a barter-based virtual currency seems to have a real basis for rising in value and crossing over into developing "real" value.

So, what do you think?

References/for more reading:

Automation/AI

http://www.wsj.com/articles/technology-vs-the-middle-class-1485107698

http://blogs.wsj.com/economics/2017/01/13/labor-force-needs-to-work-with-robots-not-be-replaced-by-them-study-says/

Basic Income

http://www.huffingtonpost.com/the-conversation-global/money-for-nothing-has-the_b_14340502.html

https://www.technologyreview.com/s/603296/finland-starts-handing-out-a-basic-income/

95% statistic

http://www.wsj.com/articles/why-the-west-and-the-rest-got-rich-1463754427