Beyond the Welfare State

If you’ve been to a drugstore lately, you may have seen the automatic checkout machines replacing human tellers – the CVS next to my San Francisco office operates with only 3 front-room staffers and six automated checkouts.  Such a shift has been long underway in the manufacturing industry, with robots replacing humans for tasks that require heavy lifting, precision, safety, and endless repetition – that is, most of manufacturing.  These shifts in automation are, by classical economic standards, surely good things – they decrease the cost of goods and make them more widely available.  But at a certain point labor-saving devices transmute into labor-replacing devices.

Let’s assume that human labor is on its way out.  This doesn’t mean humans won’t be needed for economic functions – people will have to design goods, and make some decisions about their distribution and sales, and program the sufficiently smart programs that eliminate most of the white-collar grunt work.  Even as digital diagnostics pervade people-focused industries like education and healthcare, teachers and nurses will always be needed.  But the vast majority of rather menial labor – i.e., the jobs held by most people are to be eliminated.   This is generally regarded as the Luddite fallacy, but there’s no reason the Luddites couldn’t have been right too early.  So let’s assume it.

This is a strange problem for the social-democratic left of the industrialized world.  The institutions of the welfare state, especially in America, are oriented around full employment.  The assumption is that the surplus generated by workers will be redistributed to populations in need, and the able-bodied will be left to fend for themselves on the labor market.  This has already shown signs of breaking down in the United States – in the slack labor market of the post-2008 economy, work requirements for welfare have had the practical effect of forcing many families off of welfare and into poverty.

So, in a future where technology has replaced most labor, what is the left to advocate for?  The level of economic surplus will be huge – automated factories, tellers, and farms will push the cost of goods down to unforeseeable levels.  If some of the more outlandish potential of nanotech and 3D printing come true, many goods may be effectively free.  However, left to its own devices a greater and greater fraction of that surplus will wind up in the hands of the IP owners who own patents and designs, who dole out an appropriate level to their workers and nothing to the masses of unemployed.  Furthermore, some of the few areas where costs are not expected to dramatically drop are the labor-intensive healthcare and education sectors, which thanks to the social-democratic left are somewhat universal.

I would suggest that in such a world, the left should and will adopt redistribution of wealth as an ideological, not just practical, goal and on a much bigger scale than today.  While basic income schemes are laughed at today, they were popular in the past as a potential solution to lesser versions of the future’s labor surplus.  Besides, a world with many goods and few workers does face a classic Marxist crisis of overproduction – to whom will they sell these cheap goods?  It seems that in order to keep social-democratic capitalism humming along, it might have to change very dramatically.  It will also totally upend the American welfare state, which is very oriented around work, not just mechanically but culturally.

As Americans, the “dignity of work” is one of our deep cultural beliefs, shared on left and right.  How would it survive the mechanization and replacement of labor?  Will it die out? Or will it drive us to embrace make-work as the cultural extension of our values?  A Marxist would claim the former; I really have no idea.  But ultimately, the revolution in productivity is a good problem to have, especially compared to the alternatives.

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