Globalist Paper

Disappearing Jobs? Our Thomas Paine Moment

As automation eliminates jobs, Paine’s proposal to share wealth from the commons shows a way forward.

(Credit: Julia Ivantsova - Shutterstock.com)

Takeaways


  • There is an immediate need to find new sources of income to supplement or replace labor-market income.
  • Economists and other scholars have begun take a keen interest in what is called the “Alaska model.”
  • The time is ripe for a resurgence of interest in common-wealth dividends.

In Thomas Paine’s day, and again in Henry George’s time, the United States was on the verge of running out of land—that is, land suitable for family farms.

Today the United States, along with other developed nations in the globalized economy, is on the verge of running out of what land represented in the days of Paine and George — the means by which ordinary people can support themselves.

Jobs are not only being exported to other parts of the world (manufacturing to China, call centers to India), but automated out of existence.

Although cars are still being manufactured in Detroit, they are built mostly by machine, leaving the city itself – the community that grew up around the factories – in dire straits.

Meanwhile, Amazon.com is capable of satisfying a nation’s retail needs with a fraction of the workforce that once staffed brick and mortar stores.

Not only blue-collar but service-sector jobs, too, are being replaced by technology.

Much of the mind-numbing work of “discovery” that once employed armies of lawyers and their assistants – scanning through millions of pages of dry documents to pick out relevant information – can be performed more cheaply and accurately by machines.

The higher education sector is notoriously unable to hire all those it trains, and massive online courses make teachers ever more expendable. The market for professional journalists has cratered.

When Google’s self-driving car is scaled up for the market, millions of jobs in the transportation industry – which is the largest occupation in most American states – could go the way of the travel agent.

To make technological progress a blessing

“Creative destruction” has always been a feature of industrial capitalism, but there is no question today that the jobs being created are inadequate to absorb the army of the structurally unemployed and underemployed – what economist Guy Standing calls the “precariat.”

Technological progress that reduces the need for human labor ought be something to celebrate, in the sense it makes life less back-breaking and monotonous.

But technological progress won’t be a blessing unless we find new sources of income to supplement and replace labor-market income. Wealth from the commons will be an obvious place to start.

In just the last few years, economists and other scholars have begun take a keen interest in what is called the “Alaska model.” They have found no reason why it shouldn’t be widely exportable.

No petroleum where you live? Not a problem – even a state as resource-poor as stony Vermont has considerable common wealth in the form of forests, water resources, urban land etc. These resources could sustain dividends as large as Alaska’s current modest payments.

Taming the resource curse

Living in the developing world? Turns out that distributing resource-based revenues to individuals and then taxing personal income, rather than funneling those petrodollars directly to the state treasury, is a recipe to tame the so-called “resource curse.”

It is a powerful strategy to make government responsive to citizen needs and concerns.

Does your nation already have a sovereign wealth fund? Congratulations! You can start today, and (as Alaska does) distribute dividends out of interest while preserving and growing the capital.

Some might object that income on the scale of Alaska’s current dividends (up to several thousand dollars per capita per year) would be inadequate to comprehensively address the problem of structural unemployment. It’s a fair point.

A share of commons-based income will probably not be enough to provide security against poverty (a so-called “basic income guarantee”). But commons-based dividends are a good start. And as Thomas Paine would argue, they are a birthright in any case and should be recognized and treated as such.

Another objection is that making everyone direct beneficiaries of oil drilling (or forestry, or other extractive activity) will “capture” the public as a constituency. This would make the public enthusiastic to “drill, baby, drill” when it would be wiser to conserve.

When the public owns, it conserves

As it happens, there is no evidence from Alaska that the public has demanded faster drilling.

And in fact, economic logic ought to dictate the opposite: If the public sees itself as a monopoly owner of the resource, its rational interest will be in conservation and sustainable management to maximize income over the long term.

The time is thus ripe for a resurgence of interest in common-wealth dividends. And signs of that resurgence are apparent.

But if Paine’s proposal from over 200 years ago is finally enacted on a national scale, it might first take a form that turns the Alaska model entirely on its head: not based on the value of oil extracted from the ground, but the public interest in keeping it buried.

The issue that is poised to bring common-wealth dividends into public consciousness on a national and international scale is climate change.

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About Brent Ranalli

Brent Ranalli is an associate at The Cadmus Group, Inc. and a member of the IBM Network Science Research Center.

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