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Geoman

Hey Kartik,

I agree with all your concerns regarding the foundation concept, and I will say, my interest in this type of solution is as much about pointing out an alternative pathway forward as it is about actual belief that such a system is the most desirable. I don't think it is, but I do believe that it will be a much easier to accomplish.

Meghan McArdle had an interesting article some time ago about health care reform. She basically said that, look, the existing costs are baked into the system of health care. When you talk about reducing health care costs, you are really saying you want to reduce the amount of money we give a doctor. But that doctor is invested in making a lot of money - he invested an enormous amount of time, talent, and money into being a doctor, and expects to be compensated. Reducing spending on health care means clawing back money from people who may have monstrously huge student loans, and expensive house, etc. It is going to always be tough to do.

Your idea is to write off these "liabilities". That, unfortunately, involves bankruptcy in some way shape or form for someone. The problem is, that someone currently has their hand in the public purse, and votes. Meaning, these organizations will continue to decay, and we will keep paying for that rot.

My idea is more about paying off these liabilities, and discharging them from our books. Going forward, we don't much care if they do well, or poorly, or are relevant. All we care about is their hand is removed from the public purse. The institutions themselves are left with the challenge of finding relevancy.

As you correctly observe - these last-century institutions, with their entrenched bureaucracies have already shown themselves to be impervious to the ATOM, and they are doing it because they can vote themselves more money.

My goal is not to reinforce them, it is to divorce them. If you can't stand your wife, there are two options, a hit man, or a divorce. I'm saying losing a few assets and paying some alimony is the better option. Especially since (in this case) I will need the wife to agree to using a hit man.

Geoman

Hey Ed,

"our goal should be to eliminate these institutions, not reinforce them."

Well a good analogy is this - you are getting a divorce from a terrible wife. The idea that you might have to spend some of your money to support her, on lawyers, and that she might get half of your estate, is upsetting. But what is the alternative? Stay with her and hope she dies?

This is not intended to reinforce these institutions, it is intended to divorce them. I want to divorce the government from these institutions, and fully subject them to future market forces. Unfortunately the people who work for these organizations vote as well, and will continue to vote to have themselves supported as they fail going forward. I want to cut that off.

First step in a divorce - Get the check book away from the wife.

Ed Zimmer

HB,
Let me try to convey my view on where our society is & where it's headed. This view carries the flavor of Kartik & others here but can/will differ in detail - which I see as not a problem because what we see today is colored by our past experiences (ie, we all have biases) & our view of the future can be at best an educated guess. Our STEM backgrounds should allow us to follow any disagreements in a logic tree back to differing unprovable basic assumptions.

I see our society going through a technological revolution as life-changing as the earlier industrial revolution (that moved us from an agrarian to industrial society), but whereas that one automated only manual labor, this one automates intellectual labor. Just to emphasize the enormity of this change, let me make a flat statement you'll almost certainly disagree with (and then buttress that with some logic for you to challenge).

There is NO job today that cannot be automated.

First, accept that intelligence is a combination of memory, deductive reasoning and inductive reasoning. If that's not acceptable, come up with a better (usable) definition. Then understand that computers have proven to be superior to humans in both memory and deductive reasoning. That's been obvious since Watson and such machine-learning algorithms and resources are continually improving. Then accept that most paid work requires (mentally) no more than memory and deductive reasoning - and what little inductive reasoning is required can be provided by one human working in cooperation with many robotic entities. At this point it should be obvious that we're facing a shrinking job market. A counter-argument is that the technology will produce new kinds of paid work - but in that case, the basic kinds of such work should be describable - and, most importantly, an explanation offered as to why this new work isn't as susceptible to computerization as was the old work.

If you accept this, it should cause you to question many of your "free market" assumptions. If paid work becomes unavailable (regardless of training or skill), what will society look like? Will it degenerate into a dystopia of crime and violent revolution - or is there a better solution, like perhaps the one Kartik is proposing.

HB

By the same logic we, as a society, could decide to start diluting patents by gradually and arbitrarily distributing the intellectual rights of exclusivity the patents represent. We could then claim that it is not redistribution since nothing is taken from the patent holders. The patent holders can still build what their patents describe. The technological benefits of the patent would simply flow (be distributed) to people who did not participate in the innovation. Just like universal income we would claim that we are simply distributing technological deflation without (re)distributing.

I think universal income is a dangerous idea and I'm afraid that those societies who fall for it will make an irreversible mistake that will seriously hamper their velocity towards the singularity.

Are all productivity gains redistribution? No, but indeed productivity gains already contain a huge amount of natural inherent redistribution as it is.

The innovator reaps only a tiny fraction of the overall societal benefit that his creation imparts to society as a whole. The main contribution of an entrepreneur is not the taxes he "gives back" as some class warriors would have it. It is the overall productivity gain his innovation impacts on society. So there is already strong natural redistribution. Little point in augmenting it with taxes and universal income.

Well, there is a point. But the point is to placate the masses and convince them to accept an ATOM reality that continually and naturally magnifies income inequalities -- because some people are capable in contributing to the ATOM's perpetually accelerating exponential growth while most are not. In other words, as the leverage of technology grows exponentially, so will the natural income inequalities. That is baked in the cake of exponential growth itself. The average voter will not be able to shed his instinctive inner envy and will be unable to enjoy the exponentially growing trickle down prosperity of the ATOM, so long as someone else's prosperity growth exponent is significantly higher than his.

In order to prevent the resulting revolution (which risks derailing everything for a while), the ATOM will be forced to redistribute in order to placate the masses and prevent them from seriously disrupting the path towards the singularity. The ATOM is going to have to find the fine balance between (a) a redistribution that inevitably slows down incentives and (b) a revolution that will derail it. The countries that will reach the ATOM first will be those that find the best such balance. Now, to hope that your own country (wherever you happen to live) will be the one that will sustain the best balance is, in my view, naively playing against the odds. Hence, my personal advice is:

Stay mobile!

Personally (being hamstrung by past paradigms) I'm betting on old fashioned capitalism to win the race to the singularity. I have not yet seen something to convince me otherwise, and will emigrate (once again!) preemptively if I see a significant enough proportion of voters diverging from a system that aligns competence and effort with reward.

Kartik Gada

HB,

By the same logic we, as a society, could decide to start diluting patents by gradually and arbitrarily distributing the intellectual rights of exclusivity the patents represent. We could then claim that it is not redistribution since nothing is taken from the patent holders.

That is not the same thing at all. In your example, the patent owner makes less and less, since his asset is being diluted.

I think universal income is a dangerous idea

Given that most countries already have a crude and waste-ridden form of universal income for 80-90% of citizens, you should be campaigning against that.

A real UBI has to be paired with 0% income tax.

Personally (being hamstrung by past paradigms) I'm betting on old fashioned capitalism to win the race to the singularity.

This is old-fashioned capitalism. You still don't understand that the ATOM program involves 0% income tax, even though that is plastered across the entire publication.

Geoman

Ed - "There is NO job today that cannot be automated." Sure there are. Sex worker. Priest. grief counselor. Politician. Supermodel. Cop.

My guess is we will still have human labor, but at a price. In fact, it will become a luxury item. A century ago, being portly and pasty meant wealth and power. It was even seen as attractive. Today it is about being a tan hard body - showing you have the leisure time to maintain your body.

and HB - To add to what Ed is saying - what is the alternative? Rich guys owning AIs who generate enormous wealth. There literally will be no middle class at all. Imagine Amazon with one employee - Multi-trillionaire Jeff Bezos. Unless you are invested in the means of production, you will have nothing.

I see it is as much simpler - AIs will bring about massive deflation.
The deflation rate is likely to become so large that none of the traditional solutions are going to be able to control it. Kartik is proposing a method - instead of quantitative easing (basically the government printing money for itself to spend), we give everyone a refundable tax credit. Not sure how you get "socialist" out of that - it seems like the opposite to me. Or, as Kartik has said, the terms don't even have meaning in such a context.

In Alaska we pay zero state taxes, and receive around $2,000 dividend from the invested oil wealth each year. It is massively stimulative to the economy. the alternative is the State gets the $2,000 a year to spend in potentially much more wasteful ways. Which path is better? It has been working just fine up here for decades - I certainly wouldn't call Alaska a socialist state.

Ed Zimmer

Kartik,
Did you delete my Jan. 16 response to HB or did I mis-post.

Kartik Gada

Hi Ed,

No, I did not delete anything, nor do I have such intention.

I checked the spam folder, and did not see any comments from you in there (but, ironically, found some from Geoman, which I have recovered to the main page).

If possible, perhaps try reposting.

Thanks.

Ed Zimmer

Kartik,
Sorry. Missed that little double-arrow at the bottom of the page that brings up overflow posts. Everything's there & thank you.

Geoman

Ah that explains things - I thought I had screwed up! That is why I might seem to repeat myself - my first post never appeared so I re-posted.

Ed Zimmer

Geoman,
I don't believe Kartik is proposing a "refundable tax credit". His position is 0% income tax. Rather I believe he's just proposing equal (& growing) per-capita cash disbursements. It will be interesting to see how we handle this next economic crisis. With the federal debt we're building, it will take a lot more than 3-4 QEs to bail us out the this one.

One solution which is getting some support among The Economist commenters is to simple stop issuing federal IOUs on issuance of new money (ie, stop building up that federal debt, that's meaningless anyway as it's payable in fiat dollars) and have the central bank start focusing on the currency circulation (ie, on regulating the NGDP through use of the revenue and expense accounts that compose it).

One of those accounts is "Compensation of employees paid" & there's no reason it can't be the government paying that compensation if employers aren't. The way I'd like to see it work is a pay-card distributed to all citizens with the government crediting cash to it weekly which citizens then use to consume which then gets debited back to the expense side of the GDP.

HB

By the same logic we, as a society, could decide to start diluting patents by gradually and arbitrarily distributing the intellectual rights of exclusivity the patents represent. We could then claim that it is not redistribution since nothing is taken from the patent holders. The patent holders can still build what their patents describe. The technological benefits of the patent would simply flow (be distributed) to people who did not participate in the innovation. Just like universal income we would claim that we are simply distributing technological deflation without (re)distributing.

I think universal income is a dangerous idea and I'm afraid that those societies who fall for it will make an irreversible mistake that will seriously hamper their velocity towards the singularity.

Are all productivity gains redistribution? No, but indeed productivity gains already contain a huge amount of natural inherent redistribution as it is.

The innovator reaps only a tiny fraction of the overall societal benefit that his creation imparts to society as a whole. The main contribution of an entrepreneur is not the taxes he "gives back" as some class warriors would have it. It is the overall productivity gain his innovation impacts on society. So there is already strong natural redistribution. Little point in augmenting it with taxes and universal income.

Well, there is a point. But the point is to placate the masses and convince them to accept an ATOM reality that continually and naturally magnifies income inequalities -- because some people are capable in contributing to the ATOM's perpetually accelerating exponential growth while most are not. In other words, as the leverage of technology grows exponentially, so will the natural income inequalities. That is baked in the cake of exponential growth itself. The average voter will not be able to shed his instinctive inner envy and will be unable to enjoy the exponentially growing trickle down prosperity of the ATOM, so long as someone else's prosperity growth exponent is significantly higher than his.

In order to prevent the resulting revolution (which risks derailing everything for a while), the ATOM will be forced to redistribute in order to placate the masses and prevent them from seriously disrupting the path towards the singularity. The ATOM is going to have to find the fine balance between (a) a redistribution that inevitably slows down incentives and (b) a revolution that will derail it. The countries that will reach the ATOM first will be those that find the best such balance. Now, to hope that your own country (wherever you happen to live) will be the one that will sustain the best balance is, in my view, naively playing against the odds. Hence, my personal advice is:

Stay mobile!

Personally (being hamstrung by past paradigms) I'm betting on old fashioned capitalism to win the race to the singularity. I have not yet seen something to convince me otherwise, and will emigrate (once again!) preemptively if I see a significant enough proportion of voters diverging from a system that aligns competence and effort with reward.

HB

Same thing here. Did not see the second page. Might be best to delete my last repeated post (and this one) if you can, to keep the comments clean -- and help me not look like a fool too :)

HB

Kartik,

So is universal income based on newly printed money diluting the value of money by preventing contributors to the ATOM from enjoying the deflation portion of their technological work.

I'm obviously not a fan of taxes, but I think 0% income tax is totally unrealistic any time soon. The likely outcome of introducing universal income will be UI PLUS taxes on top -- and likely a VAT to boot.

Another possibility is that with ever increasing geographic mobility many contributors to the ATOM will flee to countries with the least (re)distribution, with potentially deflating currencies.

Ed,

You are essentially claiming that we are past singularity. One day (soon in a historical time scale) machines will become more capable than the biological brain. But as of today, while machines are already more powerful in some tasks, the human biological brain remains much more powerful. But not for long. The singularity is close, on a historical time scale.

Another thing that you are not taking into account into the fate of your "poor obsolete proletarians" is that as we approach the singularity, even an hour per month of meaningful ATOM contributing work will confer a lot more goods and services than today's fourty hour week. The problem will be the envy towards those who can have exponentially more -- and ever more and more as the singularity approaches. Perhaps the envious will be sedated with VR and stay happy while the ATOM benefits trickle down.

Ed Zimmer

HB,
How am I claiming we're past singularity? That will require the implementation of inductive reasoning and to date that has not been accomplished. Some of the current neural simulation research may lead to it, but so far there's been no breakthrough (or even credible hint of it).

I don't understand what you're trying to say in your 2nd paragraph. You obviously have a dystopian view of human nature but that has nothing to do with the real choices we're facing in the real world. I gather you're accepting that we're facing an irreversibly shrinking job market. So what is your answer for those who will no longer be able to find paid work? You do recognize that as you see that group growing, you'll see rising (very inefficient) welfare costs & if you try to avoid them, you'll see rising crime (which I assume you'll expect government to protect you from and are prepared to pay the costs of a growing prison system) - and that when that group becomes large enough, you'll face violent revolution that you'll be unable to be protected against. If so, the only argument is timing - whether it's you or your children who'll face these consequences.

Geoman

Hey Ed,

Let's restate what we agree on: The singularity is coming, and is near. It can't be stopped. We don't know exactly how and when the singularity will play out. Changes are likely to be extreme to our society and economy. One of those changes is likely to be fewer jobs, and rapid deflation. Possible responses to the problems stated above:

1) Just let it happen. We always overestimate the impact technology will have on unemployment. The deflationary apocalypse is overstated. Everything will be just fine. Don't panic. What doesn't kill us makes us stronger. Etc.

2) Our society will dissolve into a dystopia of the very poor and the obscenely wealthy. There is nothing we can do to stop this, and everything we try will likely backfire. Stay liquid and mobile as some say.

3) Remove the technological deflationary pressure by taking steps to inflate the economy. These could include: a) endowing and spinning off government agencies. b) direct payments to individuals. c) the government prints money and spends like a drunken sailor.


By the way Ed, a Refundable tax credit is exactly what Kartik is proposing. And yes these already exist, and yes, people get checks in the current system. It really isn't as radical as it sounds.

This leads to a bigger point - most of what is described here is already happening. Quantitative easing? Simply a scheme to print money to stoke inflation. Send checks to citizens? Alaska has a sovereignty fund that provides a "dividend" check to each resident to the tune of $1-2k per year. Finland is doing away with all government social programs and simply issuing a credit to all residents to buy whatever they need. These are models for what Kartek is saying.

My endowment idea is a sovereign wealth fund for specific government agencies. There are many examples of exactly this around the world. Australia has the Education Investment Fund – a fund to provide capital investment in higher education and vocational education and training. The interest is used to build schools at zero cost to the Australian government. They also have the Building Australia Fund – An infrastructure fund to improve and create major infrastructure projects (including road, rail, ports and broadband). Same deal there - the earnings of the fund go to build capital projects without using government current accounts. North Dakota has the same system, as does Israel. Alabama has a fund that finances prisons, mental health programs, elderly care, and public safety. This idea is not unusual, or even remarkable. In fact it is fairly common. I'm saying lets expand and grow a system that already works, and is already in place.

Actually - Alaska does both - checks to people AND government services with zero state taxes, and specific agencies are endowed as well - the Alaska Energy Authority builds out the electrical infrastructure. The Alaska industrial development authority works on roads and ports. Both are quasi-independent agencies that are funded solely by endowments.

So kartek wants to spend the technological deflationary dividend by sending checks to the people, I prefer to save it, and spend the interest on reducing the size of government. Naturally the federal government would simply like to take the dividend (by running debt and quantitative easing) and spend it on whatever they like.

Again, we don't disagree that technological deflation is going to occur, and that money will need to be created to combat the technological deflation. We are just arguing how this money will be best spent.

Ed Zimmer

Geoman,
Let's just review where we do & don't agree. We agree the singularity is coming - but we don't necessarily agree that it's near. To reach singularity a machine must achieve inductive reasoning - & that's not on the observable horizon. (I'm confident it WILL happen, but as of today there is NO credible path to that end.) And we may agree on an irreversibly shrinking job market (but I suspect I'm seeing it shrinking more rapidly & more thoroughly than you are). And I suspect you're reading more into last-century buzz-words of "inflation" & "deflation" than they deserve. Inflation is not in my vocabulary & my use of deflation is limited to the narrow understanding that technology allows us to do more with less (affecting the availability of products/services but not necessarily purchasing power). And I'm know we disagree on institutional infrastructure. You want to beef up & perpetuate it & I want to find ways to eliminate it (while improving the services available). And I suspect that's just skimming the surface. I'm willing to (& would like to) debate any or all of these issues - but to avoid falling into esotericism I'd like to focus on the practical, eg, how do believe our government should deal with the next crisis?, how do you believe it should deal with growing unemployment & flat wages?, etc.

HB

"Finland is doing away with all government social programs and simply issuing a credit to all residents to buy whatever they need."

Is there any information on this? It seems highly improbable. Are you perhaps referring to the limited local UI they have been experimenting with, using a couple thousand individuals?

Also Finland is on a 1-2% annual growth trendline similar to the other European welfare states, while average world growth has already accelerated to a 4% trendline the past two-three decades. With such a huge growth deficit (and in all likelihood widening as the approaching singularity magnifies all growth and thus all divergences) what future can Finland possibly have? Even at current trendlines, assuming no further acceleration in growth rates (clearly contrary to the ATOM), the world average catches up to Finland by 2050. From prosperity leaders to world average in less than a century, without intervening major warfare. Unprecedented pace of decline, never before seen in human history. Now how special is that?

Under my stay mobile philosophy I'd stay as far away as I can from countries on a 1-2% growth trendline -- save having their taxpayers pick up the tab for some major medical procedure I may need, which I can have done there being still a European citizen.

Geoman

HB yes. Finland is under performing economically. We are not in disagreement there. But I very much doubt their UI program is responsible - It is actually something they just implemented to try and fix the low growth problem by adding a little efficiency to the welfare distribution system. It won't make them grow faster since no additional funds are being expended. Alaska is a much better example.

Ed - we disagree on much less than you think. I suspect you believe "near" means the next 5 years. I mean "near" as in my lifetime, which will be another 30 to 40 years, I hope. And I don't think it will be a sudden effect - the issues with it are starting now, and will get geometrically worse every year until the singularity. Let's also agree on something else - a computer with the processing power of a human brain will exist as soon as 2024. That is seven years. Will it think like us? Nope. Will that matter? Nope. We vastly overvalue inductive reasoning - we assume a lot more jobs need it than actually do.

Increases in productivity are deflation. They mean the same thing. not sure why you separate the two.

How about a joke? Guy walks into a bar with a sad face. Bartender asks him what the problem is. Guy says "My wife. She is a terrible shrew. Useless around the house, and spends my money like water." Bartender asks "why don't you just divorce her?" Guy says "What!? And pay for lawyers and alimony? I'll just wait till she dies of natural causes." Bartender asks, "how old is you wife?" Man answers "35".

You don't want to pay for the divorce or alimony, but wait for natural death. I say divorce now and move forward, since the institutions you dislike are going to have a long, slow, lingering death. And during that time they will keep begging for more funding and support from the government, which they will get, because a vast majority of people will never accepted that these institutions (some of which are hundreds of years old) are no longer relevant.

And you can't possibly oppose simply changing the law, today, that allows universities as charities to both charge tuition and spend less than 5% of their endowments. Changing that law, at zero cost to the government, would make approximately 35 universities instantly tuition free.

And , naturally, I use universities as an example, because they are easier to understand. We don't have to start there. We can spin off NOAA, NASA, or the USGS. Any agency with a defined mission can be spun off the books. Once spun off, taxes are reduced accordingly, or re-directed to spin off other government functions. I start with health care and college costs because eliminating these has a direct, stimulative impact to the economy and the average person's bottom line, but you can start the "divorce" proceedings anywhere you like.

stephen murray

another related chart showing ATOM effects in detection

https://en.wikipedia.org/wiki/Potentially_hazardous_object#/media/File:Neo-chart.png

Kartik Gada

Stephen,

That is a very good find! The exponential trend is clear.

Eventually, they will find all of them above some very small cutoff size, so the chart will level off. Then, harvesting of them for valuable elements and compounds can begin in the 2030s.

Ed Zimmer

Geoman,Yes, our concept of "near" differs, but I agree that the process is already underway so our difference is only in sense of urgency. However I prefer to think things through, try to separate emotions from intellect & try to find tenable solutions before panic sets in, so perhaps I feel a bit more pressure than you do.

We do disagree on the necessity of inductive reasoning. I'm a reasonably strong deductive reasoner but I've found it vital to have a reasonably strong inductive reasoner close to me throughout my career (and even now). My fatal weakness as a deductive reasoner is a propensity to fall into a rut - I've thought something through, I've proven it in the real world, I no longer question it - and I need a trusted inductive associate to challenge me and shake me out of that blindness. I do agree that most jobs do not require inductive reasoning (and that any inductive reasoning required for some job can be provided by one human controlling multiple deductive machines), but I don't believe a machine can achieve human intelligence until we find some way of equipping it with inductive reasoning.

Whether the better solution here is cash or endowment is secondary to convincing those in power that technology is deflationary and and money is fiat. Neither of us have a solution to that. Kartik's solution of a well-positioned country trying & proving it is viable but uncomfortably passive. I can't expect a politician to adopt such a position until their economic advisor(s) proclaim that reality & give them the right words to sell it to their constituency. So my approach is to try to educate the economics community through active commentary in The Economist magazine. (And one of the reasons I'm here is to find better ways of doing that educating.)

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