7 Dec 2015

Back to the hipster future?

Rainwater is cheap.
I've been watching the "rise" of automation, smarter algorithms, etc. for a few years now. In this post, I explore ways of protecting the majority from a concentration of profits in the hands of a minority that will may emerge. That solution depends on a transfer from the winners (capitalist humans) to the losers (unemployed white collar humans) via a Basic Income.

That idea relies on political and social will, which may not emerge. If it does not, then we may see unrest from some ("you promised me a six-figure salary, and all I got was this lousy law degree") but withdrawal by others. This post is about those who might opt out of the market economy.

Here's the scenario:
  1. Increasing automation drives down wages and employment*
  2. Workers are forced to consume less on less income and/or work time
  3. They begin to spend more time on "self supply" of goods and services, to save money and increase their satisfaction as consumers (quality) and producers (useful effort)
  4. Some of these people see the advantage of "going back to the land" where the rent is lower (or non-existent), food production is easier, neighbors are available for company and exchange, and so on.
  5. The monetary economy shrinks (and taxes on income and spending fall), thereby reinforcing the loop from #1
Where does this cycle end? I'd guess at a new "equilibrium" where bots do lots of the routine work and people do all the "craft" work, in economies that are sometimes complements and sometimes substitutes.

When it comes to teaching, for example, I can see a lot of self-guided learning via videos and text for the masses but "face-to-face" education for those who can afford human tutors.

Bottom Line: The hipsters are setting a good example of how to be happy and productive when you have little money and much time. Your interesting hobbies may be your future wealth.

* It's a basic fact in economics that your wages reflect your marginal productive capacity. Wages of humans will drop anytime they face bot competition. (More on these implications next week.)

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