Thursday, December 1, 2016

Rethinking the Morality of Our Economy

As we continue examination of last month's surprising election results and the transition to a new Presidency, there is a lot of writing and thinking about the role of the economy and different people's places in it. Many have pointed out the strong rural-urban divide (see this Brookings Institution piece, for example) and the apparent chasm between well-educated city-dwellers (who voted overwhelmingly for Clinton) and less well-educated rural folks (who largely voted for Trump). At least some of what fueled Trump's victory seems to have been a desire for jobs that once existed but are now gone, along with a perceived decline in living standards.

A lot of our national conversation about jobs and the economy rests less on economics than on a surprisingly deep and unexamined bed of moral assumptions. Consider, for example, this article:
Driverless 18-Wheelers Coming to Ohio
In many ways, this is a familiar story of automation displacing human labor. We have seen the same thing in heavy manufacturing, in coal mining, in the steel industry, in farming. Plants, factories, and farms than a few decades ago employed thousands now employ a few hundred - and are more productive than they used to be. Nearly 20 years ago Paul Kennedy identified robotic automation as one of the major forces that would reshape the world in Preparing for the 21st Century.

Every time we go through another cycle, there is always concern for the workers "left behind". There have generally been two answers to this problem. The first is "benign neglect" - let folks figure it out on their own, often by moving to places where there are more jobs, and/or sinking into poverty and despair. The second has been some variation of job training/education, to "retool" workers so that they are qualified to do jobs that haven't yet been eliminated by automation.

Deep underneath all of this is a root assumption far more moral than economic. If we start asking "why", we get a chain of logic that looks something like this:

Why do workers need to retrain? So they can get new jobs that pay well.
Why do they need jobs that pay well? So they can enjoy a good standard of living.
Why is a job necessary for a good standard of living? Because that's the way we distribute resources in our economy.
Why do we distribute resources according to the use of labor? .....

This is where we hit the moral bedrock - which automation technology may eventually cause us to reexamine. We assume that wealth must be attached to labor because ... well, because wealth distributed any other way would reward laziness. Why give people money they haven't earned? We can't imagine doing it any other way.

This notion that wealth or resources must be earned is fundamentally moral. It is based on a statement of what "should" be. It is entirely possible to distribute resources in other ways and on other bases, as the "basic income" movement argues. Many objections to that argument amount to moral repugnance rather than reasoned debate, which is why I suspect it hasn't gotten very far.

It should be pointed out that, even in our present labor-market-driven system, we are not purists about "earning". Children under the age of 14 or 16 or 18, for example, don't "earn" their keep by producing, yet few people would argue that they should. That was not true 150 years ago; we once had a system in which child labor was not only allowed but expected, and children as young as 5 or 6 were held to the same moral standards of earning as adults. We do not lack for alternative ideas, we just haven't thought about them much.

So why are driverless trucks important? Because the trend lines here are clear, even if their precise measure is difficult. We will continue to find more efficient ways to produce goods and services with less and less labor input. At the same time, our population isn't declining - it's growing, if slowly (speaking here solely of the United States - in some places, like Russia and Japan, it's shrinking). At the very least, we can expect population to level off and remain steady, which in the US means ~320 million or more people.

So what happens when those curves cross - when automation means that there simply aren't enough productive jobs for all of our workforce? Some "products", like art or music, can be produced in more or less infinite quantities, but the current labor market in those areas means that the more musicians or artists there are, the poorer all of them will be as they compete for a finite market.

The economic challenges that have surfaced through the US election are real. Promises to turn back the clock and "bring jobs back" aren't going to solve them - the trend lines aren't going back. Youngstown, Ohio is never again going to have thousands of steelworkers, no matter what kind of deals President Trump thinks he can cut.

Eventually, these curves will meet and we will be forced to rethink our most basic assumptions. We will have to stop defining people's value, in economic terms, on the basis of what they produce economically, because there will not be enough work for everyone to be productive. And that will require a moral shift, so that we cease to put "earning" at the center of our moral universe. That won't be easy, and maybe we won't manage it at all (although the alternatives are far more dystopian). But we need to start thinking about this now.

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