The Social Consequences of Inequality

The Social Consequences of Inequality

Curt Welch cited:

The Social Consequences of Inequality | Q&A |
Richard Wilkinson is an epidemiologist and a leader in international research of inequality. He is also the co-author of The Spirit Level: Why Greater Equa
March 12 at 6:58pm · Like · 1

Curt Welch: I spend a lot of time arguing that wealth inequality is the true number one problem in the US today, but this video makes it even more obvious why it’s so. If you want to know why so many people in the US feel they need guns for protection, check out the graphs on “trust” in the video. Want to understand why there’s so much violence in America? Check out the graphs. Want to understand why we have high levels of mental illness? Check out the video.

Reduce wealth inequality, and you will have reduced all these problems at the same time.

I argue that one of the best ways to reduce inequality across the board, is to implement a Basic Income Guarantee for all citizens.
March 12 at 7:04pm · Like · 1

[Person 3]: I have worked hard all my life, sometimes two jobs at time, and saved my money to buy real estate and make other investments and I have always marveled at people who invent things, and take chances to start a business and rise from rags to riches, and it makes my blood boil when I see stuff like this that sounds like socialism or communism – take from the rich (people willing to work hard for their money) and give to the poor, the lazy, and those afraid to take chance and get off their ass. I carry what some people call a dumb cell phone and watch a 20 inch tube TV connected to an antennae to stay within my means, while I see people who can’t afford or don’t want to pay for health insurance and they carry iPhones and have all the latest toys and complain that the 1% have something they can’t have. It makes me sick and I would like to tell them to go join a hippy commune or go live in some socialistic country where they can trust their rich ambitious “brothers”will share their bounty with them. Give me a break. The problem with inequality is there is a terrible inequality of ambition. Go ahead and give people something for nothing and you can bet there will be a much bigger inequality of ambition to go around.
March 12 at 10:56pm via mobile · Like · 1

William Waugh: [Person 3], do you think that the chief economic problem is the shortage of people willing to work hard?
March 13 at 8:48pm · Like

[Person 3]: William, wouldn’t it be great if we could condense all our problems down to a couple of issues. You could line up all the economists and they wouldn’t reach the same conclusions.
Thursday at 1:40pm via mobile · Like

William Waugh: [Person 3], I think there is something to some of the points you make. For example, in any system, people are going to have some freedom to make some decisions that affect the economy (their own and the world’s). An example you cite is where people can decide whether to have health coverage or buy toys. A system that rewards people for bad decisions is not good. But you carry opposition to any measure or move that smacks of socialism so far that you say it makes your blood boil. Is that because you think every such measure will increase human suffering?
Thursday at 8:11pm · Like

William Waugh: I think that we can condense 80% of our problems as the human race to a couple of issues, so long as one of those issues is the birth rate.
Thursday at 8:12pm · Like

[Person 3]: Suppose your college professor said “William, all of you “a” and ” b” students need to help the “d” & “f” students so we are going to average the grades so everyone gets a “c”. That may not make your blood boil but I’m sure you would be very unhappy. I’m not into social engineering; I just get upset if I have to share with people who have never acquired my work ethics. The country may be on a path to addiction to government entitlements. That is why all the people who are in my state of mind get upset whenever politicians push for socialistic measures.

Are there limited resources on this earth for the projected population? I agree this may be a major problem. I don’t know if any experts can rate the severity of that problem. Can people be happy in socialism based society to share the limited resources? I doubt it. In my travels through Russia, Romania, Hungary, etc. I got the impression that the majority were not happy until they could be free from the collective farms and state run companies where everyone was guaranteed a job and a place to stay. They weren’t happy until they had the freedom to use their ambition and initiative to rise above the level prescribed by the state (government entitlements). Other than people who have the misfortune of really poor health, everyone should be given incentives to make a good living. Are we moving in that direction with all of the entitlement programs? How can we teach young people good work ethics if they grow up in a family that is taught that when they need something they immediately think about how they can get a handout from the government. Why is that important? Just look at any microcosm of society, from high school students, ex convicts, or 2 year olds; they all feel better about themselves when they can accomplish something on their own, be productive, do something they are good at, or become independent.

I grew up on a farm in North Dakota and have worked since I was 6 or 7. I didn’t really know how poor we were, but we did everything we could to make a living and save enough to go to college. Most of my relatives and the people we knew were fiercely independent and did not look to the government for handouts. We were probably more like the pioneers in the early stages of this country, looking to family, community and hard work to get ahead instead of some guaranteed annual income from the government. Immigrants came to this country and were overjoyed with the opportunities they saw and the life they could have for their families just by working hard. Why did we have to move so far from that model?
Friday at 11:18pm via mobile · Like

Curt Welch: The problem with “work ethic” is that we are probably looking at the last generation of people who actually have to work for a living. Automation is going to replace most humans in the work force in only a few decades. As this happens, the only “work” left, will be investing, and consuming. There just won’t be jobs for humans anymore. Without jobs to create an income stream for people, they won’t be able to invest and share in the great wealth all this automation is going to create. And likewise, even if someone saves, if the make a bad investment gamble, they could lose everything they own, and then have no way to start over.

Before all this automation, having a job, and a good work ethic, was the foundation of our society and our economy. In this new world, that’s already being built today, we have to come to grips with the understanding that jobs and a work ethic, are no longer going to be the foundation of our society or our economy.

Socialism is going to become the norm – not by forcing the “hard working” people to support the lazy, but by making the machines support all of us. In fact, most work done today is done by machines. We just don’t give them credit, for their work. They are our slaves, but yet when the machine does work for us, we act as if “we” did the work.

We won’t and shouldn’t become a full on communistic society. That’s the wrong way to do socialism. We want to use capitalism to allocate goods and services, not some central government office. But what will happen down the line here, is that the machines will operate under a capitalistic economy doing business with each other to develop, and deliver, goods and services to us humans. The machines can still be privately owned as well by individuals, and large corporations that make all the investment decisions – as to what machines to build, and what to have the machines working on. But some percentage of the wealth – some percentage of the total GDP, will be shared socialistic across all citizens. There are many different options on how to make that work, but the result is the same, some percentage of all income/profits are taxes and distributed as cash to give everyone a Basic Income. The rest is kept by the investor as their reward for making a good investment.

In time, as all humans are phased out of the work force, everyone will receive enough Basic Income to live off of for their life and never have to work at all. But anyone that wants to save, instead of consume, and invest, will have the option of growing very rich – if they want to spend their life doing that.

In effect, we are fast approaching a time where the hard work of our forefathers in creating all this technology, will allow (virtually force) the entire human race to retire.

It may be 50 years before the conversion to this new future is really complete. But what we will continue to see, as we approach it, is widening levels of income and wealth inequality. There are people that suggest either the inequality is not “bad”, or that it’s caused by “big government” intruding into the markets, but in times, it will become obvious to everyone that those ideas are just not what’s happening. But it will take time to convene people. But once enough understand the negative impacts technology is having, they will vote to add more socialistic support, and simply understand we are heading into a new world, where “worth ethic” just no longer applies.
Yesterday at 12:15am · Like · 1

[Person 3]: Curt, you may be right, the direction we are going, because of of Mis directed politicians, is we are becoming a society of more people wanting to be consumers than workers, and eventually when the balance of that ratio becomes so great that we don’t even have people to design and build the machines we (our descendants) will see the total decline of the human race.
Yesterday at 12:24am via mobile · Like

Curt Welch: Right now, humans still do a lot of the design work. But the machines already do a lot of heavy lifting in the design department. Complies and other software tools have done a lot of the grunt work of “design” software for us for 50 years now. Software does most the layout work of chips for electrical engineers now. CAD programs do a large amount of the “grunt” work for mechanical design as well – to calculate production costs of a design, and to optimize it’s design so the make sure it’s possible for the given types of machines to actually make the part – such as if it’s injected molded, you can get the part out of the mold, or if it’s made on a CNC milling machine, to calculate the sequence of steps needed in the milling process to make sure it’s possible to build. And when the engineer wants it “made” they don’t hand it to a machinist anymore, the CAD program produces the instructions for the CNC milling machine to make the part.

Chip factories are 99% automated these days. I saw the Micron plant in VA a while back. Darn thing is the size of two or three football fields, and has about 4 guys working in it. Everything else is all automated. It can take up to a month to make memory chips these days, because they have to travel though so many different stations and go though so many different processes. The factory might have 100 different processing stations, and the line might be making 20 different types of chips, all at the same time. But robots move the packs of wavers from machine to machine as required. The computers work out all the complex scheduling of which wavers will be sent to which machines in what order. Overhead robotic crane systems transport the pods of wavers everywhere. All the humans do, is insert the blank wavers into a pod, and give the pod to the “robots”. A month later, with no humans working in the process, the pod comes out a set of new memory chips.

The other interesting fact about that Micron plant – I was told it’s Virgina’s single largest exporter from the state. They produce more GDP for the state than any other business. And all the work is done by machines, which are tended by about 4 operators. And yes, there is another 100 people or more doing office work and other things – but the actual products produce by the factory which makes all the money, is made all by machines that are 99% automated.

And those machines are very expensive. Each “station” is in the rage of a million dollars, and the floor has hundreds of those stations. This factory costs 100’s of millions of dollars, but employees less than 10 human operators – probably paid a middle class wage.

And this is what we have today. Wait another 20 years and see what happens.

The cognitive abilities of these machines are advancing very quickly. They will take over increasing amounts of not only the manufacturing, but even the design and programming, of the robots themselves. They will take over the marketing and creating of new products. They will take over increasing amounts of the the process of R&D and scientific research.

Another way automation displaces workers is by making the customer do part of the “work” themselves. Gas pumps are not as smart as the guys that used to pump our gas for us, but they don’t have to be. They still were good enough to displace the gas jocky’s that once filled our tanks for us by making us do the work. Likewise, it’s nice to have product reviews to check out written by informed writers before we make a high end purchasing decisions – but now instead of buying a book which pays a person to write reviews, Amazon is using their not so smart machines, to get customers to write the product reviews. So now another jobs is lost to automation, but not because the machine was advanced enough to test a product and write a review, but because they could get people to ‘work” for free.

Encyclopedias have always been a useful tool and employed many people at the likes of World Book and Britannica. But now, no one needs those old books when you have access to Wikipedia which is written by the users for free. The depth and detail of the information in Wikipedia is 100 times more valuable than anything once found in the old encyclopedias.

Likewise, the Google search engine is not as smart as a librarians, but with the power of the search engine, and the work of a billion people creating free content on the web, we have very little use of librarians typing index cards, or those companies that used to compile, and print indexes of books and information.

Technology doesn’t need to be as smart as human, but yet it can still do massive displacement of jobs. Think how easy it will be for them to displace us when they are close to our intelligence?

By around 2045, our individual “desktop” sized machines, will have the computing power of the combined brain power, of every human on the earth. One machine, more powerful than all humans on the earth. Only about 30 years away. Of course we will have millions of these machines by then as well. The combined “intelligence” of these machines, will be a million times more “intelligent” than all the humans on the planet.

Your idea of “don’t even have people to design and build the machines” just doesn’t fly. What we will do, is tell the machine, “I think I might like to own a burger joint that is like the diners from the 30’s, crate some ideas for me please!”. Then, it goes to work for us. It will need lots of computing power to do this, so it won’t be free, we will have to pay for it, but it will tall us about what it will cost for the machine to do this research for us. It won’t cost much, but maybe $20 in today’s dollars. 30 minutes later, it comes back and tells us it’s done a lot of research, hired a few thousand other machines to help it work on this project, and it’s drawn up a few rough ideas of the restaurant (fully automated of course), has estimated costs, has done market research and put together an entire business plan to tell us exactly how much it would cost to build this restaurant and how much it would be expected to make for us. It will give us different ideas to think about, and we can just keep iterating on different ideas, to get the restaurant we want. And when we decide we like it, we just tell it to go ahead with the project, and it builds the whole, thing, gets all the needed city permits, put together a grand opening party for us, and we just supply the money, and show up for the opening.

This sort of stuff is likely going to be a reality or something close to it, in as short of a time frame as 30 years.

The human race will be retired from “work” and they will just play around with doing crap like this for the fun of it, not because they needed to create a successful restaurant in order to survive.

A lot of people just can’t accept the idea that this is coming, and that ti’s coming as quickly as it is – but in time, when they see some of this new technology in action, they will catch on.

The problem we have today, is that too many people are thinking like you Ron, thinking based on how life was 50 years ago, and not understanding how different it already is today, and having no understanding of what’s just around the corner.

The one very important missing piece of the puzzle, is a machine that acts like it’s “alive”. We don’t have that yet – but we are very close. Without that working, most people don’t think we are anywhere near to having the machines truly take over the “conscious mental” work of humans. They only see these machines as “very fast adding machines”. But when that last piece of the puzzle shows up – and it could be within the next few years, it will allow people to see what’s really coming.
Yesterday at 1:28am · Edited · Like · 1

[Person 3]: You may have crossed over to the realm of science fiction, but I don’t really care what happens in 2045.
Yesterday at 1:27am via mobile · Like

Curt Welch: Sorry, I hit the wrong key and posted that long post before I finished it…
Yesterday at 1:28am · Like

Curt Welch: Yeah, you and I are likely too old to take advantage of what happens in 2045. But the point is, it’s already happening today and it’s causing wages to drop. People are not poor today just because they “don’t want to work” or are “lazy”, or have “a bad work ethic” – they are poor because there are not enough good jobs for “average” people anymore and they are never coming back. It’s not just a side effect of this last recession, it’s a systemic problem that’s been developing for 30 years. The recession is like that low tide that pulled the water back, letting everyone see the ocean was only 5 ft deep, instead of the 50 ft deep they thought it was. The longer it takes people to catch on to the fact that things are very different even today, because of automation, the longer people will have to suffer needlessly.
Yesterday at 1:35am · Like

[Person 3]: I think you have tunnel vision in your forecasts. You are seeing the world from a computer/software perspective. There will be other changes, needs, problems to solve that we don’t even know are coming. As an example, just when you thought we had all the medicine and medical techniques very advanced, they are projecting a shortage of doctors and as people live longer there will be other needs for workers. There will be major shifts in the workforce that we can’t begin to foresee. Staying on the subject of medicine, we beginning to see bacteria growing faster than we can develop antibiotics. Where will this lead? We can’t expect to solve everything. We may even see a pandemic that wipes out half the world population and we won’t have enough workers to produce the food to feed the remaining population.
Yesterday at 1:49am via mobile · Like

William Waugh: Facebook buries posts. Moreover, some people won’t get on it. May I post a copy of the above conversation on my blog?
Yesterday at 2:18am · Like

Curt Welch: You can post my comments.
Yesterday at 3:40am · Like

[Person 4]: @ [Person 3]: there’s a different dynamic, which i don’t think you see, that is more central. Historically, wealth has tended to accumulate and stifle productive work and social progress, including innovation. It’s not like hereditary aristocracies were famous for keeping their noses to the grindstone. Downward mobility is at least as important as upward mobility to indicate whether a society is really about opportunity — and that’s where creating a floor is critical. I think you misunderstand human nature and the way ambition motivates people. True, not letting people starve or die from appendicitis even if they are too lazy or dumb to take care of themselves means that a certain number of really dumb and lazy people will take advantage, if that’s what you want to call it. But what’s more important is that making sure every kid — no matter how dumb and lazy the parents — will get a chance to be healthy and educated. What Curt is pointing out is that even poor people in America live far better in many ways that the hereditary aristocracies used to — but those aristocracies would have PREVENTED that essentially technological progress, using exactly the arguments you make (and based on land, too). People who didn’t own anything were obviously lazy, or else they’d own stuff, etc. They couldn’t improve their lives because they weren’t educated, and they couldn’t be educated because they didn’t own anything, and tjhey didn’t own anything because they were lazy. The real Downton Abbey folks actually bitched that stuff like vaccum cleaners would spoil the servants, while health care and literacy would make the working class think above their station. That’s just unAmerican.
Yesterday at 9:31am · Unlike · 1

[Person 3]: Curt, now that I know we are talking about a futuristic period (my term for the time beyond my children’s life) I can decide what skills to teach my grandchildren. If you say that it is inevitable that ambition and work ethics will be outdated and unnecessary attributes because there will be few jobs, and there will be more people looking for handouts from the government than taxpayers supporting the government (a trend expedited by your suggested measures) it is pretty clear to me that at some point those supporting the government will get fed up with supporting those looking for handouts. I see those looking for handouts to become frustrated with waiting for their government handouts and will be looking to cut out the middleman and go straight to the source, hence total anarchy. So I will suggest that the most valuable asset and skill my grandchildren should have, besides learning how to invest the assets I leave them, will be to amass an arsenal of weapons and learn how to use them to fend off all of those who have been trained to go after the easy handout.
15 hours ago · Like · 1

William Waugh: I think that term “handout” has assumptions packed into it. So does that use of “source”. Your grandchildren, [Person 3], are not the source of wealth. Work does not make something from nothing. It makes something from raw materials. The labor component of the cost is not the whole cost. Part of it is the value of the raw materials. And I see no valid social reason not to treat them as owned by everyone.
8 hours ago · Edited · Like

[Person 4]: Um, [Person 3]: amassing “an arsenal of weapons and learn how to use them to fend off all …” the little people without property is what aristocracy WAS. Kindly don’t confuse it with either self-government or democracy, much less with a productive and innovative economy.
11 hours ago · Like

[Person 4]: One more thing, just to be cruel about facts: [Person 3], you grew up in North Dakota, which gets $1.68 FROM the rest of us, for every dollar it pays in Federal taxes. I grew up in Connecticut, which pays a dollar and gets 69 cents back from the Federal government. Basic arithmetic shows you guys are the moochers. You only get to complain (and pretend to be conservatives, bragging about how you will defend yourselves with firearms from the rest of us) because progressives are generous. (We can also do math. I commend the practice to you.)
5 hours ago · Like

Curt Welch: “If you say that it is inevitable that ambition and work ethics will be outdated and unnecessary attributes because there will be few jobs”

Well, let me clarify what I think will happen. People will still be plenty ambitious, but the ambition will take the form of social status vs money and property collecting. It’s the same thing we see happening when people inherit lots of money. They stop worrying about things like food and shelter and health care, and worry instead about their social status among their friends. One of the social status they worry a lot about today, is now much money they have – not because they need the money, but because they money is a reflection of their social worth in our society. 10 million is not “enough” because other people in your social circuits have 100 million. And 100 million is not enough for them, because other people in their social circuits have a billion, etc. Now, not everyone is wrapped up in that competition but it’s a large driving force of society.

The rich also throw lavish parties, donate huge amounts of money to charities, and all of it is driven with a component of social status. They want to be be seen as being “worthy” of being part of their society.

As we become more automated, we will also become more socialistic – share more of the wealth (as we have seen happening over the past 100 years). When we get to the point where the machines can do all the work, we will become highly socialistic and everyone will be worrying more about their social status, than things like food and shelter.

“it is pretty clear to me that at some point those supporting the government will get fed up with supporting those looking for handouts”

Some will, but there will always be others that won’t get fed up and will be happy to work and support the government.

If the only reason people worked was for money, the entire free software movement would not exist. Anyone that donates there time to create free software, knows that they are getting paid zero, and that their work will be used by millions who pay nothing for it. But yet the free software movement is hugely popular and going strong.

It’s because they aren’t working for money, they are working for social recognition. They want to be seen as part of that “sharing” society.

Millions of people work as volunteers for non-profits and again, they don’t get “feed up” and stop working because they are pissed that they are supporting someone that is not “paying” for their work.

The entire idea that people won’t work if they are not paid is non-founded. They work because they are paid with something more valuable to them than some property to “own” – the work for social acceptance.

Now, I’m not advocating a future where people aren’t paid. I’m advocating a future where there is simply a lot more sharing of wealth than there is today.

When automation reaches the point of being able to do everything, then one guy can tell the robots “make sure there is enough food to feed everyone this year”, and that’s all the “work” that has to be done to feed the world. His productivity is so highly amplified by the machines, that 10 seconds of talking, is all the “work” needed to feed the entire world. Everything else, is taken care of by the machines.

So, the question becomes, who owns and controls all this technology that can do these sorts of things? Who owns the land, and the energy sources? Who owns the factories and machines? If we allow it to be controlled by free trade, the economy will turn into a monopoly game where the best investors win it all – leaving everyone else owning nothing but a body that has no use – but to throw rocks at the police.

The best investors have to share, if the society is going to survive. They don’t have to share all their wealth, but they will have to share a good chunk of it – enough to keep people taken care of and enough so the people don’t feel they are being blocked from being part of society.

In this future of lots of wealth, people won’t have to worry about being taken care of. But they will still worry about their social status. There will be people looking for ways to be celebrities. Their “wealth” will be in their friendships, and their family social connections. And they will have to “work’ to maintain those. But they won’t have to “work” to get a fair share of the material wealth of the Earth.

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