I have been thinking a lot about the role of human labor in the age of artificial intelligence. If evolution doesn’t suddenly stop, we will inevitably face the moment when artificial intelligence will surpass our human intelligence.
If Moore’s law prevails, that moment may already come during our lifetime. Even if we regress to a linear development curve, it will still happen relatively soon.
Futurist Ray Kurzweil predicts that computers will surpass the processing power of a human brain by 2025, and that a single computer may match the power of all human brains combined by 2050.
When the computing power is there, the jobs will vanish at the rate the AI evolves to surpass human skills. That will take some decades, but not very long.
When artificial intelligence surpasses all human abilities, there will be very few jobs left for us to do. To preserve our livelihoods, we must find new ways to provide social security: food, shelter, education, healthcare and other necessities for everyone.
But we will also have to find new ways to provide human opportunity.
In a world without jobs, I see universal basic income as the best way to provide the necessities, and capital gains as the best way to provide opportunity.
Universal Basic Income
The idea of Universal Basic Income (UBI) is to offer everyone an unconditional, tax-free monthly allowance that affords them the basic necessities to live.
Because UBI has no conditions, no government organization is needed to manage it. The implementation could be as simple as a monthly drip of cryptocurrency to everyone’s digital wallet. Which is, in my opinion, the best way to implement UBI.
UBI, government, healthcare and education can be provided to us humans by AI.
I believe that UBI must be implemented together with other models to sustain peace. If people are deprived of their basic means of existence, war and terror are the inevitable consequences. Desperate situation will ignite a desperate response.
I hope we will care enough about our fellow humans to implement UBI. It solves the problem of social security.
Thomas Piketty showed us in his book Capital in the Twenty-First Century that capital gains have surpassed wage growth for the past 100 years.
Because capital gains has consistently won over wages, I have come to conclusion that it is the best way to offer opportunity in a jobless society.
This trend has accelerated since 1970s. The most valuable companies today have significantly fewer employees than the most valuable companies in the past. Whatsapp was worth $19 billion with only 55 employees.
Not only are companies hiring less people – they also pay comparatively less for the basic, non-specialized labor. Why pay more, if the robots do it cheaper? This has stagnated the incomes of the middle class, and increased the profits of the owners.
Looking at the chart above, it is easy to see how automation started to accumulate the wealth to the top 0.1%, the people who own the companies. Today, they have more wealth than the bottom 90% combined. See the chart below.
A technology company founded today will employ only a handful of highly talented individuals, and if successful, will deliver massive capital gains to its founders and investors. Most companies today try to find all possible ways to minimize the need for human labor to maximize those capital gains.
What if everyone had a chance to become shareholders in the companies that run on AI, and live from the capital gains provided by the automation? In such scenario, being employed is not necessary anymore.
This is already the reality for the wealthy. They don’t need to work, just own.
Capital Gains from Stock Incentives
Employee stock incentive programs are ubiquitous in the SF Bay Area startups, and used in venture capital funded startups around the world. When implemented fairly, employee ownership will put the investors and employees on the same side.
Stock incentives to employees can only be a temporary solution, because over time all of those jobs will be gone. It is still a nice stopgap solution, if the employees who will eventually get laid off can keep their shares.
Capital Gains from Crowdfunding
Crowdfunding has taken off big time in the recent years. It surpassed angel investment in volume already in 2015. Countries all over the world have relaxed their regulations to enable more crowdfunding for startups.
With crowdfunding, a large portion of the population could participate to the ownership of employee-less companies. This could be a pretty decent option to participate to the capital gains, if there was an opportunity to participate a large number of companies with tiny investments.
Capital Gains from Entrepreneurship
Even if AI takes over the jobs, nothing prevents us from founding our own companies that run those AIs. When UBI arrives, everyone can become an entrepreneur without having to worry about losing the safety net.
Entrepreneurship can provide sustainable income only for a small portion of people, because it is unlikely that there would be opportunities for billions of companies.
Capital Gains from Contributions
This is something that I’ve been planning. What if people could earn ownership in companies just by helping them find new business? This would not require the companies to employ people. A community of people could help the entrepreneurs to distribute their AI-powered products and services, and gain ownership in return.
We built Inbot as an institution of trusted business relationships. Right now, our community members get compensated for their help with money. However, nothing prevents us from offering a choice to receive shares in the portfolio of companies we help. As I said before, we are planning on it already.
Building trust among people is valuable even in the post-jobs society. It is likely that ownership of the AIs and robots will stay with people for much longer than jobs. Rewarding people with shares for genuine help offers a good capital gains opportunity for everyone. And it rewards emotionally intelligent behavior.
Broad Ownership via Cryptocurrency
In the recent years, Initial Coin Offerings of new cryptocurrencies have picked up, and billions of dollars have been invested in these digital currencies, led by Bitcoin.
Blockchain, the technology behind these cryptocurrencies, provides an excellent platform of trust for all exchanges of value.
I believe blockchain-based currencies offer a perfect platform for implementing both Universal Basic Income and broad ownership of shares in companies running on AI and robotics.
A combination of these could offer us the best of both worlds: the social security we need and a meaningful capitalistic upside for innovative, hard-working and intelligent people.
Issuing and trading tiny amounts of traditional shares across country borders is legally a complex and expensive transaction to handle. A derivative running on cryptocurrency, on the other hand, would make trading stocks completely frictionless.
Government vs Entrepreneurs
Looking at the current state of affairs and the level of dysfunction at governments around the world, I have little faith that they can mount a meaningful and timely response against the job loss caused by artificial intelligence.
Therefore, it is the job of us entrepreneurs to develop technologies and private business models that help people to survive and thrive in the post-jobs society.
If we care enough, there is a hope of a bright future for us all, with the freedom to use our time as we see fit.
You can stay assured that I’m doing my best to make my small contribution towards these noble goals.
My startup Inbot develops People Graph technology that maps trust between people. Inbot Ambassador is a global community of trusted entrepreneurs, investors and executives, who are happy to introduce you to decision makers they know. The community participates to the success we achieve together.
If you are interested in joining our community, email me.