In the early 1800s, more than 80% of the world’s population worked in the agriculture industry. Economic output (goods produced) was steady and mostly limited by human labor.
When industrial revolution began, machines replaced most part of the human labor. A century later, less than 25% of the world’s population worked in agriculture. However the most interesting part is that even though human effort declined, the economic output grew multi-folds and it was no longer limited by human factors like time, energy, etc.
People migrated to working in the services industry which required more cognitive effort than physical. Governments, banks and financial institutions worked on creating the modern economy which was based on demand (consumption). Concepts like inflation, interest rates, capital investments were introduced to manage and strike a balance in the economy. The main idea was to keep demand steady and slowly rising over time so that production (supply) could be continued and the economy would work in tandem.
The world embraces AI
Now as we approach the mid 21st century, the latest technological breakthrough of humankind is AI. What machines did to physical efforts, AI will be doing to our cognitive efforts. First time ever in human history, we have a technology that has the ability to replace our cognitive abilities like logic, reasoning, creativity, etc.
So in the near future if we no longer would need to work in cognitive fields then where would we go next?
If we pay close attention to what the people at the forefront of technology like Elon Musk, Peter Thiel, Sam Altman are saying, we can find a common theme – Universal Income. Most of these people are hinting at a future where humans would no longer have to actively work and would receive some form of universal income like UBI or UHI.
What exactly is Universal Income?
It’s a simple idea and I’ll try to explain it below.
Imagine a world where most of the work is done by machines and AI. The economic output of this work is goods and services that we (humans) will consume. Goods can be things like cars, vegetables, furniture, etc. and services can be things like software development, law consulting, accounting, medical diagnosis, etc.
Note: Of course, we are still far away from a future where 100% of human cognitive effort can be replaced. We will still need to have expert and talented humans in the form of doctors, engineers, politicians, scientists, lawyers, etc.
But for the sake of explanation, let’s assume that we’re living in a world where majority of the work required for economic output is done by machines and AI.
This brings us to a unique situation where we have solved half part of the economic equation of demand and supply. We have fixed the problem of supply (production) but it’s of no use because without demand, supply would eventually collapse.
Now where does demand come from? The answer is simple – Humans! We are the consumers of those economic outputs. We create the demand. This demand and supply transaction is fulfilled in the form of money exchange. For eg, when we buy grocery (demand) we pay money to the vendor (supply).
So we need to provide people with sufficient money so that demand for goods and services can be sustained. This is where universal income comes into picture.
Now since supply side is taken care of, Governments will hand out a fixed (or may be variable) amount of money to the people. People are then free to spend it on things they need which in turn will keep the economic cycle rolling.
Life’s purpose without work
This does not mean that people are not allowed to work. Those of us who still want to work can continue to do in the fields of more innovation, creative arts, humanitarian efforts, environment, etc. The only difference would be that their work won’t be tied to their ability to earn. Their choice of work would be voluntary. Irrespective of where and how much they choose to work, they will get a guaranteed income – the universal income!
The concept of universal income has already been tested in different parts and countries of the world like Finland, Norway, Alaska, etc. and it has proven to work well. In these countries, the supply side of the economy was taken care of by things like availability of natural resources like oil, gas, etc. The Govt could simply generate income by selling these natural resources without having to rely on the citizens to work to generate economic output. Of course, this is a pretty dumbed down and simplified version of how it was implemented but you get the point.
As usual, there were nay-sayers and people who opposed the idea of universal income and their main counter point was that if we take away work from people, society would collapse into mayhem as people will end up doing counter productive things like wars, infighting, etc. They argued that humans need work not only for money but also to provide them a sense of purpose. These opposers are 100% right about this part. I’ll explain it further.
Human’s also have an innate need to find purpose and meaning in life. So far, our work provided this much needed sense and purpose to our lives. Eventually, we will find other areas to focus our efforts which are unknown to us right now. Areas like space exploration, inhabiting new planets, etc. Earth will no longer be the only home of humans.
Now I know all of this sounds like some utopian future straight out of some sci-fi movie. I totally understand how hard it is at this point in time to wrap our heads around this post-work world but I firmly believe this is where humanity is headed.
Whether AI+UBI becomes a reality or not, only time can tell. Until then let’s enjoy the current AI hype cycle and ride the wave of AI assistants and agents.
