A World Without Work by Daniel Susskind

In his groundbreaking book, "A World Without Work," economist Daniel Susskind invites us to ponder the future of employment in the age of automation. As technology continues to advance at a breakneck pace, Susskind examines the potential ramifications of job displacement and underemployment caused by automation.

According to Susskind, the jobs we know today might no longer exist, and new jobs may not emerge fast enough to compensate for those lost. He argues that certain segments of society may be disproportionately affected, leading to increased social and economic inequality.

To address these challenges, Susskind offers policy recommendations on how we can prepare for and adapt to this new reality. These proposals include the introduction of a universal basic income, support for lifelong learning, and a renewed focus on the equitable distribution of wealth and resources.

As the world braces for a future of rapid technological advancements, "A World Without Work" encourages us to confront the complexities of automation and proactively consider how our societies can adapt to maintain social cohesion and foster shared prosperity.

Here's a discussion I had with ChatGPT on these topics:

Income and Wealth inequality

Income and wealth inequality have been growing concerns over the past few decades. Various studies and data indicate that the wealthiest individuals and households have seen their wealth and income increase at a faster rate than the rest of the population.

Several factors contribute to this widening gap, including technological advances, globalization, and changes in economic policy. Technological advances, in particular, have led to increased productivity and optimization in many industries, which can disproportionately benefit those who own and invest in technology. In some cases, these advances have replaced jobs, leading to increased unemployment or underemployment for certain segments of the population. Additionally, globalization has created opportunities for companies to outsource labor to countries with lower labor costs, which can also contribute to income inequality.

Capitalism, as an economic system, tends to reward those who can successfully navigate and capitalize on market forces. However, it can also exacerbate income and wealth inequality if there are no proper mechanisms in place to redistribute resources more equitably. This is why discussions around policies like universal basic income, progressive taxation, and investments in education and training have gained traction in recent years, as they offer potential solutions to mitigate the adverse effects of growing income and wealth disparities.

Corporations and taxation

Corporations can and often do attempt to influence tax policy, either directly or indirectly. They may engage in lobbying efforts, political campaign contributions, and advocacy to shape tax laws in ways that are favorable to their interests. Corporations may also hire teams of tax professionals and experts to help them navigate the complex tax code, identifying and exploiting loopholes to minimize their tax liability.

While it's difficult to make a broad generalization about how corporate taxes compare to taxes on working-class individuals, it is true that some corporations can end up paying less in taxes than one might expect. This is often due to tax breaks, incentives, and loopholes within the tax code that allow corporations to legally reduce their tax obligations.

It's important to note that tax systems vary significantly between countries, and the specific circumstances will depend on the jurisdiction in which a corporation operates. In some cases, corporations may face a lower effective tax rate due to the aforementioned factors, while working-class individuals face taxes on their income, payroll, and consumption (e.g., sales taxes) without the same opportunities to minimize their tax burden.

Public opinion on this issue is often divided, with some people arguing that corporations should pay their fair share to contribute to the public good, while others contend that lower corporate taxes encourage business growth and innovation, which can create jobs and benefit the broader economy. The debate over the most appropriate way to tax corporations and individuals is ongoing and can depend on various factors, including economic conditions, political ideology, and social priorities.

The difference between human capital and traditional capital

Human capital and traditional (physical or financial) capital are two distinct forms of assets that play crucial roles in modern economies. Here's an explanation of the differences between the two and how they are taxed:

1. Human Capital: Human capital refers to the knowledge, skills, abilities, and experiences that individuals possess, which contribute to their economic productivity. Human capital is developed through education, training, and on-the-job experience. It is an intangible asset that cannot be bought, sold, or transferred like traditional capital, but it can generate value for individuals and organizations. Human capital is typically taxed through income taxes on wages, salaries, and other forms of compensation that individuals receive for their work.

2. Traditional Capital: Traditional capital, also referred to as physical or financial capital, includes tangible assets like land, buildings, machinery, and other infrastructure, as well as financial assets such as stocks, bonds, and cash. These assets are used to generate economic value and can be bought, sold, or transferred between parties. Traditional capital is often taxed through various means, including property taxes, capital gains taxes, corporate income taxes, and taxes on dividends and interest income.

As automation and other technological advancements continue to progress, it's possible that human capital may become less important as machines and software take on more tasks previously performed by people. If this trend leads to a significant reduction in paid human labor, it could have implications for the taxation of human capital.

In such a scenario, governments may need to reconsider their tax structures to maintain adequate revenue to fund public services and support their citizens. Potential options include increasing taxes on traditional capital, implementing new taxes on automation and technology, or adopting alternative revenue-raising measures such as a carbon tax, a value-added tax (VAT), or a wealth tax.

The precise response will depend on various factors, including the extent to which human capital is displaced, the distributional effects of the changes, and the political and social priorities of the affected societies. The discussion of these issues and potential solutions is ongoing among economists, policymakers, and the public at large.

Will a world without work self-re-balance?

Predicting the exact outcome of a world without work is difficult, but it is widely believed that some form of policy intervention would likely be necessary to maintain social and economic stability. In a world where automation displaces a significant portion of human labor, leaving many people without traditional employment, the existing social safety nets and economic structures may prove insufficient to prevent widespread poverty and extreme wealth concentration.

Without adequate policy responses, it is possible that the gap between the rich and the poor could widen dramatically, as those who own and control technology and capital assets amass even greater wealth while others struggle to find gainful employment. This could result in increased poverty, social unrest, and economic instability.

To prevent such outcomes, policymakers could consider a range of interventions to support those affected by widespread job displacement and promote a more equitable distribution of wealth and resources. Some potential policy measures include:

1. Universal Basic Income (UBI): A guaranteed, regular cash payment to all citizens, regardless of their employment status or income level, could help to provide a basic level of financial security and reduce poverty.

2. Education and retraining programs: Lifelong learning and re-skilling initiatives could enable people to adapt to new labor market demands and access alternative job opportunities, mitigating the negative impacts of automation on employment.

3. Progressive taxation and wealth redistribution: Implementing more progressive tax systems or introducing new taxes (such as wealth taxes or robot taxes) could help redistribute resources more equitably and fund social programs to support those affected by job displacement.

4. Promoting new forms of work and entrepreneurship: Encouraging self-employment, cooperatives, and social enterprises could help create new job opportunities and increase economic resilience in the face of automation.

5. Investing in social infrastructure and public goods: Expanding access to healthcare, education, and other essential services can help to reduce inequality and ensure that everyone has the opportunity to participate in and benefit from economic growth.

The appropriate mix of policies will depend on various factors, including the specific challenges faced by individual societies, their political and social priorities, and their fiscal capacity. Addressing the potential consequences of a world without work will likely require a multifaceted approach that combines elements of economic, social, and labor market policy to ensure a stable and inclusive society.

What trials have been run for UBI?

There have been several trials and experiments of Universal Basic Income (UBI) in various countries around the world. While the design and scale of these trials vary, many have provided valuable insights into the potential benefits and drawbacks of implementing UBI programs. Some notable examples include:

1. Finland (2017-2018): The Finnish government conducted a two-year trial of UBI involving 2,000 unemployed individuals. Participants received a monthly payment of €560 (about $670) with no strings attached. The trial found that recipients experienced reduced stress, improved well-being, and increased trust in government institutions. However, the experiment did not show a significant impact on employment levels.

2. Stockton, California, USA (2019-2021): The Stockton Economic Empowerment Demonstration (SEED) provided 125 residents with a monthly payment of $500 for two years. Preliminary results showed that recipients were more likely to find full-time employment, experienced reduced financial stress, and had improved mental health outcomes compared to a control group.

3. Kenya (ongoing): GiveDirectly, a non-profit organization, has been conducting a large-scale UBI experiment in Kenya since 2016. The trial involves providing unconditional cash transfers of varying amounts and durations to thousands of recipients. Initial findings suggest that recipients experience improvements in well-being, financial security, and investment in income-generating activities.

4. Ontario, Canada (2017-2018): The Ontario Basic Income Pilot was launched in 2017, providing around 4,000 participants with unconditional cash payments. However, the trial was prematurely terminated in 2018 due to a change in government. While no final evaluation was conducted, preliminary results indicated improvements in mental and physical health, as well as increased spending on education and training.

It is important to note that these trials differ in design, size, and context, making it challenging to draw definitive conclusions about the overall effectiveness of UBI as a policy. Nonetheless, these experiments have provided valuable insights into potential benefits, such as improved mental health, increased financial stability, and reduced poverty.

They have also contributed to the ongoing global debate about the feasibility and desirability of implementing UBI as a response to various social and economic challenges, including automation and income inequality.

Sam Altman's involvement with UBI trials

Sam Altman, an entrepreneur and investor best known for his role as the former president of the startup accelerator Y Combinator, has been involved in UBI trials. In 2016, Altman announced his support for a UBI pilot program through Y Combinator Research (YCR), the research arm of Y Combinator.

The pilot program, which took place in Oakland, California, provided unconditional cash transfers to a small number of participants to study the potential effects of a basic income on recipients. The pilot's goal was to gather preliminary data and refine research methods before launching a larger, long-term study.

In 2019, YCR announced plans for a more extensive randomized controlled trial (RCT) of UBI in the United States. This multi-year study aimed to involve 3,000 participants, with 1,000 of them receiving $1,000 per month for three years, and the remaining 2,000 participants receiving $50 per month as a control group. The study aimed to investigate the effects of UBI on a variety of outcomes, including financial security, mental and physical health, and labor market participation.

It's important to note that Sam Altman, in his capacity as an entrepreneur and investor, has helped initiate and support this UBI research project, although he is not directly involved in conducting the experiments or analyzing the data.