In his book Four Futures, Peter Frase develops four future scenarios based on three structural forces that he believes will shape our political-economic system well into the future. They are economic inequality, automation, and climate change. I agree wholeheartedly that the future will be largely determined by the politics we develop to deal with these forces, and as Frase points out the future could be utopian or dystopian depending on how we react to and deal with them. In that vein, recently I ran across three great intellectual contributions that grapple with each one of these three forces.
The first is a new paper by Piketty, Saez, and Zucman updating their income inequality numbers for the U.S. There are many important takeaways from this paper on the state of inequality in America but the ones that jumped out at me were:
-From 1946 to 1980 real macro growth per adult was equally distributed and the bottom 90% grew faster than top 10% incomes. From 1980-2104 aggregate growth slowed and became very skewed.
-Pre-tax income for bottom 50% earners did not change over this time. For middle class the growth was 42%. For the top 10% income doubled and for the top 1% it tripled. For the top .001% the increase was 636% (same growth rate for China since 1980).
-After tax income for the bottom quintile was 4% and 21% for the bottom 50% as a whole. Transfers erased a third of the gap between growth and growth for the bottom half of the distribution.
-Overall from 1980-2014, the bottom to the 87th percentile experienced less growth than the macro rate of 1.4% a year. The top 12% experienced growth higher than the 1.4% overall growth rate. It was 6% a year for the top .001%. This can be seen in the chart below:
Basically, the bottom 90% of the income distribution did not see much benefit from the macro economic growth that took place over the last 35 years or so. The top 10%, however? Well, they are doing just fine.
The second is a GAO report on the costs of climate change for the U.S. The report just reenforces what we already know and that climate change is already, and is only going to get more, expensive. The map of long-term costs provided in the summary highlights many of the problems we are currently facing with regards to climate change effects and that will only get worse:
More intense wildfires, stronger and more destructive hurricanes, decreased water supplies, greater coastal damage and flooding, decreased agricultural yields, more damage to our already damaged infrastructure, increased heat waves etc. etc. This is our present and it will be our future. I guess the good news is that fewer people will die from the cold in Minnesota so its not all bad . . .but its mostly all bad
Finally, the third is an article in Mother Jones by Kevin Drum on the rapid advancement of artificial intelligence. Drum starts his article off with this ominous first sentence:
“I want to tell you straight off what this story is about: Sometime in the next 40 years, robots are going to take your job.”
Drum’s argument hinges on the rapid advancement computing power has already made and will continue to make as it grows exponentially. this growth will only increase the “intelligence” of artificial intelligence to the point where robots and algorithms will replace human labor because, frankly, they can do it better, whatever it may be.
Out of all three forces the growth in automation has the potential to be both catastrophic but also liberating. It would be a veritable utopia if humans did not have to work meaningless wage labor jobs to supply their basic needs. If robots can do everything then humans can do anything! However, the dark side of course is the economic gains from automation need to be distributed widely for this to happen and presently that seems like it is unlikely to happen.
Increasing economic inequality, climate change, and automation will reorder our politics. It’s possible as Frase outlines it his book that the gains from automation can help use drastically reduce inequality and mitigate the worst aspects of climate change thus leaving us in a much better world. The other potential outcome is that all these trends continue on pace and there is no redistribution which will leave us in a . . .well, are you familiar with the Mad Max franchise?