PARDON THE DISRUPTION - CHAPTER 18 (FINAL)

CONCLUSION

“Among the 435 members of the House there are one physicist, one chemist, one microbiologist, six engineers...... Dinosaurs cavorting with humans, climate scientists cooking up global warming hoax, the health establishment using vaccines to bring about socialism – it’s hard to imagine mainstream leaders in other advanced economies not laughing at such claims”
–John Allen Paulos

The dream that is America is one that says a society can bring all people, of all nations, together. It is the idea that a government exists to serve its people, not the other way around. Our founding fathers had the ability to envision a society never before seen on earth, a self-correcting republic founded on principles of democracy and justice. A Constitution constructed to evolve and change as the society itself advances. This is our real ace in the hole as we approach the threshold of massive technological change.

Ron Bailey, the science editor for Reason magazine, has written, “When people of goodwill deeply disagree on moral issues that don’t involve the prevention of force or fraud, it is a fraught exercise to submit their disagreement to a panel of political appointees or a democratic vote. That way leads to intolerance, repression, and social conflict.”

I pointed out earlier that all judicial decisions, regardless of how they are legally reasoned and/or justified, involve an exercise in raw power. Equally, when a legislature passes laws, and when the executive branch enforces those laws, this involves an exercise in raw power. You’d be within your rights to disagree, but even so, if you don’t pay your taxes a US Marshall with a loaded gun will come to your home and drag you to jail. Our prisons are full of people who violated laws made and enforced by the government. The guards who sit on prison walls have the authority to shoot to kill in the event of an attempted escape. Government is always an exercise in raw power. For that reason, it is imperative that government power be constrained by checks and balances for the protection of each citizen. This is the genius of our founding fathers.

The political process is the way social groups resolve conflict within a society. Some societies have elections to resolve their disputes over how to govern. Other societies have soldiers shoot anyone who voices dissent. In America, it is the electoral process that gives each organ of government the political authority to act on our behalf. We elect a new government every four years without violence. For an example of what happens when this process breaks down, we need look no further than the Civil War, with its 500,000 dead.

The Civil War was an example of an economically motivated revolt. In our own time, the system of government we so dearly treasure may very well be challenged by a looming deflationary period in which many able-bodied workers will fail to find jobs in the private sector economy.

Mr. Bailey has pointed out the problem when government strays from its original mandate to “keep the peace” and moves into outright social engineering and moralizing. We’re on a slippery slope indeed, for now someone’s religious ideas will carry the solemnity of state law. Someone’s moral code will now be implemented with the use of deadly force, if it’s needed, to obtain compliance. The banning of embryonic stem cell research is one such incident. The sick and dying were denied access to potential miracle cures, simply because they conflicted with the sitting president’s personal sense of morality. The rest of the industrialized world went full speed ahead on embryonic stem cell research, while the US watched its technological lead erode over time.

There is a contradiction between the speed with which technology evolves and that at which culture and social norms evolve. Technology is moving one million times faster than social understanding. That’s why embryonic stem cell research was attacked by religious fundamentalists. These are the same people that attacked in vitro fertilization as being sinful in the 1960s. There were lengthy debates as to whether or not these “test-tube children” would actually have souls. Sitting here in the comfort of the 21st century, those old debates appear outright laughable. But in the 1960s, these well-meaning people were deadly serious. Two generations later they are merely an asterisk in a historical debate long since forgotten. I predict in another 60 years the debate over embryonic stem cells will look much like that over in vitro fertilization. Much ado about nothing.

I propose a name for this phenomenon. I propose we call the inability of law, societal norms, and economic systems to keep up with the exponential growth of technology (another form of “clocks” disparity) the “Techno-legal Differential Factor.” We have previously touched on a number of situations in which government failed to anticipate legal problems created by the Internet and social networks: the loss of privacy, virtual property rights, nations unable to enforce their sovereign laws against Internet encroachment, to name a few. We’ve just scratched the surface of these issues.

When the Internet site Napster began file-sharing as a way of exchanging music for free in direct violation of copyright laws, it spawned a huge legal fight, where the technology’s inventor declaring a new paradigm in which antiquated laws cannot stop young people from swapping data. The federal judge ruled against Napster and they were eventually closed down. A new way to steal is still theft. The damage had already done, however. Soon, iTunes appeared, promising an entirely new way to obtain music. Downloads did away with more than CD’s. The traditional music companies such as Sony have suffered huge losses as artists are now able to market directly to the public. And we’ve already discussed the effect this has had on the music retail industry.

Let’s have one last roundtable.

CLAY: A more recent and tragic example of this occurred on January 11, 2013 when Aaron Swartz committed suicide. Swartz was a brilliant software engineer – a cutting edge computer genius. At age 15, Aaron coauthored RSS (Rich Site Summary), an internet protocol that allows a user to see frequently-updated material that appears on the internet. Much of what we read on the internet today comes to us in no small part thanks to Aaron’s genius. He was also a promoter of open access of information. He believed passionately in the “Digital Commons,” where all digital content would be free for everyone. He wanted to make all information available to the public. JSTOR is a digital, proprietary academic library. Aaron disagreed with the concept of charging for these articles, since the research had been done by academic professors and grad students who were on salary at institutions, many of them supported by tax dollars. He believed they should be available at no cost to the public.

Aaron accessed JSTOR through the MIT system and downloaded a reported 4 million articles onto free spaces of the internet, free for everyone. For this act of Robin Hood-like courage, he was charged with a number of federal crimes (wire fraud, computer fraud) that carried a total criminal exposure of up to 35 years in federal prison. At the age of 24, Aaron was looking at 30 years in a federal penitentiary. I’ve watched this kind of pressure break the strongest of men. A young kid suffering from depression never had a chance. One day in January, with the feds on his tail, he hanged himself.

RANDY: While Aaron carried out his civil disobedience by accessing MIT computer systems and releasing all of these documents to the public, he did not have a right to do so. If you engage in civil disobedience, you should be willing to accept the consequences. He did not have the right to unilaterally decide to release the work of others without first contacting the holders of rights to it. There are more legal problems involved than simply empathizing with this young man’s emotional torment. If you wish to use this as an example I think you must also explain the other side of this coin. Aaron no more has the right to release this information than I do to distribute copyrighted books or music to anyone who wishes to read or listen to them. What about the hard-working artists who produce the work I want to distribute? Everyone’s got to eat. Professors have the same right to decide whether they wish to release their research for free to the public. Further, in the last few years, universities have been selling the research performed by their employees to offset cuts by state governments, which in turns keeps them afloat and their employees in jobs. This is not a simple black-or-white matter.

I understand Aaron wanted to make information available to all in the service of the greater good, but, like all ideas of utopian origin, there is a dark side to this. The three of us have discussed the coming robotic revolution and the fact that the social contract between the “owners” and the “workers” will soon break down. There has to be something to take the place of manufacturing when 3-D printing becomes a household utensil. If everything is given away for free how will anyone purchase goods or feed his family? Those who have new ideas will be the masters of the 21st century. We’ve seen what Napster has wrought upon the music industry. Just this week, Virgin Records declared bankruptcy in Europe, promising the loss of countless jobs. When everything is free, how does one support a family? If everything has no value, why produce, other than for the sheer joy of the exercise?

CLAY: Like Randy, I have worn different hats in my career. I have played offense and defense. US Attorney Carmen M. Ortiz was quoted as saying “Stealing is stealing whether you use a computer command or a crowbar, and whether you take documents, data, or dollars. It is equally harmful to the victim whether you sell what you have stolen or give it away.” As a former prosecutor I understand why she felt it necessary to act even when both MIT and JSTOR reported they did not want Aaron prosecuted. Whether or how to proceed in such a situation is a decision that clearly rests with an Attorney General’s Office.

The defense and Aaron’s parents have accused the US Attorney’s Office of “intimidation and prosecutorial overreach.” As a defense attorney I understand their position as well. A young idealist committed an act of conscience for the betterment of mankind, and the government treated him like an al Qaeda terrorist. Ms. Ortiz also reported, after a loud public condemnation of her and her office, that they had offered Aaron a plea bargain whereby he would only serve six months and could request probation from the judge.

Prosecutors are no different than any other lawyers. They want to win, period. They overcharged Aaron and left him with no choice but to do what he was told. They did not want a long, drawn-out trial that would give him a national forum to paint himself as a freedom fighter speaking truth to power. They didn’t want to open the risk of jury nullification, where a jury renders an acquittal not because the prosecutor’s case has been inadequate but because the jurors themselves believe the law in question to be undeserving of enforcement.

There’s an old Texas saying, “It’s not against the law to kill a son of a bitch.” If a jury thinks he had it coming they will be inclined to vote not guilty on general principal. For that reason, if I am ever shot dead and my wife is the suspect, I don’t want her prosecuted. It’s bad enough I’ve been murdered without some defense attorney destroying my reputation to convince a jury I “had it coming.”

Nothing scares a prosecutor worse than jury nullification. It rarely happens – but when it does, it makes the prosecutor look like a complete fool. He’s spent tax dollars and taken up court time demanding the jury find the defendant guilty, only to be informed that no one cares whether the accusations are factually accurate or not. From the defense perspective, of course, it’s the ultimate win. The state will claim the jurors were derelict in an important civic duty, while the defense will crow that they did the right thing and joined a proud heritage of average citizens protecting each other from government overreach. That’s why a federal prosecutor would overcharge to such a great extent.

Aaron could only have his day in court if he’d been willing to risk spending almost his entire adult life in prison. Given that exposure, his defense lawyer would have to recommend he take the deal. No competent defense lawyer can counsel his client to refuse a six month misdemeanor with a possibility of probation at the risk of 35 years in prison. The prosecution, of course, knew this. When Ms. Ortiz claims she never intended for him to go to prison you have to ask: why was he facing 35 years? The answer is patently obvious.

Ortiz was making a strategic move to force a plea. They stripped him of any chance not to plead guilty. As a prosecutor in the 80’s, I did this myself. It was a tactic I reserved for cases involving extreme violence or the victimization of a child. I pursued rapists, murderers, and child abusers with a vengeance. To apply this tactic to a promising young genius acting on his idealism for the benefit of mankind is obscene. Everyone agreed on the facts. Randy, you’re right: these problems don’t give themselves over to an easy right-or-wrong analysis. They’re complex and murky. There’s no black and white here.

RANDY: But let’s bring economics back into the frame. The person who has a new way of producing goods must have some way of protecting his idea, as well as the time to bring it to market. If someone else can simply steal his idea to make cheaper goods without compensating him for his time and his effort, why would he even want to participate legitimately in the market? That is the reasoning behind patent and copyright law. This allows the producer of an idea to be compensated, and it is designed to encourage others to create new products, ideas, and procedures that eventually will be the driving force for new economies. Simply wanting the world to be a better place does not necessarily give you the right to ignore this.

You discussed the raw power of the United States government in deciding to prosecute, to charge, and punish Aaron. But Aaron’s use of his intellectual ability was also an exercise in power. He hacked into the MIT computer system, used his knowledge to ferret out the various articles, and then reproduced those articles across the Internet. Both the United States government and Aaron exercised serious power in this matter. On one side is the raw power of government and the legal system, and on the other is the raw power of intellect and knowledge. No surprise that they clashed. Two wrongs rarely make a right, but in this case, two wrongs created the greater wrong of plunging a fragile mind with great potential into a horrible situation and now society, the world, and, yes, even the United States government will probably be lesser for this loss.

CLAY: Some would see this as the classic irresistible force paradox. What happens when an irresistible force (Aaron) meets with an immovable object (the US Government)? I would describe it as more in line with Newton’s Laws of Motion. For every action there is an equal and opposite reaction. The final results are far from clear. What if Aaron was right? What if we are in fact evolving to a new paradigm where all information will be free? No one can answer this question definitively right now. Looking at trends, we see everything involving information moving towards zero (cost of computing, cost of communication by phone, internet, satellite, etc.). For now, we’re relegated to the sidelines, waiting to see how this plays out between governments and hackers. The US Attorney’s Office was linear; Aaron was exponential. The US Attorney is a calendar turner; Aaron was an atomic clock.

Let’s revisit stare decisis, the legal concept of precedent that was mentioned in Chapter One. We are now living in an exponential world that is still governed by a linear legal system that moves like a glacier. Courts are required by law to always follow precedent when rendering decisions. For questions of first impression, they must look to similar problems from the past and fashion new remedies as close as possible to previous ones. The whole idea is to prevent jarring, radical change. It’s slow by design. Predictability of result is everything in our legal system. Our economic system is put in motion by the enforcement of laws. We need to reinvent government in such a way that it is moves quickly, without surrendering the protection afforded the individual. This is much easier said than done.

We live in a democracy, so individual citizens can subscribe to any belief system they want, no matter how suspect or irrational. But we need to draw the line when believers in irrational systems try to make decisions concerning government policy and education. At a bare minimum, common sense tells us to have input into our educational system, you should have an education yourself. Politicians courting the votes of Evangelicals take great delight in fighting these ridiculous culture wars in our schools while hiding under the banner of “family values.” It has been my observation that the ones who scream the loudest about family values usually lead the lives that are farthest afield from those values. How many so-called family values politicians got caught in sex scandals last year alone? The hate radio guys were in rare form when they said democrats are not judged as harshly because they have no values for society to judge them against. Huh? Are you serious? Who even listens to this nonsense? Apparently, many people – at least if our elections are any indication of what is going on.

We are constantly told our children’s education is profoundly important because they will be the scientists and leaders of the future. Not only is this true, it’s the very key to our survival. Unfortunately, people with very primitive ideas often demand a say in what will and won’t be taught in our schools. The Chinese, Russians, and Indians are not constrained by this nonsense. They are teaching hard science with no superstitious restraints. Our leadership in the world of the future is not guaranteed. China is aware of what’s at stake. They push science without letting religious fanaticism get in the way. We ignore this warning at our peril.
Manufacturing left the United States because of cheap labor in Asia. Robotic labor and 3-D printing are about to offer the United States a manufacturing renaissance. Once again, new technology to the rescue. It is the entrepreneurs and the visionaries who will ultimately get us out of this mess. The siren’s song of politicians who extol the virtues of the past is a distraction. You cannot feed nine billion people with family farms. You cannot continue to burn hydrocarbons to power developing nations into their aspirations of a middle-class lifestyle. It’s time to stop the blame game and actually pursue solutions to our problems. Rather than spending billions of dollars fighting over abortion and gay marriage, we need to produce more engineers and molecular biologists. Carl Sagan touched on this theme many times. "One trend that bothers me is the glorification of stupidity, that the media is reassuring people it's alright not to know anything. That to me is far more dangerous than a little pornography on the Internet."

RANDY: That greater future we all expect is becoming more complicated because the rate of change is accelerating while our governmental institutions have remained relatively static for 200 years. It was Winston Churchill who said “... democracy is the worst form of government – except all the others...” We need a form of government that has the protections provided by democracy but can move fast enough to make decisions that keep up with the pace of technology. What could be accomplished if our political decisions had to have a sound scientific basis? Freed from ignorance, special interests, snake oil salesman, and outright fraud, our government could fund those things that would truly uplift our society. The best interests of the public would guide us, as opposed to the desires of whoever has the most money or the loudest voice. It’s up to our economists and our behavioral scientists to find a way to optimize government while still maintaining incentives.

Technology is not a government and does not respect governments. National borders are irrelevant to technology, as are legal prohibitions. Technology is power, plain and simple. Those involved in dumbing down America will only succeed in making us weak.

ROB: Remember what we said earlier about the Molecular Age. If in fact we are about to enter a post-scarcity world, we’ll be living under conditions without the remotest precedent in all of human history.

CLAY: Will we need law in a post-scarcity world? Will we need government? Is there a natural state of equilibrium that would do away with strife, anger, and conflict? When our physical needs are easily met, will human nature suddenly take a back seat and allow everyone a seat at the table? My thirty years as a litigator force me to say no. I hope I am wrong.

ROB: Recent hyper-advances in technology are leading us into a transitional period I like to call the Great Uncertainty. I agree that we are headed to a post-scarcity world, one that has incredible opportunities for a richer life for millions of people. But this transitional period may be tough on a lot of people, too – tough on those who lack the agility to move from one career to the next in an unpredictable landscape of technological abundance. Technology will need to be harnessed to provide a living for these people, as well.

RANDY: One way around this problem is to have each person own their own robot, like our friend Tony. Tony could send Jeeves, his personal robot, out each morning to make him a living. He’d have all his economic decisions made by his robotic companion. This could put everyone on a level playing field. Your high IQ would give you no advantage over a person with an IQ of 90, because he’d have a personal advocate with an IQ of 10,000, just like yours. Your economic decisions would be guided by machine intelligence just like everyone else’s.

Of course, the inborn competitiveness we all seem to share wouldn’t just disappear. Under this scenario, the person with the most robots wins. The hyper-competitive alpha male won’t stop until he owns 1,000 robots and has 1,000 times the income of the average guy. At some point, though, this would have to bottom out, due to lack of resources on earth. Space might then become the next realm for men to spread their robotic peacock feathers and strut around the room – vying, no doubt, for the attention of potential female companions.

CLAY: Human enhancement would seem to be another way around this in the short term. For people of lower intelligence, artificially augmented IQs could provide an entry into the economy. With AGI evolving at a rate that is thousands of times faster than human evolution (once again, exponential versus linear), human enhancements will not buy much time either. Science fiction writer Vernor Vinge coined the phrase “the technological singularity” to describe this phenomenon. At some point, man will create machines that are of the same intelligence as the human mind. Given Moore’s Law, machines will soon after become twice as intelligent as the human mind. Because of our biology, we cannot increase the size of our intelligence the way machines can. With machine intelligence advancing at this speed, within a decade computers will be thousands of times more powerful than the human mind, decimating man’s ability to predict anything about the future. Because it does not emanate from the human mind, and is moving thousands of times faster than the human mind, advanced machine intelligence simply can’t be judged by the yardsticks of human speculation.

To those in our society who conclude we need to ban AGI before it gets this powerful, I would point out we most assuredly do not want other countries to develop this kind of power ahead of us. We need to move as fast as we can, while working tirelessly to ensure that the AGI we do develop will be human-friendly.

So what happens when a company or a country creates AGI? The computers will take over design and begin to write their own code, while simultaneously exploring and discovering how the Universe works. As I mentioned earlier, they will likely do just what the human race has done, only millions of times faster. Think of six thousand years of advancement occurring in only six months, and you can see the vast implication this will hold. Whoever gets there first will win. No other country would be able to catch up once one country establishes this foothold. This is the race we must win – the only game in town, when you think about it. This is not like inventing a better crossbow or a better fighter jet to get an advantage in war. This one’s for all the marbles. There’s no second place here. We can’t afford to have superstitious presidents banning stem cell research and genetic manipulation as they pander to special interest groups with anti-modern, preposterous belief systems. We need to be out in front in all aspects at all times when it comes to technology. People who oppose technological advancement while spinning tales of Armageddon and the futility of science need to be ignored. They have a right in our democracy to be as ignorant and superstitious as they want. They do not have a right to bring the rest of us down with this suicidal nonsense.

If we achieve AGI first, we can be benevolent. We can share all that the future holds for a society so remarkably advanced. We must not let theocrats who nurse dreams of martyrdom get there first – the destruction of the entire human race would appear to them as final prophecy. Not a good thought.

This, of course, is not to say that AGI will guarantee a perfect future. There is a fundamental difference between computer programming and AGI. With a computer program, the computer is a slave to the algorithm that allows it to function. It cannot understand nor alter the programming. It is simply required to follow it. But if AGI is to actually mimic human intelligence, it will require creativity. By definition, creativity requires us to do things that violate established norms. We invent novel thoughts, ideas, and solutions. It requires us to expand beyond what has been accepted as the established norm. We can go outside our programming, if you will. In a word, we are able to fantasize. To create a computer that can do that will give it the ability to circumvent such axiomatic limitations as “never hurt a human.”

These disruptive technologies will continue to create both economic and legal problems from now on. In looking at the gap that occurs when one system runs in a linear fashion and another runs exponentially, we see the gap will explode as we get to the 20th step, where the linear system has progressed 20 steps, the exponential 1,048,576. When the linear progression gets to 30 the exponential is at 1,073,741,824. And on it goes.

The Techno-legal Differential Factor will continue to widen until the linear system is unsustainable in the face of exponential growth. Dr. Michio Kaku recently gave a talk where he pointed out that a birthday card with a recording chip contains more computational power than Hitler and Eisenhower had during the D-Day Invasion. They would have done anything to have such power – yet today we throw these cards away. The Techno-legal Differential Factor is indeed a real problem. We need a new form of government that can make decisions based on scientific principles to allow government to move as an exponential itself, bridging the disparity.

Eric Schmidt, the CEO of Google, has calculated that from the dawn of civilization to the year 2003 the human race created five exabytes of data – that’s a 5 followed by 18 zeros. He pointed out that in the year 2010 we created the same amount of information in two days. He went on to predict that in 2014 we would be creating five exabytes of data every ten minutes. There is so much data streaming at us that it becomes mostly noise. If our scientists are no longer able to understand the magnitude of what we are creating, where does that leave governments?

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The issue of governance in the post-scarcity/Great Uncertainty/ AGI/Creative Molecular Economy world is a mere extension of the issues created by the disruptive forces of hyper-advancing technology on the legal and economic systems. What we are about to see will, in retrospect, seem unfathomable today.

ROB: In Abundance, Peter Diamandis and Stephen Kotler describe a future that is not merely plausible, but, I believe, very likely. They tell of a world of abundance, tremendously impacted by continuing exponential advances in technology. From bountiful supplies of clean potable water, providing for more arable land and making waterborne diseases a thing of the past, to incredibly cheap energy, to extremely inexpensive access to computing power and communication technology – the future will be transformed by a continual, rapid increase in technological advancements, vastly improving every aspect of life. Educational opportunities will be increased and improved; economic juggernauts will be released that we can't even fathom yet; and today’s medical breakthroughs will be tomorrow’s standardized medicine, rendering most diseases mere historical footnotes.

Sidebar thought: If cancer and heart disease are cured in the next 15 years, what will be listed as your cause of death?

I believe Diamandis and Kotler are right. At some point in the future, these many outstanding technological developments will make the world a better place. A world of such incredible abundance will present its own challenges – including many that can’t even be envisioned today – but the problems of our contemporary world will be mere memories.

Here’s the problem. The abundant future that Mr. Diamandis and Mr. Kotler project, if it happens (and again, I believe it will), is still some years away. My best estimate is that it will take 15 to 25 years for the right combination of technological developments to be achieved. (The advancements themselves at some point may be less important than the need to gain the necessary scale to make an “abundant” impact.) The intervening years – from the present time until whenever the abundant period begins – will likely be very challenging, both socially and economically.

Earlier in this section we made the statement:

Revolt against economic repression and technological advances have provided the only disruptive elements capable of breaking wealth free from the hold of moneyed interests, providing some measure of economic democratization. Technological advances are generally preferred to revolts. But there are consequences to the exponential gains in technology – and not all of them are positive.

Revolts and revolutions, regardless of their ultimate outcomes, instill a sense of fear in the populace and rattle a nation's psyche. Modern-day politicians understand the importance of defusing explosive situations, and, armed with governmental resources and a public sector support system, have attempted to do so. We learned a very valuable lesson from 19th century France. They chose not to deal with the economic pain of the masses. Financially strapped, with no mechanism in place for public assistance – and seeming not to care – the French government in 1848 paid a very high price for their arrogance. But the amount of money it takes to relieve a nation’s anxiety about its poor economy is massive, almost certainly leading to huge federal deficits and debt. It’s not hard to imagine a backlash against the inequality perceived in the state’s providing benefits to some but not others -- not to mention against ever-increasing national debt.
In our post-war experience, all we have known is economic growth. And when times got tough economically, we followed a predictable prescription: more economic growth. But for all the reasons highlighted earlier in this section, economic growth will become very difficult to come by in the near term. An economy slowed by the downward spiral of declining purchasing power, plummeting demand for human labor in economic production, the displacement of existing workers by disruptive technologies in a globally competitive marketplace, an overbuilt real estate market, and huge levels of debt – much of it delinquent – yield a perfect storm for a slowing economy (or worse), and seem to spell the end of all this growth.

So the nation will be in better stead if there is economic growth and people are well employed, per Dr. Watkins, but the economy may very well be hard pressed to maintain even the level of activity we’re currently experiencing. The dignity he argues for faces the “diminishing” effects of an economy ever more impacted by disruptive technology, making the U.S. seemingly destined for a painful deflationary period. The number and percentage of Americans out of work may be headed to their highest levels since the Great Depression.

So what’s the solution? How does the U.S. get through this intervening period before abundance sets in? Do we allow for some level of social and economic turmoil – even knowing that such turmoil may prove unmanageable – to prompt an economic “wash out” and try to revert to our free market roots in the aftermath? Do we create interim plans and policies – with no certainty that they’ll work – and risk creating a new dependency on the welfare state? Or do we find a solution that gets the country through the painful times – likely with some tough medicine, but hopefully some equality of sacrifice as well – that may work when times get good again?

In my estimation, there is one identifiable characteristic that will be consistently crucial in both a painful, transitional economy and the new era of abundance. During both periods, there will be a great many people who are not fully engaged in the economic workplace. For the foreseeable future, many more people than usual will be unemployed, underemployed, and prematurely retired. The ranks of the unemployed – especially among the unskilled and undereducated – already comprise more than 30% of the population in some areas. Nearly half of all college graduates under the age of 25 are unemployed. 60,000 Baby Boomers are turning 65 every month – and this will continue for the next 17 years. These people are not revving up the economy with growth-inducing consumer spending. They’ve tightened their belts, in many cases even moved in with their parents or kids. There will be an enormous surplus of time not allocated to earning an income.

Likewise, the abundant future will lower the cost of living for nearly everyone – and level the playing field as well. Energy and food will be very inexpensive. 3-D printers will allow people to create their own consumer goods at home at low cost. Healthcare costs will be nominal. Robots will provide the bulk of our labor. The economy just won’t need our physical participation outside the home. It may not be the push-button age of the Jetsons, but to many it will seem like it.

Earlier we made the case that Americans generally take a positive view of their fellow man. We are caring and generous, and have a sense of fairness that was generated – and reinforced – by the experiences of our ancestors: searches for freedom (religious and political), the basic tenets of our religions, and by the mutual experiences that came from being a relatively new country.

But the angst associated with the changing world – greater uncertainty, much higher unemployment, lower economic prospects – can cause changes in behavior that may seem to belie that baseline goodness. The structure of how we provide for ourselves – the very basis of our economic system – is challenged when disruptive technologies put so many people out of work. This stresses webs of our benevolence even more.

Can the U.S. continue on its current path – declaring itself a free-market capitalist economy when in reality it is openly practicing a quasi-socialist form of capitalism, where a myriad of “safety net” programs – funded by income taxes and, at times, borrowing – support the poor, disabled, elderly, and unemployed; providing free education, healthcare subsidies, and retirement stipends? A free-market capitalist system would never accommodate such socialist characteristics.

From the Kurzweilai.net site in September 2012 comes this short article that describes the challenges a free-market economy will face:

“The Future of Work in America”

Technology and the Web are destroying far more jobs than they create. We will need to develop a “Third Way” based on community rather than the Market or the State to adapt to this reality, novelist and economic commentator Charles Hugh Smith writes on Business Insider.

“The Internet is destroying vast income streams that once supported tens of thousands of jobs in industries from finance to music. Craigslist has gutted the once-immense income stream from newspapers, and web-based marketing has shredded print-media advert page counts. Global competition and pressure to maintain profits and margins relentlessly drives enterprises to slash payrolls.

“As a society, we need to admit that ‘free-market’ capitalism is not going to bring back these lost jobs. Thanks to technology, society is capable of meeting basic human needs (food, clothing, shelter, transportation) with far fewer workers percentage-wise than were needed in the past. But as a society, we also need to admit that socialistic solutions won’t work either.

“I see community as the only viable way forward. Many aspects of human life cannot be turned into a ‘market opportunity,’ nor can they be taken over by the insolvent central-planning Central State. Paying people to stay home and rot is not a solution, but neither is paying people more than they produce in competitive markets.

“There is a ‘Third Way,’ but we’ve lost the skills and infrastructure required. Of the three elements of civil society, the Market and the State have crowded out Community. We either re-discover the labor-value of community or we devolve further into a potential ‘death spiral’ of social and financial instability.”

So is there a model that provides a template for handling these issues better than our own economic/governance evolution? One that promotes the tenets of free market capitalist practices with an affordable, reasonable safety net that provides for the needy but is not so vulnerable to fraud, waste and dependency?

Many of the same conclusions are supported by Gar Alperovitz in his new book What Then Must We Do? Dr. Alperovitz makes excellent points about the increasing wealth inequality in America – that the working poor have no ownership of the assets supporting their labor – and that that inequality threatens the economic future of the country. He capably explains the dilemma we face, torn between wanting the best of capitalism and needing the stability of socialism, without really wanting to accept a pure form of either. Among his suggestions is a greater emphasis on community and employee ownership of the companies in which they work.

Establishing worker ownership of enterprise – particularly on a large scale – has proven to be extremely challenging. Wealth seems always to migrate toward those who are already wealthy. So we keep pursuing another hybrid of capitalism to try to find the remedy and correct balance.

John Rothkopf, again in Power, Inc.:
“The fact that virtually every other form of capitalism ‘on the market’ has significantly greater roles of the state than advocated in and by the United States suggests that not only is the US view unlikely to prevail, but indeed the momentum is actually with the alternatives. They are growing faster, they're combating inequality more effectively, they are competing more tenaciously, and they are protecting their people against the volatility of the modern workplace more competently.”

Earlier, when discussing the CEO who claimed that his greatest goal was to get up each day and create new jobs, we chastised that attitude for its opposition to a free-market capitalist economy. His role, we suggested, was to maximize the return on the assets at his disposal and to focus on a “survive and prosper” course of action. But is that really in America’s best interest? Are we not better off as a nation, as Dr. Watkins suggests, when people have purposeful work into which to invest their energies – even if the production side of the economy doesn’t need them? Is there no public/private confluence of opinion on how to put millions of willing-to-work Americans into some set of positive, productive activities that contribute to the public good?
All of these “able-bodied” people on the sidelines – unable to support themselves – may very well set the stage for massive, even revolutionary, acts of public disorder. This may force the U.S. to come up with a hybrid economic/governance structure that puts these people to good use – even if there is no economic demand for their services – simply in the service of maintaining the peace. People who cannot connect with the free-market economy may be provided with food, shelter, clothing, and healthcare in return for doing “good deeds” in the public or private sphere. The private sector will buy in, paying higher taxes to support this effort, because they can’t hire enough military and police to stop this magnitude of the hordes of angry, hungry, frustrated unemployed people.

A number of books and magazine articles have been written about what will happen to our economy when robots have replaced all human beings in the labor force. When the principles of strategic foresight are applied to this problem, we come to an inescapable conclusion. The current form of capitalism that disseminates wealth based on labor will come under incredible stress, and probably cease to function. When human labor has been completely removed from the economic equation (the ultimate outsourcing, if you will) people with IQs below 90 will no longer be able to trade their labor for wages. Shouting at these people to “get a job” will be absurd – there will simply be no job to get that complies with their skill set. Their lack of employment will no longer reflect a moral malaise; it will be dropped on them by the sheer force of circumstance.

Martin Ford, in his book The Lights in the Tunnel, also predicts the end of human labor. “The reality seems to be that most people who forecast the future either cannot imagine, or are not willing to consider, a world in which human workers become increasingly superfluous. Economy-wide automation of jobs is not a technological impossibility; it is a psychological impossibility.” Mr. Ford envisions an alternative to the system that exists today, in which man can no longer trade his labor for wages. “In the future, we should instead offer people incentives to behave in ways that do not detract from the prosperity that will result from increasingly automated production.”

ROB: The economic conclusion, for me, is becoming clearer. We are going to be forced to deal with occupying the time of millions of Americans (forget the rest of the world) as consumption demand diminishes and ever more production is done with robots or 3-D printers. People will exist without anything to do. We have the "Idle hands are the Devil's workshop" dilemma to address. Current social and economic structures in the United States are failing to provide for their intended outcomes, and as the conditions change – likely, they will worsen for some number of years – they will become increasingly incapable of delivering on their designs. I am suggesting a revised capitalist system that incorporates much more accommodation for dealing – positively – with this wide swath of the unemployed. Something like a guarantee of support in exchange for contributions to society.

Isn’t this where all of these developments lead us? Technological advancements have always had immense impacts on mankind, though the far-reaching implications of those impacts are not always visible or attributable.

Technology gave us the book, changing how we learn, worship, and record our history.

Technology gave us the machines of industry, changing how we make things, power our homes and workplaces, transport goods and ourselves, and, by fostering reliable incomes in urban environments, how we live and associate.

Technology provided for a better chance at seeing justice served in the judicial system, prolonged life through advances in health care, and improved the dissemination of news and entertainment through modern media.

Technology flattened the world, giving us more opportunities to engage people across the country and the planet like never before. It changed the way we relate to one another through advances in social media.

Technology’s advancement is in the becoming-more-vertical part of the Moore’s Law exponential curve of change. Robotic labor, Artificial General Intelligence, nanotechnology, and genomics are all pieces of a wave of scientific advances that are markedly different from anything in the realm of previous advances. These are transformational.

These changes are leading us to a new economic era, which I am content to call the Creative Molecular Economy because it pays homage to the scientific and adaptability pieces that will characterize the new economic and social paradigm. When there are changes like this, there are winners and there are those who won’t be in a position to win – and may never be. Because of the relatively short time frames of the transitions between economic eras, we will still have millions of Americans “living” in the past generation’s mindset. They are the people we described earlier who still cling to the glories of the past, longing to re-create the days when the world still made sense to them. What’s about to happen will be as unsettling as any sci-fi movie where someone suddenly finds himself living in a world he has never known.

It can’t all happen at once. There is too much that will keep the barge that represents the worlds of economic, social, legal and governance systems moving in the same direction. It won’t just turn on a dime because of some new technology. But here’s what’s different this time. Beyond the cost-cutting and efficiencies of today’s business world lies a true dissociation from the traditional workplace. There is a deep sentiment being expressed by businesses that rejects the addition of any more employees – and would just as soon get rid of many who are already there. I asked the question earlier about how you would invest $10 million if you absolutely had to pay it back (remember poor Fifi). Now I have another:

Imagine you receive this offer: Tomorrow morning your company will be sent 100 new workers. They have, on average, completed two years of post-secondary education. They are free; they cost you nothing. They will work 40 hours a week at your site. You only have to provide the space and allow them into your operation every day. You cannot fire them except for behavioral or legal violations. The question: Do you accept the offer?

When I ask people this question, the only ones who say yes are those who employ groundskeepers, produce harvesters, and telemarketers. Most businesspeople don’t want more warm bodies than they already have. In most cases, more labor doesn’t add to the bottom line (anymore). More people become more trouble than they are worth. That has become an institutionalized part of doing business, and it says a lot about where the true macroeconomic and social impact of current trends is being felt. If Mr. Ford is correct and advancing technology removes millions more from the workplace – knowing that business won’t want them back – the long-term unemployment issues of today will seem paltry by comparison.

A potential of tens of millions of “able-bodied” willing-to-work Americans for whom there is no demand in the private sector economic system is a recipe for disaster.

I believe that Dr. Watkins is correct and we need to keep people occupied with positive contributions – even if the private sector doesn’t need or want to employ them. The alternative is having too many people with too little to do. Poverty, boredom, and pent-up anger are not a recipe for domestic tranquility. It gets way too close to becoming a national Molotov cocktail.

If this scenario does come to pass, the pressure to address this time bomb and avoid widespread violence will come from all corners. The “s-word” that we so hate to be associated with – ‘socialism’ – would be looked upon in a different light. In that the U.S. is already practicing a level of social welfare maintenance that affirms and promotes a government-assisted style of capitalism, it would not be a huge leap to see it taken a step further.

Tax code would be rewritten so that there truly would be a financial incentive for businesses to keep people on the payroll. Yes, taxes would increase to account for this and other aspects of the new paradigm. And businesses would willingly pay it. For those who are still not in demand by the private sector, a program of WPA-style public works might offer a very appealing trade: minimal (but adequate) living support (food, housing, clothes, health care) in exchange for labor that benefits the public at large. This could be cleaning stream corridors, reading to shut-ins, working in soup kitchens, teaching remedial reading skills. Again, this will cost a lot of money and tax revenue will be needed to make it practical. But the only other alternative, for those who fit neither category – though we wish they did – will be reflected in the need for more law enforcement (both human and technological) to deal with those who have been left behind. Avoiding the cost of commercial disruption by this group is the biggest reason the business community will gladly support the higher taxes it will take to keep peace.

The reason this scenario works so well is that it gets the U.S. through the coming rough patch – at least 15 to 20 years – before the components of Abundance begin to bring their technological benefits to the fore. As the scarcity model unravels, with a blossoming in the supply of goods and technologies accompanied by a precipitous drop in prices, prosperity will begin firmly taking its place. The programs we have described – to employ people beyond corporate need, provide good-deed public services, and oversubscribe law enforcement, will all abate to levels closer to what we see today. Taxes will drop, the cost of living will become extremely low, and a cleaner, safer world will at last emerge. A level of prosperity – the likes of which we would have thought inconceivable only a few years earlier – will at last be shared by virtually everyone.

EPILOGUE

"Humanity today is like a waking dreamer, caught between the fantasies of sleep and the chaos of the real world. We have created Star Wars civilization, with Stone Age emotions, medieval institutions and godlike technology. We are terribly confused by the mere fact of our existence, and a danger to ourselves and to the rest of life."
-Edward Osborn Wilson

The scenarios we have created for this book are based on current trends and evaluation of how they might converge – but, obviously, the outcome could play out very differently. But if one is not accepting of an “anything can happen” possibility, it takes the in-depth description of each of many of the contributing trends we included to explain how we reached the final scenario.

Strategic foresight is a tool that enables us to see many potential futures. Apart from merely extending a trend line, what is called a “cone of probabilities” is constructed around the data point achieved from extending that trend line. This process is important for two reasons. One, it alerts us to potential outcomes that we can prepare for. Two, and more importantly, it gives us a preferred future to work toward. Behind all the work of prediction, all the deep contemplation and visionary assessment in which we have engaged, the truth is that the future remains fluid until the moment its potentials collapse into the one new reality. Still, there are some things we know. We know the robots are coming. We know genetic manipulation is coming. We know technologies are coming that will change what it means to be human. We know virtual reality is going to become a new “reality.” We have made the case that there will be economic stresses to deal with that may force the adoption of new economic and governance thinking. We know the technologies exist to create an “abundant” world.

Knowing this, now, at this moment, gives us an opportunity to strive for the future we want to build, to live in. The impact of the exponential advances in technology – much of it unseen – continues to disrupt and, yet, take us to abundance. Our greatest challenge is how we adapt to the uncertainty and inevitable changes that will occur. We can develop the agility to minimize the negative impacts and have a more seamless transition, or continue with business as usual and risk a very hard landing. The choice is ours. Pardon the disruption, but it starts right now.

END