Artificial Intelligence (AI) and Internet of Things (IoT) are going to take away jobs. Many new jobs will be created, but they demand new skills. As technology advances, almost everyone needs retraining, frequently.
With most unskilled jobs gone, many will become unemployable. How should the government handle massive (say, 75%) unemployment? The simplest way to feed everyone is to give everyone "helicopter money". A simple form of helicopter money is for the government to create new money and transfer them to individuals.
Helicopter money is not perfect. But it is the simplest solution to prevent social instability without complicated tax reform. It is no worse than quantitative easing, which is accepted by most governments.
Development in Artificial Intelligence (AI) and Internet of Things (IoT) cannot be stopped. Cars will drive themselves. So demand for truck drivers and taxi drivers will decrease rapidly. Assisted by robots, one shopkeeper can serve many shops remotely. Armies do not need as many soldiers as they did in the past; in the future, most of the fighting will be done by robots and drones. Algorithmic trading will replace 99% of human trading in financial markets. Computers can read contracts much faster and more carefully than human beings, so one lawyer can handle many more contracts in the future. Simple medical diagnosis can be done by machines, so only the complex issues will be left to doctors.
Many drivers, shopkeepers, soldiers, financial traders, lawyers and doctors today will be made redundant. No doubt many new jobs will be created by technology. For example we shall need many virtual world architects, police, lawyers, etc. To fill these new roles, people need retraining. Retraining frequency will increase as technology development accelerates. Most unskilled jobs will be taken by robots. Unlike robots, haman beings cannot be reprogrammed. Many will find it hard to acquire new skills. Besides, during retraining, people will be temporarily unemployed. Some will take longer than others to retrain. So the society will be filled with short-term and long term unemployed people.
90% of the jobs today will disappear. New jobs demand new skills to be acquired by people today. Mass unemployment will be a serious social problem. With the help of robots, food production will become more efficient. There will be enough food to feed everyone. The problem is that the unemployed population cannot afford food. Massive starvation could lead to social unrest. The question is how to prevent social instability. This is a resource allocation problem.
The conventional approach is to support the unemployed with social benefits: The poor will be supported by tax money. However, if the majority of the people (say, 75%) are unemployed and only a few are paying tax, the tax-payers will have a heavy burden. High tax rates could discourage people to go into employment. This would add to the proportion of people needing benefits. To combat that, a complex system must be designed. However, a complex tax system will be costly to run. Complex tax systems are also subject to exploitation.
One simple solution is for the government to give everyone an amount of money to enable them to maintain a minimal standard of living. Such money could simply be created.
There are many variations of helicopter money, invented to serve other purposes. Some of these variations could better serve the purpose above. 100% money creation may not be needed to fund helicopter money, though we shall not explore other variations here.
In fact, technology will have major impact to economy. Helicopter money will not disrupt the economy as much as one may think. First of all, the continuous creation of new money will lead to inflation. However, technology will dramatically improve productivity. Therefore, the price of goods do not have to go up. Besides, only a small percentage of the population, namely those who control technology (probably less than 0.01%), controls most of the wealth. As a result of money generation, their wealth will be diluted over time. But they will probably not mind, as they have more money than they can spend. Besides, they would want a stable society. Those who work will receive helicopter money too. The new money dilutes their wealth, but the alternative could be social unrest.
Helicopter money is not as outrageous as one might think. Is it right to create money out of thin air? Problematic it may be, we are doing it already in the form of quantitative easing. As long as fiat money is accepted (which is not without problems, but it is a different issue), most governments are creating money.
Is it right to provide free lunch for everyone? Yes, it is, given that robots will produce enough to feed everyone. The alternative is social instability, which nobody wants to see.
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The author studies the above topic as a scholar. The discussion above is not politically motivated. Neither is any value judgements intended.
