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Trade, the interpersonal exchange of goods and services, is a necessary function of civilization. Where trade occurs, people can devote themselves to producing one kind of good or service, thereby becoming expert at such production. Both the quantity and the quality of the goods and services improve.
Direct barter was the original form of trade. As long as there were few kinds of goods and services available, it worked very well. Specialized production created an efficient economy that enabled villages to grow into city-states. But the increased complexity of society that such growth fostered led some people to discover new things and to invent new goods and services. Such invention led to indirect barter and thus diminished the efficiency of the economy.
Suppose that Ehad, the wheat farmer, wants some of the fish that Shtayim, the fisherman, has on offer. Shtayim doesnít want wheat, but he will accept olives. Ehad then goes to Shalosh, the olive merchant, and trades wheat for olives, then he goes back to Shtayim and trades the olives for fish. Thus Ehad had to spent extra time and effort acquiring what Shtayim wanted before he could get the fish that he wanted. That extra time and effort represents an inefficiency in the economy. The more different kinds of goods and services there are, the more inefficient will become as people are obliged to conduct more secondary, even tertiary, trades in order to get what they want. Those people need a way to restore the efficiency of direct barter.
In the Sixth Century BC the Greeks developed an institution that replaced barter with something much more efficient Ė money. Someone got the idea of taking pebbles of gold and silver and stamping the portrait of a king or a god on them and using them as a medium of exchange, the first simple coins. Because everyone wants them, they can be traded for anything. In our example, Ehad trades coins to Shtayim for fish, Shtayim trades coins to Shalosh for olives, and Shalosh trades coins to Ehad for wheat. The coins circulate around a social circle and goods move in the opposite direction. Thus money acts as a kind of fluid, subject to the laws of something like hydrodynamics. The pumps are entirely psychological: desire is the pressure that makes money move through a society.
But desire is not a simple thing. People donít all desire the same things, especially when thereís a large number of different goods and services available to be had. One man prefers the standard lace-up shoes and another prefers loafers (and womenís shoes comprise a world of their own). Desires also change over time, especially when invention creates new goods and services. Once men desired a fancy carriage and a fine horse to draw it: now men desire a good automobile.
To get the money to flow, production must meet desire. Originally the meeting took place in a market square on certain days. Later, people began selling their goods and services out of shops that evolved from private homes in the towns and cities. In the Nineteenth Century the growth of large impersonal corporations, augmenting traditional family-run businesses, vastly expanded the economies in which they existed.
Steam power, invented in the last quarter of the Eighteenth Century, drove the Industrial Revolution. New steam-driven machines enabled workers to accomplish more and better work. New goods and services came into being and old ones became more widely available. A city dweller displaced from AD 1700 to AD 1800 would have felt completely at home, but a city dweller displaced from AD 1800 to AD 1900 would have been astonished by the changes they would see (never mind some poor soul displaced from AD 1900 to AD 2000).
So much novelty brought the institution of advertising into being. Originally intended to let people know what goods and services were available and where they could be bought, advertising quickly became a means to inflame desire for the advertised product, usually by touting the social benefits of using it. The invention of advertising in an economy is analogous to the evolution of flowers in plants.
Ideally we have no restraint on what people can sell or where and when they can sell it; that is, we have what we call a free market. The free market works through something similar to the theory of evolution by means of natural selection. Goods and services evolve to satisfy the people paying for them. As with life, goods and services evolve through an interplay between mutation and selection. Mutation in this case consists of the improvement of or the invention of goods and services. The "survival of the fittest" selection comes through sales: products that sell well survive in the economy and products that sell poorly eventually become extinct. In the early 1950's people bought black-and-white television sets (sets that display the picture in shades of gray), but as the decade passed and more stations began broadcasting in color, people bought color televisions and the black-and-white television went extinct.
But goods and services donít produce and sell themselves. People must exert an effort to bring those things into existence and into the economy. Evolution has so shaped us that, except for certain special acts, we demand a quid pro quo for our efforts: we exert our efforts in the expectation of gaining something in return. That desire for gain we call self-interest, the ultimate source of all economic activity. Naturally, we want a suitable return on the effort that we invest in filling the desires of others.
That last fact contains the potential for evil. If a person feels inadequate to function well in their society and becomes alienated from their neighbors, self-interest can swell into an obsessive madness in order to mitigate the sense of insecurity that possesses that person. That obsessive madness, the extreme of self-interest, is greed, one of the Seven Deadly Sins. It destroys conscience (the withknowing function of the mind) and leads its victim into the ways of evil. Thatís not good for other people, so how can a culture prevent self-interest from running amok and becoming the soul killer?
We turn the economy over to robots. Intelligent machines take over the production of goods and services, freeing humans to pursue other goals. Today already (AD 2017) computers can take over the jobs of corporate executives and managers, as well as many other white-collar jobs. In the 1990's experiments demonstrated that a computer running a neural-net simulation could outperform human loan officers in determining which loan applications likely to have the best outcome for the lending institution if granted. That fact necessarily implies that todayís computers are capable of performing any white-collar job. Once a computer has been trained to make the judgements that white-collar jobs require, the activation patterns can be copied into other computers, so the skill, once acquired, can spread easily.
Robots are already taking over manufacturing jobs and have been doing so for several decades. That trend will continue. And as robots become more sophisticated over the next few decades, they will even take over the most demanding of service jobs, such as law enforcement or medical care. By the middle of this century robots should be able to do anything that a human can do and, of course, more.
What happens to the humans whom the robots displace? Unemployment happens, certainly; indeed, itís a necessity in a free-enterprise economy. But lacking a source of income, unemployed people sink into destitution and squalor. With all people unemployed, could we still have a viable monetary economy?
If we want to answer yes to that last question, then we need a fair way to distribute money to people. Our underlying assumption in that statement tells us that we still want goods and services to cost something and we want that so that the economy wonít become a rapidly expanding cancer on the world. We also must make our distribution system work before unemployment reaches a high percentage of the population and it must contain incentives for people to continue working at jobs that robots cannot yet take over. The best system for achieving those goals is the negative income tax (NIT), in which people who have incomes below a certain level pay a negative income tax; that is, they get money back from the government.
At first the NIT will provide enough money to lift everyone above poverty level. This step will replace certain programs, such as food stamps and unemployment insurance, thereby making government simpler and less of a presence in peopleís lives. As the unemployment rate increases to 100% the NIT will increase to raise everyone into the regime that economists identify as the middle class. Because the existence of a good and decent society depends upon a well-educated populace, the amount each person receives from the NIT will depend upon their level of education; thus, the society will maintain an incentive for people to learn as much as possible. Depending on peopleís willingness to learn in the universities or trade schools, incomes will range from lower to upper middle class. There will be no poor and, eventually, no rich.
To administer that system, the Internal Revenue Service will merge with the Social Security Administration, using one to bring in money and the other to disburse it. As unemployment increases, the rate at which companiesí net income is taxed will also increase. Eventually a businessís income, after expenses are subtracted, will be taxed at 100%.
Those expenses, indeed all costs, ultimately derive from what people are paid for their work. When people no longer work, we will have to find an alternate way to determine costs. We could, of course, refer to the "iron law of supply and demand", but what happens when supply costs nothing?
According to conventional economic theory, the demand for certain goods and services, especially those that confer higher social status upon their possessors, would become infinite. In a monetary economy prices serve as a brake on consumption. We want a pricing system that enables people to obtain what they need and what they truly desire and yet discourages consumption for the sole sake of consumption. Until the Omnifex technology becomes available we want the processes of resource extraction and of manufacturing to have minimal impact on the environment, consistent with the existence of a prosperous society. The robots will use those criteria in setting the pricing for the goods and services that they provide.
How will this change people? How will it change society and civilization? Will indolence take over and destroy Humanity? Or will we achieve Heaven on Earth and beyond?
What happens when people are unemployed now? In too many cases people marinate themselves in alcohol and/or drugs, vegetate in front of a blaring television, and/or display other traits little different from those of dumb animals. But those tend to be very poor, ill-educated people. We see something different when we look at retirees. When people withdraw from the workforce due to old age, they spend more time with family and friends, their social networks become more active, and their hobbies turn into almost full-time avocations. That looks more like what we can expect to see.
Athletics and the Arts will flourish. The desire to create beauty will replace the need to earn money as the main driving force in our society. People will devote themselves to sports, both amateur and professional, and to every form of satisfying the aesthetic urge, from simple crafts to more esoteric productions. Our cities and towns will become garden communities seething with social life.
Science will continue to expand the realm of human knowledge. The urge to explore the world will continue to drive people into the laboratories and onto expeditions. New discoveries and new inventions will continue to improve our lives.
Office buildings will no longer serve any human need, so, except for some historical landmarks (Iím thinking of the Empire State Building and the Chrysler building as examples), the robots will demolish them and open up the cities to redevelopment. People will need more meeting places, such as theaters, coffee shops, auditoriums, and stadiums. We will need more athletic venues and art galleries. Robots will produce all of those things for us. Our cities will become more open and calmer. With robots doing all the work, things that are now impractical become feasible. We can even increase the pace of extending civilization into space to ensure the ultimate survival of Humanity.
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