Is the AI threat to jobs also a threat to pensions, IRA's and 401(k)'s?

 

Last week we looked at how artificial intelligence (AI) was affecting the job market.  I've been trying to read more widely on the subject, in an effort to understand its implications for all of us over the next few years.  Jonathan Turley, well-known lawyer and legal scholar, offers these thoughts.

We are looking at one of the greatest job losses in history.

In a free-market system, such technological changes tend to offset losses with new jobs in emerging industries. And there will be such growth with the AI and robotic revolutions. But it is also likely that we are looking at a static class of unemployed and practically unemployable citizens as this new revolution unfolds.

. . .

The impact of AI is not confined to factory workers and truck drivers.

The danger is that politicians will react predictably and try to subsidize jobs that are no longer viable and industries that are being dramatically downsized. At the same time, they are likely to expand model programs in Democratic cities for universal basic or guaranteed income.

Democrats have moved forward with more than 60 bills creating such programs, and this week, Cook County, Ill. (the second-largest county in the U.S.) made permanent the universal basic income program it had originally launched with federal COVID-19 relief funds.

The problem is the creation of what I call a “kept citizenship” in a republic designed for people who are economically and politically independent from the government. That system is seriously undermined by a large percentage of citizens living off the government dole.

The solution cannot be an “arts-and-crafts” population kept entertained by government programs to learn glassblowing and pottery-making. A different type of citizen would emerge that is unlikely to be sufficiently free of the government to counter its excesses or failures.

. . .

All governments will face this existential crisis in the 21st Century. It will create growing instability globally. Although AI and robotics will make goods cheaper and more widely available, they are also likely to have a dramatic effect on populations. For example, as production costs drop with the new technology, there will be less advantage to moving factories to other countries with cheaper labor forces, such as China and Mexico.

Companies may choose to build near consumer markets to save on transportation costs while utilizing higher-skilled worker populations to maintain robotic and AI systems. That could produce massive unemployment in certain countries with low-educated, low-income populations. That in turn could destabilize governments and increase the chances of war in countries with large populations of unemployed young men.

There's more at the link.  Recommended reading.

Mr. Turley outlines a very real constitutional issue for the United States.  Our federal government is specifically restricted by the constitution in what, and how much, it can do - even if much of those provisions are today observed more in the breach than in the observance.  Nevertheless, I think it's a valid argument that our system of government, and how we vote for it, are designed for citizens who are not dependent on that government.  They are able to vote as free men and women because they are not dependents.  The moment they cease being free - the moment they become financially dependent on the same government they're helping to elect - the greater becomes the danger that they will vote for their own financial advantage, rather than the good of the country.  As the Roman poet Juvenal satirically pointed out almost two millennia ago, people will vote for "bread and circuses" rather than what their country needs to remain viable.  The fall of Rome not too long afterwards tends to bear out his point.

So . . . if AI leads to increased unemployment (as appears likely at present), what will the newly unemployed do?  Can they, on their own initiative, figure out new ways to make a living and rebuild their society?  Or will they listen to the siren song of politicians who promise them all sorts of freebies and benefits in return for their vote?  (For that matter, any politician who promises to set up government programs to do the hard work for people, so that they don't have to think and work for themselves, is almost guaranteed electoral success.  See the universal basic income (UBI) scheme being pioneered by Chicago, and look for something similar in New York and other "blue" cities.)

The biggest threat posed by AI job replacement is one that Mr. Turley has not mentioned at all.  It's simply this:  if government is to provide a basic guaranteed income to every citizen, it can argue that private pension schemes, IRA's and 401(k)'s are now obsolete and unnecessary.  After all, if the state will provide our needs, why do we need to make provision for them ourselves?  That leads directly to the next and larger problem:  what if the state decides it can confiscate or "nationalize" our pensions, because with UBI we no longer need them?  There are many trillions of dollars saved by Americans in such pension systems, and a left-wing government will be frothing at the mouth over the temptation to seize them all.  It would wipe out a huge chunk of our national deficit (at least until such governments spend it all again!), and can be "sold" to the underfunded portion of the electorate as a "tax on the rich" who want to "hold on to money they don't need any more".  The massive population of "blue" cities and states can be expected to vote for it en masse, overwhelming the more conservative vote of those who've worked for their future income and want to keep it for themselves.

That will, in turn, beget a whole new series of arguments and confrontations over how much UBI should be, and whether "richer" people whose private pension funds were "nationalized" are entitled to a higher UBI payment as compensation, and a whole range of related issues.  What if housing were folded into the UBI arrangement, so that anyone receiving UBI was also guaranteed a place to live?  What quality of place?  In what sort of suburb?  Will everyone be forced into Cabrini-Green style housing, or will there be any freedom of choice?

I have no idea what may emerge from the current state of affairs, but I can foresee far more problems for society than are presently being discussed.  In days past, laissez-faire economists used to claim that "What's good for the banks is good for the country".  Well, AI may be good for business, but it may very well be "double-plus-ungood" for our jobs and for our society.  Right now, we just don't know . . . and that uncertainty is dangerous in itself.

Your thoughts, dear readers?

Peter

Memes that made me laugh 302

 

Gathered from around the Internet over the past week.  Click any image for a larger view.

Sunday morning music

 

Today let's enjoy a duo who've delighted thousands with their instrumental crossover guitar pieces.  I'm speaking of Rodrigo y Gabriela, who started performing in the early 1990's and have never looked back.  I've picked a couple of old favorites, plus an extended session with Metallica's bass player Robert Trujillo.

First, here's "Hanuman".

Next, we have "Tamacun".

Finally, from Colorado's Red Rocks Amphitheater in 2014, they're joined by Robert Trujillo for an extended jam session.

Sounds like a lot of fun was had by all concerned.  You'll find lots more music from Rodrigo y Gabriela on YouTube.

Peter

Stand by for the next Shifta War...

 

I note that the Kenya-Somalia border is to be reopened.

Kenya's border with Somalia will re-open in April almost 15 years after it shut because of attacks by Islamist militant group al-Shabab, President William Ruto has announced.

Based in Somalia, the group has masterminded a series of deadly assaults in Kenya including one on a shopping centre in the capital, Nairobi, killing 67 people in 2013 and one at a university in Garissa two years later killing 148.

The plan has been announced before, in 2023, but further attacks postponed the arrangements.

Ruto said the intention to re-open two crossings follows years of security assessments, adding that there will be a heavy deployment of security forces to ensure the move does not compromise safety.

There's more at the link.

I think this is a terrible idea.  That part of Africa - northern Kenya, eastern and northern Uganda, southern Sudan, Ethiopia, and of course Somalia - has been home to the so-called Shifta bandits for generations (of whom Al Shabab is nothing more or less than a recent reinvention of the wheel, with a religious gloss overlaid on their traditional barbarism).  The current disastrous situation - almost a genocide - in southern Sudan is just the latest atrocity in a region that's been soaked in blood for centuries.  It's family against family, clan against clan, tribe against tribe.  The so-called Shifta War was fought there in the 1960's, and despite "official" peace agreements, has never really stopped.

I spent time in the area many years ago, trying to arrange mission convoys for various church groups, getting food and medical aid to mission stations that desperately needed it.  I think my convoys were the only ones that usually got through, because I made sure to hire the meanest, most vicious Shifta bandits I could find as convoy guards against their fellow scumbags.  They would be well paid, but only after the convoy got through and returned safely.  Things got "sporty" on occasion, but my guards usually justified their cost and then some.  Sadly, some mission groups decided that my methods were insufficiently Christian, and had to stop.  (It's odd that most of their aid convoys never made it more than a few miles from their depots before being raided and robbed blind.  They were regarded as "soft targets".  My convoys were not!  I think they felt I was making them look bad to their NGO sponsors.)

There are many other places like this around the world.  Western news media seldom have anything worthwhile to say about them.  They quote government ministers or spokesmen who proclaim that everything is sweetness and light, while on the ground it's "the strong survive" and devil take the hindmost.  Shifta country is one of the worst . . . and now they want to reopen a border between two of the worst-affected parts of Shifta country.

I already know what the result is going to be.

Peter

Ukraine's rapid weapons development example is spreading fast

 

Ukraine has become well-known for its innovations in drone warfare, particularly its ability to design, develop, test and produce new models in a few months.  This means Ukraine can counter Russian innovation very quickly, forcing Russia to keep on developing replacements.  The old weapons cycle of replacing equipment every year or two is now - in some cases quite literally - replacing them every month or two.

It looks like American manufacturers are beginning to get the message.  Case in point:  a prototype of a new lightweight assault drone that was developed and built from scratch in 71 days.

U.S. Defense technology firms Divergent Technologies and Mach Industries unveiled a new autonomous strike aircraft prototype in Los Angeles on February 17.

The aircraft, called Venom, moved from concept to flight readiness in just 71 days, or about 10 weeks. The companies say the rapid timeline shows how digital manufacturing and modular engineering can shrink development cycles that traditionally take years.

The prototype was built as a flight demonstration platform. It is designed to prove that defense hardware can go from initial design to operational prototype much faster using software-driven engineering and advanced production systems.

. . .

Instead of building wings, fuselage sections, skins, and control surfaces as separate multi-part assemblies, it produced large monolithic structures. That reduced overall part counts and simplified production workflows. Fewer parts mean fewer fasteners, fewer failure points, and faster assembly.

According to the companies, this process compresses production timelines while maintaining structural integrity. The goal is to create aerospace-grade hardware at a pace closer to software development cycles.

There's more at the link.

This gets even more interesting when we recall that over the past few years, the US military has developed containerized additive manufacturing (so-called "3D printing") facilities that can be deployed along with military units, including infantry or armor brigades, naval ships, etc.  Furthermore, with modern high-bandwidth satellite communications facilities, detailed design and manufacturing blueprints and instructions can be distributed from the manufacturer to those field units, built and tested under operational conditions, and feedback and suggested improvements sent back to the manufacturer, in literally hours or days.  The advent of modern AI systems means that the process can be sped up by an unknown, but undoubtedly significant factor, meaning that the "loop" of design-build-test-evaluate-redesign can be drastically shortened.  Given an adequate basic design, the ten-week process described above might be reduced to no more than two or three weeks.  One side can have a counter to a new enemy technique or weapon almost before the latter has been fully deployed.

We're only at the start of this revolutionizing of at least some military development and manufacturing processes.  It's going to become much more widespread, very quickly - and in the process it will solve a number of problems that have plagued armed forces for literally centuries.  Want an example?  Try the under-development Red Wolf cruise missile, small enough to be fired from Marine Corps helicopters and modified agricultural aircraft, enabling those platforms to reach out several hundred miles with pinpoint accuracy.  Variations on that theme are being developed right now using similar technology, and should cost considerably less than currently-deployed equivalents.

Who knows where this will end up?

Peter