Paul Fernhout writes: An article in the Harvard Business Review by William H. Davidow and Michael S. Malone suggests: "The "Second Economy" (the term used by economist Brian Arthur to describe the portion of the economy where computers transact business only with other computers) is upon us. It is, quite simply, the virtual economy, and one of its main byproducts is the replacement of workers with intelligent machines powered by sophisticated code. ... This is why we will soon be looking at hordes of citizens of zero economic value. Figuring out how to deal with the impacts of this development will be the greatest challenge facing free market economies in this century. ... Ultimately, we need a new, individualized, cultural, approach to the meaning of work and the purpose of life. Otherwise, people will find a solution — human beings always do — but it may not be the one for which we began this technological revolution." This follows the recent Slashdot discussion of "Economists Say Newest AI Technology Destroys More Jobs Than It Creates" citing a NY Times article and other previous discussions like Humans Need Not Apply. What is most interesting to me about this HBR article is not the article itself so much as the fact that concerns about the economic implications of robotics, AI, and automation are now making it into the Harvard Business Review. These issues have been otherwise discussed by alternative economists for decades, such as in the Triple Revolution Memorandum from 1964 — even as those projections have been slow to play out, with automation's initial effect being more to hold down wages and concentrate wealth rather than to displace most workers. However, they may be reaching the point where these effects have become hard to deny despite going against mainstream theory which assumes infinite demand and broad distribution of purchasing power via wages. As to possible solutions, there is a mention in the HBR article of using government planning by creating public works like infrastructure investments to help address the issue. There is no mention in the article of expanding the "basic income" of Social Security currently only received by older people in the U.S., expanding the gift economy as represented by GNU/Linux, or improving local subsistence production using, say, 3D printing and gardening robots like Dewey of "Silent Running." So, it seems like the mainstream economics profession is starting to accept the emerging reality of this increasingly urgent issue, but is still struggling to think outside an exchange-oriented box for socioeconomic solutions. A few years ago, I collected dozens of possible good and bad solutions related to this issue. Like Davidow and Malone, I'd agree that the particular mix we end up will be a reflection of our culture. Personally, I feel that if we are heading for a technological "singularity" of some sort, we would be better off improving various aspects of our society first, since our trajectory going out of any singularity may have a lot to do with our trajectory going into it.
Read more of this story at Slashdot.