Robots, Systems, Taxation and Being Human

A fashion is sweeping through the global intelligentsia. The thrill of a new existential threat to human existence is in the air. Fear of our intellectual child as Nemesis is nothing new and it afflicts the intellectual before all others. The Stoics understood our fears were usually far more powerful than our reality materialized. But there are many better qualified to deal with the ontological dimension of this future than the author.

The near universal missing step in this intellectual exercise is recourse to and consideration of basic economics. We would be well served to apply what we can know before we need invent new untethered epistemological tools.

Individuals create and realize value in relationship to other individuals in a manner that is relative. That is to say, they subjectively and relatively assess the value of a product or service in relationship to other human agents. Not by reference to the opinions, values, and production of a robot, AI or machine. The view of an individual buying a teacup is not formed in reference to its factors of production. Marx and the classical economists lost that intellectual war 150 years ago. On this Adam Smith was wrong, ask anyone who successfully graduated from economics 101. The consumer who values a kintsugi teacup has not for a second given consideration to the price, value, cost of production of a Wal-Mart teacup made in a Japanese ‘lights-out’ factory.

The kintsugi teacup was, in all probability, made by a skilled artisan potter who deliberately included the prospect of fate, thus allowing flaws into its manufacture. The cup was then dropped accidentally or deliberately, and with deep respect its random remains were swept up and delivered to another artisan. The kintsugi practitioner expressing the deepest consideration for the potter, the materials, and fate then repairs the teacup with pure gold lacquer. At this point the cup has reached a level complexity revealed only in subjective relative perception of a human that is not now, and will never be accessible to a robot, a machine or even an imagined sentient AI. Why? The value exclusively exists in relationship to the subject, not the object itself. Humans create value in relationship to themselves and not in regard to the means of production. Therefore value creation is limitless as long as humans exist, and in the absence of humans value does not exist.

The extraordinary beauty of a kintsugi teacup is not in its production and not its material content. Rather the contemplation of our kintsugi cup of tea allows the human agent a moment to reveal, the beauty of human expression, its flaws disclose the existence of perfection, its fate reminds of the fragility of existence, and it creates the opportunity for the subject to be humble in relationship to the universe itself. Value is defined by imagination, and there has yet to be a limit discovered to our imagination. So it is for the producer, as it is for the consumer. The lack of demand for farm laborers did not make the Scottish Crofters DNA redundant. Their great grandchildren are dispersed around the globe creating value beyond the Crofter’s imagination. And so it is for the descendants of Pittsburgh’s steel mill workers. I had coffee with one in Columbus last week. Beautiful, talented and highly successful, her life is unimaginably better, happier and healthier doing a job that her grandmother could not have conceived of.

Her income is not a fraction of her grandmother’s. More importantly her grandmother’s income was not reduced by the other factors of production in play in the steel mills of the early 20th Century. And my friend’s income is not now and will never be defined by her most important productive tool the iPhone 7. Marx was simply wrong. Anybody who would argue that point is a tribal socialist, or has yet to turn their mind to this train of logic. Why then the desire to trash the economic tools that allow us to discover this single condition reality? - The single essential precondition, being the existence of subjective human agency.

Many have drawn two conclusions from this un-yet realized dystopian future of plenty where our purpose and labour have been replaced by robots, machines and AI. “What are the displaced to do?” occupies the thoughts of many and seems to be more urgent the closer the thinker to the center power. This should not surprise, rare the planner who shows much regard for the plans of others. We appear not to have learnt from the last 200 years that Adam Smith was right, order emerges. In a social structure primarily organized by voluntary interactions it is the conjunction of the plans of billions with their own motivations that matters, not the concerns and plans of a largely middle class elite desperately concerned for the security of their own circumstance.

Our evolutionary context predisposes us to risk avoidance in advance of seeking opportunity. Far from its evolutionary cause, this instinct separates those with from those still seeking. The secure are conditioned by our evolution to fear those without. So it is that above the economic flood plain we think we should fear those soon to be displaced by robots and an AI with a near zero marginal cost. We forget the only thing with a marginal cost lower than Moore’s Law is the human imagination. If only we could learn to trust in the children of Adam. Smith in the Theory of Moral Sentiments described human agents motivated to be loved and lovely, able to withstand their own introspection. If only the intelligentsia found it so easy to sleep alone.

Some amongst us toss and turn concerned for the tax base. Bill Gates most recently suggests we tax robots. With the greatest respect we give proper consideration to one of our greatest living entrepreneurs. We consider the prospect of his proposal as the least worse option to support a social experiment in redistribution and unintended destruction of human dignity. Rather than respectfully treating all humans with the dignity that their agency deserves we consider the extension of a program of welfare that has infantilized the welfare dependent. Middle class pretensions to knowledge see a Faustian gift pressed into the hands of other humans. The recipient should be pleased to accept the least tolerable existence in exchange for their adult agency of self-determination. This has the moral characteristics of cultural bleach. We will be clean but surely dead.

In the meantime, we appear to have ignored the existential nature of the technology. We understand that to portray an animal as human is to deny its own reality, despite the immediate attraction of Beatrix Potter’s world. Humans live enframed in technological systems that are the product of our imaginations. Almost all our technologies form part of a system. A knife, a board, a pan, and stove are a system, just as a PC, a router and a server defined a 20th Century system of production. Robots, machines and any proposed AI will exist in a system. Neither the individual nor the AI has independent agency. We are then back to boring. Economics would call that at tax on capital.

Why are we considering the economic version of the nuclear solution? What empirical evidence is there for this necessity? None. Tightening labour markets in the United States don’t suggest immediate labour-geddon. All the history of increasing capital intensity defies this prediction. It unfortunately simply defines the limits an author’s imagination and is 21st Century Malthusianism. Instead economics demonstrates that the productive harnessing of capital has enhanced individual workers welfare to an extent greater than any other mechanism. Even the poor in the United States are to be extremely rich in the context all of human history. Labour’s share of total income does not compete with capital. Human intention grows the pie. It doesn’t depend on the zero sum thinking of the few, rather it is driven by the intentions of billions of human agents dignified by their own dreams and the demand of others for the value they create.