The Curious Case of Andrew Yang
Andrew Yang is running for President of The United States of America as a Democrat. He introduces himself on his website like this:
“I’m not a career politician — I’m an entrepreneur who understands the economy. It’s clear to me, and to many of the nation’s best job creators, that we need to make an unprecedented change, and we need to make it now. But the establishment isn’t willing to take the necessary bold steps. As president, my first priority will be to implement Universal Basic Income for every American adult between the ages of 18 and 64: $1,000 a month, no strings attached, paid for by a new tax on the companies benefiting most from automation.”
Andrew is interesting because his campaign is rooted in 1 real issue, Universal Basic Income, but he is a staunch capitalist. He appeared on the Joe Rogan Podcast and the Sam Harris Podcast and spoke honestly about his chances of winning, they aren’t good. However, he feels so strongly in getting attention on one giant issue that he is running in an insane election cycle. He argues the enormous issue of automation lies at the foundation of every other political issue we care about.
The Big Issue: Automation
I have been interested in this big issue since 2015. How disruptive has automation been and how disruptive will it be? Well, the answer is it has been incredibly disruptive already and is poised to be even more disruptive in the future. (Note that disruption is value neutral. It can be both good and bad.)
A great place to look at Automation displacing jobs is in 1810s Great Britain. Hand-loom weavers in Great Britain were highly skilled and well paid. They had great jobs. Handloom workers were highly skilled upper-middle class workers. Once the power-loom hit the scene, their numbers went to zero in a few decades. These workers never recovered. Neither did their children. The economy in Great Britain went up and up and up, but the cost to the workers in that industry at that time was devastating. As a consequence of the sudden disruption, the Luddite Movement began. It took generations for the children of the high skilled laborers to return to a middle class lifestyle. Almost all economists (and clear thinking people generally) agree that the long-run benefits to the automation of the 1800s made the world a MUCH better place. It also had mostly good effects on employment as well.
Still, an entire industry’s worth of upper-middle class workers were thrown into poverty for two generations. That has consequences.
How could AI and automation affect the world moving forward? Well, take a look at this projection:
There are other worrying projections as well. The bright folks over at Mckinsey and Company estimate that “ …technologies could automate 45 percent of the activities people are paid to perform and that about 60 percent of all occupations could see 30 percent or more of their constituent activities automated, again with technologies available today.” An even more aggressive estimate from a group of super genius economists shows, “…about 47 percent of total US employment is at risk [from disappearing due to automation].”
Imagine the consequences of even 30% of current workers being replaced by automation in a 30 year window. With labor participation rates hovering in the low 60% range, a 1/3 decline in a short period would have ENORMOUS consequences.
I will be watching Andrew Yang closely as he loses this election. He may force the topic of Automation into the mainstream.
