If middle-class Americans spend most of their time taking care of and teaching each other (and building each other’s houses and roads), all their other needs -- food, transport, physical goods -- will be met by robots. Those robots will be built and managed by a small number of very high-skilled workers, and owned by an even smaller number of entrepreneurs and financiers. That sounds like a recipe for vast inequality.
That’s where taxes come in. Those who decry health and education costs the loudest often clamor for higher taxes to pay for these big-ticket items. In real terms, this means forcing the entrepreneurs, financiers and highly-paid engineers to hand over some of the vast material bounty created by their robots to a middle-class populace increasingly engaged in care-related work.
It’s possible that such a system might work. Arguably, the U.S. economy has already moved in this direction over the years, as workers have shifted into services, inequality has gone up and the fiscal system has become more redistributive.
But there may be limits to this process. If the wealthy eventually find a way to evade the burden of higher taxes, the system may be unsustainable. And if care jobs and construction are subject to more automation in the future, the long-feared technology-driven unemployment wave might materialize at last.
So to hedge against such a collapse, the government should do two things. First, it should look for ways to make the middle class more productive; even if everyone can’t be a programmer or data scientist, programs such as Germany’s apprenticeship system and vocational education may be able to find many workers productive jobs outside care-based industries. And experimenting with welfare programs such as universal basic income, funded by social wealth funds, might prepare the country for the possibility that work itself could one day become obsolete.
This opinion piece was provided by Bloomberg News.