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- Learn to plumb, not to code…
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Dear Reader,
Payroll taxes presently constitute some 30%-35% of all federal revenues.
Yet let us assume — for the moment — that artificial intelligence meets its advertising.
In the years ahead it throws millions of American workers into idle obsolescence.
Many will go scratching.
The federal revenue stream would run dry… or at least reduce to a whispering brook.
“Good,” you say. “It would put the government upon lean rations. It would finally force government to cut spending and live within its means.”
Just so. Yet the ratchet of federal spending operates in one direction. That direction is up.
The United States Treasury estimates that Uncle Samuel will ladle out $215 trillion over the next 75 years on items such as Social Security and Medicare.
Yet revenues through that period — collared largely through payroll taxes — are estimated at $137.4 trillion.
If millions of payrolls are stripped from the calculus, the chasm widens substantially.
Where Will the Difference Come From?
Unless the flow is replenished from additional sources, debt and deficits must necessarily expand… and by plenty.
But from what sources? Capital?
At the tax rates required to make the shortages good, capital would simply throw up the sponge and walk away.
After all: Why play the game at all when the taxman seizes the lion’s take of your winnings?
What you have at that point is a fatal spiral towards fiscal oblivion.
“Ah, but I have the solution,” you say.
“We’ll just tax the productive proceeds of artificial intelligence as if they were payroll taxes. With the greater productivity AI promises, we’ll collect a lot more tax revenue,” you argue.
Yet would not excessive taxation of artificial intelligence discourage the very innovations that artificial intelligence promises?
As the site Long Finance styles it:
- The taxation of AI would slow down innovation across fields as diverse as science, health, economy, security, nutrition, the environment, and leisure. and so forth. Moreover, it would also deter people from enjoying innumerable benefits arising from AI in all those fields.
AI and the “Luddites”
Yet perhaps reduced innovation would “be worth it” if the artificial intelligence tax preserved human employment.
The drummers for artificial intelligence disagree.
They argue — correctly — that technological innovation has always spawned new human jobs, not less.
They will refer you to the “Luddites.” There were 19th century English textile laborers who raged against automated machinery that menaced their jobs.
Yet the artificial intelligence contingent notes that automation ultimately expanded employment within the textile industry.
What is more, that automation’s expanded productivity increased wages within the textile industry.
The argument has secure anchorings in fact.
Innovation and technology have always allowed humans to mine fresh sources of productive employment.
The 19th-century farmer became the 20th-century factory worker… became the 21st-century computer programmer.
What if AI Really Is Different?
Yet what if artificial intelligence, twinned with advanced robotics, displaces the human laborer altogether?
What if any act the human can perform, the artificially intelligent machine can perform better?
Some claim 40–50% of human occupations will be subject to automation over the next 15–20 years alone.
These occupations are not limited to trucking, taxi driving, manufacturing and construction.
To these we must add white-collared jobs in law, finance, medicine, accounting, etc.
What would become of the personal injury attorney, I wonder — and the human helmsman of the ambulance he chases?
University of Pennsylvania researchers, teamed with OpenAI, concluded that white-collar workers earning perhaps $80,000 per year are most likely to feel the blade.
Meantime, a joint Massachusetts Institute of Technology and Boston University report concluded that automation will displace up to two million manufacturing laborers by next year.
Learn to Code? Maybe Not
Should they simply “learn to code,” as the advice runs?
Not if artificial intelligence is already learning to code. And artificial intelligence is already learning to code.
Earlier this year Microsoft dispensed some 3,000 pink-hued slips. The bulking majority of recipients were software engineers — that is, coders.
Reports the Sloan Institute of the Massachusetts Institute of Technology:
- “…There has been faster progress in automation technologies over the last 20 years and much slower progress in technologies complementary to humans. If this view is correct, then U.S. technology looks much more substitutable for human labor than it did in previous decades.
- In the past, it was more common for every new machine to require at least one or more human operators, and subsidies to capital indirectly helped labor as well. This may no longer be so with rapid advances in automation technologies…
Learn to Plumb
Where does the tale end? I do not know.
Perhaps the artificial intelligence drummers will be proven correct.
The technology will facilitate fresh human flourishing and fields of employment we cannot presently forecast.
Or perhaps it will not. Again, I simply do not know.
Yet as a scribbler who earns his daily bread through the craft of writing, I suspect artificial intelligence will run me down one day.
As a man of advancing years, I will be unable to find fresh opportunities in vineyards farther afield.
I should have been a plumber.
After all: Few professions offer greater security against artificial intelligence.
Regards,
Brian Maher
for Freedom Financial News
