Nick Rowe has an interesting post over at Worthwhile Canadian Initiative about what will happen to humans when the price of human labor is undercut by automation. He asks this question:
Will human versatility always be enough to dodge and weave around all possible changes in technology, forever? I doubt it. Forever is a long time.
I resolve to say yes. But not in the same sense that I suppose Nick comes to the opposite conclusion. I purport to answer the question not with economics, but with epistemology. Namely, the question: what is money?
I assume that Nick defines money as a passive accounting device. Just to avoid confusion, in the video below, Dr. Bernard Lietaer defines money as non-neutral. This is not neutrality in the Hayekian sense of time-coordinating interest rates or the Keynesian sense of not affecting real variables…what he means is that the way the system of money is designed affects values and relationships. I’m going to use the definition that money is an agreement between people to use anything as a medium of exchange.
In the future, there will likely be a world currency that is a trade-reference currency. Average people will likely have little interaction with this currency…as prices will be instantly changed per the exchange rate to the currency of their locality (however defined; city-state, nation, etc). However, most business will be done under the auspices of this world currency. Due to the eradication of transaction costs, there will likely be a multitude of different currencies. Some of these currencies will be designed with different rules, taking into account value of different transactions. The Fureai Kippu currency system of Japan weds the societal values of caring for the elderly, and the value of education. Even in a post-scarcity society, there will always be things that are scarce…and people will continue to have unique talents. I see a future in which people shift from “labor” in the sense we use the word today, to “work” — people using their unique talents to do what they enjoy, and then exchanging their output via a complementary currency system. Throughout the world, you can see examples of these types of currency systems. Ithaca Hours in Ithaca, NY (which has a fixed exchange to USD), Grain de Sel in France, Yamoto LoVE in Yamoto, Japan (there is a department within Japan’s Ministry of Finance that even designs different currency systems!). All of these currencies incentivize people in different ways to pair unused resources with unmet needs. In fact, there is evidence (Lietaer, Ulanowicz) that the use of complementary currencies increases the amount of transactions denominated in formal currency within a community community.
So yes, human labor will probably become obsolete in the same way horses did…but horses are still around, and they are valued differently. Instead of valuing horses in labor output…we now value them in “ribbon output”, or in “hours of enjoyment”. In the same vein, humans will find different ways to value each other’s interactions.
Here is Dr. Bernard Lietaer describing his theory behind the value of complementary currencies:
[Edit: Embedding the video is not working for me, trying to fix the problem.]