> Solve the problem of bringing the structurally-unemployed people of the
> *first* world up to the standards of their wealthier, currently-employed
To bring them up to the same standards would probably not be possible without lapsing into a sort of communist systems where success is punished, but providing a pretty good standard should be feasible through massive automation. Even with today's technologies it would be possible to make products so efficiently and cheaply that the state could sell them without loosing money, or perhaps even with a modest profit. Massive fully automated factories churning out tons of wholesome food, clothing, furniture etc. at prices even a beggar could afford. This could be combined with the libertarian idea of abolishing minimum wages (and a basic form of welfare, probably) and free schooling: those that would be willing and able could now take their time to learn some new skills, now that they don't have to worry about feeding themselves. In time there could be free brain enhancements.
There would have to be some taxes (not for those on gov support, of course), but they could be quite low due to the efficiency (and thus low cost) of the automated world (the government itself would be automated too, thus becoming a lot cheaper and more efficient itself The income tax would be the same for eveyone, so that financial success would no longer be punished like in many socialist countries. Red tape for starting a business etc. should be cut to an absolute minimum. The state should legalize drugs, prostitution, gambling etc, and start providing those services itself to those that can afford them (the smart/hard-working/lucky ones). That should help to fill any holes in the budget...
Last but certainly not least: a pre-nanotech system like this could not support "unlimited" numbers of non-working individuals. Since it would probably be localized (we're basically talking about 1st world countries, as Damien suggested), immigrants could not (automatically) be allowed to profit from the gov support. Also, the local population would have to refrain from having kids until they've found a job and can support themselves (provide eveybody with those handy x-year contraceptive implants). Without measures like these, taxes would have to keep rising until there would be no-one left to pay for the gov services, to do research etc, and the society would grind to a halt and collapse. However, the measures could be eased off over time as new, more advanced technologies (for production) would become available.
Note: I personally like libertarian-esque ideas better, but libertarianism needs libertarians to work (just like transhumanism needs transhumanists to work). If you want everyone in a normal, average society (with lots of dumb, gullible and incompetent individuals) to have a decent living, you'll need something more "socialistic". Besides, a truly "gov-less" system is an illusion; a power vacuum will always be filled, probably by something totalitarian. But we've been here before...
> In the longer term, with the advent of molecular nanofacture and AI, we
> will *all* be in this position, to some extent. But those technologies
> will perhaps change the landscape so drastically that we will have to start
> again from scratch in thinking these issues through.
MNT and AI will quikly lead to SI, and as Vinge puts it: `Within thirty years, we will have the technological means to create superhuman intelligence. Shortly after, the human era will be ended.'
> For now, there are many people out there in the First World who are angry,
> baffled, hurt, deracinated - and their numbers can only increase. If
> extropians can find solutions to this deep problem, that will certainly
> prove the worth of the philosophy. `Answers' such as *get rid of the
> state* lack the specificity most people without work are looking for...
The main problem is, that most people have been brainwashed into believing the idea that one needs work to have dignity and a "meaningful" life. This once useful meme now often slows down automation, which is obviously bad. Also, it is a sad fact that many people are so shallow that when forced (by unemployment) to spent more time together, many couples brake up within a couple of months (recently there had been a study of laid-off German factory workers that showed a divorce rate of 50% or so after a relatively short period at home. Quite shocking, IMO).