Re: Fix unemployment
Mon, 7 Sep 1998 08:32:12 EDT

Damien Broderick asked us to address the problem of unemployment in the first world. Then, in a message dated 98-09-04 13:50:59 EDT, Hal Finney wrote:

> In my opinion, extropianism is not an ideology or an economic system
> like capitalism or communism. It is a personal philosophy.
> Rather then asking what kinds of macro-economic changes extropianism
> would advise in order to solve a global problem, it is more appropriate
> to ask how extropianism advises us to structure our own lives to avoid
> problems of structural unemployment.
> In that sense, extropian principles like boundless expansion,
> self transformation, dynamic optimism, etc., offer many suggestions.
> Exploit new technology, look ahead of the curve, remain flexible, don't
> get stuck in ruts, etc. Someone who commits to these principles is
> going to be much less likely to find themselves becoming obsolete than
> the average person.

With which I agree. By and large, extropiansim per se is a personal philosophy that says less about "society" than it does about "the individual". This is not to say that extropians find society at large or social problem irrelevant, but simply that THIS particular mode of thought and evaluation may not offer much, if any answer for questions that are not about the individual. That said, I think Hal's also made a very good point that extropian values are the kinds of values that unemployed INDIVIDUALS would find useful.

A problem with ending the discussion there is that it doesn't say much about how to transmit extropian values to people who don't know about them (even if they may not be called "extropianism") and who are indisposed, as a matter of their individual biographies, to accept them even if they DO learn of them.

It doesn't hurt to think about this problem in extropian terms. So, over the first cup of coffee, here's a take at "extropian" solutions to structural unemployment:

Earlier in the discussion, Robin Hanson suggested a taxonomy of unemployment (and suggested that we talk about only one sub-issue, a wise suggestion I unwisely ignore):

> 1) Search - one is between jobs, and doesn't want to grab the first job
> that comes along. Similarly, companies don't want to hire the first
> candidate that comes along.

This is probably the easiest aspect of the issue to address with the "extropian toolkit". Even the mainstream business press now accepted the reality of a true "information revolution" and we're likely to see more and more improvements in quality as well as quantity. The abstract problem of matching people to jobs is one that will become increasingly less difficult as time passes. I see advertisements for web-based job searching tools all the time. The information cost of finding a job should drop to near zero in the mid-term future (20 years) as access to near-perfect job information is available to even the poorest in the first world. Problem solved :-)

> 2) Minimum wages - supply & demand may not meet with imposed wage bounds.
> The price employers would be willing to pay may be below the bound.

This is one where ideological issues and practical politics impede progress, or at least experimentation. Both of the mainstream political parties in the U.S. accept a minimum wage without question, and I have no doubt whatsoever that the same is true throughout the first world.

Clever people who want to work or to create jobs below the minimum wage get around the limits in some cases. Some entry-level job-types escape the effect of minimum wage constraints through de-facto independent contracting. I'm thinking of many kinds of domestic personal service, such as one's yard workers or swimming pool workers. But the kinds of entry-level work that could lead to the improvement of the working skills of unemployed people in a first world economy are the very ones most likely to be effected by minimum wage constraints.

Although it has little chance of being adopted without other fundamental structural changes, an extropian solution to this problem would be to create experimental "free enterprise zones" where minimum wage constraints were significantly relaxed or did not apply at all.

If one accepts that basic life-sustaining products and services will become cheaper with advanced automation and manufacturing techniques, the pressure to maintain minimum wages should abate. If many of us who expect such decreases are right, one should look for a lowering of a fairly-calculated "poverty line" sometime in the mid-term future; say, sometime just beyond 20 years from now. If this happens, then the time would then be right to move for experimentation with a lowering of the minimum wage, with concomitant positive effects on unemployment.

> 3) Capital constraints - people may not have assets to invest in their
> own education and training, and so may settle for less than their
> potential. Others who might invest may be stopped by bankruptsy laws
> which prevent effective indentured servitude.

As I've pointed out before, credit co-ops seem to me to be a very extropian solution to this problem. Organizations like Grameen Bank offer at least one avenue of progress on capital accumulation for people at the lowest ends of the spectrum. Over-regulation of the financial industry, especially regulation created by a state structure too much under the thrall of established, large financial institutions, is a major barrier to use of this tool. Ironically, second- and third world countries, with less "efficient" financial regulatory mechanisms, have had better luck with credit co-ops like Grameen.

Robin's reference to bankruptcy laws and indentured service raises a much more complex set of issues. I can't help but think that limitations on creditor retaliation for default have at least some positive effects on entrepreneurial motivation. Whether those positive effects are offset by the negative effect of limitations on credit is a FACTUAL question, but one which would be exceedingly difficult to subject to empirical analysis. (I don't doubt that economic MODELS can be created to support either conclusion :-)

> 4) Time runs out - if your industry/career gets smaller, and you're near
> retirement, it may not be worth retraining you.

Another area that can be ameliorated with application of extropian ideas and values. First, a lowering of information barriers generally should make retraining easier and less costly. Second, the kinds of work that older people can do should be increasing as value shifts away from manual labor and toward mental labor. Third, with increasing life spans, "retirement age" will steadily rise, while at the same time the social custom of sabbaticals should further erode a unitary image of a single "life/career".

> 5) Bad luck - if your industry/career gets less in demand, you may have to
> accept being less in demand. Insurance can mitigate this loss.

Insurance is the solution. How it's implemented is of course another whole set of questions. Monolithic state-supported unemployment insurance tends to be inflexible and a poor tool for creating the kind of loss-history/premium feedback that is essential for effective operation of insurance mechanisms. An extropian approach would be to encourage wherever possible the creation and implementation of a diverse marketplace of private unemployment insurance.

> 6) Poverty - if you live in a time/place with little capital, and moving
> is prohibitively expensive, capital may be too expensive to make it
> worth training you.

This is at least a two-fold problem. As I point out above, credit co-ops are one tool that poor people can use to accumulate capital. Second, as information-work becomes more important, locality becomes less important. Thus we see developments like the information workers in the second and third world (I'm thinking of India and Russia, and just encountered the same phenomenon in Mexico) who telecommute to work in the first world. This is high-end work, of course, but is at least one facet of a solution to this aspect of the problem.

	Greg Burch     <>----<>
	   Attorney  :::  Director, Extropy Institute  :::  Wilderness Guide   -or-
	           "Good ideas are not adopted automatically.  They must
	              be driven into practice with courageous impatience." 
                                    -- Admiral Hyman Rickover