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It’s a beautiful summer day. The sky is clear, the temperature is warm, but not hot, and the birds are chirping. For a moment, you’re filled with regret. Instead of enjoying this day and all of its magnificence, you must get dressed and report to work. Then, a realization engulfs you like a warm blanket; you don’t need to do that anymore. In this era, work is optional. You are free to do as you please. Many have feared the day when machines take our jobs, a day that never came; innovation has always birthed far more new jobs than it has eliminated. Perhaps, until now. Artificial intelligence may represent a rupture unlike any before. We must confront this possibility head-on: not with panic, but with pragmatism. Rather than clinging to 20th-century solutions or futilely resisting progress, we must redesign our economic and social systems to embrace a future of radical abundance and human flourishing. Here’s how.
The Jobless World
Fears of mass unemployment at the hands of our machines have historically proven very wrong. Sure, innovations do indeed eliminate the demand for certain kinds of jobs. Technology eliminated, for instance, the need for telephone operators to route calls. Alarm clocks replaced “knocker uppers,” people literally hired to wake you up in the morning, by knocking on windows. Even the profession of the “computer” was absorbed by the very machine that now bears its name. Yet, paradoxically, there are more jobs for humans to do than ever before; technology has always created far more jobs and opportunities than it has eliminated. With this understanding in mind, as loath as I am to say it, this time might, in fact, be different.
Artificial intelligence, especially when embodied in physical machines, doesn’t just augment human capabilities; it can conceivably do everything that a human can, and more. AIs can take phone calls, work on spreadsheets, drive trucks and taxis, work on assembly lines, clean homes, and even build buildings. There is no reason to think that machines cannot replace all manner of human physical and cognitive labor. Furthermore, unlike humans, machines don’t require workers’ compensation insurance, a pension, or a wage, and can work in extreme conditions with no lunch break, no holidays, rest, or complaints. Machines will be the perfect employee, far preferable to humans in almost every conceivable way.
Even if, however, our machines cannot replace all human jobs and tasks, AI will still change the nature of employment, unlike anything humanity has thus far experienced. As Peter H. Diamandis notes, prior technological employment displacements were sectoral, hitting one or two sectors at a time. AI, on the other hand, will transform virtually all industries, more or less, at once. The speed of automation will far outpace individuals' ability to adapt. Retraining humans to switch careers takes months or years at a minimum; AIs will acquire new skills within weeks, and as their capabilities expand, human labor will be continually pushed to the fringes. Many will be in a constant state of retraining for jobs that probably will not exist by the time they are ready to take them, and even if it does, the pay will be low, as demand far exceeds supply.
In a sense, machine-driven mass unemployment is already well underway. As technology advanced in the 20th century, many nations built an ever-growing patchwork of welfare programs to provide aid, either in cash or benefits, to people who were unable to work. These beneficiaries now include low- and no-income groups, the disabled, and the elderly. I have been a vocal critic of these programs because they lack clear objectives and function more like populist vote-buying mechanisms than genuine efforts to help a changing economy weather change. This messy patchwork of welfare programs is also easily gamed by free riders or otherwise creates a series of systemic perverse incentives, trapping people in the very circumstances they are ostensibly intended to address. Welfarism is a 20th-century mistake we best not repeat.
Alternative options for dealing with technological unemployment aren’t great either. If and when mass unemployment arrives, the knee-jerk populist reaction of most politicians will be to outlaw machine labor in a foolish effort to protect and preserve jobs for humans. We can expect legislators, for instance, to prohibit fully autonomous vehicles under specious claims of “safety.” Others will prohibit AIs from practicing law by ensuring mandatory licensing, which can only be obtained by natural-born humans. Let me be clear: Efforts to stifle automation, to swim against the current of progress, are bad responses and will only cause more net pain and harm. Instead of resisting unemployment, we should embrace it.
The Jobfree World
This requires a paradigm shift, a cultural realignment. We have long been conditioned to associate idleness and joblessness with failure. After all, if the market isn’t paying you for your time, the thinking goes, your time must not be very valuable. In a future where labor is mechanized, most of us will not be worth hiring. Yet, we never really needed the job; only the income. For many of us, the job is a shackle preventing us from living life to the fullest. There is nothing inherently human or dignified about standing on an assembly line and bolting together a door assembly, or sitting in a cubicle, writing up reports. Sure, some of us may enjoy our jobs, but most of us would rather do something else with our time. If AI allows us to devote more of our time to our true interests and desires, it’s a liberating force, not an oppressive force. It’s something to be welcomed, not feared.
Harnessing this opportunity, however, requires rethinking our economy from the ground up. It means taking bold, but calculated action. First and foremost, however, the government should abolish income and corporate/business income taxes. These taxes are not only fundamentally unfair, forcing humans into a kind of fractional slavery, but they also disincentivize employees from working and companies from hiring. When we remove these harmful taxes on production, employers will have less incentive to let go of their human staff, and their employees can keep more of their rightfully earned income. Lost revenue can be replaced by taxes on land, resources, and consumption.
In this brave new world, some might be tempted to double down on the minimum wage to ensure that even as technology reduces the value of our labor, we are paid well. This would be counterproductive. Wages are set by the supply and demand for labor. A minimum wage is a price control that forces trade-offs and would generally encourage faster automation and human displacement. A wage floor is only helpful when there is a monopsony of labor. Monopsony is the opposite of a monopoly; instead of one entity controlling the supply of something, it controls the demand, in this case, the demand for labor. Monopsony is common in small towns where there might be one or two dominant employers that control the wage “market price.” In this limited circumstance, a wage floor can beneficially correct the monopsony.
Lucky for us, however, in this job-free world, we will need a lot less money to begin with. If and when machines do take our jobs, it will be because they can do them better and cheaper. To the extent that we are concerned about falling incomes, however, we could consider adopting a “wage subsidy,” or, as Ben Glasner of Agglomerations calls it, “a publicly funded top-up to low hourly wages.” Glasner proposes a subsidy equal to 80 percent of the difference between the employer-paid wage and a “target wage”, which he sets at 80 percent of the national median. This policy proposal provides all the right incentives. A wage subsidy doesn’t discourage hiring because the state, not the firm, bears the additional cost. Further, because the subsidy phases out gradually as an employee's earnings approach the target wage, it doesn’t discourage earning either. Every raise, every promotion, is still beneficial. Lastly, it mitigates the aforementioned monopsony problem by compressing the wage distribution immediately under the “target wage” and enhancing competition between employers.
A wage subsidy, in fact, is conceptually similar to another approach to the same problem: the Negative Income Tax, or NIT. NIT is most often associated with Libertarian economist Milton Friedman, who championed the idea as a more straightforward replacement for traditional welfare. An NIT is an income tax system that reverses the direction of tax payments for incomes under a specified target level. Again, it does this gradually, phasing out as employee incomes rise to the target rate. In that sense, it functions exactly like a wage subsidy for low-income workers, but it goes one step further; an NIT doesn’t require employment to receive the benefit. The wage subsidy, therefore, could be seen as more “pro-work” than an NIT. Depending on our goals, this could be seen as a feature or a bug.
Going one step further brings us to the best-known contender for dealing with technological mass unemployment: Universal Basic Income, or UBI. Which gained prominence during the 2020 presidential campaign of Andrew Yang. Yang planned to levy a VAT tax on the goods and services Americans buy, using the revenue to send monthly checks of $1,000 to every American, no questions asked. This “Freedom Dividend,” as he called it, would ease the pain of technologically-driven unemployment. Critics of the plan, of course, noted its extreme price tag: at over $3 trillion a year, or 3/5th of the total Federal budget at that time, they argued that the cost was not worth the benefit. For many Americans, it would only hand back money already taken from them as taxes, yielding no net benefit and deadweight loss to boot.
It’s an indisputable fact that all of these proposals are expensive. However, because wage subsidies and NIT gradually phase out as incomes rise, they are comparatively more affordable than UBI. Still, the sticker prices are misleading; these programs are intended to replace, not supplement, the existing welfare infrastructure, which already costs hundreds of billions annually. They would also save on administration. The current welfare industrial complex requires armies of staffers, offices, equipment, etc, which add ~5-10 percent in administrative cost. A wage subsidy/NIT/UBI that runs directly through the tax code could trim this to under 2 percent, saving tens of billions annually. Direct cash assistance is also likely to be more effective than the patchwork of in-kind benefits the welfare system currently provides. The research finds that cash transfers generally outperform in-kind transfers in reducing monetary poverty, improving health/nutrition, and increasing food security. This is, in part, because cash transfer programs like NIT or UBI eliminate a hard “benefits cliff,” the income threshold at which benefits are cut off, which perversely punishes subscribers for raising their incomes.
To the extent that a true UBI or NIT may prove unaffordable, however, we might consider limiting payments only to minor children and their parents, a “Minor Universal Basic Income,” or MUBI, if you will. If we view children, more nodes on the “social supercomputer,” as a positive externality, then an MUBI makes sense; effectively subsidizing more humans by compensating parents for the cost and labor of raising children. Further, if we split these payments, half to parents and half to children, with the latter held in an index fund accessible at age 18 or 21, compounding interest and capital gains work their magic. A $500-a-month MUBI, held in a conservative index fund for 18 years, allows a young adult to begin their adult life with ~$175,000 of assets. Assets that could be used to buy a home, a car, start a business, or just be kept in the fund until retirement. Indeed, without adding a single dollar, the capital gains alone could grow to $2 million by the time that child retires.
Conclusion
The arrival of truly capable AI does not spell the end of human meaning or dignity; it offers the first real chance in history to decouple survival from drudgery. By abolishing punitive taxes on work and production, replacing broken welfare traps with smarter mechanisms like wage subsidies, NIT, or a focused MUBI, we can ensure that the productivity gains flow back to everyone. Humanity could finally be liberated to explore, create, invent, care for one another, and reach for the stars, not because we must labor to eat, but because we choose to build, dream, and wonder. Instead of a jobless dystopia, the jobfree world could be the most inspiring opportunity our species has ever been handed. The only question left is whether we will have the courage and wisdom to seize it.
Never. Gonna. Happen.
Honestly, it sounds horrible to be job free. We need to strive for something, and as much as 'art' is thrown in our faces, I can say art is great, but it's nothing quite like materially creating something.