The coming Great Extinction – of jobs

Summary: News of the coming great extinction has the chattering classes agog with fear. But they’re (as usual) looking the wrong way. The rapid evolution of algorithms, software, and robots will make many kinds of jobs as extinct as the Great Auk. This will reshape the world into a wonderland — or unleash disastrous social turmoil. It’s up to us.

The Great Auk, last seen 1852. Lots of jobs will go extinct, just as they did.

Great Auk
Great auks by John James Audubon, from “The Birds of America”(1827).

Yet another of these coordinated-looking propaganda barrages warn us of the danger. These are all from June 2015…

These headlines are correct, but about the wrong subject. They are exaggerated speculation based on false claims about damage to the biosphere (e.g., 30 thousand species going extinct each year). The coming great extinction is of jobs. The drumbeat of automated has become background in the news, the unnoticed washing away of the foundation to American society. When it is seen, the job losses are often attributed to corporate oligarchies, free trade, or massive immigration.

It has just begun. To more clearly see this trend I recommend following the few experts charting the path to this new world. Such as Martin Ford.

Martin Ford interviewed by Knowledge@Wharton

Traditionally, robots have been in factories, but I think that over the next 10 to 20 years, automation in the form of robots, smart software and machine learning is really going to invade pretty much across the board. It’s going to start impacting jobs at all skill levels. It’s not just going to be about low-wage people who don’t have lots of education. It’s really starting to impact also professional jobs.

… we’re in the midst of a transition where in the past, machines have always been tools that have been used by people and made those people more productive, but increasingly, the technology is really becoming a replacement or a substitute for more and more workers. That’s going to be a huge issue over the coming decade.

Martin Ford

… On Wall Street, most trading is now done by algorithms. There have been lots and lots of jobs that have disappeared already, and again, the important thing is that in many cases, these are skilled jobs. It’s not about the skill level or how much education you have. The primary question is, is the job on some level routine, repetitive and predictable? In other words, can the actions that a worker undertakes in that field be predicted based on what they’ve done in the past?

If the answer to that is yes, then it’s going to be susceptible to machine learning, which is really the central technology that’s driving all of this. It’s a huge range of jobs, and it includes a lot of jobs that are good jobs that people need to go to school for. So that really kind of throws a wrench into our conventional thinking about how all of this has worked in the past.

We already see systems that are beginning to impact journalism that can crank out news stories based on data streams. We see the field of law being impacted, with algorithms that do document review taking over a lot of the more routine work that used to be done by lawyers and paralegals.

A lot of that is driven by machine learning, and is going to scale across a whole bunch of the knowledge economy. I can imagine that over the next couple of decades anyone who has a job sitting in front of a computer doing something that is some on level routine and predictable — cranking out the same analysis or the same report every month — that type of thing is going to be susceptible to this. That’s an enormous number of white-collar jobs out there. At the same time, there’s going to be a huge impact on many more routine, lower-skill jobs as well — areas like fast food, driving vehicles. So it’s really very, very broad-based.

I suspect he underestimates the ability of technology to eliminate jobs. As in this…

“Some of the safest jobs are going to be areas like …car mechanic because it’s really hard to build a robot that can do all of those things.”

The complex hydro-mechanical machinery of a car will always require mechanics. But in ever less amounts as technology replaces human diagnosis with computer analysis, and repairable mechanical parts are replaced by disposable electronics. The result might be somewhat like already seen in home electronics. We still have plumbers and electricians, but few home appliance repairmen.

The growing tsunami of stories about automation shows the real debate: how many jobs will the Great Extinction destroy? Next up: when will we begin to prepare for the coming social disruption?

Watch a Team of µTug Microrobots Pulls a Car

Automated stores

CafeX unveils fully automated robotic cafe … companion iOS & Android app will allow users to order drinks prior to arrival. Cafe is ~60 sq ft & is open 24 hrs/day.

Also see Happy Meals: now made with 20% less people!

An ad for IBM’s Watson to ease your worries about the robot apocalypse

Conclusion

Day after day we get new stories about new software and new robots replacing people.This bonanza of productivity can make a better world — or create a nightmarish disaster as power and income concentrates in those who own the machines while jobs disappear and wages stagnate.

One solution is expanded welfare — a guaranteed minimum income — as recommended by Bryan Dean Wright in today’s LAT op-ed “Robots are coming for your job“.  That would bake high inequality into American society. Cake for the rich from technology; crumbs for everybody else.

We have 50 years of warnings about the new industrial revolution. It’s here. Our decisions will determine if our future will be Jupiter Ascending or Star Trek. The clock is running.

Robots: dystopia or utopia?

For More Information

For more of Martin Ford’s insights see “Economic Growth Isn’t Over, but It Doesn’t Create Jobs Like It Used To“, Harvard Business Review, 14 March 2016. Also follow his Twitter feed.

If you liked this post, like us on Facebook and follow us on Twitter. See all posts describing how the 3rd industrial revolution has begun. Also see the posts about the evidence that we’ve entered a period of secular stagnation. And especially see these…

For deeper analysis see these books…

Rise of the Robots
Available at Amazon.
The Future of the Professions
Available at Amazon.

16 thoughts on “The coming Great Extinction – of jobs

  1. What makes this revolution different from the last one is that it won’t just be the poor and powerless that’ll be ‘replaced’. A lot of (well paid) respected middle class jobs are going to go as well. Your point about algorithms is well made, many people still worry about robots, when in fact the main threat is probably (initially) from the black box in the corner.

    Why go to consult a lawyer to get your house purchase through, when you can get a computer to do it for you. Improved medical diagnosis and testing will, probably, eliminate a significant chunk of the medical profession. Middle level government and civil service, tax planners, translators, generic office workers.

    Honestly, I don’t think it matters how much time we have to prepare, every profession thinks they’re already working in the best way possible and are indispensable. Until it’s too late. The print workers in Fleet Street (UK) were a prime example, they fought ‘new technology’ tooth and nail and, probably, made the end nastier than it would otherwise have been.

    I’m not optimistic.

    As an aside, I always considered Star Trek to be an interesting example. Their society had, obviously, eschewed the use of any form of AI. Tremendously sophisticated technology, all controlled by pushing buttons. A bit like trained monkeys. Is that the fate that awaits us?

    1. Steve,

      “I don’t think it matters how much time we have to prepare, every profession thinks they’re already working in the best way possible and are indispensable. ”

      We didn’t successfully managed the previous industrial revolutions by preserving jobs as candle and buggy whip makers. We need to fairly share the bounty produced by these machines — as unions, the New Deal labor reforms, and progressive taxation did before. Unfortunately we’re going backwards — tossing away those reforms, making the coming jobs extinction worse.

    2. That’s an interesting idea: the new ‘idle class’ must earn their guaranteed minimum income by sitting in front of a screen 40 hours a week pushing buttons, essentially playing a video game all day to get paid their salary.
      “Man, today at the office was rough! I was busy harvesting my jelly bean farm, when a giant squid came along and ate most of my crop. But it turned out okay, because I got 30 gold coins for fighting it off using my archer towers.”
      If the game is engaging enough, it could become the new opiate of the masses, suppressing social unrest. I’m sure there’s been a clever short story, movie, or tv show written to that effect already.

  2. Perhaps airbnb and uber are instructive examples in how the network automation disruption unfolds. I think those two are just first wave disruptions where the founders are able to capitalize significantly on harnessing the automated network effect. The next round is brewing in blockchain tech, I suspect a cooperatively owned network that is governed almost purely by code will emerge that is more efficient and equitable than airbnb or uber or airbnb.

    With trends towards smaller lower cost manufacturing compinents (3d printing, low cost cnc) it’s possible to imagine networked manufacturing cooperatives emerge as well.

    1. roamer,

      “harnessing the automated network effect”

      Also harnessing an increasingly desperate workforce — and our unenforced labor laws (i.e., a pretend change in the name of employees and “poof” — decades of labor law evaporated).

      “it’s possible to imagine networked manufacturing cooperatives emerge as well”

      It’s possible to imagine many things. But large-scale coops will probably remain in people’s imagination.

  3. “This will reshape the world into a wonderland — or unleash disastrous social turmoil. It’s up to us.”

    It seems to me we are rapidly approaching or have surpassed the limit of our technological capacity to manage the change we (unintentionally) create.

    1. Andy,

      Why do you say that?

      Especially as in the past we seldom had little more than a glimmer of the effects of technology until it was obvious, due to our limited information collection and analysis systems (we had little data about the US economy until the 1930s and esp 1940s). Events just rolled over humanity.

      Also, we now have a great deal of information about how industrial revolutions occur — and how to deal with them. In the 18th century they had neither.

  4. As I recall, having been raised on a steady diet of POPULAR SCIENCE magazine (and later WIRED), having robots do all the work WAS THE ENTIRE POINT OF HAVING ROBOTS.

    1. smendler,

      Great point! A previous post described 50 years of science fiction predicting the rise of robots. But those stories also predict that we will be unprepared for the consequences.

      Excerpt from one of those stories:

      “The cab came floating down out of the sky at the intersection and maneuvered itself to rest at the curb next to them with a finicky precision. There was, of course, nobody in it; like everything else in the world requiring an I.Q. of less than 150, it was computer-controlled.

      “The world-wide dominance of such machines, Chris’s father had often said, had been one of the chief contributors to the present and apparently permanent depression: the coming of semi-intelligent machines into business and technology had created a second Industrial Revolution, in which only the most highly creative human beings, and those most fitted at administration, found themselves with any skills to sell which were worth the world’s money to buy.”

  5. Thanks for returning to this subject again, but I am once again baffled by the relative absence of more detailed analysis of already-proposed ideas for addressing increasing tech unemployment and possibly full UNemployment at some point in the future, including some proposed by authors you have cited as particularly noteworthy in this and other 3rd IR articles you have written, e.g. Martin Ford in his most recent book, Jeremy Rifkin in “The End of Work” (1995), and the authors of “The Second Machine Age” a couple of years ago.

    For example, in response to the recent LA Times piece by Wright you cited in this article, you dismissed his idea for a Data Mining Royalty Fund as just another idea for a Universal Basic Income (UBI) or Basic Income Guarantee (BIG)– based on citizenship rather than welfare or work–that would simply lock in perpetual inequality (even though the income generated by Wright’s idea would appear to fluctuate, for better or worse, from one person to the next), without–to the best of my knowledge–ever having compared and contrasted something close to the full range of ideas that have been proposed by others, including those that would be funded by tax revenue vs those that could be funded by other means.

    I see Wright’s idea as a version of the “internet micro-payments” idea proposed by Jaron Lanier in his book entitled “Who Owns the Future” a couple of years ago. Marshall Brain has also proposed a variety of more “provocative” ideas as well, included raising money for a guaranteed income by selling advertising on currency, and I believe Jerry Kaplan’s recent book on tech unemployment also adds some ideas to the discussion.

    For an overview which summarizes most of the generic, rather than particular, ideas that have been advanced, see “Ten Responses to the Technological Unemployment Problem.” declineofscarcity.com And for MUCH more detailed information on the history and current status of guaranteed basic income thinking and proposals, I recommend the now more than 30-year old Basic Income Earth Network (basicincome.org)

    OTHER RECENT SOURCES SUPPORTING GUARANTEED INCOMES:

    http://www.nytimes.com/2016/03/03/technology/plan-to-fight-robot-invasion-at-work-give-everyone-a-paycheck.html?smid=fb-share

    http://www.nationofchange.org/…/why-we-need-a…/
    Why We Need a Guaranteed Income. Soon. – NationofChange | Progressive Change

    http://www.pbs.org/…/will-guaranteed-income-ever-come…/
    Will a guaranteed income ever come to America? | PBS NewsHour PBS.ORG

    You also seemed to dismiss the feasibility of large-scale “information age” worker cooperatives, but others disagree. For example, platform coops combine a cooperative business structure with an online platform to deliver a real-world service. “What if Uber was owned and governed by its drivers? What if Airbnb was owned and governed by its hosts? That’s what an emerging movement is exploring for the entire sharing economy.” (See: http://www.shareable.net/blog/how-platform-coops-can-beat-death-stars-like-uber-to-create-a-real-sharing-economy)

    But if you are hoping for a resurrection of organized labor as part of the solution, you might find this more feasible: http://billmoyers.com/2015/07/27/the-future-of-work-in-the-uber-economy/ Excerpt: “The problem created by the new digital economy is not merely one of income inequality. The challenge is how to stabilize the economy and re-establish economic security for the broad swath of American workers. One important way would be to figure out how to provide the support structures workers and families need, regardless of their employment situation or their job classification.

    “Fortunately, we already have a working model that can be adapted: Individual Security Accounts. As former Treasury Secretary Larry Summers and others have said, the key is portability: the personal support infrastructure for workers and families must be designed so that the safety net follows the worker from job to job and employer to employer. Such “multi-employer plans” have been used for many years in industries like construction, infrastructure maintenance and mining. Most construction workers, for example, are independent contractors and temp workers.

    “Via labor unions, they contract with an employer to do a specific job, and once that job is finished, their relationship with that employer ends. In any given year, that worker may end up working for numerous employers at various jobs and projects. Despite the fact that these construction workers are hired on a contingency basis, the types of benefits offered by a multi-employer plan are substantial and fairly comprehensive, on a par with those provided by many large businesses to their regular employees.”

    In “Saving Capitalism” (2015) Robert Reich examines key problem areas such as antitrust regulation and the tightening corporate stranglehold over intellectual property, and he arrives at some innovative reforms—e.g., paying all Americans a guaranteed annual income, a thought not quite as radical as it might seem and backed by an odd-bedfellow assortment of libertarians (e.g. Charles Murray) and conservatives. More specifically, Reich suggests making Americans shareholders of the intellectual property market, requiring a payment of royalties into the public domain as the cost of holding a patent.

    This is similar to the idea of democratizing capitalism advocated by supporters of “Capital Homesteading” through various means (based on the ideas first proposed in “The Capitalist Manifesto” published in 1958), such as employee stock ownership and community stock ownership plans, but primarily by allocating part of every expansion of the money supply by federal reserve banks–intended to accommodate expected/hoped for future econ growth without triggering inflation–directly to citizens as interest-free loans for investment in securities according specified criteria, rather than simply lending into existence ALL new money to the private banking system for lending (at a guaranteed profit) to customers rather than citizens. (See: http://www.cesj.org/homestead/summary-cha.htm for a summary of the Capital Homestead Act, the 21st Century version of Lincoln’s Homestead Act enabling each person to own income-producing shares.)

    In the 1980s, an international lawyer named Stuart Speiser–whose previous claim to fame was as an attorney for Ralph Nader’s lawsuit against auto manufacturers 50 years ago–sponsored two essay contests to solicit proposals for “Universal Stock Ownership Plans” (See: The USOP Handbook: A Guide to Designing Universal Share Ownership Plans for the United States and Great Britain, Council on International and Public Affairs 1986; and Mainstreet Capitalism: Essays on Broadening Share Ownership in America and Britain, New Horizons Press, 1988.)

    Similarly, Shann Turnbull, an Australian MBA from Harvard has long advocated for what he calls “Ownership Transfer Corporations”, which would use tax and other incentives to encourage the initial investors/owners of businesses to gradually transfer ownership to a broader group of stakeholders that could include employees, customers, and/or citizens of host communities–but only after their expected ROI has been realized.

    30 years ago, Robert Gllman proposed a “Common Heritage Dividend”, based on an updated version of the 19th century “single tax theory” of Henry George, which would tax all real estate at 100% of its unimproved value, and which Gilman (and George) believed could raise so much revenue that it would eliminate the need for all other taxes.

    Peter Barnes has also long been promoting a variety of ways to fund a guaranteed basic income–including a “cap and dividend” instead of a “cap and trade” carbon tax–funded by revenues generated from user fees paid by private, for-profit entities for the right to use what Barnes regards as what are, or should be, publicly-owned natural resources and other assets.

    In his most recent book “With Liberty and Dividends for All: How to Save America’s Middle Class when Jobs Don’t Pay Enough” (2014), Barnes asserts “We need broadly shared streams of non-labor income. Where might such non-labor income come from? One possibility is higher taxes. But there’s another and better source: wealth we own together. Consider the Alaska Permanent Fund, which uses revenue from the state’s oil resources to pay dividends to every Alaskan. A similar fund based on several co-owned assets could be established nationwide. Dividends from co-owned wealth make political as well as economic sense. They’re not welfare but rather legitimate property income. They rest on conservative as well as liberal principles and can unite our country rather than divide it. (See: http://dividendsforall.net/potential-revenue-sources/)

    Similarly, others have pointed out that several other conservative so-called “red” American states like Alaska have created sovereign wealth funds that receive revenue from private-sector use of government-owned assets, which allows them to reduce taxes. According to the following article, “The great 20th-century conservative economist Joseph Schumpeter thought the left had overlooked a major selling point in pressing the case for public — i.e., government — control over productive capital. “One of the most significant titles to superiority,” he suggested, was that public ownership produced profits, which means not having to depend on taxes to raise money. The bulk of the left never took up Schumpeter’s argument. But in an oddly fitting twist, these days the mantra of public control in exchange for lower taxes has been embraced by a surprising quarter of the American political leadership: conservatives.” http://www.nytimes.com/2015/07/23/opinion/socialism-american-style.html?_r=0

    Finally, in 1999, two Yale law professors published “The Stakeholder Society”. https://books.google.com/books/about/The_Stakeholder_Society.html?id=K1xFbmwOdCUC
    “A quarter century of trickle-down economics has failed. Economic inequality in the United States has dramatically increased. But what would happen, ask Bruce Ackerman and Anne Alstott, if America were to make good on its promise of equal opportunity by granting every qualifying young adult a citizen’s stake of eighty thousand dollars, that could be used for higher edu, business or home investment, and/or retirement? Ackerman and Alstott argue that every American citizen has the right to share in the wealth accumulated by preceding generations. The distribution of wealth is currently so skewed that the stakeholding fund could be financed by an annual tax of two percent on the property owned by the richest forty percent of Americans, and could gradually be paid back at death by most recipients. Ackerman and Alstott analyze their initiative from moral, political, economic, legal, and human perspectives.”

    (Also see Asset-based egalitarianism[7], https://en.wikipedia.org/wiki/Asset-based_egalitarianism, which traces its roots to Thomas Paine, who proposed that every 21-year-old man and woman receive £15, financed from inheritance tax.[3] In 1989 LSE professor Julian Le Grand proposed a similar idea, calling it a “poll grant”.[3] Subsequently the related concept of Individual Development Accounts was developed in the United States by Michael Sherraden.[3][8] This approach – termed “asset-based welfare” by Sherraden – saw asset redistribution less as an egalitarian measure than as one which supported poverty reduction by encouraging saving.[9] Sherraden argued that owning an asset led to people changing their way of thinking, being more likely to plan and invest in their future – in a way that providing people with an equivalent flow of income does not.[10] The idea of a universal account for all children first appears in Sherraden’s Assets and the Poor (1991).

    But trying to figure out the best way/s to reduce inequality and put more purchasing power into the hands of the growing number of unemployed and under-employed may become a moot point if the premise of Rifkin’s most recent book becomes reality. In “The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism” (2014), Rifkin describes how the emerging Internet of Things is speeding us to an era of nearly free goods and services, precipitating the meteoric rise of a global Collaborative Commons and the eclipse of capitalism. http://www.thezeromarginalcostsociety.com/

    If Rifkin is wrong, and advances in 3D printing and decentralized renewable energy generation and storage don’t lower the cost of ever more necessities, there may be other ways to help more people “make ends meet” that don’t depend on one or more income or revenue-sharing schemes. For example, see Shareable’s Top 10 Stories of All-Time: http://www.shareable.net/…”Way back in 2009, long before the “sharing economy” was part of everyday conversation, Shareable started covering this movement and alternatives to capitalism as we know it, including worker coops, the open source movement, publicly-owned energy, tiny houses, the commons (including limited equity co-housing), car-sharing, meal-sharing, and much more. We even created our own Sharing Cities Network to help connect people around the world under the banner of livable, human-scale, sharing communities.”

    OTHER POTENTIALLY RELEVANT SOURCES OF INFO ABOUT WAYS TO RESPOND TO TECH UNEMPLOYMENT

    A Celebration Society by Jonathan Kolber offers a ground-breaking solution to the most serious problem of our age: accelerating automation threatens to put millions out of work within the next decade. If we don’t get in front of this problem, we face civil unrest and destabilization on an epic scale. The book was released on December 1, 2015. http://www.acelebrationsociety.com/

    http://grist.org/…/none-of-the-worlds-top-industries…/ A sobering new study finds that the world’s biggest industries burn through $7.3 trillion worth of free natural capital a year. And it’s the only reason they turn a profit. grist.org

    Life in a ‘degrowth’ economy, and why you might actually enjoy it https://theconversation.com/life-in-a-degrowth-economy

    THE “OTHER” SHARING ECONOMY: How on Earth is an exciting new book outlining the emerging not-for-profit economy that lies beyond http://www.howonearth.us/

    MORE SOURCES OF INFO DESCRIBING TECH UNEMPLOYMENT I HAVE NOT YET SEEN YOU CITE:

    http://www.basicincome.org/news/2016/03/united-states-white-house-economic-report-discusses-technological-automation/ Summary: Released in late February, the White House’s Economic Report notes “Both job creation and job destruction as a share of total employment have been in continuous decline since 1980, but job creation has fallen faster in the last two decades.” Many have argued that mass unemployment due to robotics and automation is decades away, but the report cites an Oxford University study by Frey and Osborne (2013) that argued up to half of current jobs in the US could be automated within the next 20 years. A vast majority of jobs that pay less than $20 an hour are in danger of eventual automation, as are a significant number of jobs that pay $20-40 an hour. (Note: A new Oxford-Martin School report released this year forecasts that jobs in the developing world may be even more at risk of automation than those in the developed world.)

    http://www.nytimes.com/2016/02/28/magazine/the-robots-are-coming-for-wall-street.html?action=click&contentCollection=Technology&module=RelatedCoverage&region=Marginalia&pgtype=article

    https://www.washingtonpost.com/…/what-we’ll-encounter…/
    What we’ll encounter on the path to the jobless future

    We need a new version of capitalism for the jobless future
    https://www.washingtonpost.com/…/we-need-a-new-version…/

    1. Thomas,

      Thanks for the cites, but at 2300 words long this is too much for a comment. It’s twice the length of my long posts. Not only is unlikely to be read by many (or perhaps anybody), it kills any conversation in the comments — which is what they’re for.

      I don’t enforce this, but comments should be a few hundred words max.

    2. A few other articles of potential relevance to this discussion:

      http://www.informationclearinghouse.info/article44385.htm by Paul Craig Roberts. EXCERPTS: In the 21st century, Americans have been distracted by the hyper-expensive “war on terror.” Trillions of dollars have been added to the taxpayers’ burden and many billions of dollars in profits to the military/security complex to combat insignificant foreign “threats,” such as the Taliban, that remain undefeated after 15 years. Meanwhile, the financial system, working hand-in-hand with policymakers, has done more damage than terrorists could possibly inflict.

      The purpose of the Federal Reserve and US Treasury’s policy of zero interest rates is to support the prices of the over-leveraged and fraudalent financial instruments that unregulated financial systems always create. If inflation was properly measured, these zero rates would be negative rates, which means not only that retirees have no income from their retirement savings but also that saving is a losing proposition. Instead of earning interest on your savings, you pay interest that shrinks the real value of your saving.

      Central banks, neoliberal economists, and the presstitute financial media advocate negative interest rates in order to force people to spend instead of save. The notion is that the economy’s poor economic performance is not due to the failure of economic policy but to people hoarding their money. The Federal Reserve and its coterie of economists and presstitutes maintain the fiction of too much savings despite the publication of the Federal Reserve’s own report that 52% of Americans cannot raise $400 without selling personal possessions or borrowing the money.

      http://motherboard.vice.com/read/bitcoin-blockchain-summit-with-richard-branson-on-necker-island. Hannes Grassegger of Das Magazin reports from the Blockchain Summit on Necker Island and discovers how the global economy is being overturned by men in flip flops.

      EXCERPTS: An advisor to governments, Hernando de Soto may be Latin America’s most renowned proponent of market capitalism, which he sees as a tool against any evil available, most recently terrorism. When he has a question about Russia, as Casey explains it, “Hernando” just calls Putin—and he picks up. Bill Clinton once called de Soto the “greatest living economist.”

      The Peruvian had primed the participants for their mission: to bring capitalism to life. For de Soto thinks true capitalism does not yet exist. Poverty, according to the theory that brought de Soto international fame, is not exploitation, but exclusion. In other words, people are unable to participate in capitalism because they have nothing to bargain with.

      Slum residents, for example, build huts but cannot own them, as there is no place and no law that will register them. If they had some kind of official paper, a certified claim to the property, a title, the hut would be worth something. They could sell it, or take on debt to start a business. To raise people out of poverty, therefore, their valuables must somehow be linked to them as individuals. They must have property rights.

      In most countries, this is next to impossible. De Soto opened a folder of papers: the three dozen applications necessary to register a company in Peru. A “physical blockchain,” he said, that takes hundreds of days to process. If such situations were remedied, world poverty would end, and true capitalism would blossom. The participants were rapt.

      Next to de Soto sat Brian Forde, a quiet man who until recently was Obama’s technology advisor. Now he is leading the Digital Currency Initiative at the Media Lab of the Massachusetts Institute of Technology, as well as traveling around the world convincing governments and companies to give the blockchain a try.

      Paul Brody is a minor star in Silicon Valley. His husband negotiated Facebook’s purchase of Instagram. Brody himself had 6,000 people working under him at IBM, where his focus was the Internet of Things. “People are too fallible. We have to take them out of the equation.”

      Next to Brody sat Jeff Garzik, one of bitcoin’s longtime developers. At the moment, he is looking for investors to help him put mini-satellites into orbit for a special bitcoin network. “No government in the world would be able to control bitcoin anymore,” he said.

      Brody, the star executive, explains that in the near future practically everything will be online. “Every toaster will have a chip like this one here,” he said, holding up his iPhone. “This chip has more processing power than the first iPhone,” he added enthusiastically. “This device could connect to the net.

      And what happens to things when they go online? We record their usage, start measuring their capacity, and try to increase it. Like fitness, thanks to Fitbit wristbands that count our steps. Like apartments, that we sublet on Airbnb when we’re away. Like cars, that you can rent when they’re not being used.”

      “Unused potential is everywhere,” Brody continued. If there were a method for indexing this potential and trading with it, the market would be “tremendous, unbelievable.” The blockchain, he said, is precisely the tool to manage an “internet of value,” in which “everything” would be tradeable. De Soto beamed.

      The blockchain would, in essence, allow capitalism to more fully move into the realm of the internet. This has always failed in the past, because in digital environments, everything is so easy to copy. Therefore nothing is scarce, which is why digital content, like music, images, and text, is almost always free, or extremely protected.

      The blockchain’s comprehensive ability to allocate each piece of code within its system could completely eliminate the possibility of copying a song, for example, because who has which digital copy when would be traceable. A digital magazine based on the blockchain system would have unique copies, just like a printed magazine. It could be bought and sold like a physical object.

      Next, a long-haired computer scientist named Patrick Deegan demonstrated one of the idea’s applications. He’s used blockchain to create digital passports that allow people to register their possessions. Deegan talks about “smart contracts”: digital agreements that execute themselves automatically, like leased cars that will not start if the installment has not been paid.

      Administrative staff would be unnecessary. Deegan is optimistic. The blockchain, it seems, could automate bureaucracy. It could replace millions of employees. A moonshot. Most recently, he said, the world’s most powerful banks have formed a consortium named R3 to employ such ideas.

      Ted Rogers is president of the bitcoin vault Xapo, which Larry Summers joined after ending his candidacy for president of the Federal Reserve. Bitcoin entrepreneurs have to get out of the pirates’ islands, Rogers said, and into “clean” countries. Xapo has one of its legal headquarters in Argentina, another one in Switzerland. “Switzerland could become the home of bitcoin,” he suggested. He finds the culture of privacy and the hands-off government optimal.

      All of this dramatically serves the common good, most of the speakers say during their presentations. One speaker invoked the visionary architect Buckminster Fuller, a kind of Abraham in the epic of Silicon Valley. He handed out Fuller’s bible, Spaceship Earth, and told how “Bucky” passed on his mission in his last days: “On personal integrity hangs humanity’s fate.”

      He then presented a rating system for humans in which people are continually evaluated. Like the taxi service Uber, where customers rate drivers and drivers rate customers, but for all of life, visible to everyone.

      The problem is the business case for Bucky’s vision is not obvious. The reactions in the audience were mixed. Luckett then said the development of the internet and blockchain are not only spiritually correct, but deeply natural. Nature too is organized in networks. As proof, he showed pictures of networks of mushrooms next to visualizations of social media networks. The applause was frenetic.

      “When everything goes through the blockchain … I could fire half my team,” he beams. “Lawyers, notaries, bankers—they just do what the blockchain does automatically.” “Huge sectors of government do nothing but manage assets and execute contracts,” the man said. “Not just the central banks, but the passport agencies, registration offices, land registries for real estate. All of that will be unnecessary.”

      https://www.inverse.com/article/12898-the-futurist-start-up-sui-generis-is-uber-but-for-techno-socialist-city-states “We don’t really believe in democracy.” March 15, 2016

      Sometimes the best way to start is to start from scratch. The tech futurists behind Sui Generis, a Montreal-based company with ambitious plans to jump-start stagnant nations with networks of startup-friendly city-states, don’t see the point in revamping existing countries and their dying governments. The world we live in, they posit, is too far gone. If we want progress, we’re going to have to begin again.

      Co-founder Guillaume Dumas argues that the evolution of science, medicine, and technology is being stifled by restrictive governments designed in ways unsuited to humanity’s future needs. Dumas envisions a network of “corporate socialist” utopian societies — built on a foundation of economic freedom, transhumanist ideals, and fun — erected on land shared by existing nations in exchange for a cut of the profits. He’s aware it sounds crazy, but he stands by his vision. Government representatives from Latvia and Madagascar stand nearby, actively mulling his proposals.

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