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Unevenly Distributed

We made a conscious decision in writing What to Do When Machines Do Everything that we would focus on AI’s role in wealth...

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We made a conscious decision in writing What to Do When Machines Do Everything that we would focus on AI’s role in wealth creation – not wealth distribution. Modern western businesses, operating in hyper competitive capital markets, are focused on making money. How that money is spread through society is a secondary issue to the executives and business leaders that seek advice and guidance from Cognizant and The Center for the Future of Work.

But on our travels telling the story of AI in boardrooms and barrooms around the world, the same questions keep on coming up, sometimes openly, sometimes in whispered side conversations; “Ben – we get it; AI is the great story of our time. But what’s going to happen to workers automated away? What’s going to happen to folks left behind? Is the Fourth Industrial Revolution going to lead to a real revolution?”

These questions have hung openly and heavily in the air (along with the Mary Jane) here in San Francisco this week at the annual user conference, Dreamforce. Amidst the excitement about Einstein (SFDC’s AI offering) session after session has focused on “inclusive capitalism”, “diversity”, “citizen coding”, “democratization of tech based opportunity”. There are clearly many, many business people who understand that even though their primary focus is on making money, the distribution of money issue can’t be entirely ignored.

Of course, San Francisco is the perfect back drop to discuss these questions. Perhaps nowhere in the world does the future clash so glaringly with the present as in the streets around the Moscone Center. Allbird clad, Jamba Juice sucking, tech masters of the universe scuttle past cardboard hugging, bug-eyed, lost souls, on their way to their 8am keynote presentation on “mindfulness”. Presiding over it all is the new Salesforce Tower, looming like T.J Eckleburg’s glasses in The Valley of Ashes. San Francisco is the geographical embodiment of the power of disruption, with all of its positive and negative consequences.

Given that the question of wealth distribution is so present, so pressing, and clearly so legitimate, what can be done to ensure that the incredible power of new AI based technologies and business models produces utilitarian outcomes, i.e. generates the greatest happiness of the greatest number. Answers here in SF have been thin on the ground, I’m afraid. Plenty of talk but an absence of solutions (and comfy seating).

As I see it, and as I’ve been telling anyone who’ll care to listen, there are really three approaches;

1 (the one that underpins our entire perspective presented in our book) – individuals, organizations and societies need to master the new tools to outperform their competition. Do that successfully – through education, training, and re-training - and you (personally, corporately, societally) will participate in a new golden age – the Code Rush.

2 try to stop (or at least) slow the power of AI based disruptive transformation to allow individuals, organizations and societies more time to adjust and adapt to the new Code Rules.

3 reconfigure society so that the current “winner takes all” philosophy, that pre-dates the rise of AI but which clearly AI could hugely exacerbate - is changed.

Popular amongst approaches 2 and 3 is the notion of a “universal basic income”. Tax the fruits of robot/AI based labor and distribute the monies in the form of a payment to everyone in society. Break the link between work and money and utopia is finally within reach, the argument goes. Attractive as it sounds, the idea of UBI breaks down very quickly when you get past the sexy sounding name. Would everyone get it? Even those happy in their work? How could people live on $5,000 or $10,000 (the numbers often bandied around as being the amount on offer) in New York? Let alone San Francisco. How could the US afford to pay the c.150m people in the workforce today? What about moral hazard? Wouldn’t the devil make work for millions of idle hands?

Forms of UBI are already in place in parts of the world today. Citizens in Norway and Saudi Arabia for example, flush with the spoils of oil that was oil before the new oil was code, pay “negative taxes” i.e. they receive payments from the government and don’t make payments to the government. But rather than being happy about it Norwegians, according to journalist Simon Saetre, “have been corrupted by their oil money, are working less, retiring earlier, and calling in sick more frequently”. recent turmoil amidst the ruling classes in Saudi Arabia reflects a desire within a new generations of leaders to wean the Kingdom off the addictive drip of petrodollars, change the lotus-eating culture, and put the country to work. Neither country’s experiences provide compelling evidence that UBI is a model to be scaled around the world. UBI is a nice fantasy but not really a practical solution.

There are though a series of ideas and ways and means that could make approach 3 a reality. And surprisingly none of them are new, or weird, or utopian or fantastical. And even more surprisingly, none of them have received any airing at Dreamforce. Yet they are all tried and tested and have worked in the past, in countries around the world and for considerable periods of time;

1 Legislation - governments could (some do) enact laws that balance the playing field between capital and labor. President Roosevelt led the charge against American trusts in the early 20th Century, which in turn created the conditions for what is now widely seen as a golden age of American expansion and wide spread prosperity. Prime Minister Attlee introduced death duties in 1945 that defenestrated the British aristocracy, releasing an explosion of middle class energy that generated the Swinging Sixties and Cool Britannia.

2 Unions – many socio-economic commentators (including Thomas Pitteky) date the start of the latest era of wealth concentration to the collapse of unions at the hands of Ronald Regan and Margaret Thatcher. The notion of unionization remains deeply unfashionable amongst white collar workers (although professional bodies for doctors and lawyers that in effect work as unions are perfectly acceptable) but in a Newtonian world (for every force there is an opposite and equal reaction) it would not be beyond logic to imagine that “Labor” could once again organize to take on “Capital”.

3 Withdrawal of custom – in our present day market economy the ultimate power is the power of the market. As the original (and best) Stephen Colbert put it, “Global warming is real because Al Gore's movie made money— the market has spoken”. If you don’t like the way the world is going, and don’t like what companies are doing replacing people with software and machines, don’t buy from them. Buy from companies that are “people first”, not “AI first”. Some people don’t buy from Walmart because Walmart’s low prices knock out local independent competition who can’t compete on price. Use your purchasing power to be the change you want to see. Take it to another level and move to a town like Portland with an artisanal culture of man, not THE MAN, made.

4 Establish a “People First” business – start up a company that does not use AI, robotics, automation based software, or other labor saving devices, but rather favors employing people, and then win in the race against the machine, in the market.

Approaches 1 through 4 are things that could happen today. Could ... but don’t hold your breath.

The tax proposals in the US congress currently are unlikely to slow down our new robber barons.

Fledgling efforts to re-establish a credible union movement seem to have a long way to go.

Me: “We should buy the lightbulbs from ACE”.

Wife: “But they’re cheaper at Walmart”.

Me: “Oh, ok then ...”

A “people first” business sounds good, but with no technology? Is that even doable nowadays?

Elements of approaches 1 through 4 may come to fruition in some form and in some configuration over the next few years, but the truth is that none of them are imminent. Legislative fixes are years, perhaps decades away. A societal rejection of low-prices (paying more for goods and services to protect employment and generate wage growth) is not on the horizon. Public capital markets would crucify a company that tried to operate by a completely new set of rules - as Snap is finding out, painfully, as I type.

And all the while the AI clock is ticking. All the while AI is re-shaping what organizations do and how they do it. All the while mastery of AI is becoming the key determining factor between success and failure in the world in which we live.

The discussion of wealth distribution is extraordinarily challenging and complex. Maybe we’ll only solve it when we apply AI to it. The Randians and Ghandians of San Francisco should perhaps start eating some of their own disruptive dog-food.

In the meantime there is one thing you can do. Read What to Do When Machines Do Everything to learn how to get ahead in a world of AI, algorithms, bots and big data. While the question of wealth distribution will swirl around us for the foreseeable future, undoubtedly revisited here again in SF at Dreamforce 2018, and will require the cooperation and coordination of thousands, if not millions of people, the wealth creation issue is right in front of you today, and what you do about it is entirely in your own hands.

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