Is Socialism Inevitable?

A while back I wrote about how industrial automation is reducing available work.  I expressed my opinion that this is not necessarily a bad thing, and I showed how aggressive automation will eventually make widespread welfare essential to our economy and even survival.  I have gained some new information and insight on this subject, and I would like to revisit it.

First, I would like to summarize the automation thing.  As more and more processes are automated, more and more work is eliminated.  (Note that I prefer to say that work is eliminated, not jobs.  This is because jobs is an abstract idea that is subject to interpretation.  I could have twenty people do the same work that one person would do and create a bunch of jobs, but they would be worthless jobs.)  If we take this to its logical conclusion, eventually every piece of work that can be efficiently automated will be.  Machines will produce everything necessary for survival.  The catch is that there will be almost no work needed to maintain production.  In other words, there will not be enough work necessary to justify employment of a majority of the population.  The only option to maintain a stable economy (and survival) will be a robust welfare system that provides aid to a vast majority of the population.

Now, I recently read an article on "prosumption."  Many U.S. businesses have started having customers take over many roles traditionally filled by paid employees.  The article even talks about a restaurant where the customers cook their own food.  It is really little more than a combination kitchen and grocery store, scaled for the use of many people at once.  This allows the restaurant to hire fewer employees by making the customers do most of the work.  It turns out that not only is this strategy profitable, but many customers find the novelty of the experience enjoyable.  Unlike automation, this strategy does not reduce work.  Instead, it eliminates jobs by getting people to work for free (see why I differentiate between work and jobs).  Just like automation though, it alters the balance of monetary flow towards businesses and away from consumers.  Ignoring automation and taking this trend to its logical conclusion, everyone will eventually spend a majority of their time paying a lot of money to work for free.  This will eliminate most jobs, which will ultimately have the same impact as automation.  Now, I will admit that, unlike automation, this trend is unlikely to play out to its logical conclusion, but it is also very unlikely to go away.  It will probably eventually reach a balance where people start to realize that they are working for free and will be unwilling to go beyond certain limits.  They will still be willing to do some work for free though (for instance, self checkouts, where people work as their own cashier).

Together, these two trends have a synergy.  Automatable work will eventually be automated.  Most non-automatable work can become the victim of prosumption.  Cooking is very hard to automate due to different tastes and things such as allergies.  It is clear from the above example, however, that many people are willing to cook their own food in a restaurant environment.  Pumping gas is also difficult to automate, because every car has the opening in a different place, but most people in the U.S. have already been trained to pump their own gas.  With the advent of cheap 3D printers, more and more people will be able to do the work of engineers and artists, in creating their own products.  There will always be a few jobs that will have to be paid, most of which are high end engineering jobs and machine maintenance jobs (someone has to keep the automation working).  In the end though, automation and prosumption can together eliminate a vast majority of jobs.

What happens then?  Well, as I mentioned before, if there is not enough paying work to go around, there are two options.  Either most of the people starve to death, or those with all of the resources give to those without.  If the people starve, there are no consumers and the economy collapses.  If the economy collapses, no one has enough resources, the machines decay, production stops, and even the most rich die of starvation.  For society to survive, it is mandatory that the resources of the rich be distributed to the general population.  When there is barely any work available, it will become necessary that people be provided things which are necessary for survival, without working jobs for the privilege.

Now, I am not saying that full blown communist socialism will be necessary, and in fact, I think it would cause exactly the same problems here that it has caused everywhere else.  A highly socialized system truly is inevitable though, if we can manage to avoid economic collapse long enough to get highly automated.  We may even be at the tipping point already.  For most of the last decade, unemployment has been high.  The latest trend has been steadily increasing or at least high but stable unemployment rates.  This has lasted long enough that the numbers are beginning to get skewed as unemployed people give up on finding work and are no longer counted as unemployed (unemployment only counts people who are actively looking for work).  Experts keep thinking this trend is going to turn around, but the evidence is not supporting that conclusion.  It is possible that we have finally hit the point where there is literally not enough work to go around.

I believe that the recent recession is evidence that we are near or at the tipping point.  One major consequence of the recession is that businesses are becoming tighter with their money.  Industry in general is beginning to automate more to reduce risks associated with an unstable economy.  The more businesses can eliminate paid labor, the better they can handle fluctuations in the value of money.  In short, it appears that the recession has driven automation and prosumption forward another step.  We are seeing the result of this in unemployment rates that are not improving despite government efforts to stimulate the economy.  The current government shutdown has been predicted to cause more economic issues, as it has the last few times.  Further, government shutdown, regardless of impact on the economy, will make the economy feel less stable, which is very likely to push automation and prosumption even further.  If we are not at the tipping point now, we probably will be within the next year or two.

Currently there is a major problem with increasing welfare to mitigate the effects of extremely cheap production.  Our government has a huge amount of debt, and it does not have sufficient income to sustain a welfare system that is as robust as we need.  In part, this is because of bloat.  We have a huge number of social programs, many of which are unnecessary and several which serve the same purposes for different groups of people.  We need to reduce bloat by eliminating low value social services and by combining redundant social services.  This will not solve the problem, however.  The next step is fair taxation.  Besides the fact that it should be obvious that treating ethereal entities (such as businesses) better than individuals is wrong, the biggest potential source of taxable income is large businesses.  The problem is that large businesses also get more tax cuts than almost anyone else.  The only group that gets more tax cuts than businesses is the bottom of the lower class, who do not even make enough money to pay taxes at all.  The welfare system we need to support the huge population of unemployed that is likely to appear in the next decade or so cannot be supported by anyone except large businesses.  Ironically, it appears that taxing businesses exactly the same as individuals would fix this problem in a single shot.

We do not need stimulus to create more jobs.  In fact, stimulus does not work very well anymore, because large businesses use it to buy more automation (or to give bonuses to already overpaid CEOs), which actually eliminates jobs.  Government contract work can create some jobs, but typically not very many and only temporarily.  The problem is not that there are not enough jobs.  The problem is that there is not enough work to provide enough jobs.  In other words, jobs are becoming increasingly unnecessary to the survival of our economy and nation.  People still need to survive though.  The rich can clearly not be trusted to provide for the unemployed.  As such, it is necessary for our survival as a nation, as an economy, and as individuals, that a robust welfare system be created that is funded from the very top.  If this is not done, the ultimate consequence will be massive economic and then government collapse, along with mass starvation and probably violence.  Pure socialism is not inevitable, but without a good helping, we are in trouble.