by Jarl Jensen, ForbesBook author of “The Big Solution: Deactivating The Ticking Time Bomb Of Today’s Economy“
Are some companies moving closer to having more robots than employees? Recent studies indicate a trend in that direction.
The data: Research from Google Cloud shows two-thirds of manufacturers who use artificial intelligence in their day-to-day operations say that their reliance on AI is increasing. And a report from PwC predicts that by the mid-2030s, up to 30% of jobs could be automated.
The key questions: How much automation vs. how much human innovation? Which is better for a sustainable economy? And why are some businesses spending more on automation than people?
Large inequities between the labor class and corporations exist in part because of cheap lending practices, enabling corporations to borrow large sums from banks – and one result is the trend toward more automation. Corporations would rather have an employee base full of robots, and a select few humans to monitor the robots, because it saves them money in labor cost.
Borrowing without a maximum limitation means it is easy, and often more affordable, for corporations to invest in automation or robotics than their labor force. It is cheaper to take a loan from a bank to finance the purchase of artificial intelligence software than it is to re-train workers or engage in improving work skills. The unfortunate reality of our economic system is that there is no incentive for banks to stop making loans to rich people and corporations – even if the end result is a decrease in jobs due to automation and artificial intelligence.
The economy can be engineered to make it more equitable – ”an economy for the people.” These are three of the tools I suggest to fix the economy:
1. Direct deposits.
The first and best tool at our disposal is the money that a new and better version of the Federal Reserve would deposit directly into the bank accounts of every American of working age. This is not a basic income. It is an essential liberty.
My idea is that the direct deposits would be made for future work. The amount each working person would receive would be adjusted according to the signals being received from the economy.
The way out of the debt trap is direct deposits. Direct deposits put the people first. It forces the system to adjust to the needs of the people. The money we’re talking about for these direct deposits is money that the Fed simply creates out of thin air like it does when it issues money for loans to banks. But this money is not creating a debt that has to be repaid, thus does not grow the national deficit or become a debt burden for the Americans who receive it.
2. Blue sky markets.
Blue sky markets are money for businesses that pursue the common good. This tool takes big problems out of the government’s hands and puts them in the hands of entrepreneurs. Blue sky markets issue money directly to fund commodity exchanges that effectively solve these big problems. They create money for the purpose of fixing what is broken and making a more sustainable, stable, and compelling future.
One example of implementing this tool is in addressing climate change. Businesses would bid on the exchange to remove CO2 from the atmosphere. Money that is not debt-based, taken directly from the Federal Reserve, would pay the lowest bidder to remove the CO2. Competition for profits would compel entrepreneurs to figure out how to do it efficiently and effectively.
3. New kind of savings account.
Today, any money you put in the bank doesn’t sit in your account. It gets repurposed. The bank uses it to invest, to loan out to other people or entities, and to create more debt. But if, alongside these new direct deposits, you had new high-interest bank accounts that are accessible to everyone, then that would keep some of the money out of circulation. Many people would choose to save the money and collect the interest.
The money to pay those higher interest rates would come from the Fed. With more people saving because of this high-interest incentive, and much less of that money going out in circulation, he reasons that inflation would not set in despite all the direct deposits and blue sky markets. And as a huge bonus, this system makes planning for retirement a lot easier.
Having an economy for the people is all about reimagining how we value money and restructuring how banks do business. It’s about real freedom, sustainability, and the optimization of society.
Jarl Jensen is ForbesBook author of “The Big Solution: Deactivating The Ticking Time Bomb Of Today’s Economy“. He’s the founder and president of Inventagon, a company creating simpler research and development solutions for organizations across the globe. Jensen holds patents for medical technologies that have reached sales of over $1 billion. He founded EuroMed, a company he sold in 2016, and has written five books about the economy and its relationship with society.