Someday, we will need to understand and deal with the fact that human labor will become increasing superfluous in the functioning of the global economy. The Creedance Clearwater Revival song "Someday Never Comes" counters the notion that understanding or grasping reality somehow can be deferred rather than by confronting the signs and signals of that inevitable future evident in the present. The seeds and roots of a radically different form of economy have been germinating and growing in humanity's inexorable drive to leverage and exploit increasingly advanced technology.
Martin Ford's primary thesis in his brave and thought-provoking work "The Lights in the Tunnel" confronts us with the prospect of the disruptive impact of rapidly advancing technology which will eventually obviate the market-based economic system. In a market economy, the product market/factor market cycle flows goods and services from firms to workers' households in exchange for workers' labor at those same firms. Ford challenges the "conventional wisdom of economists" that product markets will continue to expand, that technology will continuously drive down prices, and he presents a solid case for the advent of an economy characterized by systemic unemployment (some signs of which are already apparent in the economy of the early 21st century). Off-shoring and automation will continue, but at some "tipping point," technology and machines will become sophisticated enough that the need for human labor will diminish - rapidly and with severe consequences for our market economy and the principles upon which it is founded.
While Ford presents a compelling case for his thesis, his valiant attempt at offering potential solutions finds itself on less solid foundations as a consequence of appeal to somewhat idealistic assumptions and questionable premises. Massive changes in the current tax structure including progressive wage deductions and consumption taxes seem reasonable to consider but some of the proposed redistribution schemes may be counterproductive. The notion of representative government is attacked in the section "Defeating the Lobbyists" where Ford suggests that Congress delegate its Constitutional authority to legislate tax policy to "a board of highly skilled professionals" that are "removed from the political process" (147). So we are to remove responsibility from our elected, accountable (by the electoral process) representatives and hand over decision-making for restructuring the economy to a small cadre of "we-know-what's-best-for-you" elites. The justification for this change is that we Americans, as a rule, do not "...have the time, energy or attention span to take an active interest in the intricate and mundane details of the legislative process" (ibid). Unless lobbyist influence is removed, there will be "dramatically reduced opportunities for the type of behind the scenes bargaining and compromise that was once an integral part of the political process" (ibid)! Brings to mind the "behind the scenes bargaining and compromise" that led to passage of the problematic healthcare reforms and the equally problematic hidden machinations and lack of transparency in non-legislative decision-making whereby billions of taxpayer dollars were mysteriously distributed as part of the Troubled Asset Recovery Program (TARP). Missing in action in the latter are identification of the beneficiaries, the benefits, and accountability to the people. Ford seems to advocate as well a Federal Reserve with no oversight and an abridgement of first amendment rights (148) that would curtail freedom of expression by lobbyists and special interest groups.
Implied in the latter half of the book in which Ford focuses on solutions, is a strongly Keynesian program of government intervention to steer and, eventually radically reconstitute, the free market system in order to preserve the mass market which is so crucial to continuing increases in prosperity. Some of these proposals ring hollow given the dubious record of the federal government in constructively steering the economy. Ford implies that the private sector cannot reshape itself and evolve as technology essentially eliminates the bulk of labor-intensive industry. Instead, "preservation of robust market demand...[must] become a core function of government" (161). A massive scheme of income redistribution coupled with "absolute firewalls" around government safety net funds is proposed. The notion of "absolute firewall" is anathema to situations where one group is responsible for managing someone else's assets: nothing is sacred; there are no `lock boxes.' Government policies will "provide unequal income but equal opportunity" (169). But isn't this the definition of the consequence of free markets? Isn't a "highly-regulated, market-oriented" system an oxymoron?
Ford points out the problematic issues of externalities which concerns benefits or costs from marketplace actions that do not accrue to those who create the benefits or costs, for example, the destruction of a public good like clean air by industries that reap the benefits of production but do not pay the cost in terms of damage to the environment. However, Ford seems to reflexively appeal to government `solutions' to manage externalities. He advocates that government get in the business of journalism (176-77), set up a "National Incentives Board" (again "staffed by professionals") to presumably engineer appropriate social and commercial behavior by "...adjust[ing] incentives...in much the same way that the Federal Reserve controls interest rates" (178). Ford mentions the crucial issue of "moral hazard" and the myriad problems involved in transitioning to an economy that is less, perhaps much less, based in labor-intensive production, but does not reconcile proposed solutions with the disruptive impact on `normal' competitive dynamics among organizations and the `natural' and ultimately constructive process of Schumpeterian creative destruction.
Ford briefly mentions the "international view" (183-185), but underestimates the challenges of the international system whose structure, and inherent propensities for conflict, I believe will persist for generations to come. The global economy and world political system are far from the state of homogeneity implied or assumed in Ford's arguments. This is not to say that some of the scenarios outlined in the book will not come to pass, just that the transition to alternative market modes is made more complex by persistence of the international system structure that has evolved over the last several hundred years and in which our societies are deeply entrenched. Ford posits, let's assume correctly, that relaxing constraints on production reduces the role of resources, labor, and technology, leaving consumer demand as the sole persistent feature of a market economy. The section "The Evolution toward Consumption" offers a brief but interesting discussion of the implications of the idea that "an individual's consumption might someday be valued above his or her contribution to production" (206) launching questions in the inquisitive mind about the validity and implications of post-materialist (Inglhart) or post-scarcity theses. Will consumption patterns shift significantly from material goods to the intangible, i.e., to virtual experiences, artificially-generated physical or cognitive sensations; to increased epistemic appetites (seeking knowledge for knowledge's sake), to art, leisure, or spiritual activities less based on consumption of material goods and services? How will consumers' tastes and preferences change in the far future when we are healthier, have (perhaps much) greater longevity, and have hopefully conquered the challenges of subsistence living experienced by so many of the world's less fortunate?
While it is easy to take pot shots at any work that engages substantive economic, social, and political issues, my critique is not intended to diminish the power of Ford's work in broaching the important issue of the global economy in a world increasingly dominated by automation and eventually (in my view) by strong artificial intelligence (AI) in the sense that Ray Kurzweil outlines in his book "The Singularity is Near." Ford's is a bold work and well worth the time to read and study. Ford offers astute observations that serve as a springboard for conversation and consideration of the impact of technology advances on the marketplace of the future.
