Distribution is the unloved, bastard child of economics. AI may finally bring it in from the cold. Think Maslow, not Marx, but if your taxes go up, say thank-you. You’re still employed.

[What follows is opinion, not research, and written to be provocative.]

Economics arose contemplating the use of scarce resources to produce goods and services – which ones, how best to make them and for whom. For years, I warned students that "for whom" would seem to fall off the table and disappear from our discussions. I encouraged them to drag it back in wherever they could.

A world where human labour is effectively in permanent surplus was a predicted result of 20th century labour-saving technology, has at times existed in some unfortunate places and, in a practical sense, underpinned the dismal outlook Robert Malthus and David Ricardo shared for the prospects of those whose only source of income was selling their labour. Modern authors on routes to personal wealth seem to agree. You need money or property - now including websites, working for you while you sleep. Labour alone doesn't do it.

Distribution means who gets the benefit of production - the goods and services produced throughout an economy.

The current threat - by AI, to the need for labour and ultimately to its value, doesn't guarantee we solve the problem any more than it did at other times or in other places. The problem may be more acute, but we have left nations and predicaments to fester before.

"Free lunch" is anathema to free enterprise and the incentives that have kept production rolling, providing the goods and services we want and need. Economic policy aimed at unemployment has been a favoured proxy for ensuring adequate distribution - people who aren't working cannot look after themselves and their families, cannot participate in society on an equal footing, and do not contribute to the economic engine of consumption. Social assistance - welfare, is framed differently but it, too, attaches to people whose labour is not wanted or needed or who cannot work for hire. Those same policies have been perennially attacked for their impacts on risk-taking, industry and work-ethic as well as their costs which, based in tax revenue, are argued to reduce investment and consumption. In other words, the argument has been that sharing the pie also risks shrinking the pie itself.

Technology grows the pie. Consider fire, the wheel, horse-power, sailing ships, print, water and wind-driven machines, electricity, internal combustion, flight and several others, before getting hung-up on computers, the internet and smartphones. AI is one of these. We won't know it's full impact until we turn it loose. It won't all be positive, but its impact on the "pie" will be.

Still, the question remains: who should benefit?

The implication of a universal basic income or a guaranteed annual income is that people with no connection to the productive system would still reap its rewards. Expect its opponents to be a strange alliance of free marketeers and people against taxation and those who oppose a UBI as a way of opposing AI.

Economic growth may generate some of the funds required to provide a UBI, but taxation will be the largest tool. What technology really does is improve productivity, releasing resources to other uses, thereby reducing costs. If growth is required and useful, productivity drives growth. Where growth is not wanted, it just releases resources – fewer raw materials, unemployed labour, both replaced by the capital of new technology.

AI may generate some growth, but the world’s population is expected to stabilize toward the end of this century. Overall, growth from additional mouths to feed, will then come to an end, except for regions benefiting from in-migration but balanced buy regions losing to out-migration. Some growth will be driven solely by productivity and creativity – who knew thirty years ago that we would all insist on carrying a computer in our pockets at all times? But taxing the dwindling number who are involved in production, to support those who are not, will inevitably follow. Of course, with even a static economy, the value of that production will be no less than it is, and in fewer and fewer hands. Overall, the taxed will be no worse off than they are – better off, to whatever extent growth occurs, and accrues to them.

Can we get over our aversion to the free lunch?

We should. Here are two reasons why:

1. Henry Ford realized that his shareholders, employees and the buying public were all the same people. To sell automobiles, he needed a consumer base that could afford automobiles. Driving up Ford wages drove up everyone else's and sales soared. This lesson endures. People who can't afford breakfast won't buy Spotify, let alone a driverless Tesla. Yes, a producer can profit handsomely from a small slice of a premium market, but it was those sales volumes and the need to compete that drove innovation.

2. It will be you - or your children. A world that simply doesn't need all our labour cannot be assumed to be the worry of someone else. If machines can learn to recognize patterns and predict the behaviour of complex systems with continuous improvement over timespans that will exceed a human life, we can expect almost any learned profession to be at risk. But remember the "risk" is the liberation of brilliant minds to other use – as long as they can also live a decent life. A "life worthwhile" may be in sight.

Incentives to work hard - the work ethic, have been important to a world struggling to feed itself and to make a decent life for people, where more labour produced more food and, later, more goods and services. The "work ethic" has been engrained in cultures the world over.

Is it reasonable to maintain such reverence where labour is in permanent over-supply? If the work ethic has outlived its usefulness in economics, what is to replace it?

Let me suggest Maslow, not Marx.

When Karl Marx and Friedrich Engels advocated that people should do what they can and receive what they need, society was still incapable of providing basic needs to all. Incentives to hard work were still very much required. In the 19th century, profit on accumulated capital was required to ensure its continual redeployment in increasingly better uses.

How can we maintain that drive, that edge if the benefit from the production of goods and services, profit, etc. must be significantly redistributed to the keeping and wellbeing of others?

We might turn to Abraham Maslow. His hierarchy of needs describes a set of objectives we each strive for - once the preceding objectives are all met. According to Maslow, when people are free of fear and from want of basic needs, they turn their energies to higher and better uses. This suggests that people will still want to work for the social connection, for self-esteem, acclaim and accomplishment, self-fulfillment. Maslow’s self-actualization.

In a world organized according to Maslow, there would be no shortage of people wanting to work, to roll out and road-test their ideas, and to lead a civilization of freed men and women toward a boundless future of imagination.



