The Human Replacement Fund

In an ideal world, there would be no need for human labor. We’d all do the things we love, be it drawing, baking or tinkering with computers. All our needs would be met by utilizing the work of machines.

But we don’t live in an ideal world.

Innovation is constantly replacing humans, hell, the word “computer” used to mean a completely different thing some time ago.

Over the long term, this innovation great! I doubt that in today’s world, anyone is expecting actual human beings to manually do the math necessary to put half naked women in your Instagram feed.

Still, over the short term, the implications of such fast innovation are devastating. Think of the millions of people suddenly left without work when the steam engine was created. Or think of all the people that may be left struggling if this AI shit actually manages to become something more than glorified text prediction.

While innovation is necessary, its advantages must benefit everyone, including the people it’s replacing.

Replacing People with Machines#

Why does this happen? In short, businesses “must” do this in order to remain competitive. But this choice has unforeseen negative consequences for everyone involved, including the businesses themselves.

Let’s say that you’re the owner of a business that’s producing shirts. You currently employ 100 people that hand sew around 200 shirts a day.

Now let’s say that the sewing machine appears on the market, and you’re an early adopter. You fire 50 of your employees and give the other 50 sewing machines.

You’re now producing 400 shirts a day and spend half of what you used to on wages.

Since your costs are lower, you decide to lower your prices as well, so that you can take some market share from your competitors. Once they realize how you can afford to sell shirts at lower prices, they’re going to adopt the same strategies in order to remain competitive.

This means more job losses to the machines.

You and all your competitors are now producing ungodly amounts of shirts, every single day, and all of you are listing them at extremely low prices. Yet, no one seems to buy them anymore. Why is that?

So many people ended up without a job that they can barely afford to eat. They don’t care about your dirt cheap shirts, they have bigger problems.

Once this happens, your machines are worthless.

Your storage fills up with shirts that people may need but cannot afford. At some point you will either have to stop production, or sell the shirts below cost, just to empty your storage halls.

When this point is reached, it is no longer economical to use the machines for production. Lucky for you, the people are desperate so they’re willing to work for pennies.

You now employ 100 people that hand sew around 200 shirts a day.

The cycle continues.

The Human Replacement Fund#

The idea behind such a fund would be to help people displaced by technological advances, while they are looking for new employment in different sectors of the economy. Over the long term, such a fund would be beneficial to both people and business owners.

Former employees would benefit from financial aid and respecialization courses, thus easing the stress of being laid off.

Business owners would delay profits generated by the newly adopted technologies. However, contributing to the fund would ensure their success over the long term, as people wouldn’t fall into sudden poverty and would still be able to afford their products.