By Daniel Archibald | CFA
From childhood we are taught the virtue of sharing with others. Most who dedicate some or all of their lives to helping those less fortunate than themselves will attest to the joy and satisfaction that comes from selfless acts of kindness. And in a world full of families without food and children without a home, there is plenty of work to be done.
Living in a wealthy land and in a wealthy time has given many Australians more than they need. Wants will likely remain endless, but most of the simple necessities of life are well within reach of most (especially those few who might read this article). Thus, the ability for many to share wealth to those in need is high and the opportunities are abundant.
But what if there was not such grave needs? What if famine and thirst in the world were no more? What if access to clean water and healthcare was available to everyone, everywhere? A future with universal potential to share with all and a future with unlimited resources to meet every need. This future may well be coming.
The share economy
We've all heard of services such as Uber and Airbnb, but how can these revolutionary ideas lead to the idealistic future described above? Two possible ways worth consideration are:
- Better use of resources - even though technological redundancy is still built into new devices and machines, there are now ways to easily utilise someone else's spare resources. This is spreading to other areas of the economy (e.g. sharing bandwidth and computer power, sharing office space). This will likely lead to a surge in available resources.
- Modes of wealth transfer - the easier and more efficient it is to transfer wealth from those who have surplus to those in need, the more sharing that can be accomplished. A major hurdle for governments and charities alike is the resources wasted in trying to help. These new business models highlight how technology can be utilised to drive the efficient use of resources and thus grow the wealth pool.
Automation
Yes - Robots will eventually take most of the jobs and functions now employed within our economies. Driverless trucks and cars will soon be common sight and the benefits from just these two automation technologies will be enormous. Traffic accidents and fatalities will plummet while transport and haulage capacity will rapidly expand. The well-being and lifestyles of those without cars or those who cannot drive (especially the elderly) will be benefited enormously. And then the robots will replace most all factory jobs and then service jobs. And soon we will have so much leisure time and so many resources that we won't know what to do with it all. Of course, there are those who have a more pessimistic view of all this. Will mass unemployment also mean mass poverty and inequality? Will the robots take over the world and get rid of us humans? Will the road to prosperity be littered with mindless wars and deadly revolutions? I hope we can get it right, but history has shown the trickiness in technological advancement.
Cheap energy
What happens when solar energy becomes much, much cheaper than coal or oil? What happens when we figure out nuclear fusion? Could energy eventually become effectively free? If you look at any product on the shelf today and calculate how much of the cost of that product is made up from either energy costs or labour costs, you can quickly start to see how low-cost energy and automation could easily see goods and services costing very little to make and distribute. The productivity gains from robots and nuclear fusion would be magnitudes bigger than the rollout of the steam engine and would lead to a huge increase in available resources.
Recent talk of universal basic income (UBI) is primarily being driven by the factors listed above. In a world with potentially unlimited resources, but likely mass "disemployment", how do we make sure that goods and services are shared in a fair and equitable manner? Will it be some kind of Marxist utopia or are we heading for some kind of socialist dictatorship? Or will capitalistic tendencies drive an acceleration in wealth inequality? Will we spend our days venturing into new ideas and creative endeavours or will we be content to sit and watch endless re-runs of Seinfeld? These questions will all be answered in due course and I hope we get it right. But in the end, all I really want is a robot that will do the laundry.