Must Income Still Be Attached To Work?

Before getting to the topic of this post, let me make this observation.  I write these pieces to try to pique the reader's interest, so readers will reframe my questions in their own terms and then consider the questions anew from their own perspective.  I am not trying to give a definitive answer and certainly don't claim to be doing otherwise.

I hope the motivation for this particular piece is obvious.  Recently there seems to be one article after another about how artificial intelligence, either coupled with robotics or as a stand alone, will displace workers from their current jobs.  These pieces cast the situation as a tragedy waiting to happen.  Surely that would be the case if many workers who were displaced from their current jobs then lost their wage income as a consequence, and then they couldn't find other employment so they couldn't find a way to make up that income loss.  This seems to be the narrative that most people have in mind.  

But what if the income loss was minimal or not at all?  The jobs would be gone but the income wouldn't be.  Surely, that is logically possible.  Given that, two questions come to mind.  First, what is to prevent it from happening?  Much of the rest of the post will be spent on considering that question.  Second, are there plausible ways to overcome these restraints?  I'll have a little to say about that too.

The companies that are producing AI have been making massive investments in their products.  The logic for doing so is that they expect there will be quite a large return on investment.  The companies that purchase AI services from these producers likewise expect to do so profitably, either by increasing productivity or by lowering cost.  The latter implies layoffs, which heretofore have not happened when companies are performing well.  But that will no longer be the case.

It is instructive to consider those sources of income which are available at present that recipients get when not working.  One of those is unemployment insurance.  UI is intended to provide bridge income until the recipient can find another job.  In the jargon of economics, there are market frictions.  Job search takes time, to assess available alternatives and find a good fit for the worker.  In the absence of UI, the person might very well take the first available job offer, because the income need has to be satisfied.  But the first offer might not really make for a good match.  Allowing the process to play out for a while will yield better results.  The bridge income that UI provides enables a better way to manage this market friction.  And with that UI is available only to those who have worked previously and paid the UI premiums via a tax on their paychecks.  Further, UI is of limited duration only, to encourage the recipient to meaningfully engage in job search.

Another source of income available to some of those who aren't working is retirement income.  Social Security and Medicare might be the first of these to come to mind.  There are other possible sources of retirement income, private pensions or pensions provided by state government.  Eligibility for retirement typically requires reaching a certain prespecified age and having been employed for some required number of years or becoming disabled while on the job, with the disability significant enough that the individual can no longer fulfill work obligations.  As there no longer is mandatory retirement, the decision to continue to work or to retire is left up to the employee, for those who are eligible.

It is important to observe that for both UI and retirement pay, earnings while previously working matter in setting the amount of the payment, with higher earnings leading to higher non-work pay.  At least part of this is that those with higher earnings contributed more while working, so they should be entitled to receive more on that basis.  But the prior pay-in and the subsequent pay-out need not balance.  So, I'd like to introduce an ethical notion here that I believe matters a lot. It is believed that those who earned more, either through their own hard work or because they were especially talented, deserve more.  In some sense, this is a parallel idea to that good students should get higher grades.  From core beliefs, such as in the Puritan Work Ethic, we have been socialized into these views, which can be regarded as part of the more general "meritocracy" that so many subscribe to.

What should happen then if a good chunk of the workforce will get laid off in the near future with no prospect whatsoever of finding other employment?  If some sort of payment were given to these folks as a source of income, should their prior earnings matter as to the amount of the payment, or are prior earnings irrelevant in this case?  And if prior earnings are irrelevant, are they deserving of some payment nonetheless, even if they are no longer productive?  If they are deserving, then doesn't this point to an egalitarian payment system, socialism if you will?

Before I argue for an answer to that last question, I want to note that there might very well be macroeconomic reasons of the Keynesian kind for making such a payment.  In the absence of such payments there could very well be massive aggregate demand failure, plummeting the economy into a depression.  In this circumstance we'd need something other than the unemployment rate to determine whether this is happening or not, a statistic of the sort:  (Actual GDP)/(Potential GDP).  If this depression were happening, the firms producing AI might not be making large returns and those companies that moved to utilize AI in their business may find their revenues inadequate to continue operation.  This nightmare is foreseeable, so payments to non-workers might then be justified simply to boost aggregate demand sufficiently.

Yet we tend to think of macroeconomic fixes as solutions to business cycle downturns.  Eventually there will be upturns again (or at least one can hope so).   Won't the payments to non-workers halt in this case?  However, the situation where much of the workforce is displaced by modern technology may not be part of the business cycle.  Instead, it might be the new normal.  What then?

This gets me back to ethical considerations.  Should non-workers receive no payment whatsoever, because they don't deserve it?  Or does the simple fact that they are human beings mean they should be entitled to such a payment, sufficiently large to live life decently?  My point here is that it is our ethical beliefs which are apt to provide the greatest barrier toward creating a system of payments to non-workers, which might possibly become a system of payments to all, where a few do work and receive income beyond this generally provided payment.

At this point I think it is worthwhile to consider a couple of references to help lay the foundation for the argument.  One of these is Paul David's well-known paper Clio and the Economics of QWERTY.  The paper is about the economics of lock-in, where we are stuck in a solution that may have been optimal in the past but no longer is, yet we are unable to move to something better.  The QWERTY keyboard provides such a great example of this.  It was designed initially to encourage typing at a slow pace, so the keys wouldn't jam.  Eventually, with improvement in typing technology, particularly the advent of the electric typewriter, and then the personal computer, typing speed was desired.  Yet the QWERTY keyboard persisted.  The explanation comes from the numerous interdependencies that arose, which relied on the QWERTY keyboard remaining in place.  Alternatives, such as the Dvorak layout, were at a huge disadvantage, even if they allowed faster typing for those who mastered that system.  So, the question arises, are we locked into a meritocracy belief system, even if that is soon to be superfluous or already is?  

The other paper is Bertrand Russell's essay from almost a century ago, In Praise of Idleness.  It offers an eloquent argument that an alternative belief system is needed.  I encourage readers of my post to have a go at Russell's piece and see if they find his arguments persuasive.  A question I've been scratching my head about for some time is this.  If you are convinced about the necessity of an alternative belief system, how do you go about convincing others of that as well?

Now I will give a wave-of-the-hands view of our national politics.  We are a plutocracy, where many of the plutocrats have disdain for paying taxes.  It is evident that raising taxes substantially would be necessary to finance a decent-sized payment to non-workers.  Hence, the plutocrats have incentive to maintain the meritocracy belief system intact, to block such payments and hence keep the tax burden on themselves in check.  Their strategy has been to create division among the broader populace and, to date, it has been effective along these lines.  Is there a way to break out of this box that we're in?

It is evident that those future non-workers who would receive payment would vote for such a system.  But, in my view, their support of the idea is not sufficient to make it a reality.  A good chunk of the winners in the meritocracy sweepstakes must also embrace this system, and willingly accept a larger tax burden for themselves to enable it.  They would do so out of a sense of a social obligation.  I wrote about this previously in a post called, Might Members of the Professional Class Embrace Democratic Socialism?  If there are enough within the professional class who do make such an embrace, then I believe it can break the logjam.

But there I didn't consider the impact of AI on jobs.  The fear of that is now front and center making the urgency in doing something significant all the greater.  

Although I'm an idealist at heart, I hope my arguments here are nonetheless perceived as sensible.  If enough others start to ask these questions then maybe something important can be done to address the issues.

Cinderella Is A Fairy-Tale

March Madness will begin the Sweet Sixteen round next Thursday.  Now that yesterday's games have been completed, three quarters of the field has been sent home.  Below is a table of those teams that remain, along with their conference affiliations, and their seeds within the region to which they were assigned when there were 16 teams per region.  

Before getting to the lessons I'd like to draw from this information, let's look at a bit of recent Tournament history.  It was just three years ago, in 2023, when Florida Atlantic University made it to the Final Four, whereupon they faced San Diego State, which won that game.  Neither of those teams made it to the Tournament this year.  I know FAU because my parent's condo in Boca Raton was near Glades Road and I would sometimes drive by the entrance to the FAU campus.  But I'm guessing that most college basketball fans wouldn't have heard of FAU prior to that appearance in the Final Four, so for me they qualified as a legit Cinderella team then.  

In this year's Tournament, High Point, another school most fans hadn't heard of (including me), would have qualified as a Cinderella team had they made it to the Sweet Sixteen.  They were competitive in their game against Arkansas, so I surely don't want to pooh-pooh them.  But from my perspective, it was close but no cigar.  Miami of Ohio, which did win its play-in game, would have qualified as a Cinderella team if they had made it to the round of 32.  But they were soundly beaten by Tennessee.

I'm having trouble getting the image of the table to post

properly.  So, as an alternative, here is a link that should work.

All the remaining teams are from power conferences.  And while there are a few teams with unimpressive seeds, Texas in particular may be of interest because it had to with in the play-in game (First Four), which implies that those making the seedings weren't sure whether they deserved to be in or not.  But they are a big school with a rich sports history (though more in football than in basketball).  So, no way are they a Cinderella Team.  Likewise, Iowa doesn't qualify as a Cinderella team even though they have fewer resources than Texas.  They are a Big Ten team.   No team from a power conference can be considered a Cinderella team.  

Now, let me get to a conjecture.  Covid disrupted college basketball.  Indeed, the Tournament was cancelled in 2020.  There were strict protocols enforced in the subsequent years to allow play.  How it influenced outcomes, I can't say, but surely it had some impact.  NIL started somewhat before Covid, but it is my belief that it really took off when the Player Portal began, which was in July 2021.  And the consequence is that most of the better players who enter the portal, particularly those who have been around for a while, will end up on a good team in a power conference.  It makes it less likely that teams from other conferences will make it to the Sweet Sixteen.  The commentators were saying during the round of 64 that Mid-Major teams were holding up their end.  But all of those teams are gone from the Tournament now.  And my guess is that over the next few years we are unlikely to see them in a Sweet Sixteen game.  

Here is something else.  I'm nauseated by all the sports betting and really wonder whether either players, coaches, or refs could fix the outcomes of games without it being immediately obvious that they were doing so.  (For example, what counts as a foul versus what is incidental contact is one of those things that clearly is more art than science.  Limiting playing time for a player who is in foul trouble is another one of those.)  A team from a non-power conference which wins its first game may then attract some fans who want to bet on it in the next-round game.  If that happens some of the players on that team, who may not be getting big bucks from NIL, may want some way to cash in on their recent success, especially if they don't see themselves as candidates for the NBA draft.  This is a disaster waiting to happen.  

Fans want to root for the underdog.  Showing my Big Ten loyalty, last night I watched Florida play Iowas and there I rooted hard for the Hawkeyes.  This is so even though when Illinois plays Iowa I'm completely for Illinois and totally against Iowa.  But Iowa was a big underdog in that game with Florida and it was compelling viewing.    Some other schools that are blue bloods in college basketball had similar experiences to Florida.  North Carolina's loss to VCU is one example.  From a seeding viewpoint, neither Kentucky's loss to Iowa State nor Kansas' loss to St. Johns can be thought of as the underdog vanquishing the favorite.  But in terms of the history of the teams performances in the Tournaments, there still was a bit of David vs. Goliath in those games.  So, I'm not yet ready to argue that NIL coupled with the Transfer Portal will tend to make the blue blood schools reliable favorites in the NCAA Tournament.  The talent pool itself seems sufficiently diffuse that other things than the school brand should matter for which become the better teams.  And I'm guessing that this year fans will be satisfied with the Tournament, even if there is no team in the Sweet Sixteen that qualifies as a Cinderella.

But if the situation doest repeat itself, fans may become unhappy with the outcome.  What then?

Pur Did

Given my post from last month, Pur Didn't, I felt obligated to write this one, with Purdue winning the Big Ten Tournament.  Congratulations to them, and with that they are now a #2 Seed in the West Regional of the NCAA Tournament.  So, this win would seem to establish Purdue as a real contender.  

But that earlier post was mainly concerned with player injury and having teams try to avoid that before the NCAA Tournament.  Indeed, as the play was very physical in the championship game between Purdue and Michigan, both Trey Kaufman-Renn of Purdue and Yaxel Lendeborg of Michigan were injured, though how severe those injuries are is anyone's guess.  

In contrast, Illinois had another overtime loss, this one in its quarterfinals matchup against Wisconsin on Friday. And in that game they surrendered a large lead, similar to what happened in the regular season game against UCLA. It's hard to know if the player miscues, and there were more than a few of those, were somehow related to player injuries, the type that aren't officially reported.  Coach Underwood has said that Keaton Wagler has been nursing an injury to his back.  Will a few extra days of taking it easy help to improve his condition?  Again, who knows?  But it surely couldn't hurt.

Illinois will be a #3 Seed in the South Regional, in spite of that Friday loss.  The advantage of being well seeded is most pronounced in the first round game, though that does put on some added pressure because everyone expects the team to win.  And because of its recent losses, Illinois may be susceptible to that.  We'll see.

As I'm wrapping this up, we are under a tornado warning here.  We will likely get a severe thunderstorm in the next few minutes.  Later tonight it is supposed to snow.  I can imagine that bad weather might interfere with travel plans that teams have.  I mention this only because it is another random factor that could influence the outcomes in some of the Tournament games, yet nobody has that factored in at the moment.  I hope it ends up not mattering.  Again, we'll see.

Optical Delusion

In my head-in-the-sand approach to our national politics, a flawed attempt to keep my temperament on an even keel, I spend a lot of my time with diversions.  The best of that is reading fiction.  Last week I finished, Simply Poe's Best Short Stories, and this reflection is based on what I learned there.  Many of the story titles were familiar to me but either I hadn't read them or I had forgotten their plots.  Yet some of the titles were entirely new to me.  My favorite was The Spectacles and it, in particular, serves as my motivation here.

I find Poe interesting to read because many of his stories inhabit the world found between the psychological and the drug-induced supernatural.  The mind plays such a key role.  And Poe taps in very well to the sources of this interaction - our deepest aspirations, our fears, our partially forgotten memories, and our physical limitations.  

Poe's writing also appeals to me because it fits into my own biography, where I have spent much of my life devoted to a kind of seeing, the one done with the mind when the eyes are closed or with them staring at the ceiling or perhaps looking at pen and paper or a computer screen, contemplating some equations or a graphic that represents the math.  I wrote about this in a post called The Professor Mind. But in that post, I wanted to go back to childhood if that were possible, to identify when that way of thinking initially manifest in me.  I didn't concern myself with going in the opposite direction in time.  I'll do a bit of that now.  

For about fifteen years as an economics professor, my research was a kind of theoretical math modeling.  The math gave the work both a rigor and a way to identify when the results actually could be identified in the theory.  But then, in the mid 1990s, I had a career switch to Ed Tech, both as an instructor who explored effective uses of online technology in teaching, and as an administrator who supported other instructors in doing likewise.  

This career switch was a happy accident.  Only in retrospect did I realize that it was a good fit for me, matching my collegial interests and where I was in the life-cycle to a field in its infancy, which of necessity entailed much in the way of open-ended exploration and, in particular, a pathway for engaging conversations with colleagues around campus.  I felt horribly under-prepared in this at first.  But I found those I met were willing to attribute expertise to me because of the title I held and I did not try to dissuade them from their views on this point.   Eventually, via a lot of background reading and sufficient job experience, I began to feel comfortable in the new role.  I dare say, however, that I was never a very good manager and supervising the staff under me was not where my interests lay.   Since I didn't "come up through the ranks" I lacked common experiences with my staff.  That made it harder for me to manage them.  I enjoyed much more the ambassadorial function, interacting with other faculty and administrators around campus, as well as support providers in different units on campus.

My administrative appointment started at 50% time, with the other half of the appointment as a faculty member in the Economics Department.  That was soon bumped up to 75% time administrator and eventually to 100% time administrator.  When that happened I stopped teaching the large intermediate microeconomics class that had been the source of my experiments with ed tech.  I did teach once in a while after that, but as an overload and then only very small classes, once a Discovery course for first-year students and then three different times for the Campus Honors Program.

Three months into my initial administrator job, I took over running SCALE, a soft-money and quite small organization. It supported faculty in what we then referred to as ALN (Asynchronous Learning Networks).  There was an all-everything staff person who managed the office and the other staff.  We would go for coffee late in the afternoon to review the goings on of the day.  For me this made managing the staff just like the ambassadorial function and I enjoyed that.  A few years later, as the SCALE renewal grant was winding down an underfunded hard-money organization was formed to succeed SCALE.  It was called CET (Center for Educational Technologies).  

Initially CET included SCALE staff, some staff who migrated over from the campus teaching organization, and a couple of new hires.  After about a month or so I was feeling overwhelmed by the managerial issues.  I needed an Assistant Director who would assume many of these burdens, but at the time there wasn't money in the budget to do a search for such a position.  So, I half-assed it, informally creating the position of office manager from among the existing staff.  It created some internal issues, but it worked well enough that I could devote much of my time doing what I wanted to do.  A couple of years later, a real search for an Assistant Director was held as the CET budget had grown after the campus got a permanent CIO.

A year after that, CET merged with the campus IT organization (CCSO) to form a new organization called CITES and CET was renamed CITES EdTech.  CITES also absorbed the classrooms technology unit, which previously had been housed in the campus teaching organization.  I became the Assistant CIO for Educational Technologies and I had both CITES EdTech and CITES ClassTech in my portfolio.    Also, the mission changed, in a not so subtle way.  Where before the focus was on effective uses of the technology for teaching, subsequently the aim became finding a way to have a scalable solution to support instructional technology.  Initially, this was concentrated on finding a suitable enterprise Learning Management System (alternatively referred to as a Course Management System) for the campus, one that eventually became known as Illinois Compass.  

Let me give one more paragraph about this history and then move on.  In the language of Malcolm Gladwell's The Tipping Point, I conceived of CET primarily as connectors.  The innovators were the handful of instructors around campus who made novel and effective use of the technology in their classes.  The best way to make other instructors aware of these innovations was via workshops, with multi-day summer workshops, combined with some incentive for the attendees to implement in their own classes based on what they learned at the workshops.  This was quite effective and further established a collegial relationships between the attendees and EdTech staff.  But it didn't scale very well.  Many instructors were adopting the technology without having attended the workshops.  Further, CET was underfunded.  So the CIO suggested that the workshop funding get reallocated to the CET base budget.  Now CET funding was more solid, but it had lost its lever to engage faculty on effective uses of the technology in teaching and began its move to simply being a support organization for learning technology.  Perhaps that was inevitable, but my heart wasn't in this alternative mission.

Now let me get to what I mean by the word delusion in the title of this post.  And in doing so, I will consider only my own delusions.  It has two pieces to it.  First, it is becoming so enamored with an idea that other related matters move to the background and then may very well be ignored entirely.  Second, it is based on an assumption about scaling - if it can work for me then it will work for everyone else who is like me. I will illustrate with some posts from this blog.  

I began this blog in spring 2005, partly intrigued by blogging as a release for me, but mainly because I had many work-related issues on my mind and not enough knowledgeable yet disinterested friends to have good discussions about those issues.  So, after a bit of experimentation to see if I could generate the requisite prose, I announced the blog to a few friends.  Then, a couple of months later, I got discovered by a well-connected blogger, Scott Leslie.  Soon after that, I had regular readers for my posts.  The first set of posts to consider came a couple of months later.

They are about using undergraduate students in the role of peer-mentors, course content creators, big brothers and sisters, and any other way they might genuinely assist other students who aren't quite as far along.  Further, it is about the campus as a whole embracing this at scale.  I called the overall idea Inward Looking Service Learning (INSL).  There are 7 posts in total under this label.  They all appeared in August 2005.  I had used undergrads in my teaching the large intermediate microeconomics class, where the feature was having online office hours during the evening, and where the course design was constructed to encourage the students to make use of those office hours.  While my course design was somewhat novel, the use of undergrad peer-mentors I got from seeing the practice in some undergrad engineering classes.  I did this starting in summer 1996 and continued in the spring semester each year until spring 2001, after which I no longer taught that class.  So in making the INSL posts, I was writing about an idea that I was no longer directly involved with, but the idea was a take away that stuck with me thereafter.  Note that it only has the technology play a support role, which has been my general view right along.  

In writing these INSL posts I had the right qualifiers - pie in the sky, going over the deep end - to convey that I was making a speculative argument.  But why do that unless there is some belief that others will embrace the argument and give it a try themselves?  To my knowledge, that didn't happen.  Might that have happened if the ideas were marketed a good deal more?  The delusion rests in ignoring that question, hoping that the posts themselves would suffice, and otherwise contenting myself with providing a description of how it might work.  One probably should ask whether there is some benefit to the posts apart from encouraging the embrace of the ideas necessary in attempting implementation.  It is conceivable that others might generate their own ideas, distinct from INSL but where INSL served as a stimulus in generating these alternatives.  Would that that then justify writing the INSL posts?  If so, isn't it delusion then not to verify that some other alternatives have been generated?  It's been quite a while since those INSL posts were written, so my recollection is not perfect on this.  Yet I'm not aware of anyone letting me know of their alternative that had my INSL posts as at least part of their basis.  So, I'm guessing there weren't any alternatives of this sort.

A different thought is that these posts are simply throwing ideas against the wall to see if anything sticks.  A small probability of success means that not sticking is the likely outcome.  Does past failure mean that the next idea shouldn't even be tried?  Perhaps the answer to that question depends on how to consider the cost of writing up the post.  Is the time engaging or burdensome?  I don't have a definitive answer on that one, but I can say that in drafting this post, I seem to have gone back and forth with the answer.  If it is recognized in advance that some of the time spent will be burdensome, then there is a need to be able to get through those periods, having the procrastination come to a close and getting down to brass tacks.  Delusion seems to be the answer there.

My other example comes from a recent post, offering up my "solution" for our national politics, where members of the professional class take the lead by signaling that they are willing to pay substantially more in income taxes so as to enable higher taxes on the uber rich as well, with the proceeds going mainly to people of ordinary means. and without that having negative political consequences.  The post is entitled,  Might Members of the Professional Class Embrace Democratic Socialism?  In this case I enlisted a friend from grad school who is still a practicing economist to give it a read and offer her reactions to the piece.  That took quite a while to happen and then her reaction was less than enthusiastic.  I had hoped for a more uplifting response.  There is still a fair amount of work to tighten up the argument in the piece and assemble all the relevant recent data to be included.  For the time being, this is one where the procrastination is still ongoing.  

With regard to college teaching and learning, in the mid to late 2000s, given my position on campus I could claim some expertise as to the underlying issues and possible solutions.  I also had a reasonably strong reputation at the national level among others engaged with learning technology for higher education.  So the blog posts such as the INSL series may have served a purpose about informing the profession, even if implementation of the ideas wasn't in the cards.  Regarding our national politics, however, I cannot claim any such expertise and I am well behind the times as a practicing economist.  This itself doesn't stop me from noodling about the ideas.  But then writing up my tentative conclusions, I'm really not sure as to how I will proceed in the future.  The writing activity itself is therapy for me.  Perhaps I should content myself with writing without feeling a need to espouse that I alone have the answer. Not only would that be less delusional, but would be less egotistical as well.