The Post-AI era is also the era of mass disability

Is Stephen Hawking disabled?

Obviously this is a rhetorical question. Hawking is 70 and retired from the Lucasian chair, but he remains a tenured professor. He is a bestselling author of multiple popular books, has been married twice, and has three children.

He is clearly not disabled.

Is a physically strong male with an IQ of 65 disabled in Saint Paul, MN? Yes, of course. Forty years ago, however, there were many jobs that would pay above minimum wage for a strong back and a willingness to do tedious work. Heck, in those days men earned money literally pumping gas.

Would Stephen Hawking have been disabled in 1860? Yeah, for the short duration of his 19th century life.

Disability is relative to the technological environment. Once a missing leg meant disability, now it rules out only a small number of jobs. Once a strong back meant a job, now it means little.

Technology changes the work environment; it makes some disabled, and others able. It's an old trend, automated looms put textile artisans out of work 200 years ago.

Those artisans had a rough time, but workers with similar skill sets have done well since. Economic theory and history teaches us that disruptive technological transformation can produce transient chaos, but over time resulting economic growth will benefit almost everyone. More or less.

But history only repeats until it doesn't. Economic benefits don't have to be evenly distributed. If fewer jobs require strong backs, then people whose primary talent is the strength of their spine may earn relatively less. If supply exceeds demand, the price of labor will fall below the "zero bound" of the minimum wage. Some backs won't find work; those workers are disabled.

Most people can play in more than one game, but the competition is getting tougher and the space for human advantage is shrinking in the post-AI era. The percentage of the population who are effectively disabled has been rising along with national income and the Gini coefficient. It's not just the pioneers now, Respectable economists are wondering about tipping points.

So enter The Wolverine...

 

Krugman acts as though he's just started thinking about the post-AI economy, but he isn't fooling anyone. We know he grew up on Asimov and the Three Laws. Now that the election is done, and he doesn't have to be a strict non-structuralist any more [1], he's started writing about what the post-AI era means for income inequality using the phrase "Capital-biased technology". He has recently promised us a "future" column on policy implications.

Future - because he's trying to break it to us gently. I, of course, have no such qualms. A year ago I wrote about the policy implications of the Post-AI era (emphases added) ...

The AI Age: Siri and Me

... Economically, of course, the productivity/consumption circuit has to close... If .1% of humans get 80% of revenue, then they'll be taxed at 90% marginal rates and the 99.9% will do subsidized labor. That's what we do for special needs adults now, and we're all special needs eventually...

Or, in other words, "From each according to his ability, to each according to his need". In the post-AI era we will need to create employment for the mass disabled.

See also:

• Baumol's cost disease: medicine, education and post-AI disruption 10/2012
• Life in the post-AI world. What's next? 9/2011
• Google's A.I. recognizes cats. Laugh while you can. 6/2012
• The AI Age: Siri and Me 12/2/2011
• Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III. 4/2010
• Unemployment and the new American economy - with some fixes 1/2011

 and from the K (NYT):

• Rise of the Robots
• Capital-biased Technological Progress: An Example (Wonkish)
• Policy Implications of Capital-Biased Technology: Opening Remarks
• Is Growth Over? (K responds to Bob Gordon's essay that deprecates the impact of IT. FWIW, I think Gordon has no idea how much IT has already disrupted, and what is yet to come.)
• Robots and Robber Barons

elsewhere

• Artificial intelligence: Difference Engine: Luddite legacy | The Economist 11/2011

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[1] Clark Goble made me read a critique of my team's champion. I found hurt feelings (K has claws), but no substantive critiques. That's a shame, I've long wanted to see somebody like Mankiw (who was once readable) engage K on his denial of structural factors in 2009-2012 unemployment. I suspect K has always known of ways to argue the structural case despite the persuasive low global-demand data. I wonder if he was disappointed that nobody dared challenge him.