Post-labor economics. What is this and why is it starting to filter into our conversations?
For the moment, it is still on the fringes, residing mostly in the technology corners, with "digital philosophers" discussing where things might be heading. At the same time, some economists, for what that is worth, are starting to pick up on this concept.
How are things going to be affected? More importantly, what is the fallout?
There are a lot of tentacles to this, obviously stretching beyond a single article. However, it is worthwhile to start bringing the conversation forth.
Here I will delve into some of the basics, what part cryptocurrency can play, and how this differs from many other proposed solutions out there.
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What is the post-labor economy?
Basically it is the forecast that technology will take over larger portions of the means of production, resulting in a time when humans are effectively forced out. Driving this concept is the advancement in AI and robotics.
As these progress forward, the areas where humans excel in comparison to machines decreases. It might be slow at this point but I can assure you it is accelerating.
Many fear the impact upon jobs. This, unfortunately, is only the beginning. We have to consider the effects on asset prices, utility of infrastructure, and the social contracts that society operates upon.
Cryptocurrency is about ownership. Specifically, this is ownership in the digital world. It is a crucial point which we will elaborate on.
The underlying current in this is "better, faster, and cheaper". This is what generates the exponentials that we are already witnessing.
Spread this across an entire economy and the foundation of economic productivity, along with ownership, changes completely. Here is where society is confronted with an array of issues.
In my estimation, the solution to this, at least in part, is cryptocurrency. This is how individuals can capture the means of economic production. Since this technology only resides in the digital realm, it is ideal for the shift to AI.
It also aligns with the democratization of everything (digital). This starts with data, moves to compute, and extends to activity.
We are also looking at something market driven.
Many dispute the point that I am going to make here: jobs are cooked.
It is only a matter of time. There are a host of people who believe this is false. Time will tell. However, the pace of innovation, especially with AI, is going to eliminate a host of jobs in a short time frame.
Moving beyond that, since it is so widely discussed, is the impact on assets. Consider how much is tied to our present asset base.
We get a glimpse of it with the remote work movement. This is another area that people deny is a real change, citing companies pushing people back to the office. If that was true, why is commercial occupancy rates in most major US still down 50% from pre-COVID levels?
Going one step further, what happens when these people are not needed at all? If a piece of software can handle enough tasks, jobs go away. This is why the push to build hundreds of billions of dollars in data centers.
The value is going to be moved from offices and retail outlets to data centers.
Just consider the impact that has on the economy as we deal with those defaults.
Many might applaud this, believing it is good for the rich to suffer. However, consider where this debt is residing. It is in pension funds, individual stock portfolios, and on the balance sheets of financial institutions.
Defaults put companies out of business which usually means further job loss.
Deflation is a bitch, something that most overlook. People seem to want prices to come down. The problem is we do not select which was decline. When the price of milk or eggs comes down, joy follows. However, when the price of one's home collapses, the same feeling is not had.
The tentacles of deflation are long and varied. You might wake up on day and find your stock portfolio is crushed because the "safe" companies you invested in are seeing their revenues drop like a stone.
Or you might just end up laid off.
Why is crypto so important to this discussion?
When it comes to technology, nothing is more important that AI. This will take over as the driver for the means of production. What this means is that capital is going to replace labor.
Here is where the discussion turns to Big Tech. The knee-jerk reaction is to believe they will benefit while everyone else will lose.
That could happen. However, there are alternatives to this outcome if people will understand them.
AI is a powerful force. The democratization of this is crucial. This means taking LLMs and building other models that are outside the control of Big Tech. The components of compute, algorithms and data are essential.
This needs to be tied to blockchain, or at least a Web 3.0 application. When this occurs, we are dealing with tokenization, which means distributed ownership. If designed right, this truly operates outside the realm of the traditional financial system.
It is how we see the financial benefits of the data driven economy spread out.
Ultimately, this could be tied to robots where a fleet of them could be tokenized. At this point, the bridge from the digital world to physical occurs. We would have real world production captured in tokenized form.
All of this could operate outside the bounds of Big Tech. Naturally, they will still get their share and have a part to play. That said, billions could participate in the hundreds of trillions in economic output that will be generated.
We have touched upon a time where there is an abundance of networks.
There are going to be billions of AI agents residing on this, When a network is tokenized, the economic value generated can filter to that level. Therefore, we are not dealing with a singular use case.
Networks will developed their own well rounded economies. Instead of focusing upon a specific industry, such as social media, we are going to see the "everything network" evolve. People will find most of what they need tied to that network.
As the economy grows, value is directed towards the token. This is going to come in a variety of ways, much of it likely as a result of automation. We can see how what is bad news for workers is shifted to a positive.
This is not a solution that is being espoused. Since many are stuck debating if we are headed towards a post-labor outcome, technological advancement is roaring ahead. Unfortunately, the masses are going to be stunned over the next couple years.
A lot of this might take a while to completely unfold. We are looking at the better part of a decade. That said, a post-labor economy could be seen in 10-15 years.
That is not a long time to prepare.
