About Nick: i am an economist based in malaysia. I write about development economics, while sneaking in a pop culture reference or two.

A World Without Unemployment

Published in The Edge Malaysia, 21 - 27 November 2016.

The definition of an ‘unemployed’ person is a person who wants a job but cannot get one. The persistence of unemployment in today’s global economy, particularly youth unemployment, has led to unemployment or underemployment being identified as one of the world’s top five global risks for the next 18 months, by the World Economic Forum’s 2016 Global Risk Report. Indeed, this issue sits alongside the global refugee crisis and crises of governments and war in the top five.

Looking beyond 18 months, the future of unemployment, in its current definition, looks far scarier due to exponential progress in technology. According to a report from the Oxford Martin School, the OECD estimates that approximately 57% of jobs were susceptible to automation across the world. The proportion differs across countries, with the 47% of jobs being susceptible to automation in the United States compared to 77% in China, 85% in Ethiopia and about 65% in our very own Malaysia.

It is not just the low-skilled jobs that will get replaced. From the same study, among the top 10 jobs most at risk of being replaced by automation include Mathematical Technicians, Tax Preparers, and Insurance Underwriters. Indeed, the World Economic Forum’s Future of Jobs report cites a popular estimate that 65% of children entering primary school today will ultimately end up working in completely new jobs that do not yet exist.

I am a big believer that technology – especially machine learning and artificial intelligence – will make this future a reality. Against this backdrop, how should we move forward? There are some who would consider moving backwards to a 19th century Luddite mentality, destroying or opposing machinery that they believe was threatening their jobs. I am not in that camp. However, I do agree we should look backwards – way backwards, even, to circa 4th century BC, and the philosophies of the great Greek philosopher, Aristotle.

In arguably his most influential work, Nicomachean Ethics, Aristotle seeks to answer the question, “What is the ultimate purpose of human existence?” What separates Aristotle’s theory of justice from most Western philosophers such as Bentham’s Utilitarianism, Hayek’s Libertarianism, and even Marx’s Socialism, is that Aristotle does not separate questions of fairness and rights from arguments about honour and virtue. Western philosophies typically seek principles that are neutral among ends, enabling people to choose their ends for themselves. Aristotle disagrees – indeed, he argues that the right is indistinguishable from the good and that the purpose of human existence is to lead the ‘good life.’

The good life, according to Aristotle, is defined as the activity of the soul in accordance with virtue. The activity of the soul need not be a job but rather the telos, or purpose of a person. This notion of an individual’s purpose need not just be one of self-indulgent desire such as drugs and alcohol, but – as per the second part of Aristotle’s conception – be in accordance with virtue and hence, a proper goal of the telos. In today’s terms, the good life is simply a morally – note that I did not say ‘legally’ as moral and legal are not necessarily one and the same – driven life of purpose, where an individual pursues his or her purpose on a moral basis.

If we take Aristotle’s philosophy into the discussion of unemployment today, one thing is quite clear – the human race and our modern day conception of jobs have strayed far from the ideals of Aristotle. Jobs are now seen as a means to a life, not as ends in themselves. After all, if left to choice, not many of us would choose to work, at their current pay, backbreaking jobs under the sun in construction, or pick up garbage or be cashiers at checkout counters in supermarkets.

Therefore, we have created a world in which jobs are just means to get by; earning some amount of income just to pay for rent, for electricity, for food, for transportation and if we are privileged enough, the odd vacation every now and then. Now, we face potentially a new world of both low growth and massive technological disruptions. A McKinsey Global Institute (MGI) analysis finds that for the next 50 years or so, global growth is set to moderate to about 2.1% per annum, compared to 3.8% from 1950 to 2014.

McKinsey’s solution is to spark global employment growth by driving productivity growth. Yet, in a world where technology may truly render half the available jobs obsolete, that solution seems shortsighted. I propose a more radical view, founded on the philosophies of Aristotle. First, by severing the link between work as a mere means of paying the bills, and second, by allowing people to create the jobs they want. The former is to free people from pursuing jobs they do not want while the latter is to have people do the things that best fit their moral telos.

The policy to do this is called Unconditional Basic Income (UBI). In Malaysia, we already have an unconditional cash transfer – the Bantuan Rakyat 1Malaysia – but a UBI expands this idea even further. It proposes a basic income to all citizens of Malaysia. If we believe that there are basic human rights that should be accorded to all individuals, and if those basic human rights cost money – such as the right to shelter (not the same as the right to property ownership) – then we need to either provide that shelter or provide the means to attain that shelter. After all, as Aristotle states, “No man can live well, or indeed live at all, unless he be provided with necessaries.” The UBI is controversial and rightly so, with many critiques. I will address the UBI in detail in a future column.

Therefore, to address the growing specter of future unemployment, we need a radical shift in mindset about the nature of jobs. We need to stop glorifying work for the sake of work and demonising those who choose not to work but to pursue their telos. In short, let us break the link between a job and paying the bills, and work towards a link between a job and self-fulfillment. If this sounds like a socialist utopia, it is not – I am not a socialist by any stretch of the imagination – as I will argue in my future piece on the UBI.

The final point to note is that, in the Oxford Martin report, the jobs that are least likely to be replaced by automation include mental health workers, social workers, doctors, psychologists and teachers. This should be instructive. The common denominator between these jobs is a strong relationship with people. Aristotle believed that the good for humans would be the maximum realisation of the function that was unique to humans. This holds across time as well. It is no coincidence that teachers, healers, and community workers have been mainstay jobs from the dawn of humanity till today. In a world that increasingly becomes robotic, the scarce quality that humans have is simply being human.

Exploring the Case for an Unconditional Basic Income

Empathy and Policymaking