Probably the most hazardous thing when it comes to long-term investment is technology. Getting it wrong can be hazardous, but getting it right can give you a strategic edge for many years. Think of the advantages their road network gave to the ancient Romans.

But even when we get technological development right, we often don’t think of the social consequences, or think about them only when crises stare us in the face.

Robotics – anything from intelligent ATMs to driverless cars to electronic nurses and armies – are a case in point.

The artificial intelligence (AI) driving robotics is creating so many efficiencies and new wealth that it would be foolhardy to try and stop it or its applications.

AI will probably prove to be one of the most beneficial yet disruptive technologies in human history, and it has to be managed at national and supra-national levels.

Lack of management of such a powerful technology will lead to severe opposition and unnecessary crises which may impede both the technology and its wealth creation.

Millions of jobs are at stake. To take only one example: there are 3.5 million truck drivers in the US alone, forming the biggest job classification. Millions more drive other vehicles for others. What work can they get in 15 years’ time when driverless vehicles become the norm?

Not to mention other job categories at high risk: cashiers in supermarkets, accounting and legal staff, editing jobs, medical diagnosis and testing, production workers, teachin  and even computer programming itself.

In the UK, for example, robots are estimated to eventually take 15 million jobs.  This is about half of all current jobs.

AI is potentially the biggest job disrupter in the history of the world. It will render many people not just unemployed but unemployable.

Many social leaders have started to take the issue seriously but since there are always more than enough problems to deal with, today politicians tend to kick the evolving problem down the road for others to solve when the problem becomes critical. No one wants to look as if one is fighting windmills in La Mancha.

The coming jobs problem, however, must either be cushioned or it will lead to fundamental and probably ugly changes to the way we live, including to democracy.  We need to do some exploration and initial planning now.

We have been brought up believing that you can always educate or re-train almost anyone to do almost anything. But, sadly, it is not so. Most of today’s increasingly sophisticated professions and well-paying jobs need 10 years minimum just to acquire the basic body of knowledge and skills. Most jobs needing little skill are being robotised and eliminated as you read this. And there’s no guarantee that even sophisticated jobs won’t be robotised away.

Keep in mind that AI will replace humans and do a better job, not extend their brawn or mental abilities, like the machines of old. This is a fundamental difference, often ignored. AI is going to be much more disruptive than the Industrial Revolution.

AI is already enabling machines to learn and self-correct faster than humans. Computers beat grandmasters at chess and, recently, even in the ancient Chinese game of Go, which I found to be as complicated as chess, if not more so, and in which I suffered major defeats.

Artificial intelligence is potentially the biggest job disrupter in the history of the world. It will render many people not just unemployed but unemployable

A forward-looking people would rather explore inspiring solutions than follow the route of some countries which have already given up and are instead building fortified buildings and concentration camps, for a world even more sharply divided between the haves and have-nots!

The foremost solution seems to be to plan so that every person earning less than a certain threshold will receive from the State an ample living wage, usually called the basic income, which will allow him or her to live a decent life. In many countries, this would be around 50 per cent higher than the minimum wage.

Basic income will be guaranteed by government and can either be a form of “negative income tax” where only people who do not reach a threshold income receive money, or as a “demogrant” model where every citizen receives money, irrespective of existing income.

If basic income is introduced there would be various implications because a basic income is itself a revolutionary concept, the peak of a liberal, social democracy. It would respect man’s humanity, fully in accordance with Christian teaching.

If we have in place a basic income, will we have to incentivise people to work? If so, how? Would a demogrant model lead to a reduction in wages which companies have to pay?

Would tax on companies have to rise to finance a basic income? Can companies which employ people be compensated by, say, doubling the wage deductions for tax purposes? What would be the implications on our border security?

Consumption is likely to increase, the economic engine lubricated, and this would be good for both profits and taxation. The reason is that with a guaranteed basic income people would be less anxious about the future and spend more. People, in my experience, tend to over-save, much to the delight of their heirs.

If one wanted to be a painter, a musician, or take up micro-imaging to come with a better estimate of the number of sand grains at Għadira, locate Atlantis, or even become a ‘lifelong student’ without having to mark exams, it would be possible.  This, too, would be wealth.

Importantly, though, we have to start thinking how this basic income will be financed.

As usual, there are four ways: taxation, efficiency (cost cutting), government borrowing and money creation.

Basic income would of course substitute existing unemployment, sickness, welfare and other social benefits. Basic income can also replace pensions. Part of the financing will therefore come from this consolidation as well as from the resulting administrative simplification.

Both taxation and government borrowing take money from people and eventually return it back, in various equitable and inequitable ways. Taxation and borrowing are not as different as many think they are.

When government borrows, however, it would have an obligation to repay at some point in time and, due to this obligation, there are usually constraints as to how much a government can borrow.

Previously, money creation was anathema but recent experimentation with quantitative easing programmes creates money, though in this case the distribution favours the few against the many.

There are various ways, therefore, to finance a programme of universal basic income, and starting to think and to plan now will save us from big problems in future. Which financing combination is likely to work best will have to be worked out with a great deal of thought.

Properly harnessed, AI can prove to be a great strategic edge for the creation of wealth and prosperity; left wild, it can mean blood in the streets.

email@paulvazzopardi.com

Paul V. Azzopardi is an investment advisor and author.

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