Walter Russell Mead outlines two possible futures for middle-class Americans: one where most of us lose “the race against the machine,” the other where smart government policies enable an eventual successful transition to an economy where IT and robots do a shockingly large percentage of the jobs humans do today — but the carbon-based life forms still have plenty of meaningful work to do.
Mead calls that first scenario, “Bladerunner with food stamps.” Mead:
“ It’s likely that an information age welfare state would consist of two components: straight out welfare and “social inclusion” payments for some, subsidized make-work jobs (like Postal Service employment in an age of email) for others. …
If the information economy works like this, the whole country would start looking more like California and New York City: unbridgeable class divides, huge inequality, fountains of innovation, and tiny islands of great wealth and privilege surrounded by proles on the dole. Inside the glittering bubble, the digirati and their courtiers would live lives of intense purpose and excitement.
Outside the bubble, meaning would be the good in scarcest supply. . … Bellies will be full, but lives will be empty, and with that emptiness will come ills of every kind: addiction, brutality, ugly, and stunted sexual and emotional lives for many, neglect of the young and the old.”
But it doesn’t have to be that way, Mead writes. We can have a future of rising wages, plentiful middle-class jobs in the IT age. His suggestions:
1. “First, make hiring easy and cheap.” Get rid of employer-based social insurance and pension programs. Let government pay for the employer’s share of social insurance out of general tax revenues.
2. “Put the service economy and especially small business and entrepreneurship front and center.” Barriers to entry must fall. Regulation that make it difficult to start a business or enter a profession must be reformed. ”Zoning and housing policy should look for ways to encourage homes to be used as workplaces as well as living spaces.”
3. “We need to feed the state to the people even as we individualize its services.” End government monopolies on providing what are thought of as government services. “Turning bureaucratic government institutions into voucher-based programs will both stimulate the rise of a new type of service-oriented industry and provide better tailored government services at a reasonable cost.”
Of course, right now we are doing none of these things. At this point, Obamacare is a disincentive to hire full-time workers. And liberals have attacked conservative ideas to inject more choice and competition into government programs. Does Washington have an explicit entrepreneurial agenda? I don’t think so.
Mead’s essay make a great companion piece to Brink Lindsey’s excellent new book, Human Capitalism, where he notes a disconnect between the demand for high-skill human capital and out current ability to widely provide a fertile environment for its development. His similar agenda: 1) maintain economic growth by encouraging entrepreneurship, 2) reform K-12 education by unleashing competition, 3) compensate for disadvantaged environments through early childhood interventions, 4) combat social exclusion of low-skilled adults, 5) improve higher education by limiting tuition subsidies, 6) remove regulatory burdens to entrepreneurship and upward mobility.
American Enterprise Institute
May 23, 2013
America Is Turning Into ‘Blade Runner With Food Stamps’