Well, good morning, good afternoon, or good evening, ladies and gentlemen. Welcome, or welcome back, as the case might be. My name is Dali Bor Petravich. I'm your host to these tectonic conversations. And today, I have a very, very special guest on a very important and very timely topic. I am thrilled to welcome David Shapiro. David, thank you very much for finding time to be with me and with us today.

Thank you so much for having me.

It's a pleasure, David. David is a technologist and a futurist, a self-described AI maximalist. But for the purpose of this conversation, David has emerged as the leading voice in the new movement that is focusing on post-labor economics. And this drew my attention when I first came across David and his work about probably six months ago now. Um, I had the pleasure of spending three decades in technology, and the last two of those with the world's largest professional services firm. As a senior partner, I came across some of the world's most successful and smartest business leaders and policymakers. Um, and that actually helped me pay attention to what I first heard David say. And since then, I've spent an increasing amount of time following and understanding the model that is emerging. And I feel it is superbly important for all of us to actually be paying attention to what David has to say. Your hypothesis, David, and the emerging thesis and theory has helped put a face and name to the underlying observation, concern, and angst that I feel, and I feel many are feeling, about what is actually happening out there in our society and in our economy. And the idea of this conversation was to provide an additional platform for you, David, to address audiences that would not have come across you yet, people who might be following me and my channel. Um, and for those who are interested, I would warmly invite you to think about how you might get involved and help this movement progress, because I believe we are addressing here one of the most pertinent and serious questions that we will be facing in our societies going forward. So, now that I've raised all the urgency to this, David, thank you very much for your time again. Um, what is the post-labor economy, and why should we be caring about it?

Yeah, I mean, well, thank you for the, uh, kind introduction. Uh, in the very shortest version, post-labor economics is the observation that productivity has been decoupling from labor inputs for quite a few decades now, since about the 1950s. And with the rise of more technologies, the so-called Fourth Industrial Revolution, where we have humanoid robots, artificial intelligence, we are seeing that accelerate a little bit as these new general-purpose technologies, uh, saturate and diffuse out into every sector. We're the, the writing on the wall that many feel is, what am I going to do for work? And that's why this framework was ultimately dubbed post-labor economics, is because the anticipation is that we're heading towards a paradigm where most economic activity, dollar for dollar, is generated not by human inputs, but by machine inputs. And that's the overarching idea of post-labor economics.

So the idea is that as technology displaces work, what we can foresee is that we are now facing technology that can actually displace all different types of work to a point where we can see the horizon where there is no more work available for humans.

Mostly, uh, certainly the, the, the lion's share of work is vulnerable to automation today. Uh, as most people know, we moved from an agrarian economy to a manufacturing economy, and now we're in a service-based economy. Well, service-based economies are predicated primarily on knowledge work, and artificial intelligence is getting smarter and better at reasoning and cognition and planning. Uh, just a few days before this recording, uh, two labs, both OpenAI and Google, won gold medals on the International Math Olympiad, uh, which is the most prestigious math competition in the world. Uh, and this was not predicted by anyone to happen for another year or two. And that kind of advanced schedule, that calendar, where everyone, where things happen faster than people anticipated, has been the norm in this space for the last few years.

Correct.

So when you look at the capabilities expanding, you say, "Okay, well, the frontier of automation," this is a term by Anton Corn, uh, who's an economist who is a visiting fellow at IMF. Uh, he coined the term "the frontier of automation," and basically that says this is the sphere in which, uh, machines are capable of displacing human labor. So when you take those two facts, that it, that the machines are getting smarter, and we presently have a knowledge-based economy, because something like 80% of jobs in the, uh, in, in developed economies such as America and Europe are service-based. So they are knowledge work, retail, that sort of thing. That means the lion's share of jobs out there today could be vulnerable to being completely replaced, or through a process what's called labor substitution. Um, so it could be substituted for machines here very soon, in very short order.

Yeah. Yeah. So to help us address this, uh, I know that you're working on publishing a book. That book is going to contain six parts. These six parts are taking the concept from introducing the concept and, and, and, and sort of proposing the challenge, all the way through to some concrete ideas on what could individuals, organizations, and nations do to address this situation. What I would like to do, David, is to walk through these six parts today with you, one by one, um, so that we can have, you know, a meaningful, robust conversation on each. And I would also invite audiences who are following us live, if they have any questions, to use the Q&A function of this platform and submit a question. So we're not going to be able to address questions on chat, but please, if you have a question, submit using Q&A. So let's start at the beginning, at Part One, Chapter One, which is "Rise of Automation." Can you sort of set us up with, with, with a basic understanding, where, where should people start?

Yeah, I mean, the fundamental, uh, assertion here is that automation has been advancing for actually several centuries. Uh, for me personally, it kind of really started with the printing press, the Gutenberg printing press in the 15th century, which cut down the amount of time that went into printing books by a factor of about 200. Uh, so instead of taking a year or two for each copy of a book, it took a couple weeks. Uh, now, to be fair, setting up all the, the print faces took a couple years, but once you got it set up, you could easily print hundreds of the same, uh, book. Uh, advance forward, you have the first, second, and third industrial revolutions, which included steam power, uh, mechanized power, diesel, solar, not solar, internet, and so on. So you have this, uh, long arc where humanity has been automating away tasks, starting with strength, and then, uh, to a lesser extent, dexterity after that, because there's basically four primary food groups of of labor that humans can do. So it's strength, dexterity, cognition, and empathy. So we've automated, we've automated away the human need for strength. We did that a long time ago with steam power, uh, with diesel power, with electrical power, and that sort of thing. We are working on automating away dexterity with industrial robots and soon humanoid robots, uh, and now the latest wave in the Fourth Industrial Revolution is we're automating away the need for human cognition and human empathy with, uh, the rise of generative artificial intelligence technology like ChatGPT and similar. Uh, so with that, that is the, that is the, in a nutshell, the long arc of the rise of automation. And so what we show, and what we find unequivocally, is that as automation advances, it dislocates more and more labor. 200 years ago, in the year 1800, about 70 to 80% of Americans were farmers. A century later, in 1900, it was about 40%. Today, it's 2%. So that entire way of life, where the majority of people worked a certain way, worked and lived a certain way, in the span of two centuries, basically became extinct. Now, that's not to say that farming went away, but farming became so much more efficient that only a tiny fraction of the population is required to feed not just the rest of the nation, but then export food.

Export. Yeah.

And so when you see that paradigm shift and you say, "Well, what caused this?" It was a combination of automation technologies and general-purpose technologies. Now, one of the differences, so this is one of the things that I get challenged on often, is what's different about the Fourth Industrial Revolution? The difference here is that AI is both an automation technology and a general-purpose technology. So some of the most famous general-purpose technologies are going to be things like the wheel, and the internet, and steam power, and electricity.

Those are general-purpose technologies which have many, many use cases. However, artificial intelligence is also an automation technology in that it directly replaces or approximates human activities. A steam engine gives you a lot of torque, right? The internet, uh, is a faster way of communicating over long distances, but artificial intelligence is, we call it artificial intelligence because it is an artificial version of human intelligence.

Uh, so, yeah, that's, that's the long history of automation and, uh, the rise of automation through several economic paradigms and industrial revolutions. So, what you said, I think, is really, really important to understand that there are four ways in which humans contribute to productivity: strength, dexterity, intelligence, and empathy.

Yep.

And what you are effectively describing is that strength has been automated since the very beginning. One could say, even now, the agricultural revolution 12,000 years ago started us on the replacement of human strength with bulls pulling plows on, on, on, on the fields. Right? So it could go all the way back.

But we are now in the process where...

...all the other three are being actively attacked or displaced with automation: intelligence and dexterity, and ultimately empathy. And that is, I think, really, really important to appreciate. And the second thing that I think you mentioned was is important to, to, to stress, and maybe this is for the first time ever, that we have not created just a tool, which is what we've done in the past, but we have created actually an agent who has the ability to think and perhaps decide. So this is a different ball game altogether. Now, many people would say, "This is okay. We've been through this before. It is uncomfortable, but, you know, it'll be just like last time. Many jobs are going to go away because these four will be supplemented by technology, but there will be new jobs coming that we still cannot imagine yet." Do you have any sort of reflection on that?

Yeah. So, first, to validate, there are often labor rebounds after these kinds of innovations. Yeah. Uh, so, you know, for instance, cloud engineers, right? You know, YouTube influencers, those jobs did not exist 150 years ago, and even explaining what those jobs would have been to someone would have been near impossible 150 years ago. So technology often does create new affordances that say, "Okay, we have a new structure, a new way of delivering value and creating goods and services." So, therefore, we can hypothetically proliferate the number of jobs. However, there are a few caveats. First and foremost is that every time we've had disruptive technology, so a process called creative destruction, which was a term coined by von Mises, uh, a century ago. So creative destruction is usually painful. And the reason that it's painful is because the current way of doing things, your status quo, the, what you're used to, gets disrupted, gets upended, and it takes a while to produce something new. So there's what's called "Engels' Pause" from the early 19th century, where, uh, weavers and loom operators were replaced, and it took about 60 to 70 years for wages to go up again. So basically, as that technology was saturating industrial England, an entire generation or two went by without their their quality of life really materially improving. And that's kind of what people are really afraid of, is saying, "Okay, yes, in the long run, artificial intelligence and robots and quantum computing and all of those things, there could be entire jobs and entire sectors that we can't even imagine." But how long is it going to take to realize those, those new sectors, and will they materialize in the first place? So those are some of the, some of the major concerns around, "Okay, yes, does it create new jobs?" You know, the Luddite fallacy is the idea that that technology destroys jobs permanently and they never come back.

And I like to flip that on its head and call it the labor substitution fallacy. Uh, and this is something that I just kind of made up, and it's a, it's a term that I use to say, actually, technology doesn't create new jobs. It never has. What technology actually does is that it creates deflationary pressure so that you have capital that is then liberated for to to supply other demands of goods and services. But there is no law of physics or law of economics that says new goods and services must be rendered by human input.

There's no, there's no need for it. If, if, if you can provide some service or some good where it's just machines giving it to you, there's no reason to have a human involved. Now, historically, humans have been involved just by virtue of the fact that human labor has been the only thing that is intelligent enough and flexible enough to render most goods and services. But the fundamental assumption or or thesis underpinning post-labor economics is maybe humans are not the primary producers in the future.

That's where we're coming from. Yeah. Yeah. So, so, so in that first chapter, "Rise of Automation," what, what is the takeaway? What, what's the, so what's the point? What's the "aha" here for, for, for the audience to take away?

So, the primary thing is, whenever you're looking at these paradigm shifts, you say, "What, what problem are we solving?" The first and second industrial revolutions solved strength, right? We harnessed steam, we harnessed coal, we harnessed petroleum. And so now we had an abundance of calories that we could use for mechanical torque and thermal energy. So that's what we saw. So we ended up with, with, we could probably call them an era of thermal abundance. That's what we created with the first and second industrial revolution.

Yeah.

The third industrial revolution was the digital revolution. So we solved communication. Communication is now much, much faster, or information. You know, the internet, the rise of the digital superhighway, that sort of thing. This...

We have achieved, sorry, on that point, we have achieved super abundance in certain aspects even today, like long distance are no longer a thing. There is a super abundance of our ability to communicate with anyone anywhere on Earth in real time for free, essentially.

Right. In fact, you could argue that we we have become like the equivalent of obese because we have so much information. We're completely saturated that we, we end up anxious because we're always on. Um, and there's, there's far more digital information than anyone can consume on any given day. So that is that is super abundance or hyperabundance. I want to pin that because I think it'll be important for later on in the conversation when we actually talk about what the age of abundance actually could look like, that we actually have right now examples of things that are truly super abundant, which at the time were scarce and therefore expensive and complex and misunderstood and desired. So let's just pin that one for now. Sorry, let's, let's go on.

No worries. Yeah. And so the, the, the final point is that what we're, the, the problem we're solving right now, the primary constraint is cognition, or intelligence. So we're, we're entering into an era of cognitive hyperabundance. We solved thermal abundance. We solved communication and information abundance. Now we're solving cognitive abundance. And one way to, because that sounds pretty abstract, so one way to understand this is ask yourself, "What's the optimal number of super geniuses in the world?" Is it five, or or five million, or five billion? Right? How many, like, for anyone who's ever worked in a company or or looked at their government and said, "Wow, these people are idiots. We need more intelligent people." Right? Um, so that is kind of the problem that we're solving, is is the bottleneck of super intelligence, or even just highly talented humans. Uh, so the era of cognitive hyperabundance is really kind of the project that humanity is on right now, and it takes many forms, right? There's artificial intelligence, there's quantum computing, there's simulations, there's all kinds of ways that you can solve this, that some of them look more humanlike, like humanoid robots, some of them look less humanlike, but they still do things that humans either would take a long time to do with our brains, or simply cannot do with our brains. And so that's kind of the, the takeaway.

So the four modes of human, human's contribution to productivity are being eroded, and they're being eroded fast. So let's talk about maybe, let's move on to Part Two, uh, of, of Part Two is is focused on the actual decline of labor. So can you sort of...

Take us further, and I would love if you could add some sort of data and examples from, from real world that you are aware of to sort of strengthen your point.

Yeah. So Part Two of the book is about the decline of labor, which you can't, by definition, you cannot enter into a post-labor economic paradigm unless labor goes away. Now, to make that assertion, you'd have to have evidence that labor is in fact declining or eroding. And what I've actually found in my research is that the, the turning point, at least in America, was around 1953. That's when prime age, uh, employment peaked at about 98% for for men. So 98% of, of prime-aged working men, working-age men were in the economy in 1953, and it has been declining ever since. It's at about 89% today. Now, that still sounds good. 89% is not catastrophic, but it's not 98%. So that's the first fact. Another fact is that manufacturing in America peaked in 1979 with about 21 million or 22 million, uh, employees. Today, just four and a half decades later, the, uh, uh, the manufacturing sector of America employs half that number, but it has six times the output, or sorry, three times the output. Meaning that each, uh, each man-hour put in is six times more productive. So this is the nature of automation is that with fewer people, you become more productive until you don't need people at all. So, because one thing that many people kind of believe, and this is not entirely incorrect, is that a lot of manufacturing jobs have gone overseas. Yeah.

So you can say, you can blame globalism, you can blame offshoring, but even accounting for that, MIT economist named David Autor, who coined the term in the, in the 2010s, "the missing millions," where if looking at the productivity, the American productivity of manufacturing, you would expect it to employ millions more people than it does already. But you say, "Okay, well, when you account for globalization and offshoring, where are these other jobs?" And those other jobs were lost to automation. Now, you'd say, "Okay, well, that's, that's heavy. That's, you know, physical space. That's not, uh, you know, cognition. That's, you know, that's you can, you can make those claims." However, since the year 2000, back office jobs have followed the same exact trajectory, but instead of 45 years, it's only taken 20 years.

So, back office jobs are about half of what they used to be. But back office workers are much more productive than they've ever been due to cloud automation and software as a service and now artificial intelligence. Uh, and now it's eating into developers. It's eating into lawyers. You know, we're eroding all of these different sectors. And so the, the long story short is, when you look at the evidence, you say, "Okay, well, wages are still technically going up, but productivity has gone up way faster than wages," which is exactly what you'd expect to see during the rise of automation. Now, there's another problem with this, and it's not just that, you know, unemployment is still okay here in America. We're at about 4 to 5% right now. Total labor force participation rate peaked in the year 2000 at about 66%. Now it's down to about 61%. Meaning some people have just checked out of the economy permanently. And this is despite population growth due to, uh, births and immigration. So the population is going up, the participation rate is going down, and it's not really showing any signs of reversing. It's not completely linear. There are some ups and downs, like with the pandemic and that sort of thing,

but more and more people are checking out of the economy permanently. Now, to make matters worse is that this is, we're seeing an undermining of labor power.

Globalization and offshoring undermines the, uh, the, the bargaining power that laborers have locally, but also policies have undermined unions and other, uh, aspects of labor power. So, we're kind of at a, at a lose-lose.

And so, when we, when we talk about the decline of labor, there's kind of two components. We're seeing the decline of the need for human labor, which is unequivocal across pretty much every sector and every domain. The need for humans is declining, but also at the same time, labor's bargaining power is also declining. So, this is the kind of the primary point of section two of the book, is to show, yes, automation is on the rise, and exactly as you'd expect, people are becoming more productive, therefore you need fewer people. It's really that simple. But then there are many downstream effects from that, uh, observation. And the whole purpose behind the post-labor economic movement is, I think what you set up, if you just play the movie forward to its logical conclusion, we might end up in a situation where there is full automation of everything, goods and services, and that people who actually genuinely want to work simply do not have the ability to, because they cannot provide any economic value. Bad.

So we have to figure out a way to deal with this, uh, during the transition that we are all already in, so that we end up in the good spot at the end of this, as in that these increases in production and creation of new wealth that everybody projects will happen, benefit the whole society, except instead of benefiting a micro percentile of of the owners of those ultimate technologies. Right.

Sure. Yeah. And one of the primary reasons for that is that capital tends to, uh, uh, concentrate over time. And as capital becomes more important, capital begets more capital. You know, as, as the old saying goes, you have to have money to make money. Well, if you lose your job, you don't have any money to participate in this new economy that we're building.

Yeah. Now, that is not necessarily automatically a catastrophic thing, because, uh, or many people might not assume that it's automatically catastrophic. And one of the reasons is because historically, for about the last century or so, the primary role of the government has just been to ensure that there is a fair enough labor market, that you let the market sort it out. You say, "Okay, you know, uh, where wherever there's demand for labor, that'll be a price signal, and people will train for that and so on and so forth." And that is, that is the social contract that we've operated under, which is that you have the right to work, and you have the right to work for any job for what that'll hire you.

But in the future, thinking rationally from the perspective of any business, you say, "Well, I can use this piece of automation software, or buy a robot, or lease a robot, or whatever it is that you want to do, or hire a." Which one is going to be cheaper? Which one is going to be better and faster? Which one is going to have the better bottom line for my company? And this is the kind of cold calculation that every company makes. Do you hire someone internally? Do you hire out a contractor? Do you, uh, use B2B and and and sub-contract it out? Or do you amortize it over, uh, over capital? And so that is one of the primary, uh, concerns that many people have, which is that just the, the iterative rational standpoint, as technology gets better, because it always, it's always inevitable, eventually, once technology can replace people, it usually does, uh, in almost all circumstances. There are a few exceptions here and there where we decided, like, "No, we want to have a human making some of these decisions," or, you know, uh, a human signature underwriting certain things, but even then, in the long run, businesses make the rational decision. And it's not just at the business level that these decisions are made, it's at the national level.

You actually have multiple, multiple layers because how is one nation going to compete with another if they're stuck in a more kind of Luddite mindset where they say, "Well, we have this automation, but we're not going to use it," because then you just hand, hand victory to whoever your competitors are on the, on the international stage.

Absolutely. So, in other words, the, the challenge that we have as a society is in the fact that every, every entity is going to be making its locally rational decision. But when you compound these locally rational decisions and spread them across the whole, the whole economy, this could, this could translate into a very challenging situation. Right? It, it could translate into a challenging situation. And I think that what we've spoken about already is that the pace of this change is so fast that we have never experienced this level of disruption in this short amount of time. And we don't yet know what's coming. Like, we are just at the opening salvos of this transition.

Yeah. Yeah. Yeah. So, there's, there's a few dimensions to understand how fast it's coming and what's coming and that sort of thing. So I mentioned earlier, artificial intelligence, humanoid robots, quantum computing, all of these things are general-purpose technologies. They're also automation technologies. Now, when you look at the level of diffusion or saturation, these technologies that exist, namely artificial, starting with artificial intelligence, are already in literally every sector, from education to military, public, private, it's already there.

Y...

And then you combine that with the rate of capability expansion of these, of these, uh, of these technologies. So one of the, one of the key characteristics of a general-purpose technology is that they improve over time. So not only can they be used in every sector, they improve, uh, not necessarily quickly, but they improve over time. But what we're seeing is that it actually is improving very quickly, which means that you get to network effects where suddenly, you know, whenever there's a new technology, business leaders might say, "Ah, well, I'll wait till it's cost-effective, or I'll wait till it's proven out." But as the token cost of artificial intelligence goes down exponentially and its intelligence goes up exponentially, that that calculus is going to be crossed much sooner than many people realize. And it's already, of course, crossed the calculus, uh, for many businesses who are already adopting artificial intelligence, specifically generative AI. I think last I checked, uh, and of the Forbes 500, 20 to 30% are officially using generative AI for something, and that's expected to reach 70 to 80% within two or three years. Uh, and in those two or three years, the tech, the underlying technology will have improved pretty dramatically.

Yeah. And I think that what you mentioned about both Google and OpenAI achieving gold medals in the math Olympiad, which just happened a few days ago here, here was for me a very, very good evidence of how fast this is coming and how surprisingly fast it actually is. The Polymarket bet on whether AI will achieve the gold medal was at about 20, I think 20 or 23%, just a day before, uh, OpenAI announced that they did. So it went from 23% to to essentially 100% within a matter of an hour,

as the announcement came, which tells me that even those who are following these trends to the point that they're placing financial bets on it were shocked and surprised. They were not expected. That was the, that was the bet that this will be achieved this year, and we are in July.

So, y... I think that I, I don't think it is, um, I don't think it's alarmist to say this is coming at us much faster than people appreciate and understand, and the impact will be greater than people think it will be. We are in that, in that mode, right?

Yeah, absolutely. Uh, and, you know, we've been making these promises for a while. Many people, their reaction is something like, "Ah, I've heard this before. The promise is that computers and AI are going to replace all work, you know, ever since the '60s or '80s." You know, Marx and Keynes, uh, every economist has predicted that machines will do all the labor eventually. Uh, and they, well, it hasn't materialized yet. Um, and we can actually explain why there's actually more labor to be done, despite what some of them predicted. And that is, uh, quite simply, as the, as the, the domain expands in terms of what you are able to do, what you, what kinds of goods and services you can provide at a lower price point, then you suddenly realize that that market demand. The iPhone is a perfect example. People had cell phones for many years before the iPhone, but then you had a different kind of product that offered new dimensions to that service, and then it materialized entire new sectors: mobile apps, and all the other services that are tied to your phones. I mean, even logging in now, you know, you have menus that at at restaurants that you have to use your phone, you pay for things with your phone. And so you have these, these knock-on network effects that, you know, Marx and Keynes didn't fully anticipate, but in hindsight, we can understand them, uh, as, as to why they ultimately did create more jobs. However, this time is different because again, what we see is the machines are already encroaching on literally every behavior that humans do that add economic value. So if that continues for any length of time, the conclusion that you mentioned is one of the most logical, inevitable conclusions, which is that the marginal utility of humans drops below that of the machine. It doesn't even have to drop to zero.

Yeah.

It's just that the machine has to be cheaper and better and faster than us, which that's what machines tend to do is they become better, faster, cheaper, and smarter than us.

Yeah.

And then you don't hire humans anymore.

Yeah. Yeah. Exactly. So, so I think that like, like we're now touching on this topic of power, um, and property, and the power that humans have in the economy, and how is this, uh, being attacked or eroding? I would love if we can maybe move on to that topic. You've introduced just a moment ago this concept of "better, faster, cheaper, safer." Um, can you expand on it a little bit more and take us into, into, into Part Three, which is about the, the power and property?

Yeah, so we've got power and social contract and, and so on and so forth. For most of human history, uh, basically since we came up with the idea of of economics and property, one of the primary ways that people contributed to society and also had power was by contributing labor. Uh, you know, you could always have, uh, labor revolts where people just refused to work the land back when it was more, uh, agricultural. Uh, then even during the rise of the first, second, and third industrial revolutions, uh, all productivity was still predicated on human, uh, human effort or human input. Uh, and so humans could always refuse to work, and by refusing to work, you seize up the economy. Uh, and that is how, uh, many, that's a fundamental social contract that has allowed, uh, nations such as England to demand more and more democracy over time,

uh, which then spread to America and France and the rest of Europe, uh, because the idea was that you have to have what's called a credible threat. So when you have the, the masses, or the proletariat, or the ordinary citizens, if there's a credible threat that they are able to say, "You know what, we want things to change." So there's one of the ways that you can do that is with labor scarcity, and labor scarcity happened naturally after the Black Plague, or Black Death. Um, so a third of Europeans died. Therefore, there was a huge amount of labor scarcity, and suddenly all the peasants found that, "Hey, I have a lot more negotiating power. I have a lot more bargaining power."

Now, what we see historically is that in places with labor gluts, that doesn't happen. So everywhere from Russia, uh, to ancient China, people were just seen as kind of perennial crops where there was just always going to be so many people that you didn't really have to put a high valuation on human life and human rights. And many of these places still struggle with that today. Look at the way that Russia treats its soldiers. It treats them as disposable. Um, so that's just an example as to where labor scarcity, uh, actually paradoxically increased bargaining power. Now, as machines become better, faster, cheaper, and safer than humans, labor scarcity doesn't ever happen again, meaning that the value of human life and the value of, uh, the nec, the necessity of human labor inputs then drops, perhaps permanently. So if that's the case, if the entire social contract that we have, that we have built, that is based on, you know, capitalism and democracy and all those things, when you look at what actually came underneath those, it was the exchange of labor for, uh, for, uh, uh, prosperity. That's been breaking down that promise, that you exchange your, your labor for, one day you'll be wealthy and things will get better. At least for the younger generations, that has not proven to be true, which is why there's a lot of disaffected people. And you typically see this. It comes in cycles, longer cycles throughout civilizations, where something changes, or sometimes it's a new technology. Sometimes it's just that wealth concentrates over time, those kinds of things. But then something has to break. And this gets to where and why I added Part Three to the book, which is about power, property, social contracts, is that many people are afraid that something is going to have to give, that there, that we're basically building up pressure, and something's going to blow out before too long.

Um, if you look at the statistics right now, something like more than a third of Americans expect a civil war and think that it's necessary. You don't get that level of anger unless something is going wrong in society. And the fundamental promise of the American dream has been corroding for, you know, the last several decades. Um, so I don't know where you want to go from there, because I can talk about this for a long time.

Well, I think, I think it's really, you are now, I think that now we are touching the actual nerve of what I think many people are sensing, which is that labor, in all of its forms, from the actual laborer on the field to those chief executive officers who exchange their labor for their stock and shares and millions, that everything is actually being disrupted at the moment. Even the upper ones, perhaps even more disrupted than the, the ones towards the sort of more simpler, more, more simpler, more sort of, uh, strength-based, dexterity-based types of work. So I think this, this is now touching the nerve. So let's maybe talk a little bit about, um, about the concept of how people generally generate income, and how is this, how does that look today, contrasting the income that's coming from wages versus income that's coming from property versus income that is coming from governments, and what do you feel is going to be the shift there?

Yeah. Yeah. This is, this is a great question. And so, uh, the, the fundamental thing to understand here is that household income, aggregate household income, comes from three overarching buckets, three big buckets. So number one is wages from labor. Uh, so that's your job, or, you know, if you're a solopreneur like I am, then, you know, the various contracts and other things that you have. Uh, the second bucket is from property. So that is rental properties, stocks, bonds, those sorts of things. Uh, businesses that you might own. Uh, and then the third bucket is government transfers. So this is things like SNAP, or retirement, or Medicaid, those sorts of things. Any money...

Fair social, social supports. Yeah.

Exactly. Yeah. Any, any money or value that you get directly from the government is considered a transfer. Anything that you're entitled to because you own the property, that's, you know, property-based income. And then wages. Now, when you look at it all broken out, it's about, um, 60 to 70%. It varies from nation to nation, but in any developed nation, it's about 60 to 70% wages. And then the other two are usually about split in half, although it's a little bit more in nations like Germany, where there's a little bit more of a welfare state, um, and, and less of a property base. But in America, it's about even between property-based income and transfers.

Now, let's say 60, wages, 60% this is average family income.

Yep.

Across the whole population comes from three sources. 60% comes from wages, people exchanging labor for, for, for money.

20% is, let's call it passive income. So you're not directly working for it. Your property works for you, as in you've got stocks, and stocks pay dividends. All stocks increase in price, and you sell them, and you achieve profit, and or you have rental properties, or you have vending machines,

right?

They work, they, so that's about 20%. And then you, the remaining 20% is what government transfers to help people, welfare, social services, and other transfers. So it's 60, 20, 20.

Yep.

That's about the breakdown for America. Yeah. And we spend the first 30 minutes describing how this 60 is now, it's under attack. It's actually being displaced.

Yes.

Right?

Yeah. So labor share of income. So one way that you can break down, if you look at the entire economy, like all, all income made, if you break it down into a pie chart, labor share, labor's share of income has decreased from, I think the peak was about 56% 50 years ago, to it's about, uh, just over 52% today globally. So it's declined 4% in the last few decades. And again, that doesn't sound like much, but we're getting to the point where less than half of all income is going to be based on labor before too long. So, if you lose the, not just, you know, everyone has the right to work, but if you lose the ability to work because nobody will hire you, then your economic agency will, will continue to go down.

And if you, and if you say, "Well, I refuse to work," business owners, capital owners are going to say, "Well, we'll just find a robot that'll that can do it instead, or we'll find an AI that can do it instead." That will be a viable option here, uh, in the coming years. And that's the most rational choice. Um, you know, it might sound like I'm vilifying business owners. I'm actually very much on business, I'm on, I'm on business's side. I'm on the citizen side because I want businesses to automate everything. That's how we get to the future, is we want them to automate everything. That is their job. It's, you know, I want them to get to zero employees if they can. That's the challenge to to businesses. But at the same time, that deprives us citizens of one of our primary levers of power, which is the ability to work, to or to withhold work, as a way of getting what we need. And then we're, we're reduced to just democratic rights, but of course, without a credible threat of, you know, forcing something to get your way, then what do you do? We kind of run out of levers of power. Uh, and that's one of the reasons that I'm, this is to me, I want to emphasize this, because this is the, this is the, the, the darkest hour of post-labor economics, is if we end up in a situation where there is not a redistribution or pre-distribution of not just the wealth and prosperity, but a reallocation of civic power, we could end up in a place where many people are kind of, you know, left, left in the lurch for quite a long time, kind of like Engels' Pause back in, uh, in England in the early 19th century. And I don't know about you, but looking forward to 60 or 70 years of decreasing prosperity and decreasing hope, that's not something that I really would look forward to. So, if we can find a way around that, uh, then that would be ideal. And of course, you know, there's the, the wealth and prosperity itself. Automation is going to generate more wealth and prosperity than we know what to do with. That's not actually the problem. The primary problem is allocation and distribution.

Yeah. So, and, and because then you say, well, right now we distribute wealth and prosperity, and the, the primary signal that you use is property and labor.

But if we lose labor, then only property matters in the future.

Correct.

And so, if you don't have any property going in,

you're kind of up the creek without a paddle. This is what a lot of people are worried about.

Correct.

So that's, that's kind of the fundamental thing. And then even worse, if we don't have a lever of power to say, make it go our way, other than our vote. Now, voting is a good lever of power in a functioning democracy. The concern though is that if laborers don't matter to the state, then voting power is also going to erode. So then you end up in this, this multi-dimensional kind of race condition where you lost labor power, and you're losing more labor power, and the government is even more just focusing on those that are economically productive, which is the owners of capital. So then what happens to most citizens? And then so you end up in this quagmire, this, this kind of death spiral where the economy shuts down, uh, the civic fabric also shuts down, and we really just want to avoid that. And this sounds, this sounds, uh, fantastical, but it's actually happened a few times in the last century, uh, with the Chinese Great Leap Forward, with the dissolution of the Soviet Union, we have seen nations fundamentally implode because their social contract was, was ruptured.

Was eroded. Yeah. And this...

Yeah. So, so this is actually superbly important, and part of the reason why I wanted to have this conversation on my platform is to actually raise this question and and compel those who might be listening to this conversation, but specifically industry leaders, shareholders, owners, and policymakers, that this conversation needs to be happening, and that the community that is emerging around, around post-labor economics is actually coming up with proposed solutions and frameworks that should help through. We'll touch on them soon. But yes, before we go there, you mentioned something important: economic agency.

Would you be so kind to explain what you mean by economic agency, and what do you feel economic agency consists of?

Yeah. So the, the definition, there's, there's a few definitions of economic agency, but the simplest one that I prefer is just someone's ability to influence their economic fate. And that is, you know, there's, there's kind of a few primary pillars. So number one is, excuse me, uh, labor rights. So the right to work. Uh, next is property rights, which is the ability to own and, and have that property respected, uh, by, by society and by the state, and enforced by the state. And then democratic rights, which is the ability to influence the government itself. So those are kind of the three pillars of economic agency, which there's many, many downstream effects from that. So, for instance, um, I know that my bank account is safe because of all the regulations. And so part of the social contract there is that the state has regulations that ensures that my bank will behave, and if they don't, if they misbehave, then my, my bank account is insured by the government. So that's an example of, of some of the security. Um, all of my investments there, I know that the, that every time I make an investment through my stockbroker, the SEC has inspected and crossed all the T's and dotted the I's to ensure that what I'm investing in is a real asset, and that if something goes sideways, I'll know about it. So those are examples of, of how the state can actually shore up my economic agency. Now, the state takes a more passive role in...

A lot of these things. It's not giving me anything. It's saying, "I'm giving you the opportunity. I'm giving you a sandbox that you can play in." Uh, but in the case where, you know, one of the games that we play, which is the labor market, if that game completely dries up, then the only markets remaining are democratic involvement and property involvement.

So then, you know, you've lost. And you have just, you have just described out of these three, labor one is being under, well, I'm not saying it's inappropriate to say under attack. It's not. The labor is being decoupled from production, and therefore your labor rights are steadily, and if we play the movie forward, are going to be decreasing to the point that at some point in the future, it might not be relevant. Your property rights are firm and in place. And then your democratic rights, we discussed it also, and I don't want to fold my finger because that's what ends, you know, that's what we end up with, right? So we have to therefore, we have to therefore deal with the fact that the labor, uh, part of our economic rights is decreasing by either strengthening our property, tower, property rights, protecting democratic rights, but also perhaps inventing the fourth pillar.

Yes. Yeah. So, you know, one way to think of it is, a chair can't stand with three legs, right? If it only has two legs, a chair falls over. So, one possibility, and this is something that I'm exploring, and by the way, it's not just what I'm exploring. There are nations exploring this, and plenty of people in the web3 and crypto space. What about algorithmic rights or data rights? Uh, which is another way of creating, um, a lever of power. Now, it's not a one-size-fits-all lever, right? It's not what some people promise that, you know, blockchain is going to upend society and change everything. But when you look at the characteristics of labor, it's individualized. It's, uh, it's, um, it's inalienable from the human body. There are many characteristics that mean that labor is kind of unique in terms of how it creates power. Then when you look at blockchain and crypto and those sorts of things, they're interesting because they're decentralized. They're permissionless, which is really important. Um, and they're unstoppable, meaning you really can't shut them down.

So, if you're trying to create a platform or an ecosystem that allows for collective bargaining or collective power, those are some of the best technologies. And so one of the hypotheses that I had, and that I've been looking for evidence for, is that maybe this set of technologies, and I don't, when I say cryptocurrency, I don't mean just Bitcoin, right? There's central banking digital currencies as an option there. There's blockchain more broadly. Um, could actually replace or help shore up labor power. Now, what I found is, you know, for anyone who is in the space, there's what's called a decentralized autonomous organization, which is essentially a blockchain-based company that is permissionless, and all the resources and governance of that company are, uh, managed on the chain. Uh, that's the lingo for saying that, you know, you use quadratic voting and you use soulbound tokens and those sorts of things to say, "I have a stake in this company." So that's decentralized autonomous organizations, or DAOs. They're now legal in Wisconsin. They're also, they've been legalized in, I think, Switzerland. I think Switzerland was the first nation that legalized them nationally at the federal level. But there are other uses for blockchain technology. So, one is Estonia. They actually have a direct democracy based on blockchain technology. And you might say, "Well, what's so special about blockchain?" It's transparent and it's immutable.

Um, so those are two characteristics that actually are kind of the antithesis of corruption because, as they say, sunlight is the best disinfectant. Well, if you have a blockchain that everyone can scrutinize, then there is no, there is no opacity to, uh, democratic decisions. Georgia, the nation, has also done the same thing where they put their land registry deeds on a blockchain. Uh, and that's another thing. So, it's, you know, who owns what property. Uh, and that allows, that allows for a lot more resilience so that everyone knows who owns what, uh, and this prevents, uh, corruption and those sorts of things. And those are just two very small examples. Another third example is that the EU is trying, uh, what's called SSI, which is self-sovereign identification. So rather than, rather than some state issuing, saying, you know, "This is your EU passport," or "This is your, you know, my, in my case, North Carolina driver's license," where a state authority says, "Your identity has been verified." It's allowing people to own their own identity, which again, is another form of power because information is a, is a very powerful form of power. So those are just some examples as to how we might build a new social contract, at least in part, on the back of technologies like blockchain and crypto.

This is, this is very, very interesting. Um, that introduction of the fourth pillar, I think, could be absolutely transformational and revolutionary and give people an element of comfort that, you know, there, there are ways to supplement what we feel, I think, generally, the other two pillars of labor and democracy being, being gradually eroded. Uh, so David, I'd love to move us now from statement of the issue, and we've been now stating the issue for the first 50 minutes of this, identifying the concern, right? Uh, to, so now what, what do we do? What are the ideas, models, frameworks, solutions that are emerging? Now, I've been following you and your work, and we've been sort of discussing and pinging and communicating. I know that there is a framework that you are proposing of multiple layers that add up to a potential solution. Can you share a little bit more, or a lot more?

Yeah. Yeah. So, there's, there's, there's a few parts of the next, next, uh, part of the framework. So, first is, what do you measure? Anytime that you're looking at a big, uh, systemic level problem like this, you have to have the right measurements. Things like GDP, Gini coefficient, those are, those are good starts, but they're not necessarily, uh, the be-all and end-all. So, we can talk about measurements. Then there is prosperity. So, there's redistribution and pre-distribution of prosperity, which is what actual policies do you put in place so that people can participate in this new economy. And then finally, there is the reallocation of power. So, there's different measurements and interventions at each of those levels. And also, there are different, uh, different, uh, considerations depending on what scope you're looking at. So, for instance, if you're, you know, if you're a town or a county or a city that is looking at, "What do we do about, you know, decline of labor?" Or if you're a state or region or province or federal government or an international alliance, even. So, there are different levels of concern and different levels of granularity of interventions and measurements. Uh, so it's a, it's a relatively large body of knowledge and evidence, but fortunately, the biggest thing is the closer that I looked, the more I realize that lots and lots of people are trying all kinds of things already.

So, for instance, um, my home state of North Carolina has the, um, has a county, what is it? County Economic Performance Dashboard. Um, Argonne National Labs has created the CI, County Economic Performance Index, just as a couple of examples as to what they're measuring. Um, and much of the data that many nations already collect is already, uh, there's a lot of hidden wisdom and insights in that data. So, for instance, the idea of what we talked about earlier, which is measuring, uh, wage versus property versus transfers, that's already measured. That's already, the data is already collected, so we don't have to invent anything new there. It was, it was actually kind of amusing the first time I proposed that a think tank said that what I was proposing was feminist Marxist nonsense, and I'm like, "The federal government's already collecting this data."

Um, so I don't know what you're talking about. Um, but that underscores the point that when you talk about some of these things that feel too new, and a lot of people kind of have knee-jerk negative reactions. So that which, Yeah. Go ahead. I was going to say, this is, I think, actually very important to mention that, um, like a lot of pushback that I would anticipate would be saying, "Oh, this is, you know, communism or socialism repackaged." Um, I am a capitalist as it gets, like I, and I know so are you. The idea here is to actually avoid that. To actually avoid that.

To not put the population at the whim and control of governments, but instead to empower the population with property rights and other means that will ultimately supplement their labor to the point that they can continue living a quality life with a future that is brighter still.

Yes. So, this is not about, "How do we get, you know, universal basic income so that nobody needs to work?" This is about, "How do we create a portfolio that will allow you to see the future and be happy and excited about it because you know what's at the end of this transition is truly the stage of, you know, hyperabundance of goods and services?" Right? Yes. So, to differentiate between, you know, communism, socialism, Marxism, many people use those interchangeably. One of the things that they all have in common is that it is the government runs everything, right? It's government property or collectively owned everything.

Um, and that creates a situation where people are even more disempowered. Um, and the reason, so there are plenty of reasons that you want to avoid that. First, in the state, they end up abusing that power. No matter what their original intentions were. Um, when you say, "Well, the state, the state knows best," um, it, it never pans out that way. So, first and foremost, second, you lose a lot of information. Uh, you know, the free market, whether it's a labor market or a market of goods and services, that creates a lot of information so that you have everything from price signals, which tells you what to produce, where it tells you who's being more productive and less productive, and those sorts of things. So, you want to preserve as many market-based solutions as possible.

As labor declines, because right now, the labor market is one of the biggest components of the economy. So, even if you want to preserve free market economics, as most of us do, you still need to anticipate, okay, what happens when labor is only 30% of the economy instead of 70 to 80% of the economy? Because labor, like some labor, will stick around. That's one thing we could maybe circle back to at the end, is what kind of jobs are going to stick around. But the short version is that automation is destroying jobs faster than new jobs are being created.

Um, so if we want to reconcile with that future, we need to say, "Okay, one of the constraints is that we want to have market-based, capitalism-friendly solutions, not centralized solutions."

Important. You don't want to. Yeah, that's very important. You don't want to put all your eggs in one basket. Every time you become completely dependent on the government, and you have no agency, because going back to the idea of economic agency, if all that you have is an allowance from the government, that is no way to live, right? Like, sure, you can probably subsist on that, and there are plenty of people in my audience that do because they're on disability or retirement or pensions or that sort of thing. So, I don't want to, I don't want to, um, I don't want to talk down to anyone who is living in that kind of situation, but I think they would also be the first to agree they don't really have a way of participating. Wealthy enough to have stocks and bonds and property and those sorts of things. This is the point that people might not be able to participate, even if they truly want to. Like when you have a professional who has spent 30 years building a career to do some expert special thing that is based on their knowledge and experience, and then suddenly that gets displaced by a solution that costs $19.99 a month to subscribe to, that person wants to participate, but they might not have the opportunity. So, to me, that is really, that is what we need to solve for, but in an open market mechanism.

Yep. And I'm looking for, let me see if I can bring it up. Um, I think you have it, the, uh, the pyramid graphic. Um, I can't find it right off the top of my head.

I do, but I don't have, I don't have a handy version to share it. So, what we're going to do is, I can either describe it as you look for a diagram, but essentially the concept here is that there are multiple layers of, uh, future income sources that we need to all be thinking of, and I think this actually applies to everybody from the individual and their families, ultimately to, you know, communities, regions, provinces, states, and ultimately nations.

Yep. So, so, I'm not able to find the, the, the graphic, but the idea, let's talk about. Yeah, we can talk about it. So, when, when you say, like earlier, you used the word portfolio, I think portfolio is the best term. So, you know, yes, one of the things that I say is we probably will want some sort of guaranteed income or basic income. Um, it's probably not going to be like the, the universal high income that some people like Elon Musk talk about. Um, I gave a talk at a university and, you know, one of the students asked me, like, "What if we get a universal basic income?" And I said, "Well, you know, because he's like, 'Why would I work if I have that?'" I was like, "Well, what does basic income mean to you? How much, what's the dollar amount?" He said, "$5,000 a month." I said, "That's not a basic income. That's, that's, that's more than some people make today."

Um, so we're not talking about that. When you talk about universal basic income or guaranteed income programs, usually the pilots are between $200 and $500. Uh, which is not enough to pay rent. That's, you know, if all you do is feed yourself, that's, you know, that can feed you and a couple other people if you're very economical about it, but it's not going to pay rent. It's not going to pay tuition, those sorts of things. We might, you might argue for a slightly higher universal basic income. But the point there is that that forms the foundation of the pyramid, uh, where everyone gets it. So, everyone has at least a little bit of money transferred to them from the government. So, there are a couple ways you can do this. You can tax and redistribute. You can do helicopter money, which is you just print money and give it to people.

Um, but people can argue about the specifics, but someone's got to pay for it because if you don't take money out of circulation, then you're going to end up with inflation, which devalues everyone's money, when that's no good.

So, I was going to say, as you described, that immediately popped into my mind. Of course, printing money drives inflation. So, that would be a major risk. You also mentioned taxation.

I think maybe we should just pause here for a second and explore this a little bit further because I know that UBI is a big, it's a topic that is talked about now, and there are strong views for and against.

I would love to get your thinking about how would a nation potentially source funding to fund universal basic income. So, if you can address that, and the second thing that I would like to ask you in that context is, printing money of course raises inflation, but automation and technology is deflationary. So, is there a scenario where these two forces end up in an elegant equilibrium while providing universal basic income, at least during this transition phase, which might be the next three, five, seven, 10 years?

Yeah, I, you know, I've thought about that, and one possibility is that if we see, because automation is deflationary through multiple measurements, let me, let me just start there, is that first and foremost, automation makes goods and services cheaper. That's why we do it. That's why we use technology is because it makes things, you know, better, faster, cheaper, safer.

Um, now, another reason that automation, particularly artificial intelligence and robots, could be deflationary is because it can cause people to lose their jobs. Uh, people having less spending money is still deflationary. That's, you know, there's any number of ways to achieve it. So, less purchasing power means that, um, rather than the value of the money that you have going down, uh, in your bank account, it'll start to go up because less people have money. So, law of supply and demand, as demand drops, then price drops.

Yeah. Yeah. So, it's, it's, it's pretty straightforward. So, I could imagine a situation where if we start to see a deflationary regime take over, um, that governments start to issue stimulus checks again, because we know we can predict the amount of inflation that they create. So, if you end up with a regime that's too deflationary, you might just inject money directly into the economy. Now, what people would probably prefer is something more regular.

Uh, so then, to your second part of your question, which is, how do you fund such a thing? This is going to be a little bit more difficult because most basic income programs have been either at the local or state level, and they've also been very narrowly funded. So, you're talking about sometimes it's, you know, a few dozen families or a few hundred families are given basic income, not every family in a region. So, we're not really, we haven't done an experiment yet on a large enough scale to see where does this money come from.

Uh, now, the obvious thing is, well, if those who own the capital, which is the robots and data centers and AIs and all the big tech companies, where they're getting the most money, um, you know, maybe a robot tax is a way to go, or just taxing wealth in general.

Um, some people have proposed a very modest, like, 0.5% wealth tax on any account over a million dollars or over a billion dollars or whatever you want to say. Um, the idea there is that you put a very, very small tax on the largest concentrations of wealth, and that'll help inject some of that more or less stagnant money back into the economy.

Um, that's a proposed solution. Uh, so there are plenty of ways to do it, but what I said earlier is that creating the wealth is not going to be the problem there. We're about to hit a tipping point of solar, nuclear fusion is on the horizon, artificial intelligence, robots. We're going to have more prosperity and wealth than we know what to do with. It's just, what are the little systemic changes that we make so that it circulates?

Bingo. This is, I think, very, very important thing to stress. Uh, I agree with you. I think all the indications are that we are upon a productivity and prosperity, um, I don't know, I don't know golden age, I don't know how to describe it, but that because of the automation, everything is going to be faster, cheaper, better, safer, easier to produce, and we are going to be accumulating as a society a lot of prosperity and wealth. The problem is, though, that a lot of that wealth will be generated at the same time as the curve of the employment goes down.

Right? So, we will have a window of opportunity while that additional wealth is generated to figure out how to keep the society ticking and how to avoid what could be a catastrophe that, like you described, what happened in China. You described what happened in the Soviet Union after the collapse of the Soviet Union. If we don't do this systematically and smartly and wisely, we could end up in a situation where all of that wealth has accrued to a small percentage of owners with 90% of others who are no longer able to participate. So, we have to figure this window very, very quickly, and hence the urgency for me of this conversation.

This window. So, let me make this maybe even more real. I believe that most organizations, explicitly or implicitly, are in the process of figuring out their own business case about what do we do about this and our new hiring policies, but also what do we do with the people that we already have. So, imagine what happens when all these business cases get acted on next year, for example, right? We might be under very, very significant pressure in the system much faster than, than, than, than I think most people think. And to me, this is really the reason why I'm wanting to raise this conversation because we need to be solving this now.

Yes. Yeah. So, to get back to the pyramid idea, I just, I just jotted it down since I couldn't find it. So, UBI could be the foundation.

Let's say that's the foundation. Yeah. Everyone gets a couple hundred dollars a month, probably in an ideal world, from the federal government, from their state, and from their city. So that, so that if you're in a more productive city or state, you get even more, you know, guaranteed income or basic income. So you end up with a portfolio of transfers or, you know, probably monthly checks that you get from the government. The next layer could be what some people are calling universal basic capital.

Um, so the Trump administration just created baby bonds, where every, for every child that's born, they get, uh, they get a $1,000. Um, I don't think it's, it's not been implemented yet. It's just a trial. So, I don't want to get people too excited. But the idea is that for every child that's born, they get, uh, $1,000, and I think it's in an S&P 500 index fund, um, is the proposal. So, that's an example of just basic capital, where the government just says, you know what, instead of giving you money, let's give you, let's just give you a chunk of the pie, right? Let's just give you some stocks and bonds right off the bat.

Uh, so that can be done for children, it can be done for adults. Um, there are other ways that you can look at that, but the idea is that you have some level of private ownership that is just guaranteed by your government. And again, there's no reason that that only has to be done at the federal level. It can be done at the state, regional, and local. So, these are, so, so let's imagine the py, well, as I have the pyramid written down, but so the universal basic income is the bottom layer. And the idea is that universal basic income, your genuine essentials for survival, as in your food, and like that's the basis of Maslow's hierarchy, and then, you know, we can become, we can now be intellectually climbing up the Maslow's hierarchy of economic agency. Next level up, what you're describing is called public wealth fund dividends.

Yes. And what you're describing essentially is an equivalent of sovereign wealth funds, regional wealth funds, municipal and local wealth funds, where corporations, whether they're nonprofit or whatever types of corporations exist, and citizens who live in that region, in that state, in that nation, participate as owners, co-owners of public wealth. Is that the idea?

Yeah. So, wealth funds, um, so there are, there are rural wealth funds, there are municipal wealth funds, there are sovereign wealth funds. None of these are new. They exist all over, uh, in various formats. Uh, many of them are tied to natural resources. Not all of them. You can treat them like an endowment, where it's basically an account that owns stocks and bonds, and the dividends and proceeds from that are used generally to pay for the government or to pay for services that the government provides.

Um, so then you get, you know, things like transportation and healthcare, that is effectively, it's free to you. Um, but then it, the cost is defrayed by that wealth fund. In other cases, you can have disbursements from those wealth funds, like the Alaska Permanent Fund, which distributes about $1,700 a year to citizens of Alaska based on oil income. Now, if we're trying to get away from oil, then that might not last forever. So, we'd want a little bit more diversification in our portfolio. There's nothing magical there.

Um, but yes, so wealth funds as a way of having collectively owned capital. Now, the custodianship of those funds is important. Um, every time you have a huge amount of wealth that's concentrated in one place, it becomes a target for corruption and manipulation and exploitation. So, transparency, good governance, democratic rights, and democratic institutions are really important to have those. Which is one way that you can circumvent that is by going to more private sector. So, that's why the other layers of the pyramid are private sector.

Yes. So, let's talk about the third layer. So, the third layer, you called collectively owned private assets.

So, that is now the third layer that builds on top of these first two.

So, help explain what you mean by collectively owned private assets, as well as, by the way, I recognize what you said. Everything you're going to talk about pretty much exists somewhere, has been tried and piloted somewhere. So, none of this so far is,

None of it's magic.

None of it is magic, right? But let's build the pyramid to the next level. What is the next layer? Collectively owned private assets. What do you mean by that?

Yeah. So, this is things like trusts, um, employee-owned companies, cooperatives, that sort of thing. Again, none of it is new. Uh, but the idea is that you create, you, we would overhaul our legal frameworks. So, for instance, Wisconsin that's allowing DAOs, decentralized autonomous organizations, that can be an example of an entity that people just spin up, and that entity then owns assets, whether it is real estate, whether it is code, happens to be.

Um, again, we're not reinventing the wheel here. We're just saying, "Hey, let's put this in a framework."

So, collectively owned private property. Um, it can, that can be, uh, land trusts. So, that's a common one where you own farmland or forest land, those sorts of things. Um, yeah, there's nothing, there's nothing particularly special about it, but it can be legally or financially prohibitive to create these things, and what you can do with them can be difficult, which is why it's included in the framework is because what we want to do is not necessarily have the government say, "Hey, like, yes, we can hand out universal basic income and universal basic capital and establish sovereign wealth funds," but then you also want to create a new segment of the free market that says, "Hey, let's have you guys work together because collectively you're smarter than the government."

I agree. I agree. And so, when I think about collectively owned private assets, in addition to what you just described, most of us actually, as we participate, as we just participate in the economy, we frequent various brands and stores, and we get loyalty cards, and we get, you know, we get sort of recognition that way, and companies are sort of attracting us to become their customers. I can absolutely see a model where, you know, loyalty concept is translated into fractional ownership concept.

So that, you know, the company that I frequent ensures my consistency by translating my purchases into a micro-fractional ownership of the company itself, plus shared shared ownership companies, employee-owned companies, or proliferation of equity-based compensation to the people before automation takes over, right? So, how do you create an organization that will compel the best employees to work for it because they are all getting equity, knowing that at some point, five years out, 10 years out, this enterprise is going to be fully automated, but I'm fine because I have a unit or I have a share?

But that's the idea. So, to me, what is really important to emphasize is that industry champions, industry leaders, owners of businesses, this layer is the layer that you need to contribute and participate and figure out what works for you and what will work for your customers and for your employees. This is the point. The bottom two layers are mostly driven by public sector and policymakers. This middle layer is actually driven by industry champions and owners.

Yes. And, and one of the, so, first and foremost, we have to also give, let's give some concrete examples so that it doesn't sound alien. Um, REI, successful outdoor company. Um, they're a cooperative. So, if you're a member, you get dividends based on your purchases at the company. Many credit cards give you cash back and they give you points. That's another example of this program. Um, airlines give you frequent flyer miles. All kind of equity, not necessarily equity, but those are loyalty programs that show that if you give customers a stake, they tend to become more loyal customers.

So, none of that again, we're not reinventing the wheel at all with any of these ideas, just kind of codifying and systematizing it to show, hey, this is actually possible. Uh, ESOP, so employee stock option plans, uh, is another good thing that, uh, pretty much any private company, any for-profit company could do. Uh, studies often usually show that employee-owned cooperatives, the employees tend to outperform because they're more invested, knowing that they're going to get better returns.

Uh, certainly at companies where I've worked in the past where they had a stock option plan, it felt really good. You know, it's like, hey, 10 or 15% of my income, it comes in company shares, and I know that I get them at a discount because those shares were at the, you know, cheapest. I get, I basically get an automatic purchase of those shares at the cheapest that they were during that pay period.

Um, and then usually at a little bit of a discount before that. So, hey, my success is based on the company. So, every time the company is spending money, I'm thinking about, hey, this might come out of my, my shares. That sort of thing. So, those are all examples of collectively owned private property or private assets. It's not necessarily, you know, put it on a blockchain and it's going to be a decentralized autonomous organization or a new memecoin that's out there.

Many people in the web3 and crypto space immediately default to those kind of more imaginary assets, but we're talking about very concrete brick-and-mortar real assets. This, in other words, this has to work for an average Joe and Jane.

Yes. For people who find themselves in the middle of this tornado and are not themselves, you know, entrepreneurial in nature, or just normal people with normal families that have to feed. This has to work for them, right? So, thank you.

Has to be automatic.

It has to be automatic and it has to work for them. Um, so now we said, UBI layer, publicly owned wealth fund layer, collectively owned private property layer, and then there are still two more layers to go.

There is your, your personal property and then what you call residual wages.

Yes. And I'm, I'm putting residual emphasis here on the residual. So, let's talk about private, privately accumulated assets as the fourth layer of the pyramid.

Yeah. So, this is very conventional. This is your rental properties, your stocks and bonds, and any companies that you own. Not really a whole lot changes there. Uh, but the idea is that the bottom three layers create a more solid foundation, allowing you to accumulate more private property. Whether that is, you know, you buy a rental or a timeshare or stocks and bonds and those sorts of things, because if you create that safety net, which is based on, you know, some redistribution, but then also collective ownership and collective safety, then that gives people that baseline security. And one of the things that we can do, just as an example from a government perspective, is we could do a dollar matching program.

Um, you know, many people have had 401ks where your employer will match the first 5% or I think the most that I had was up to 11%. It was a really great company that I worked with, where you do it, where the government might do a dollar matching program for every qualified investment that you make, they will match it as long as you hold it for more than a year or two, or whatever the rule might happen to be. So, we can incentivize people to accumulate wealth because if we are, if we all collectively decide that we're moving to a property-based future where we need to broaden property ownership in order for the economy to continue going well, you just subsidize it, and you subsidize it with tax code, which is that's how we encourage people to buy homes.

Yeah. Right. It's all your homeowners insurance and your interest that's tax deductible. So, that actually comes off of your mortgage rather than paying rent. So, if you want people to invest in property, you just make it easier and you incentivize it through those schemes such as tax breaks and dollar matching schemes and those sorts of things. Um, and over time, with the foundation of universal basic income and universal basic capital and collectively owned assets, um, then you have a new paradigm where people own more and more property. Therefore, they are participating in the growing pie more and more. That, and that is exactly where we need to be moving, clearly. That's the message.

So, now you mentioned, so, so let's just, I want to just linger on this for a moment in the personal personal accumulated assets, your property, you mentioned things, uh, am I back? I, you mentioned some obvious things like your rental property, if you were fortunate to invest in, you know, a condo or a house that you are renting, that's an example of personally accumulated assets, or the stocks and bonds and mutual funds that you have invested through your pension. But think of that actually as your passive income source. And look at, I would suggest that everyone ought to be considering and contemplating what might be other sources of passive income that you could be acting on. What could be some of those sources of income? I give you a couple of examples that are maybe too obvious, but nevertheless, a vending machine business is an example of a passive income business, right? There is some startup, there is some work, but for all intents and purposes, that is a way to enter into to expand your sources of passive income. Pay attention to what's happening out there and opportunities that are emerging that might not be self-obvious. For example, a month ago, Tesla allowed full self-driving and allowing people to actually convert their vehicles into robotaxis. This changes fundamentally the whole sector where now you are, your depreciating asset, which is a car, has always been a depreciating asset. Unless you invested in something that is going to accrue value over decades like a Ferrari, your cars are depreciating assets. The cars of the future could actually be a revenue-generating assets, right? So, there are opportunities to pay attention and get yourself involved that will further strengthen your passive income source. And the whole trick here, I think, is to figure out how do we get the whole population to expand their passive income so that we can all benefit from the automation that is going to be generating the wealth to fund the society going forward. Right. So, to me, that is really important to focus on. Right.

Absolutely. And then on the very top, residual wages.

Yes. Yeah. So, as I mentioned earlier, you know, much of a huge component of economic productivity has already decoupled from human inputs, and that's going to continue. With that being said, not all jobs and not all labor is going to go away forever. Uh, there's, if you look at what's called Baumol's cost disease, you can look at where wages and inputs are already going up. So, for instance, things like personal coaches, yoga instructors, healthcare, education. Now, healthcare and education might be completely upended by automation here soon, but the definition of Baumol's cost disease is that low productivity and low elasticity domains tend to become more expensive as everything else depreciates because more demand goes to those unique services. So, like a good therapist, a good therapist is always in demand, and so they're always booked up. That's an example of demand rising for those particular kinds of services that'll go up, uh, for the foreseeable future and perhaps even permanently, just due to human preferences for things like live performances, what's called the meaning economy, or the experience economy, or the attention economy. There are going to be many, many segments of the economy that do stick around forever. But how many comedians do we really need? And also, you have to be a good enough comedian to sell tickets, just as an example. So, there's always going to be some of those jobs that stick around forever. Another category of jobs that'll probably stick around are what are called statutory jobs or high liability jobs. Yeah. So, that is something where a human needs to be involved for regulatory compliance, or because they're a judge or a politician, you need a human signature, and you need someone who's going to be accountable for that particular decision or activity.

Um, and then a final category that someone pointed out to me recently is, even as AI and robots get better, humans are still relatively energy efficient. We run very cool. Our brain only consumes about 20 watts of energy. If you have a lunchbox with a few pounds of food, you can operate all day out in the field.

Y. So, there's, you know, but who wants to be a deep, deep woods forester? Not everyone wants to be a deep woods forester.

Not everyone can be a deep woods forester, or an emergency first responder. And who knows, it could be that robots end up better at those jobs than us anyways. But the point is, is that some jobs are going to stick around, probably indefinitely. We might ultimately create entirely new job sectors. It remains to be seen. There's nothing on the horizon. That's one thing that's important to emphasize. There's nothing on the horizon. But some of those jobs are going to stick. 20 to 30% of household income will be residual wages. That is, we're looking at an aggregate. We're looking at saying, okay, it's 70 to 80% right now, 60 to 80% right now, depending on the nation. That's going to shrink as a component of aggregate household income. So, therefore, you need to grow property and, to a lesser extent, transfers to make up for that difference.

Yeah. And, and so David, and through this last commentary, I think you've touched on this question. By the way, the Q&A is lighting up, and I'm trying to see if we are addressing questions from people who are asking. Many of many people are actually asking about what are the jobs that will remain? What would be your general advice to people? What should they be thinking and doing right now? Let's say you're talking to, you know, a 20-year experienced knowledge worker, pickup profession, accountant, engineer, professor, like, what would be your perspective and advice to people?

Yeah. So, the number one thing is, the most valuable skill is communication. Uh, and communication comes in all formats, whether it is negotiation or conflict resolution or coaching or presentation. Um, that kind of skill is very much baseline to everything that's going to stick around, whether you're, whether you want to pivot to become a personal coach or a yoga instructor or an influencer, right? Uh, every time I give a talk at a university, one of the things that's brought up is that the number one job for, uh, for young people is they want to be YouTubers. And well, I make a living from YouTube. And so they, "How did you do it?" It's communication, right? You get good at running meetings, you get good at talking to strangers, you get good at expressing yourself, and of course, you do it all the time like I do, and you get better at it.

Uh, so communication, absolutely, is the foundational skill, uh, for the future. Um, that, not just foundational, but universal. Beyond that, when you look at, like, okay, where's the direction that things are going, um, you can look at what your true passions are and look at where there's an intrinsic component to something that, uh, that adds value. So, think about things like authenticity, um, experience, empathy. So, this is when we go back to the four categories of where humans add value, which is, uh, strength, dexterity, cognition, and empathy. Empathy is the final attribute that some of that is irreplaceable. Even if machines are good at faking it, authenticity is underpinned by empathy. So, for instance, I have members of my audience, and one of the reasons that I have, uh, that I have a large enough audience that supports me is because of that authenticity. A lot of my audience doesn't even agree with me, but there's a level of connection and authenticity that to them is valuable, and it's valuable enough that they choose to support me, to support me in my work.

Yep. Excuse me. Um, so, yeah, just think about those things. Um, what one thing that's interesting is that the meaning economy and the experience economy, none of it is new. These jobs have always existed. Whether it's priests or entertainers or live musicians or people in helping and care professions, those jobs have always existed. But what happens as we're moving into this fourth economic paradigm after the agricultural paradigm, manufacturing and service, we're moving into this experience economy. And so these jobs that have been relatively small are now getting bigger. So, for instance, I have an upcoming podcast with, uh, about coaching, and there was a glut of people entering the coaching space a couple years ago. So, there was a market correction where there was too many coaches, and it kind of cooled off. But it's still a growing sector. It's still a massively growing sector. Nurses as well, and those sorts of things. So, there's always going to be some area that's growing. Now, is that going to be enough to absorb everyone that loses their jobs? Probably not.

Probably not. That's why that's hence this conversation. But for those that are eagle-eyed and hardworking and already well-positioned, and honestly, sometimes a little bit of luck goes into it, um, but for for the right people and with the right motivation, you can pivot and get into something that's going to be a little bit more durable in the long run. I think really this is really worth emphasizing the meaning economy and the experience economy, and this actually triggered a thought. You know, when I go to the local coffee shop, I actually, or in my case, not a hairdresser, but a barber, let's say, I do want the barber to shave me, and we have a conversation, right? And it's a local person that I've known for 30 years, right? And so there is that quality that I think is going to remain. As a matter of fact, if I think if we play this movie forward, if anything, we are going to become much more communal in our community as we build relationships with people with whom we're going to be interacting in our day-to-day, which then takes me to a second consideration here. Uh, when I think about jobs that are going to be impacted in sequence, in sequence, you described humans bring strength, dexterity, cognition, and empathy, and we've already automated strength. I think that it is

Actually, cognition that is at the frontal attack right now, and that dexterity type jobs are actually safer now than cognition type jobs. So to me, I think, and I don't know if you agree or not, but like, if I look at somebody who is, you know, a mid-career accountant and somebody who is a plumber, I think that the plumber is going to skip their job longer than the accountant going forward.

Yes. Uh, I'll say yes, but there is a caveat. Um, and and you're absolutely right because of the because of the combination of problem-solving and expertise, as well as fine motor control that goes into electrical work, HVAC, plumbing, those sorts of things. And that's just a few. There's plenty of jobs like that. Welders, right? Um, I remember having lunch with someone who is an underwater welder. That is a tough job. It'll be a while before a robot can do that.

However, as the accountants start losing their jobs, they're going to retrain. And some of them are going to retrain to be plumbers and HVAC technicians, which means there's going to be a labor glut in some of the. Correct. They're still going to get hit with a spillover effect from some of these other layoffs that are going to start happening because the accountants and developers who lose their jobs, they're pretty sharp people as well, right? They're they they're probably mentally capable of retraining in in the cases that they want to. Some of them will choose not to. Not everyone wants to go become a septic worker, right? You know, >> uh, but at the same time, some of them will. Uh, and that that could spell problems, uh, potential problems for people that are already in that space.

Yeah. So now, here is another thought that I think is is is we we should touch on. A lot of this disruption comes to comes to us through what is happening in artificial intelligence, or as you all call it, alien intelligence. And therefore, intellectual type of work is most at risk for um replacement in the next few years. But I think what people maybe fail to appreciate is that the real amplification of impact can be expected when this digital version of artificial intelligence becomes a physical expression of artificial intelligence through robotics. And I I think that we are at at at the brink of a Cambrian explosion.

Yes. Of robotics where fast forward five years from now, people are thinking, oh, robotics, they think robotics, uh, on the factory floor. And maybe a little bit more creative people think about, oh, you know, I can completely see how a humanoid robot will be useful for me at home and maybe at work. But they don't consider the full spectrum of automation and robot robotics that is upon us, from nano robots that will be, you know, going inside your body to kill a cancer cell that will be autonomous and intelligent, all the way to Gigafactory, which itself is an autonomous robot that happens to be producing other robots that are on wheels. So we are looking at the Cambrian explosion of of automation coming coming at us behind this initial phase of digital intelligence that is already shaking us, right?

Yes. So this will be quite quite a like we live in the most interesting times ever, I think. Yeah. There there is there's an old Chinese proverb that says, "May you live in interesting times." Um, and we we certainly rolled the dice, uh, well, on that one. Uh, but yeah, to your point, um, you know, going back just a little bit, the cog, the if your job is primarily what I call a KVM job, keyboard, video, mouse job, um, then you're at the highest risk. And in fact, just last week, OpenAI released their computer using agent commercially. Yeah.

For everyone. >> Uh, very soon. And those agents are going to be getting much smarter. Now, that's strictly cyberspace to your point. Then the combination of wheeled robots, you know, basically one way of thinking about it is is the, uh, is that any self-driving car is a kind of robot already. You've got drones. Those are kinds of robots that are autonomously delivering goods. Sometimes they're delivering weapons on front lines, but they can also be used to deliver lunch. Um, so you've got that. So you've got wheeled, you've got, uh, boats and planes. And they don't have to be humanoid in shape. And yes, even even lights out factories that are completely autonomous, that is itself another kind of robot, or, you know, compound many robots kind of stacked together. And as so, the the there's a few constraints there. So while it is exciting, um, there's there's this principle called Hoffstatter's law, which is that it always takes longer than you think it'll take, even when you take into account Hoffstatter's law. So, first, we have to we have to make the robots smart enough, right? They're not quite smart enough yet. The dexterity is there. Um, but economies of scale, getting the actuators and sensors and building the chassis for cheaper, scaling up the batteries, those sorts of things. So, that's that's well in hand. But making them smart enough, particularly to be fully autonomous, because it takes a lot of intelligence for planning. So most robots, at least in the early days, are going to be connected to the cloud because that's you you'll they'll they'll be managed by, you know, a super intelligence in the cloud because you can't run a super intelligence off of a battery this big yet, right? It's the physics just doesn't work out. It'll take about 10 or 20 years, but then your robot will be far smarter than you. Um, I kind of had a tongue-in-cheek joke saying that like, you know, that we've achieved super intelligence when it's built into your toaster. Um, which is coming. People are already putting AI into toasters. I'm not sure why, but they are.

Um, >> but the point is, is that it it will be downsized. So, you we have to wait for the intelligence to get denser, the compute to get denser, um, the construction of the robots to scale up, those sorts of things. Now, when we say like some people say, oh, it's going to take 40 or 60 years. No, it's going to take 10 to 20 years maximum.

Maximum. >> Um, yeah. And and it's it we're already seeing, uh, humanoid robots dislocating some factory jobs. Uh, Amazon warehouse, BMW plant, those are the two first ones. Many thou tens of thousands more are going to be shipped to other warehouses and factories here soon. And that's a great proving ground for them to become more and more dextrous and more and more autonomous. And this is 2025. So it would be kind of I think it would be silly to to uh, assume that it's not going to improve much over the next couple years. And we're looking at by 2030, you know, the mass production, the intelligence, the autonomy is going to be there. By 2035, the the ramp up of produ, uh, uh, production of these units. We're looking at a billion humanoid robots by 2040 at the latest. It very well could happen sooner as we find efficiencies and, you know, for instance, getting away from, uh, expensive neodymium magnets, for instance, could be a way to make production cheaper and faster.

So it will take a little while, but if you're saying that we only have 10 years until like basically all jobs that as we know today are gone, that's very, very fast in the grand scheme of things.

That's exactly that's very, very fast. And I think that's the limiting factor here. The actual scarce resource is electricity. That's the scarce resource that that that that once that is solved, and we know it's being solved, is going to propel this really quickly. But the second thing that I think people do not appreciate is the the difference between linear and and and and exponential curves.

Yes. >> That once, and I think we are close to a reality that these, let's call them alien intelligent systems, are going to now start self-improving. And once they start self-improving, then all bets are off. Like the exponential curve of self-improvement, I think I think is going to surprise us. And then that s how do you actually deploy that towards acceleration of robotics and further automation? I think we are we are up for a for a major set of surprises over the next months and and and years. But yeah, maybe David, what we should do is let's maybe shift towards now, what what is the what is the good that can come out of all of this?

Yeah. So this is something that a lot of people love exploring this because it feels science fiction. Um, you know, futurism, you it's it's very easy to imagine a utopian future where everything is great. Uh, but I've spent the last couple years focusing on how do you actually get there.

And what's it what's it actually going to look like? Um, and so I try and I try and keep it keep these thoughts grounded in, you know, what is what's human nature actually show, uh, what is actually within the reason for building. So, one of the places that I like to start is people say, well, what about meaning? What about purpose? How do I how do I know my value if I don't have a job? And, uh, one of the things that you can look at is just what is from a from a biological perspective, what is it that humans actually need for their well-being? Um, there's a few frameworks that I've studied for this. So, one is called self-determination theory, where mastery, competence, and and relatedness are the three primary psychological drivers. So mastery or competence, um, is, uh, and sorry, I said that wrong. Is it's competence, autonomy, and relatedness. Sorry. Um, so competence or or mastery is people feel psychologically good when you're good at something. Um, one of the things that I love doing, and I'm not going to do it now because I'm not warmed up, is I love singing. I don't make any money from it. I mostly only do it in the shower, but I like being good at it. Um, you know, and and other people like, whether it's restoring Mustangs or building cabinets. A lot of people do stuff and they get really good at something not for money, and sometimes not even for social acclaim, but just for its own sake. So mastery or competence is one of the one of the things that people need, and you don't need a job for that, by the way.

Uh, the next is autonomy. So was actually studying this framework actually taught me the importance of economic agency because economic agency answers the fundamental psychological need of autonomy, which is how much control do you have over your time? That's the fundamental thing. Is, you know, do you do you wake up when someone else tells you to wake up, or do you wake up when you want to wake up?

Uh, absolutely. Everything that I designed in post-labor economics was how do we increase people's autonomy over time? Because that's one of the primary ways to know that your social contract is working. Because if you say next year you're going to have even more free time than you have this year, and in a decade you're going to have all the free time in the world, then you know that that is that you're moving in the right direction. And the last one is relatedness.

Related. >> Go ahead. I was going to say, I I came across a wonderful meme that I posted on my LinkedIn post that says, "The goal is not the money. The goal is freedom."

Yes. >> That's really the autonomy you speak about.

Yep. And that's why we call it the the great decoupling, is we're decoupling your livelihood from the wage labor negotiation. Yeah.

Uh, we still need it right now. Again, most of the economy is based on wage labor negotiation. There's nothing wrong with that. It's been a great, uh, uh, coordination mechanism, but it's it's a coordination mechanism that is disintegrating.

Um, and then the and so then relatedness is the last part of of SDT framework, which is your relationships. And if you have more free time, you have more time for relationships. To your point earlier, uh, we will I think we will kind of have a back to basics kind of societal shift where we focus more on community.

Um, just an example of how my wife and I are already living that is we're both self-employed, so we have more autonomy than we did as employees. But one of the things that we do is we take our dogs to the dog park every morning, and we see the same people at the dog park. Our dogs have friends, and we have we're friends with the other dog parents.

Um, and that's just one example of of community that is great, and not everyone can live that way right now. Um, and so I just remind myself every time we go out there, I was like, I want everyone else to be able to do what I do, is take your dog to the dog park every morning, or take your children to the park every morning.

And not be worried about getting them to school on time, or getting them getting yourself to work on time, so that you have more time sovereignty. Another framework that I studied to understand what is it that humans actually need to be happy and healthy is, uh, what was called Glasser's choice theory. And I actually learned this when I was, uh, interviewing a bunch of educators about artificial intelligence. This was almost three years ago now. So Glasser's choice theory is a framework that is, I think it's it contains six things. I don't remember all the all the pieces off the top of my head.

Uh, but basically, some of the things that that people want are like social status.

Um, they want, um, so social status or fame. Um, and there's a lot of overlap between it and Maslow's hierarchy, which is how I why I often don't remember all the components of it.

Um, but you want fun. Um, so you want fun, you want status, and and a few other things like that.

Um, and again, none of those are actually predicated on having a job. Now, many people get some of those from their workplace. You have workplace relationships. You if your if your job is demanding and you feel a sense of accomplishment or satisfaction from it, you know, you see shows about, you know, high-powered lawyers, and it's like they like winning the deal or whatever.

Oh, yeah. >> Plenty of people, plenty of people do get a lot of their satisfaction, but there is no intrinsic biological need to use a job to get some of those needs met. There are plenty of other ways of getting those met. So, that's where I start is just a first principles view of what does the human animal need to be healthy?

Uh, so, and then from there, you say, well, you can ask bigger questions. How how do we participate in the economy in the future? Yeah. How do we participate in democracy in the future? And in many cases, it's not going to be that much different. You're still going to go to your bank, right? Your your stockbroker and your bank will probably manage a lot of those resources that we talked about. Universal basic income, universal basic capital, uh, collectively owned assets. You might still do that all through your credit union in the future, or your your your commercial bank, or your stockbroker.

So, some of those things won't necessarily change. Uh, democracy, you're probably still going to vote, but if we adopt some of this the, uh, platforms like they did in Estonia and some of the that they're looking at in the EU, it might be that you vote directly from your phone.

Uh, it might be that you also, uh, are able to express your values more frequently. So you might have like micro votes that come up, and if people aren't working, they have a lot more free time to participate in civil society, which, by the way, that's nothing new. The in during the golden age of Athens,

If you were if you were a citizen, you went to the Pnyx and you debated every day, right? You know, listen to Socrates and and and, uh, and and argue with, uh, with the other other landowners. Same for the Romans. The the, uh, the the patrician class of the Romans, uh, they had the same kind of lifestyle where it was very much they were they were civically engaged. The ideal Roman citizen was a was a soldier citizen who also was politically active. And if people are not working, and by the way, we already see that people are far more political active today. Just look at social media.

Yeah. Absolutely. Absolutely. >> Conversation. Uh, but, uh, those are those are just a couple things that I think will will change. But what I have found, because I I'm obviously still working very hard, but because I don't have a wage labor negotiation, I try and and tell people sometimes the transition to a post-labor lifestyle is easier and harder than you think. And and I say that it's easier because you realize, oh, this is what I wanted to do all along. I wanted to spend more time with my wife and my dogs and and focusing on the things that I care about, like post-labor economics. I don't make any money from this work yet.

Um, so I do it because I think that that it's important and it's meaningful.

Yeah. >> Um, it's harder because we have so much programming, so so much so much, uh, capitalist programming or, uh, uh, um, um, uh, Protestant work ethic programming, where if you feel if you're idle, you feel guilty, right? You're I'm not I'm not supposed to be doing nothing. I'm not supposed to be resting. I'm I'm supposed to be working hard and and on the grind. And, you know, I was very burned out for a couple years because of that, because I got even better at working harder. And I tell you, that's no way to live. And interestingly, I achieve more now, even though I work less. So work work smarter, not harder.

Um, and I I think that people will will find that they can find things that they care about, whether it's music or politics or economics or whatever. Um, you know,

Ecological work, right? You know, go clean up a river if if you care about the environment. There's so much for people to do other than work.

Um, >> and we live we certainly live in a society that has, uh, conditioned us all to judge our value through the type of work that we do. And many people, mo a lot of people self-define, uh, based on the role that they play in the company that they work for, right? Y so.

What I believe, first of all, I am a techno optimist. I believe that we are heading and that the age of abundance and and this what you describe is actually upon us. And I I believe it's upon us sooner than we think. And that risk that is facing our society is how to move through this transition period into that state while preserving social cohesion and peace.

Yes. Yeah. But once we do, I think once we do, and once we are at the stage where you no longer need to be in the labor arbitrage to make a living and to gain status, we are going to be thinking of the last 12,000 years as the age of human enslavement and the future as the age of human liberation. Right? You will be actually liberated to do those things that you want to be a have competence and mastery, because that they are those things are in your center of your eeky, right? And you will have autonomy to pursue it, and you will have time and quite frankly, facilitation to strengthen relationships. And if listeners are saying, well, what am I going to do? What is going to be my purpose? If those three things do not offer you purpose, then your other alternative will be to put VR glasses and just live in, right, live in the digital world, I guess.

Yep. Yeah. Plenty of people will go that direction. Um, I think that some people will get bored. Uh, I think I think after a little while of of digital distractions, some people will say, you know what, I'm I think I'm ready to do something for my own sake. You know, whether it's get in shape or pick up an instrument or or that sort of thing. And some people do find, you know, uh, video games challenging enough, you know, there there skill-based.

So, there's plenty of people who go that direction as well.

But yeah, to each their own. And and and that I think going back to the idea of autonomy and self-direction, however people want to choose to spend their time, that level of liberation and decoupling, I think is is is the goal. And that narrative, that story is what I think can get everyone on board. So, thank you for the, uh, the the time to to get this message out.

Yes. So, I I've been following the questions as we were discussing to to make sure that we touch as many as we can. There was one interesting question. Uh, I know that you you are of course focusing on developed countries, developed nations. I am obviously, well, I don't know how obvious it is. I'm a very proud Canadian dialing in from Canada. You are in the United States. Uh, how, just maybe a a question to how does this work to a in in in in sort of the the non-Western economies in the rest of the world, let's say?

Yeah. So this this is something that comes up quite a bit, and I've I've been studying it just to make sure that I'm well-rounded. And one of the maybe counterintuitive things is that I think I have personally come to believe that automation, particularly cognitive automation, is going to hit globally pretty much all at once. And the reason is because it is cheap.

Uh, you know, how how much, you know, a top lawyer you'd pay at least $200,000 a year, whereas these AI systems, particularly purpose-built ones, cost a few cents an hour to run.

You can run that anywhere. Uh, and so there's, you know, to to your point a moment ago, labor arbitrage doesn't mean a thing anymore. It go it it becomes completely invalidated for cognitive labor. Uh, so when you have, and and this is what Sam Altman said, is intelligence too cheap to meter, right? Hyper cognitive hyperabundance. If we end up with cognitive hyperabundance anytime soon, it's going to be a global effect very, very quickly. Now, the one other component is, well, what about physical space? Because in some places, some of the poorest places or or, uh, least developed nations around the world, physical labor is still as cheap as 70 cents an hour. So, it'll take a little while for humanoid robots to be, uh, amateurized down to that degree. However, it's when I say a little while, I mean five to 10 years before you have a $5,000 humanoid robot that can do physical labor at the equivalent of 50 cents an hour.

Yeah. >> So, while yes, it will take like obviously the places that can afford the AI and the robots will be impacted first, the spillover effect I think is going to be very, very quick, uh, in the grand scheme of things. Now, it's not going to be symmetric. It's not going to be all at once, but the, but it's not going to, I don't I don't see a case for entire continents or nations being fully left behind.

Just for no other reason that they all have sunlight hitting them, right? So they have opportunity for solar, so they have an opportunity for energy abundance. They have usable land that can be used for all kinds of things and other natural resources. So I see, I do not see personally. Now, people are obviously welcome to disagree, um, until the framework is fully tightened down, but I don't see that being a huge risk. Now, that's not to say that there's not going to be unique problems in the developing world. Those I'm not aware of yet. So, I'm I'm assuming that there will be regional differences, geographic differences, and cultural differences.

Um, but I have been primarily focusing on the technology and the economics. Uh, so, that's kind of my my take for the developing world. Yeah, David, this has been a fantastic conversation. I have learned a lot.

Um, thank you very much for your time. I know we approaching the two-hour mark that we planned for. So, I want to be respectful of your time.

Um, might I just maybe call out some of the things that I think are important to to to remember for for this call. First, we are in the middle of a decoupling of labor with productivity. And that's driving the the that's driving the conversation of what do we do as humanity? How do we deal with this? So that we'd end up in a better state.

Because the other option is could be truly catastrophic.

Um, what we bring as humans to to labor, uh, arbitrage is essentially strength, dexterity, cognition, intelligence, and empathy. Strength has already been automated. We are now in the process of automation of dexterity and cognition, and that is going to be eroding fast. And the last for probably the vestige that will stay on will is is the empathy.

Yes. So that that was an important framework to to remember. Another one that you that you brought was the fact that automation happens anytime when automation can do anything better, faster, cheaper, and safer. And we are now in this situation where systems actually are better, faster, cheaper, and safer on very, very on many, uh, jobs that now could that now or imminently or in the near term could be automated by doing it better, faster, cheaper, safer. You introduced the concept of rights of of economic agency and and and economic agency that includes labor rights, property rights, democratic rights. And the discussion is that labor right is eroding as we discussed. So therefore, other rights need to stand up to supplement it. If we were to preserve the quality of living, namely the property rights, we should be strengthening democratic rights and perhaps introducing a new pillar around the, um, the the algorithmic rights.

You also mentioned, um, let me see what else did I take? Yeah, regarding the the future, what are the skill sets that people need to be aware of and sharpening that you said number one is is communication. Number one skill is communication. Number two, authenticity. Number three, empathy. I might add, curiosity and resilience would be superbly helpful in the package. And then what you also introduced is the SDT model or a framework that helps people think about what might they be doing with themselves at the point when they find themselves in a comfortable non-labor arbitrage situation. And you said focus on your competence and mastery, achieve autonomy and relationships. Like those are the three things that are really important. David, I would like to give you a closing note or closing remarks, and then we can end.

So, excellent. >> Over to you.

So, yeah. Well, uh, Dalabore, thank you so much for the, uh, time and attention and for everyone who's tuned in.

Um, it really means a lot, uh, to me. And I I think I'll end on just kind of a more my my intuition is is a more personal note, just that, you know, this entire framework I've been working on for the last couple years, and I always it makes progress whenever people poke holes in it. They say, "Well, what about this?" And sometimes it can be frustrating when someone says, "Well, how do you do it peacefully?" or "What about the developing world?" But every time someone asks, "What are those what about questions?" The whole thing gets better and stronger.

And, uh, and so it has been a it has been a collaborative process between me and peers and colleagues, but also my audience. So, and I I I try and read every comment, and even if it's a comment that I don't see, I actually hoover up all the comments that people talk about post-labor economics with the help of AI.

So I get a lot of feedback from across the entire world about, uh, this framework. So if you're excited about it, if you have questions, if you have pushback, if you have feedback, uh, you know, post it anywhere. Post it on LinkedIn, post it on any social media. I'll eventually see it, and that'll it'll that's one of the easiest ways that anyone can contribute and anyone can help. Now, what I will caution, there is an asterisk, which is that some of the questions, some of the common questions are already addressed in the framework.

But you'll have to wait for the book to come out, The Great Decoupling, which the drafting should be done in a month or two.

And then it's just a matter of the publishing cycle, and you'll be able to get your hands on it.

Uh, and that's that's all I got. Thank you so much.

Thank you. And my invitation to everybody is to join the movement. Um, to to find David's work, U Substack, of course, David is also very active on YouTube and has a massive and increasing following. And as you would have seen, no surprise why, uh, but and also you started on LinkedIn. So there are multiple ways to to get engaged, to follow your work, and to contribute to your work, and like the little part that that I'm doing. So with that, David, thank you all very much. This has been recorded indeed, and very soon we'll be posting it both on the Tectonic Conversations, but also David will post it on his channel as well. So with that, thank you very much, and have yourself a wonderful Wednesday.

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Full Post-Labor Economics Deep Dive and Book Preview! Interview with Dalibor Petrovic

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