A Scottish wellbeing economy can 'painlessly' integrate AI

We have reached a turning point in the history of economics — indeed of history itself. In last week’s column I wrote: “We need an altruistic revolution and we need it now.”

Economic revolutions are not uncommon in recent human history.

However, for most of history, human existence involved family groups sharing equally. What we understand as economics did not exist.

The agricultural revolution began when people domesticated animals and planted crops — ending nomadic lifestyles. Increased productivity led to food security, population growth and the development of multi-family settlements.

Around 9000 years ago, humans began to live in large cities and trade with each other. While specialisation led to basic trade, the economy was mostly agrarian. Some 293,000 years after the arrival of homo sapiens, money was invented.

With the advent of the industrial revolution, the move from handmade to machine-made goods led to cheaper, faster production and the mass accumulation of wealth through productivity rather than Empire.

Modern western cities grew exponentially, workers left the land and switched to living in cheap city housing with immediate family groups.

Between the years 1800 and 2000, the world saw a 600% increase in its population. Even though GDP simultaneously rose 1,000%, poverty, poor diet, disease and starvation in the world’s wealthy cities became commonplace, as did the dominance of nations with access to mechanical warfare. 

Capitalism dawned with the industrial age

Our modern economic system became fully detached from the natural human behaviour of history.

In living memory, we have seen massive change — mini-economic revolutions that we mostly didn’t notice. Post-World War II economic expansion was a peace dividend. For the first time in war both winners and losers benefitted due to mass investment in rebuilding the economies of Germany and Japan.  

The golden age of capitalism was short lived though and was partially based on the 1944 Bretton Woods Agreement that sparked international free trade and made the dollar the global currency. Those heady days lasted until the 1970s crash and the 1973 oil crisis.

Since then, we have been living on borrowed time.

Boom and bust, world poverty, increasing inequality, massive environmental damage and climate change all possess a clear and immediate threat to our economy and human existence.

Our answers: neo-capitalism, financial deregulation and Brexit, have all led to future pain.

We now live in a post-industrial, information technology age

Robotics and AI will have a vastly more disruptive impact on the economy and society than past technological advancements.

Previously technology destroyed working class jobs; the mechanical loom, the washing machine and the combine harvester all caused short-term unemployment and poverty.

However, increased productivity and economic growth replaced those with service jobs for the working classes.

Now technology is replacing middle-class jobs. AI programmes are drawing up contracts and doing accounts faster and better than humans.  

Some suggest we are moving into a post-work economy. However, new information technologies won’t immediately cause massive job losses but will first suppress wages and significantly expand financial insecurity across society.

This will create two classes.

One is the secure asset-class: those that have inherited wealth or assets that they can charge rent for such as tenanted flats, land, patents or investments.

The other is the insecure asset-less-class.  

If you lost your job tomorrow and never received earned income again, would you be able to afford to live? If not, then start to think of yourself as a member of the insecure asset-less-class and your outlook will change.

Let's prepare society to painlessly integrate AI

If we continue to base our economic thinking on outdated policies using increased growth as a cure-all, we are heading towards a dystopian future.

If we measure alternative outcomes such as health, happiness, equality, fairness, environmental sustainability and societal wellbeing and make those the primary task of government, we can prepare society to painlessly integrate AI and get ready for the post-work economy. 

Politicians are beginning to sense the economic paradigm shift and the talk of wellbeing economics is becoming pervasive.

However, very few of them truly understand the size of the forces at work. They think that adding tick boxes to the failed neo-capitalist system will make a difference — it will just buy time.

READ MORE: AI: Scotland led the way and we can once more

No nation is in as good a place to start the wellbeing revolution as an independent Scotland.

With independence, Scotland would be in a position to redesign our economy with wellbeing at its core. We could decide what institutions to keep or to empower, create a new system of measures that put wellbeing outcomes for society, business and people on an equal footing. 

It's a radical plan — quite the opposite of the failed "don't scare the horses" approach of the 2014 Yes Campaign — but it offers exponentially more payback from independence.

We can demonstrate that independence is not an end but rather a means to build a better society by building a better economy.