Robert Reich is opting in on technological socialism, a phrase often uttered by futurists, believing automation will cause a paucity of good jobs, and, one way or another, an endgame for capitalism that’s functional. He may be overreacting, but a working world of few hands and a long tail is at least a strong possibility. An excerpt:

The iEverything will be the best machine ever invented.

The only problem is no one will be able to buy it. That’s because no one will have any means of earning money, since the iEverything will do it all.

This is obviously fanciful, but when more and more can be done by fewer and fewer people, the profits go to an ever-smaller circle of executives and owner-investors.

One of the young founders of WhatsApp, CEO Jan Koum, had a forty-five percent equity stake in the company when Facebook purchased it, which yielded him $6.8 billion.

Cofounder Brian Acton got $3 billion for his twenty percent stake.

Each of the early employees reportedly had a one percent stake, which presumably netted them $160 million each.

Meanwhile, the rest of us will be left providing the only things technology can’t provide – person-to-person attention, human touch, and care. But these sorts of person-to-person jobs pay very little.

That means most of us will have less and less money to buy the dazzling array of products and services spawned by blockbuster technologies—because those same technologies will be supplanting our jobs and driving down our pay.

We need a new economic model.•

The main question I’ve asked since beginning this blog–and one you may be weary of by now–is this: How do we reconcile what’s largely a free-market economy with one that’s highly automated? All work that humans currently do that can be replicated by Weak AI will be ceded to the machines. Will the lack of McJobs (fast-food workers, hotel clerks, customer service, etc.) and many knowledge-based ones (here and here) be replaced by work in other yet-to-be hatched industries? If not, how do the majority of people share in the great bounty that automation will yield? I don’t think getting to own really cheap smartphones will be enough. At some point, the people grow tired of bread and Kardashians. The opening of a Salon article about the destabilizing effects of the Peer Economy by that mensch Robert Reich:

How would you like to live in an economy where robots do everything that can be predictably programmed in advance, and almost all profits go to the robots’ owners? 

Meanwhile, human beings do the work that’s unpredictable – odd jobs, on-call projects, fetching and fixing, driving and delivering, tiny tasks needed at any and all hours – and patch together barely enough to live on.

Brace yourself. This is the economy we’re now barreling toward.

They’re Uber drivers, Instacart shoppers, and Airbnb hosts. They include Taskrabbit jobbers, Upcounsel’s on-demand attorneys, and Healthtap’s on-line doctors.

They’re Mechanical Turks.

The euphemism is the “share” economy. A more accurate term would be the “share-the-scraps” economy.

New software technologies are allowing almost any job to be divided up into discrete tasks that can be parceled out to workers when they’re needed, with pay determined by demand for that particular job at that particular moment.

Customers and workers are matched online. Workers are rated on quality and reliability.

The big money goes to the corporations that own the software. The scraps go to the on-demand workers.

Consider Amazon’s “Mechanical Turk.” Amazon calls it “a marketplace for work that requires human intelligence.”

In reality, it’s an Internet job board offering minimal pay for mindlessly-boring bite-sized chores. Computers can’t do them because they require some minimal judgment, so human beings do them for peanuts — say, writing a product description, for $3; or choosing the best of several photographs, for 30 cents; or deciphering handwriting, for 50 cents.

Amazon takes a healthy cut of every transaction.

This is the logical culmination of a process that began thirty years ago when corporations began turning over full-time jobs to temporary workers, independent contractors, free-lancers, and consultants.

It was a way to shift risks and uncertainties onto the workers – work that might entail more hours than planned for, or was more stressful than expected.•

The opening of a Guernica piece about the fall of Detroit and the rise of American income disparity, by that tiny communist Robert Reich:

“One way to view Detroit’s bankruptcy—the largest bankruptcy of any American city—is as a failure of political negotiations over how financial sacrifices should be divided among the city’s creditors, city workers, and municipal retirees—requiring a court to decide instead. It could also be seen as the inevitable culmination of decades of union agreements offering unaffordable pension and health benefits to city workers.

But there’s a more basic story here, and it’s being replicated across America: Americans are segregating by income more than ever before. Forty years ago, most cities (including Detroit) had a mixture of wealthy, middle-class, and poor residents. Now, each income group tends to lives separately, in its own city—with its own tax bases and philanthropies that support, at one extreme, excellent schools, resplendent parks, rapid-response security, efficient transportation, and other first-rate services; or, at the opposite extreme, terrible schools, dilapidated parks, high crime, and third-rate services.

The geo-political divide has become so palpable that being wealthy in America today means not having to come across anyone who isn’t.

Detroit is a devastatingly poor, mostly black, increasingly abandoned island in the midst of a sea of comparative affluence that’s mostly white. Its suburbs are among the richest in the nation.”

From Robert Reich’s new appraisal of America’s first Gilded Age in the late 19th century, which was defeated, and the current one, which has not yet been:

“We’ve entered a new Gilded Age, of which Mitt Romney is the perfect reflection. The original Gilded Age was a time of buoyant rich men with flashy white teeth, raging wealth and a measured disdain for anyone lacking those attributes, which was just about everyone else. Romney looks and acts the part perfectly, offhandedly challenging a GOP primary opponent to a $10,000 bet and referring to his wife’s several Cadillacs. Four years ago he paid $12 million for his fourth home, a 3,000-square-foot villa in La Jolla, California, with vaulted ceilings, five bathrooms, a pool, a Jacuzzi and unobstructed views of the Pacific. Romney has filed plans to tear it down and replace it with a home four times bigger.

We’ve had wealthy presidents before, but they have been traitors to their class—Teddy Roosevelt storming against the ‘malefactors of great wealth’ and busting up the trusts, Franklin Roosevelt railing against the ‘economic royalists’ and raising their taxes, John F. Kennedy appealing to the conscience of the nation to conquer poverty. Romney is the opposite: he wants to do everything he can to make the superwealthy even wealthier and the poor even poorer, and he justifies it all with a thinly veiled social Darwinism.

Not incidentally, social Darwinism was also the reigning philosophy of the original Gilded Age, propounded in America more than a century ago by William Graham Sumner, a professor of political and social science at Yale, who twisted Charles Darwin’s insights into a theory to justify the brazen inequality of that era: survival of the fittest. Romney uses the same logic when he accuses President Obama of creating an ‘entitlement society’ simply because millions of desperate Americans have been forced to accept food stamps and unemployment insurance, or when he opines that government should not help distressed homeowners but instead let the market ‘hit the bottom,’ or enthuses over a House Republican budget that would cut $3.3 trillion from low-income programs over the next decade. It’s survival of the fittest all over again. Sumner, too, warned against handouts to people he termed ‘negligent, shiftless, inefficient, silly, and imprudent.’

When Romney simultaneously proposes to cut the taxes of households earning over $1 million by an average of $295,874 a year (according to an analysis of his proposals by the nonpartisan Tax Policy Center) because the rich are, allegedly, ‘job creators,’ he mimics Sumner’s view that ‘millionaires are a product of natural selection, acting on the whole body of men to pick out those who can meet the requirement of certain work to be done.’ In truth, the whole of Republican trickle-down economics is nothing but repotted social Darwinism.” (Thanks Browser.)