The United States of America 2021

All Presidential candidates should be required to answer one fundamental question: At the end of your tenure as President what will be the ratio of U.S. per capita income to global average per capita income? Why? Currently, this ratio is roughly fourteen to one, and Americans generally are OK with that. The rest of the world is not, and this is the fundamental inequality question. Americans seem unaware on how just well off we are. If the United Kingdom were a state, only Mississippi would have a lower per capita income.

Two decades ago, Thomas Barnett posed this question in a slightly different form in his book, The Pentagon’s New Map. He was exploring the missions the nation might give to its military and observed that it seemed unlikely that the American people would willing accept several decades of slow decline in per capita income. The only alternative he saw to avoid this was overwhelming military force. To those who voted for him in 2016 and 2020 the answer may be Donald J. Trump. It is not a silly response.

For decades, the technology industry has seemingly offered an alternative pathway. For fifty years, we have benefitted from “Moore’s Law.” The semiconductor industry has been able to deliver roughly 30% per year improvement in price performance of its products, with even greater improvement in some complementary technologies. The New Economy study of the National Academies highlighted this a decade ago (I was a member of that committee). But Moore’s Law is running out.

More importantly, the ability of technology to eliminate jobs in the coming years seems far more certain than its promise of creating new jobs. The combination of Deep Learning or Artificial Intelligence with robotics will eliminate or downskill millions of jobs. Estimates range up to 50% of all jobs in the next twenty years. No one knows or can know in truth, but the effect is not small.

The opportunity to create jobs is there, but in the best case it relies on market mechanisms that inherently take time. You can eliminate jobs in a few hours, but it may take years to recreate them. That it will happen is the fundamental premise of neoclassical economics, but there is no guarantee of the number or quality of the jobs created. As has been widely noted, the pandemic has accelerated this trend by a decade or more. The bottom quintile of our society has been made obsolete in the most brutal fashion possible. How do we respond?