KIZUGAWA, KYOTO PREF. – Technological innovations in the field of artificial intelligence are making such enormously rapid progress it is often said that all production facilities will become unmanned and a large majority of clerical work will be taken over by AI. This has given rise to an extreme theory that either AI or robots will replace humans in many jobs, pushing the unemployment rate close to 50 percent.
Although the jobless rate reaching 50 percent may be an exaggeration, it appears all but certain that the rate of technological unemployment — loss of employment caused by technological progress — will reach 10 to 20 percent. This means that unless some steps are taken, the Fourth Industrial Revolution driven by AI, the “internet of things” and big data will lead the human race to a dystopia rather than to a utopia. What measures could be taken to lead us to an utopia instead?
Gross domestic product, the total value of income earned in a country over a given period of time, is distributed to capital and labor. At present, the percentage of GDP allocated to labor stands at around 60 percent. If factories become free of human labor and a majority of routine clerical work is taken over by AI, the labor share will likely dwindle to about 20 percent.
While the average tax rate on employee compensation, which constitutes a large majority of the labor share, is around 5 percent, tax rates on corporate income, income accruing from interest gains and dividends and remunerations paid to corporate executives — or capital’s share of the GDP — exceed 20 percent.
Therefore, a sharp decrease in the labor share will result in a sharp increase in the government’s tax revenue. Slightly more than 20 percent of earnings emanating from AI and robots, which constitute the core of capital, would be forcibly transferred to the government, the sole party with the power to collect taxes.
In other words, improvement in labor productivity brought about by AI, the internet of things and big data would double the value added that is allocated to capital, and slightly more than 20 percent of that sum would be taken by the government.
How should the government use the increased tax revenue? It should be allotted to providing more public services as well as to promoting academic research, education and the nurturing of artists — all deemed to be of no value in the market economy.
Specific examples regarding public services include making medical treatment, education and care for the elderly free of charge, preserving the natural environment and reducing greenhouse gas emissions.
The government should also establish a scholarship program to support youths who aspire to be researchers of philosophy, history, archaeology, aesthetics, literature and pure mathematics — all deemed to be useless academic studies — and create what could be called the “institute of intellectual studies” to open the doors of employment opportunities to scholars of such disciplines. Similar assistance should also be provided to youths who wish to pursue artistic careers.
When humans are freed from labor to produce goods and services, and when they are given an opportunity to immerse themselves in intellectual activities that have been considered to be of no value or wasteful in the market economy, it would mean the arrival of the ultimate utopia, although people’s standard of living standard in such a world might only be modest.
When people are freed from the economic yoke of poverty, labor, unemployment and production, their interest is bound to move away from economics and toward such fields as philosophy, history, literature, the arts and natural sciences.
Ancient Greece produced outstanding philosophers such as Socrates, Plato and Aristotle as well as great mathematicians like Euclid and Archimedes. The production activities of slaves, who reportedly accounted for one-third of the population of ancient Greek city-states, largely enabled these and other men of wisdom to immerse themselves in those disciplines, which in a market economy would have been regarded as useless. Similarly, slavery also enabled those who lived in Thomas More’s “Utopia” to engage in intellectual activities by working only six hours a day.
In Japan, it was the landlord-tenant farmer system that supported those kinds of people. They often appear in novels written by Natsume Soseki (1867-1916), like the schoolteacher in his work “Kokoro” (“Heart”). They were members of the privileged class and were financially reliant on their parents, who were parasitic landlords and collected rent from tenant farmers. They had no need or desire to work and spent their days reading and contemplating.
In the Fourth Industrial Revolution, AI replaces much human labor and as a result sharply increases government tax revenue. As part of its use, the government should earmark large portions of that increased tax income for the training of people in the humanities and the arts. We should be grateful for AI assuming the role played by ancient Greek slaves.
From the 20th to the 21st century, universities found their raison d’etre in training competent people who could contribute to economic development. Businesses hire and pay wages to people who can help produce goods and services.
Since the mid-1950s, Japan emphasized GDP growth and the government’s education policy put top priority on improving and expanding university departments of natural sciences and engineering for the purpose of training young men and women who would lead technological innovation, which was believed to be the driving force of economic growth.
Considered to be the ultimate technological innovation in human history, AI could conceivably eliminate the need for human labor in production. The government, which imposes taxes on certain portions of added value or income created by AI, should spend much of the increased revenue on promoting humanities, basic sciences and the arts, including traditional crafts — things that may be deemed useless from the standpoint of economic and industrial development. That would bring about a second Renaissance.
What’s important is to make pursuing careers as researchers and educators in “useless” disciplines an option for highly talented youths, and give the most outstanding among them the privilege of devoting themselves to reading, contemplation and debates at research institutes run with government funding.
Hopefully the output of such institutes — books, dissertations and other papers — would be translated into English and many of them would appear in syllabuses at universities in the United States. Today, the only humanities work by a Japanese appearing in U.S. universities’ syllabuses is “Zen” by D.T. Suzuki (1870-1966). Social changes brought about by AI should pave the way for a second Renaissance.
Takamitsu Sawa is vice director of the International Institute of Advanced Studies in Kizugawa, Kyoto Prefecture.