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Is the Purpose of a Free Market to Destroy Jobs?

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This question was inspired by one of the many debates that I had with several members of another cryptocurrency team and their community. Regarding the issue of A.I. gobbling up human jobs and how that should be perceived within the context of building a new economy, one of them said, “The whole point of the free market is to destroy jobs, that's what we want. . . .” The following summarizes my response to that person.

Political Systems Dictate the Course of Economic Systems. I’ve seen the “destroying jobs is good” argument many times, but like virtually all puritanical libertarian theories, they substantially ignore the fact that political systems overwhelmingly dictate the pre-distribution and distribution of income, wealth, and bargaining power in the real world, not supply and demand. Anybody who has ever worked as a lobbyist, senior executive in a large company, or national-level politician knows this is true because the structure of every economy is fundamentally created by the structure of the economic policies and regulations that govern the economy.

The Job Apocalypse. In the past, there were new industries for jobless people to migrate to; that’s no longer the case in today’s “Gig Economy,” which is a polite euphemism for “Job Apocalypse.” In fact, the wealth and power concentration problems in the fiat and crypto economies today will become amplified in a world dominated by A.I. because A.I. amplifies the status quo if the A.I. is controlled by those who already benefit from the status quo. Those who have the most financial power have the most political power, which enables them to deploy A.I. to preserve and amplify their wealth and power.

Wealth Distribution vs. Redistribution vs. Pre-Distribution. By definition, the status quo in every country is dominated by creatures who already control the flow of wealth in an economy because of their lucky birth and/or their influence over the political system and the laws and regulations that determine how income, taxes, and wealth are distributed throughout the economy. These are all pre-distributional dynamics that directly distort and concentrate the downstream distribution of income, wealth, and political power, which has nothing to do with the supply and demand of a free market.

The Dogmatic Blindness of Puritanical Libertarianism. The ideology of Libertarianism substantially ignores all these pre-distributional affects and narrowly focuses on avoiding redistribution, regardless of the costs to society and the impact on the stability and sustainability of the ecosystem. That narrow, fundamentalist perspective ignores all the real-world political and socioeconomic realities that influence the entire continuum of pre-distribution, distribution, and post-distribution of wealth and political power in every fiat and crypto economy.

Whales Have Incentives to Destroy Jobs. The 10 largest corporations on Earth today own and/or control more wealth than over 90% of all the countries on Earth combined.[1] The top-50 largest banks own and/or control more wealth than our planet’s entire GDP. This is not the inevitable consequence of a free market; it’s the inevitable consequence of an economic system that is not structurally designed to resist the pre-distributional affects that dictate how wealth and power are distributed downstream in the value creation and distribution process. This inevitably destroys the Capital-Labor Duality by incentivizing gigantic corporate cannibals to destroy jobs in their home countries. (No, this is not necessary to achieve an efficient global economy, as I explained in the Broken Capitalism book.)

A.I. Amplifies Pre-Distributional Distortions. In addition to the collapse of the human labor force, A.I. also amplifies these wealth and power concentration trends. This is giving whales in every fiat and crypto economy even more power to substantially control the political systems in many countries on Earth today. This gives them even more power to rip the job creation heart out of the global economy and then redirect the global river of wealth to themselves, while causing the income and wealth of everybody else to perpetually decline or stagnate.

Libertarianism Has No Meaningful Solution to Any of These Problems. The “destroying jobs is good” argument is a form of intoxication caused by an unconscious impulse for ideological purity. The “destroying jobs is good” argument substantially ignores the reality of human nature, the needs of human health and welfare, ecosystem stability and sustainability, and political system domination by whales in the real fiat/crypto world. Technologically and philosophically, all other cryptocurrency projects today substantially ignore all the problems described throughout the Gini book and this website, which is why Gini was born.

Humans Don’t Need “Stuff”; They Need Sustenance and Purpose. To substantiate his “destroying jobs is good” argument, that person said, “We don’t want to work, we want stuff. . . .” I discussed this fallacy more deeply in the Broken Capitalism book, but in summary: Many studies have demonstrated that humans must feel a sense of purpose to maintain their mental and physical health. “Work” gives humanity a sense of purpose. Without jobs, humans have no economic purpose, which is socially and emotionally intolerable in a capitalistic society. Even with a Basic Income, mass unemployment will create endless adverse consequences for human societies because it destroys the balance of power between capital, labor, corporations, governments, and every strata of human existence. In fact, without a strong Capital-Labor Duality, economic and political tyranny is inevitable.

A Recipe for Feudalism & Slavery. Ignoring the problems associated with wealth concentration in any crypto/fiat economy is a guaranteed recipe for feudalism and modern slavery, not free market capitalism. To believe that somehow the free market (which is a fantasy) is going to magically give gigantic corporations and governments the economic incentive to share their pre-distributionally entrenched political and economic power with the general population ignores human nature, common sense, and the history of political and economic oppression on Earth.

Emphasizing Ecosystem Stability is Not Communism. No puritanical, fundamentalist economic theory will ever result in the decentralization of economic and political power in fiat/crypto economies because pre-distributional affects create a structural tendency for every economy to concentrate wealth and power into fewer and fewer hands. The only way to achieve true decentralization of wealth and power is to structurally, systemically, and continuously recycle wealth and power back into the general population with strict, automated, and non-biased mechanisms that resist unhealthy concentrations of wealth and power. This is why Gini's Ecosystem Stability Mechanism was created.

By definition, any ecosystem sustainability mechanism is “redistribution,” but it’s not communism or socialism; it’s simply a structural mechanism to offset the pre-distributional distortions that inevitably produce unsustainable wealth and power concentration in the first place. Without a full commitment to structurally offsetting those pre-distributional distortions, we are on a guaranteed path to feudalism, economic imperialism, fascism, corporate slavery, and political oppression.

To Our Libertarian Friends. Everybody on the Gini team was a libertarian most of our lives; so, we often still feel an emotional bias for Libertarianism. However, after we understood the problems described throughout the Gini book (also summarized in the Gini School Intro) and how ineffective the ideology of Libertarianism is in a world dominated by A.I. and the collusion between gigantic corporate cannibals and self-serving politicians, we did not hesitate to re-calibrate our minds with real-world realities. In fact, that’s what rational, truth-seeking humans do when they encounter new facts and realities.

To the Ideological Trolls. A couple people from another cryptocurrency project attacked me with many ideologically-driven insults. To those people: I spent 100s of hours trying to help your team understand that your money supply concentration is a big long-term problem, but it’s clear that the new crypto-billionaire founders of your project are happy with the status quo. I appreciated your project from a technical perspective, but your team will never be able to resolve your project’s monetary policy problems because they’re trapped by the status quo. Even if they wanted to fix the problems, they can’t now because they must answer to the whales (early investors) who should have never been given that much power in the first place. This is a problem for all other fiat and crypto economies today, which is why we were compelled to launch the Gini Foundation.


[1] This reality, the data that supports it, and its consequence on our global economy are explored in more detail in my previous book, Broken Capitalism: This Is How We Fix It.

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