Federico Pistono: Basic Income and Other Ways to Fix Capitalism (Transcript)

Here is the full transcript of author Federico Pistono’s TEDx Talk: Basic Income and Other Ways to Fix Capitalism at TEDxHaarlem conference. 

 

Federico Pistono – Author

Goedenavond Haarlem. [Good evening, Haarlem]. Feeling good, yeah? So, who here, today, of you, had lunch or breakfast or any meal whatsoever? Great, we’re lucky.

Because there is about a billion people on the planet who live in absolute poverty, and they don’t have this privilege. Getting a meal is maybe a fanciful thing. And even industrialized nations, with very developed countries, there is about 15 percent who live below the poverty line, like in the United States, or even Italy.

Now, the story that we tell ourselves to justify these kinds of things doesn’t really – it’s compelling to hear, because it’s reassuring, but it’s not real. And it’s no surprise that we like stories, we evolved by listening to stories, and that’s how our brains have developed for hundreds of thousands of years.

And some of these stories became bestsellers, one of them was the great epic of capitalism versus socialism. And of course, we all know the story – well, depends whom you ask or who told you the story. And it also works the other way around.

And these stories, if you really dig deep, they’re just fairytales, because the reality is very different. There is not a single truly 100% capitalist country in the world, as there is no truly socialist country in the world. They’re all many variations of the two and other ideological systems and other types of societies.

But the wealthiest and the healthiest of countries are those that have learned to actually combine the best of them by looking at the evidence and the results instead of just sticking to an ideology and telling themselves a reassuring story.

We have some of the prime examples of these in the Scandinavian and some of the more continental European countries, and I could even include the Netherlands to some respect. It’s important that we tell ourselves credible stories, and not fairytales, because fairytales are very dangerous and can lead to unnecessary suffering or deaths of hundreds of millions of people as we’ve seen in the past.

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Now we have many challenges, and one of them is unemployment. But instead of telling you a story, or a fairytale, let’s have a look at the data.

So here is a graph showing the employment to population ratio in the US – and in the OECD countries the statistics are very similar. And this is corporate profits over the same amount of time. Now, if you put the two things together, and you look at the recovery rate – the gray lines are recessions, and the recovery rate you see the degree of recovery – you see very, very astonishing results.

We have corporate profits at an all-time high, unemployment is at a multi-decade low, and if you take into account that women entered the workforce only around that period, we’re actually at the lowest point ever. And we’re in the shallowest period of recovery. We are in what, in economic terms – it’s almost called the jobless recovery.

Now, there is some studies coming out from the Oxford Martin School, and MIT, from my colleagues, that suggest that half of all jobs in the US are subject to automation – robots and other artificial intelligence and smart programs. And research just coming out in Europe also suggests the same results.

Now I’ve actually performed the same thought experiment, and I’ve done my own research two years before the Oxford Martin School and MIT, and I had the exact same predictions. And one of the big criticisms that I received was: Sure technology displaces jobs, robots steal jobs, but in the end you always create new jobs because you have new opportunities, new sectors, and there is always time to recover and find new ways of doing things.

I said: “Okay, that might be true, but let’s look at the data, let’s look at the historical perspective and the timeframe.”

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So I took all the occupations, and I listed them by number of workers, from the top to the bottom. And I asked myself a very simple question: What kind of occupations were invented within, let’s say, the next fifty or sixty years? Because if technology only displaces temporarily jobs, then there should be a bunch of new occupations that are invented in recent times.

Actually I had to scroll down quite a lot: number 33, computer programmers. It was invented actually 65 years ago. So the reality is that new jobs are very few, highly skilled, very sophisticated, very difficult to do, and very few people can do them.

And certainly not the 45-year-old truck drivers, maybe 70 or 80 million of them, who are going to be totally displaced within the next five to seven years. And other hundreds of millions of people in other professions. So think about a 45-year-old truck driver having to compete with a 17-year-old Ukrainian whiz kid who writes four apps a day on his computer. Not very credible.

And if you look at another trend, the multi-billion dollar companies of today employ fewer and fewer people, and they have a bigger revenue per employee.

If you take Apple, Google, Facebook and Amazon, and you combine them, they are worth more than a trillion dollars together, but they only create 150,000 jobs. And the newest companies create even more revenue per employee because they’re worth billions and billions in a very short amount of time, and they employ a few dozens or at maximum a few hundreds of people.

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