Summary

Yang presents a stark warning about the great displacement – AI and automation replacing human labor en masse, particularly affecting "normal" Americans. Job polarization will leave only low-end service jobs and high-end cognitive work.

Yang's solution centers on UBI ("the freedom dividend"), funded by VAT, combined with human-centered capitalism that measures success beyond GDP. He also proposes time banking for non-monetary meaning, structural reforms, and creating a gov’t department to regulate tech's impact on society.

"Unprecedented advances are accelerating in real time and wreaking havoc on communities around the country, particularly on those least able to adapt and adjust."

"Humans need work more than work needs us."

"Video games give back what has been scooped out of life: community, a feeling of competence, and a sense of being an important person who people depend on."

"Increasingly, employing lots of people will mean you're behind the times."

Key Takeaways

• The great displacement: AI replacing human labor en masse
• "Unprecedented advances are accelerating in real time and wreaking havoc on communities around the country, particularly on those least able to adapt and adjust"
• Normal = average, median: 1y college education, $31k, $17/h
• 5 major sectors to be automated: office and admin support, sales and retail, food prep and serving, transportation and material moving, production
• Self driving trucks before cars (2020-22 as major adoption ramp up)
• Job polarization: we'll only be left with low-end service jobs, high-end cognitive jobs
• "Increasingly, employing lots of people will mean you're behind the times"
• "Humans need work more than work needs us" but only 13% (32% in US) are "engaged with their jobs"
• 2015: 58% of cross-sector experts agree "it is in fact different this time" (job loss)
• Retraining programs don't work; 44% of new grads are underemployed
• Scarcity mindset reduces IQ by 13 points in underprivileged people, none in privileged
• Men dropping out of workforce, 2/3 of college grads are women
• Disability surge: basically unemployment insurance
• "Video games give back what has been scooped out of life: community, a feeling of competence, and a sense of being an important person who people depend on"
• Gaming is an inferior good: investment / use is inversely correlated with wealth
• Public faith in institutions at all time lows
• Blame in job loss will shift from migrant immigration → elites(?)

• UBI / "the freedom dividend": $12k for ages 18-64, indexed to increase with inflation
• Cost: $1.3T, could do with VAT (every country has VAT except US)
• Time banking: social credits system for non-monetary meaning + purpose

• Proposal: pay presidents $4M/y but can't accept speaking engagements or join boards
• CEOs should get jail time (1 month) instead of just fines
• Department of the Attention Economy

Notes

Introduction

• The great displacement: AI replacing human labor en masse
• “Unprecedented advances are accelerating in real time and wreaking havoc on communities around the country, particularly on those least able to adapt and adjust”
• The market will not solve the problem
• Non-profits are bandages, only gov’t can solve this problem
• Human-centered capitalism

1: What’s happening to jobs

1: My journey

• Childhood*
• Venture for America: goal of 100k US jobs by 2025
• Dichotomy of average America and venture America risk taking
• Two fundamental questions:
  • What’s happening to the US?
  • Why am I becoming such a tool?
• Tech is decimating cultures, economies

2: How we got here

• 50% of banking by top 5 banks
• 94% jobs are temp / contractor jobs
• Real wages flat / declining
• 92% → 50% children earn > parents
• Shareholder value maximization
• Winner-take-all dynamics (tech)
• Everyone is less happy in an unequal society, even the top

3: Who is normal in America

• Normal = average, median
• 1y college education
• $31k, $17/h
• Shockingly low for most people reading this

4: What we do for a living

• 5 major sectors to be automated: office and admin support, sales and retail, food prep and serving, transportation and material moving, production
• Naive alternatives don’t work:
  • Everyone becomes a coder
  • Upwork, Etsy etc.

5: Factory workers and truck drivers

• Self driving trucks before cars
• 2020-22 as major adoption ramp up

6: White collar jobs will disappear, too

• Routine vs non-routine jobs
• “Increasingly, employing lots of people will mean you’re behind the times”
• Job polarization: we’ll only be left with low-end service jobs, high-end cognitive jobs
• AI + big data

7: On humanity and work

• Currently, loss of work is one of the worst things that can happen to people
• That being said, only 13% (32% in US) are “engaged with their jobs”
• “Humans need work more than work needs us”

8: The usual objections

• 2015: 58% of cross-sector experts agree “it is in fact different this time” (job loss)
• The job market is not efficient
• Retraining programs don’t work
• 44% of new grads are underemployed
• Idea: low GDP growth due to cheap labor due to automation

2: What’s happening to us

9: Life in the bubble

• Finance + tech dominance
• Ballooning student debt
• College admissions → risk averse
• Fewer people are starting companies
• “It is not the innovator’s job to figure out the social implications of what they do. Their job is to create and fund innovation in the market as cost effectively as possible.”
• It’s the job of gov’t and leaders to account for society (but they’re under-informed and can be lobbied)
• Assortative mating → “unicorns”

10: Mindsets of scarcity and abundance

• Entrepreneurs often privileged
• Entrepreneurs have abundance mindsets
• Scarcity setting reduces IQ by 13 points in underprivileged people, none in privileged
• Scarcity mindset in general increases stress → makes you irrational, impulsive

11: Geography is destiny

• Shrinking cities / scare opportunity shatters communities
• Growing uneven distribution of education, opportunity, etc.
• Need positive narratives

12: Men, women, and children

• Men are dropping out of workforce
• 2/3 of college grads are women
• Raising children is hard

13: The permanent shadow class: what displacement looks like

• More suicide
• Drug use epidemic
• Disability surge: basically unemployment insurance
• She could probably not pay any taxes
• Write off rent, food, etc. any time you’re talking about AI
  • Because benefits aren’t a part of this
• This is going to be really good for the org because of simplifications
• It’s a better financial situation, but you are comfortable with it
• Can give 90 days notice (if worried about firing)
• Let’s walk through what are the things that concern you here
• Biggest is usually benefits: but you’ve got your parents so that’s fine
• For the org, we’d be more comfortable with a contractor
• Tradeoffs, some benefits

14: Video games

• “Video games give back what has been scooped out of life: community, a feeling of competence, and a sense of being an important person who people depend on”
• Men: 8.6h/w playing video games
• 50%+ of service-work men live with parents
• Gaming is an inferior good: investment / use is inversely correlated with wealth
• Gaming → gaming, drugs in 30s
• Tradeoffs actually make more sense (rational) when job prospects dwindle

15: The shape we’re in / disintegration

• Public faith in institutions are all time lows (medical system, media, public schools, government)
• Social capital decreasing
• Capitalism was great before, but maladaptive now
• Some project a violent revolution
• Utter collapse of society and economy
• Comps to French Revolution
• Will likely be race + identity with automation + economics as the underlying force
• Blame in job loss will shift from migrant immigration → elites(?)
• California and/or Texas could leave the US
• Hypothetical disaster*
• Not GDP, “we have to start thinking about what makes life worthwhile”

3: Solutions and human capitalism

16: The freedom dividend

• Work encompasses 3 things:
  • The means by which the economy produces goods + services
  • The means by which people earn income
  • An activity that lends meaning or purpose to many people’s lives
• UBI / “the freedom dividend”
• $12k for ages 18-64, indexed to increase with inflation
• Cost: $1.3T, could do with VAT
• Every country has VAT except US

17: UBI in the real world

• Countries are trying it and it’s working*
• Is work core to what we do or is no one going to work when we have UBI?

18: Time as the new money

• Non-profit roles will thrive in UBI
• Creativity will thrive in UBI
• Time banking: social credits system
  • Non-monetary meaning + purpose
  • Trust infrastructure
  • 200+ communities trying
  • Popularized in the 90s
  • Should be institutionalized

19: Human capitalism

• No pure capitalism exists
• Market feudalism → expansionist mercantilism → industrial capitalism → welfare capitalism → institutional capitalism / corporatism
• Human-centered capitalism:
  • Humanity > money
  • Unit of economy is person, not dollar
  • Markets exist to serve our common goals and values
  • Blend of metrics > GDP growth
• Grassroots and activism won’t work, it’s really on the gov’t to solve this

20: The strong state and the new citizenship

• Need regulators who can truly ignore the market
• Presidents now do speaking gigs and thus “go softer”
• Elites have gotten too cozy
• Proposal: pay presidents $4M/y but can’t accept speaking engagements or join boards
  • Then, no need to make powerful people happy
  • Right now, you can’t anger big industry cuz it’s waiting with a big paycheck right after
• CEOs should get jail time (1 month) instead of just fines
• Need to regulate AI, negative effects of smartphone use
• Department of the Attention Economy

21: Health care in a world without jobs

• Last in efficiency, equity, health outcomes
• Employer-based health insurance is a shackle, reason not to hire
• Healthcare market is a crap chute, not a real market in most ways
  • Only a few options
  • No real idea of differences between providers
  • Costs are high and unpredictable
  • Overly complex
  • Cost insensitive when in need
  • Opaque pricing (especially with insurance)
  • Often under distress when making decision
• Various suggested fixes*

22: Building people

• Character, morals were mean reason for education
• People are so much more capable than we think (eg. 2% → 99% capable of quantum physics)
• Khan Academy
• Online courses aren’t effective
• Bottom 2% of recognizing women need time with newborn babies
• More communal living
• Universal pre-K
• Spending too much on higher ed
• Eg. could require spending entire endowment income on students
• US News rankings works against our interests
• Minerva University: startup rethinking higher ed
• Western culture historical ideals:
  • Warrior: courage
  • Saint: compassion
  • Thinker: contemplation
• New ideal: “worldly self of middle class values”
  • Warriors: spin class, spartan race
  • Saint: non-profit, social entrepreneurship
  • Thinker: blogosphere