Should Robots Pay Taxes?

Getting Ready For A New Economic Order

This article isn’t just about a robot tax. The robot tax is used as an example to demonstrate the myriad options thought about by economists, futurists and experts around the world to deal with a world enabled by Artificial Intelligence .

This article provides readers an approach to managing inevitable and seismic changes to the fabric of society and to the existing economic order. Disruption brought about by technologies of the magnitude of Artificial Intelligence (AI) can occur in spurts, can be hidden but will affect the whole of humanity.

How we choose to respond is key to managing change and not letting the change manage our lives. I have tried to articulate some elements of our response which include among other things thinking about robot taxes, lifelong learning and global think tanks

Anxiety Over Excitement

Seismic changes in the form of disruptive technologies often evoke more anxiety than excitement. This feeling is all too human and all encompassing. I feel it on a daily basis. Don’t get me wrong — I am not a Cassandra but I am not an irrational optimist either. I am trying to live in the space between the two. I am trying to imagine what the future could be like and therefore what my response should be. I don’t deny it could be an exercise in futility but here’s what I have learnt so far. Hopefully, it benefits you:

Drawing Parallels

While discussing AI, parallels with the Industrial Revolution are inevitable:

1. Technology spreads in waves across the world: It explains why the industrial revolution did not spread uniformly across the world especially to countries like India and China. This may not be the case with countries like China leading the AI revolution along with the US.
2. The industrial revolution replaced hands but the AI revolution could replace minds.
3. The rapidity of change has accelerated and the tools of change (computing power, cell phones etc.) have proliferated. These factors stress the importance of creating and deploying responses rapidly.

More so because governments will be hard pressed to deal with dislocation of jobs and demands for intervention and protection. This is especially true, as some say, that the gap between the rich and poor may widen. Based on data from the Maddison Project by the Grogingen Growth and Development Center, the Economist mapped the annual change in per capita GDP which shows a decelerating trend post the introduction of Machine Intelligence.

Economists Chasing A Moving Target

While in conversation with Tyler Cowen, Jeffrey Sachs (Jeffrey D. Sachs is a world-renowned professor of economics, leader in sustainable development, senior UN advisor, bestselling author, and syndicated columnist) remarked that economists are constantly analyzing a moving target (i.e. constantly changing and shifting economic landscape).

These changes are exacerbated by rapid technological change. The ability to setup a business at almost zero marginal cost, the sharing economy, rise of freelancing as a full time occupation, the digital nomads, the 4-hour work week, freelancing, use of mathematics and computer code on data to create efficiency and the emergence of data science and decentralized computing are all characteristics of the emergence of a new economic order- one that we need to start responding to at the individual, firm and ultimately global level.

Thinking in Probabilities Doesn’t Always Help

Knowingly or unknowingly, people (including me sometimes) have an infinite capacity to over complicate things. This is because technologies such as AI are like an elephant being groped by almost blind people (let’s get real — all of us have blindsides including experts) looking at different parts of the elephant to predict what kind of an animal it is. Consider the cognitive bias codex to imagine the varied types and extent of our biases.

In other words, the probability of ‘Singularity’ or AI taking over humans could be really low say less than 10% and could very possibly be in the realm of a Black Swan event. However, there is a range of opinions from doomsday predictions to unbridled optimism. But, what about the common man? He needs immediate, actionable guidance not a ‘maybe this, maybe that’ answer depending on probabilities.

One of the most clear form of communication today are bumper stickers. I am not saying our response to AI should be a bumper sticker but it could be a winding path that should be laid out and explained.

Why You Shouldn’t Worry?

Even then, if you still want to worry about singularity, consider other disruptive technological forces relentlessly working to make life better but not without potential dangers:

1. Decentralized Computing: Smart contracts eliminating middlemen (brokers, IPO underwriters, lawyers etc.) and the Blockchain eliminating economic profits (e.g. the transaction cost of remitting money can be almost zero).
2. FinTech technologies upending financial services and the de-centralization and digitization of money creating rapid but unequal global changes.
3. Other global forces that could affect humanity as a whole — climate Change, geopolitical uncertainty and rising inequality.
4. Gene editing including CRISPR CAS9: A simple version of the CRISPR/Cas system, CRISPR/Cas9, is a relatively simple to use technique to edit genomes. Scientists, including a CRISPR co-inventor, urged a worldwide moratorium on applying CRISPR to the human germline, especially for clinical use. They said “scientists should avoid even attempting, in lax jurisdictions, germline genome modification for clinical application in humans” until the full implications “are discussed among scientific and governmental organizations”. These scientists support basic research on CRISPR and do not see CRISPR as developed enough for any clinical use in making heritable changes to humans.
5. Yet, in April 2015, Chinese scientists reported results of an attempt to alter the DNA of non-viable human embryos using CRISPR to correct a mutation that causes beta thalassemia, a lethal heritable disorder. (source: wikipedia).

In the end, I want to leave you with these words from Baz Luhrman:

“Don’t worry about the future; or worry, but know that worrying is as effective as trying to solve an algebra equation by chewing bubblegum. The real troubles in your life are apt to be things that never crossed your worried mind; the kind that blindside you at 4pm on some idle Tuesday”

Why You Should Be Pro-active?

The GDP of a country in simplistic terms is people times productivity. In the developed world where population is declining, technology particularly machine learning and AI comes to the rescue. An interesting perspective to observe is the collision of two powerful forces. Consider, for example, eastern traditional thought vs western ideology in the minds of young middle class in Asia. One force will eventually be more powerful than the other. Despite obvious opposition, the bottom line is that introduction and progress of AI is inevitable because of compelling reasons. We are just not sure of the speed of spread of the technology across the world.

A recent report by McKinsey Global Inst titled “Artificial Intelligence, The Next Digital Frontier” lays out economic rationale for corporations and occupations to utlize AI. As per the report Tech giants including Baidu and Google spent between $20B to $30B on AI in 2016, with 90% of this spent on R&D and deployment, and 10% on AI acquisitions. Artificial Intelligence (AI) investment has turned into a global race for patents, talent and intellectual property.

In a nutshell, firms have very sound economic incentives to invest in AI and will continue to do so. Refer the infographic below. The bottom line: inevitable economic change.

Likely Responses

At The Individual Level

1. A change in mindset is the first step. Lifelong learning just graduated from being a fancy buzz-word. Start educating yourself on a daily basis. Most CEO’s read extensively in addition to managing their businesses. Warren Buffet credits his success to reading 500 pages a day.
2. Utilize as many forums (books, friends, colleagues,experts, podcasts, blogs, MOOC’s etc.) to understand the fundamentals and the state of play in AI and Machine Learning today. I have provided a short list here.
3. You will be able to have a meaningful conversation with people who run the AI systems in your organization and interpret the results that the AI engine provides. You might not need to learn coding as long as you learn enough to understand the logic behind the AI system and have enough knowledge to interpret the results.
4. Pick up any programming language you want to learn. C is the mother of all languages but C++ is also good to be introduced to fundamentals of object oriented programming. You can even pickup Apple playgrounds or XCode to coding in a fun way and learn to create your own mobile app. You might be surprised to know that coding is logical instructions given to a machine in English. You don’t need to learn assembly languages unless you are enthusiastic to do so.
5. The other approach is to Get Python and start learning to code in Python. The objective behind learning to code is not to actually write software but to understand how software is used to communicate with machines, the kind of common errors that occur and fundamentals such as loops, nested loops, objects and containers and ultimately to be able to use AI as an input .Think of it like learning English grammar not to become a published author but rather to be able to understand and interpret the rules to score well on a competitive test such as the GMAT.
6. If you are more creative, try to learn HTML and CSS to be able to understand and edit websites; Java and JavaScripts could be a good pick too.
7. Any basic lectures on cloud computing, distributed ledger technology (DLT) and machine learning would also help immensely.

At A Corporate Level

A Robot Tax

“A moderate tax on robots, even a temporary tax that merely slows the adoption of disruptive technology, seems a natural component of a policy to address rising inequality,” Shiller averred.

Revenue could be targeted toward wage insurance, to help people replaced by new technology make the transition to a different career. This would accord with our natural sense of justice, and thus be likely to endure.” — Robert Schiller, a 2013 Nobel laureate in economics, Professor of Economics at Yale University and the co-creator of the Case-Shiller Index of US house prices

The Robot Tax could also take different forms in terms of the corporation providing mandatory training to the displaced, basic income later and a performance bonus based on milestones.

Other Responses

Technology may spread in waves with SME’s or startups not adopting AI immediately. SME employment could be one of the options for people seeking roles outside of large multinationals.

Providing training to those displaced on debugging and interpreting AI results and ultimately manage the AI system could be another response for a corporate.

Basic income can be a function of successful completion of training and then applying it to actual work i.e. a basic income that incorporates dignity of labor.

Assumptions:

1. Most people love to work. They want to earn their livelihood as opposed to just getting free income in the form of Universal Basic Income (UBI) without effort. Basic income is needed to sustain and variable incentives can promote a drive to work.
2. There is perfect competition between markets and technology spreads in waves.

At a Global Level

For problems affecting humanity as a whole ? Guess who has to respond — the whole of humanity irrespective of where the technology originates. Although not the same thing, an analogy is the spread of a virus. Do we wait to co-ordinate globally to combat viruses such as Ebola?

Granted, we are not dealing with a pandemic but a sweeping global change driven largely by technology.

Consider a thought experiment, if you are a CEO/President of a global think tank tasked with change management. The important word here is Global. Imagine the variability and the time it would take for the change to completely sweep the world and the myriad problems with some nations wanting to halt or slow down the advance of autonomous machines to save jobs to other nations completely going full throttle. Even today, there are people without proper food, clothing, shelter, sanitation or education.

It goes without saying then: you would need a global road map which is created using public private participation that draws on experts around the world to create policies and project plans.

Final Thoughts

Will machines with Artificial General Intelligence be able to dream, imagine and create something out of nothing? The essence of a post AI life does not necessarily have to be faster or cheaper output but rather the fulfillment lies in the journey itself. Therefore, creative pursuits requiring imagination could be the future.

Devoting more time to solving mathematical conundrums, rediscovering the joys of painting, composing music and combating chronic diseases can be certain higher level tasks that humans can engage in using AI.

The article above is just a collection of responses to open up a larger debate on proactively and positively managing change in the best interests of people across the globe. Yes, a mouthful of words that look good on paper but seem like an almost insurmountable task. However, I am optimistic and I keep this in mind:

All else said and done, technology should work for humanity and not the other way around.

Thank you for reading. If you think this article is educational, please share it with your followers on Facebook, Twitter, LinkedIn or other social media. You can follow me on Twitter: @akothari_mba

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