#198 Why save for retirement if capitalism is going to collapse and/or universal basic income will be available. How millennials can lead the next work transition. More information, including show notes, can be found here.
Episode Summary
Capitalism, universal basic income, socialism, and artificial intelligence are all tied together in America’s current economy. Today’s millennials are asking big questions about the future of the national economy and what place AI has in the job market. On this episode of Money For the Rest of Us, David tackles these questions and contemplates the idea of a universal basic income. The keys to successful capitalism and fulfilling employment are also discussed.
Why aren’t millennials saving for retirement?
David explains on this episode of Money For the Rest of Us that 66% of millennials have nothing saved for retirement. Why aren’t millennials investing in their own future? Some aren’t committing to a savings plan for retirement because they don’t believe capitalism will exist by the time they retire. Some even think socialism could it be a great retirement plan. There are, of course, many different degrees of socialism, including some that emphasize a market economy. David shares some of the negative consequences of state controlled socialism as practiced in Venezuela and Cuba.
Artificial intelligence is not going to take over the world, but it will lead to a cultural shift and a consideration of universal basic income
Why artificial intelligence is accelerating rapidly, AI is not going to take over the world as in some dystopian horror story. AI machines do not have the ability to be creative or complete multifaceted, complex tasks. So-called “weak” AI that is currently available can only complete one-track tasks, all of which must be pre-programmed. However, AI machines will eliminate the need for humans to complete repetitive and routine tasks. Since millennials are already shirking these factory-like positions, the only thing that will change in today’s economy once artificial intelligence becomes mainstream is the way we think about employment and entry-level positions. Since AI is set to potentially replace 50% of jobs over the next 20 years, significantly increasing the productivity of the economy in terms of the ability to produce goods and services with less resources, businesses, households and governments will need to grapple with how people will get income to pay for the ample supply of goods and services that will be available.
State controlled economies should be feared, not something to look forward to in the American economy
A top down, state controlled economy lacks the bottom up, creative dynamism of capitalism, although even capitalism has rough edges that need to be addressed in terms of an adequate social safety net. David explains what is currently occurring in Venezuela. The Venezuelan government has completely destroyed their nation’s economy, with 50% of the GDP collapsing since 2012. High-ranking politicians are using food vouchers as incentives for reelection votes and basic human needs are being preyed upon for political success.
Capitalism occurs when passion, creativity, and market needs intersect
Capitalism flourishes when people unite their creative passions with market needs. David explains that when people “have their soul in the game,” projects take off and success comes much easier. It starts small, often grows into a full-fledged business, and can grow exponentially from there. But creativity is often dampened in a state-controlled environment. Individuals need to feel fulfilled and excited by their work. While universal basic income could serve as a safety net within the broader scheme of capitalism, it cannot be the only option.
Episode Chronology
[0:42] David introduces his topic for this episode, “Capitalism is Creation”
[1:55] Why aren’t millennials saving for retirement?
[6:07] Why artificial intelligence is not going to take over the world
[8:45] Massive job decimation due to artificial machines and the idea of universal basic income
[11:34] How constrained capacity is eliminated through AI
[12:27] Why state controlled socialism is something to fear and the Venezuela case study
[16:04] Unique, fulfilling work often starts with an idea and a passion to create
[22:40] Investing, just like capitalism, starts small and grows
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