I have not written any essays for NEP these last several months because I’ve been working on a longer piece. It’s now finished and available as an ebook on Amazon and ibooks. The title is “LOW EARTH ORBIT—A Novella about the Near Future.” The story imagines the circumstances under which MMT breaks through into political awareness and acceptance. The heroine is an economics professor named Stephanie Eccles. There are, of course, a few comments about what modern fiat money makes possible in terms of architecture. I hope everyone will read it.

As a preview, here is one of the pivotal chapters:

  1. AiBots

One of the reasons Elon Musk’s business plan went viral, I’m convinced, was because when he proposed it, in 2019, people had already begun, intuitively, to understand that a profound change was unfolding in human society. In February of that year, an obscure South African economist working at the United Nations, E.M. Mhende, published a short paper that garnered considerable attention in the mainstream media. The title of the paper was “A Theory of Digital Labor.” The most memorable—and often quoted—paragraph in the paper was as follows:

Today, 3,000 contiguous acres of land can be tilled, seed-drilled, fertilized, pesticized, herbicized, and hydrated by a multi-faceted, digitally operated and controlled machine which is monitored and directed by Artificial Intelligence algorithms measuring and analyzing soil moisture, air temperature, humidity, wind-speed, weather forecasts, and insect monitoring traps. If infestations are detected, the “AI Farmer” will automatically deploy “honey-drones” to locate and attack the intruders with lethal chemicals. When the crop is optimally ready for harvest—as determined by the AI algorithms—the same machine system will cut and cull the crop, wash and irradiate it, process it, package it, and load it into awaiting transport trucks. The transport trucks, operated by their own self-driving AI algorithms in conjunction with the national GPS system, deliver the packaged food to regional distribution centers. The distribution centers, managed by their own algorithms, offload the transport trucks and direct the packaged foods into “store pallets” which have been programmed by a regional ordering system integrated with the automated inventory system of participating grocery and food stores. Robotic fork-lifts load the “store pallets” on waiting, self-driving delivery trucks which carry the pallets to each store in turn along their automated route. The driverless truck offloads the pallets on the receiving dock of each store which retracts the pallet into its stocking room where one, or a dozen (depending on the size of the store) robotic stockers scan the pallet’s items, set them into their stocking basket, and roll into the aisles to fill and organize the shelves. A human being now appears, for the first time in this entire process, selects an item from a shelf, carries it to a self-check-out kiosk, pays for it with a tap of a cell-phone, and disappears out the door.

What is striking to consider in this entire scenario of modern reality is not that artificially intelligent robotic machines are now capable of performing virtually every act necessary for the production of consumer goods and services; what is striking is to see, so clearly, the one thing the AI machines are incapable of doing: they are incapable of being consumers.

The topic, implications, and warnings of the paper were hotly debated. On the one hand, things seemed to be functioning just as they always had: People worked in exchange for money. They then used the money they earned to buy the things they needed. The needed things they bought in turn were provided by the work of other people, providing those other people with the money they used to buy the things they needed, etc.—a virtuous cycle of money managed by the “invisible hand” of free-market economics. Sure, machines came along and displaced jobs—but history seemed to show that for every employment displaced, the machines seemed to create the opportunity for two new employments! You couldn’t have been an airline pilot or flight stewardess before the airplane was invented, right?

On the other hand, however, this time things felt different. Whereas previously machines were “tools” that people used to do things faster, more easily, or with greater accuracy and efficiency, now machines were simply eliminating the need for the participation of people altogether. The machines themselves had acquired a generic nickname, as if they were a new kind of species populating the planet: “AiBots.” And, indeed, even in 2019 AiBots seemed to be moving in everywhere. They were showing up in hospitals and doctor’s offices, where they performed patient exams and diagnosis, administered anesthesia, delivered meals, changed beds, and sanitized bathrooms. AiBots had already taken over banks completely—in 2019 there was not a human bank-teller left in America. Retail stores had virtually all transformed themselves with the AiBot Sales Kiosk system which was a hybrid of on-line ordering and instant product retrieval from a constantly stocked back-of-the-wall inventory. Fast food venues used AiBots to assemble and package hamburgers and tacos. AiBots were erecting steel building frames and wrapping them with brick facades. AiBots were, in many cases, building AiBots.

The reason the AiBots were moving in, of course, was because the “invisible hand” of the free-market was nudging them through the door: In every case, the AiBot was introduced for a single reason: It increased corporate profits. Human labor, it became insidiously obvious, is a terrible, messy, inconvenient and expensive thing for a profit-making business to have to deal with. Humans are stubborn and difficult to train. They often don’t pay attention. They sometimes slip things into their pockets when no one is looking. They get sick and don’t come to work. They get sleepy in the afternoons. They get angry and pouty if slighted. They gossip and distract co-workers. They get pregnant. They need vacations. They demand retirement plans, and Christmas bonuses, and cost-of-living wage increases. Human employees, in short, were discovered to be the single biggest obstacle businesses have to maximizing profits. It was no longer a question, then, of giving employees new “tools” that increased their capacity to produce—it was now simply how can the “tool” replace the inconvenience of the employee altogether.

In retrospect it’s no wonder, really, that the jobs the Republican regime so vigorously promised after the 2016 election were failing to materialize. What E.M. Mhende’s little U.N. paper pointed out was that the AiBot revolution was creating, in fact, a “race to the bottom” in the global corporate economy—the “bottom,” in this case, being the essential collapse of the corporate economy itself. And the intrinsic logic of the corporate business model—the fiduciary responsibility of management to maximize the monetary profit of shareholders—made it impossible for the players to change the game, to steer things in a different direction: “Digital Labor,” it had come to pass, could produce—with enormous profitability—virtually everything the world’s consumers might want or need to buy. In the end, however, the consumers who were supposed to be doing the buying were not just out of work—they were unable to earn the money they needed to buy the products and services so “profitably” produced.

6 Responses to LOW EARTH ORBIT—A Preview

  1. David Harold Chester

    The politicians will never be aware nor interested in MMT. As politicians they are only interested in their political party and faintly with the constituents in their ward or borough. But the economics of money, equality of opportunity or how we might better share in a socially just way wealth is completely beyond them.

    • Hearing that they could eliminate the Corporate Income Tax and the FICA taxes might get them interested!

    • MMT is already digitally key-stroking money into existence…it is merely doing so in a very narrow and concentrated way. When the financial elites, er, job creators, collapsed the global economy where did the trillions come from to “foam the runway” or whom was it distributed to?
      It (MMT) is already here but the concentrated few it so rapaciously benefits would just as soon you not realize this.

  2. It certainly does look as if the fiduciary responsibility of corporate management to maximize the profits for shareholders, will effectively kill the goose that laid golden eggs. Is there some point at which the shareholders and governments recognize this?

    • John Zelnicker

      There is no fiduciary responsibility to maximize shareholder profits. That is a myth. Of course, it’s a myth that serves the elites quite well so they continue to promote it.

  3. 1. Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC.

    “We can also look to boost demand by running large budget deficits. We can spend money on long neglected needs, like providing quality child care, education, or modernizing our infrastructure. Remember, if we have more output potential because of productivity growth, the deficits are not problem.

    In short, there is no reason that productivity growth should ever be viewed as the enemy of workers. We just need the right set of policies to ensure that they share in the gains.”

    2. The Job Guarantee: A Government Plan for Full Employment

    “The benefits of full employment include production of goods, services and income; on-the-job training and skill development; poverty alleviation; community building and social networking; social, political and economic stability; and social multipliers (positive feedbacks and reinforcing dynamics that create a virtuous cycle of socioeconomic benefits). An “employer of last resort” program would restore the government’s lost commitment to full employment in recognition of the fact that the total impact would exceed the sum of the benefits.”


    Modern Monetary Theory in Canada