Will automation make everybody better off? Or will it result in the suffering for countless millions who will be unable to find enough to work to support themselves? We hear both claims and many others routinely in media.

From the media: Robots will take our jobs. We’d better plan now, before it’s too late – Larry Elliott, The Guardian

Robots won’t take all our jobs – James Surowiecki, Wired

Automation will make the rich richer, claims thinktank – Tom Allen, V3.com

Here’s How Artificial Intelligence Is Going to Replace Middle Class Jobs – Leena Rao, Fortune

“As we automate a lot of the repetitive work, we are going to see increased demand for creative skills,” says Brynjolfsson. – Richard Gray BBC

Some call for government programs such as a universal basic income to address the problems while others insist that the free market will enable us to adjust to new technology.

First, we should realize that, provided that resources are allocated well, almost everyone ought to be better off with automation. Automation decreases the amount of work required to keep humans alive and increases the goods and services that can be supplied for the same amount of work.

The true concern that the media coverage implies is that resources will not be allocated well, that almost all of them will end up in the hands of a few owners of automated factories while unskilled workers will end up starving. Many believe that the free market is simply incapable of adapting to that level of automation.

But what is the free market? What makes it free? Certainly not that the price of everything is zero! Rather, it is free in the sense of liberty. The market is made up of many different institutions, both for-profit and not-for-profit organizations including banks, insurers, manufacturers, agriculture businesses, charities, unions, etc. The freedom of the market is the freedom to choose whether to be part of any of these institutions and to what extent. Even a social instrument that seems as fundamental as money could be avoided by bartering or living in a commune.

Each of these institutions was invented to address a flaw in a free economy. Trade is much easier with money than with barter. Insurance allows us to pool risks and thereby reduce the damage caused by unlikely but expensive mishaps. Unions enable employees working together to bargain more equally with their socially powerful employer. All of these institutions were invented and then adopted by a free market because they proved useful.

Three women and a goose make a market. – Danish proverb

The alternative to a free market is a controlled market where a central authority decides what institutions should exist and who should belong to them. Communist economies seek to plan all economic activity centrally. A free market can also make use of central planning. Indeed, every company is, arguably, a miniature centrally planned economy. The salient feature of communist countries was that their citizens have no choice about whether to be part of a centrally planned economy.

The success of the free market does not result so much from the particular genius of its institutions as its ability to absorb and subsume any institution that proves useful. If central planning of broad swaths of the economy had proven itself more efficient, people who can choose free markets would voluntarily adopt such central planning by giving over direct control to the central planners. But the free market is successful because a superior solution to a problem can simply be adopted by the free market. It does not require the approval of central planners first.

It would be hubris to insist that we have arrived at the perfect set of institutions today. Indeed, it is very likely that future inventions will develop helpful institutions. Some new institutions may well be necessary to adapt to a world with widespread automation. A defense of the free market ought not to be a defense of current free-market institutions, but rather a defense of allowing individuals to freely choose whether to belong to them.

What new institutions might be adopted in order to adapt to an automated world? One might be an insurance plan against having your job made obsolete by new technology. Another might be widespread ownership of shares in the companies that own automated factories. A third might be a form of mutual aid society. Or, most likely perhaps, a new institution yet to be conceived.

I believe that humans are creative enough to come with the new institutions necessary to adapt to a changing world. What I fear is that we will not be allowed to do so. We do not live in an ideal free market, where we can choose whether or not to belong to any particular institution. Instead, we live in a mixed society where we are free to choose whether to belong to some institutions but other institutions are either mandated or forbidden. We are not always free to experiment with new institutions to identify the best ways to organize society.

If humans are free to experiment with new institutions, I believe we will find an excellent solution. However, there is a great danger that those who benefit from the status quo will use their influence to prevent the adoption of new institutions. Further, others will attempt to force institutions they think best on other people, leading to great suffering. The great danger we face is the danger of not being free enough to adapt to new and changing circumstances.

Dr. Winston Ewert is a software engineer living in the Vancouver, BC area. He obtained a Ph.D. studying electrical and computer engineering at Baylor University. His work on specified complexity, swarm intelligence, evolutionary simulation, and genome analysis has appeared in conference, journals, and books. He is a Senior Researcher of the Evolutionary Informatics Lab, a Senior Research Scientist at Biologic Institute, and a Senior Fellow of the Walter Bradley Center for Natural and Artificial Intelligence.

Also by Winston Ewert Is technology neutral? Or does it change our world whether we like it or not?