This piece is about an interview I conducted with former economics teacher David Keller about the future of our economy.
Sitting down in Mr. David Keller’s empty classroom, I could feel the cool breeze coming from the open door. There was a stillness to the room that was interrupted only by the rustling of leaves outside and the faint ticking of the clock on the wall. I was nervous at first, but his hospitality quickly put me at ease. He began the conversation by telling me how excited he was to speak on the economy, his enthusiasm for the topic made clear through the animated gesticulations he made as he spoke.
From there we transitioned into talking about his career. He told me about his passion for teaching, something he had been doing for 25 years. And while he was currently only teaching civics and history, he had previously taught economics for 12 years and loved the subject, explaining that it was the confusion surrounding economics and the desire of many to understand it that made it so compelling to teach.
He told me about the volatile nature of our economy and that many unpredictable factors play a large part in it, but also that there are certain trends in our economy that we can analyze to predict what will happen in the future, and that there will be crucial points in our future where our economy must adapt and transform.
Keller asserts that the goal of our economy “at the basic level, is just to provide people the goods and services people want.” However, all economies are different and over the course of time, different trends emerge and decline. So what are the current trends, and what do they point to?
In the past 50 years, the most significant change is that America has shifted away from manufacturing goods, and more towards service. The source of this shift is unclear, though he speculates that a large part of it was caused by the negative connotations associated with working in a factory, explaining that “manufacturing, historically, has relied on people working in a factory, and that [type of] work is really hard, [so] people don’t like it too much.”
Expounding on this trend, he explains that in America, workers have been able to unionize in manufacturing industries and demand shares of profit, forcing many corporations to outsource labor. In contrast, China has not had this political and economic development, so companies are able to essentially treat workers as slaves, turning China into the manufacturing powerhouse that America relies on.
Keller also explains that “capitalism, as an economic system, requires growth for it to sustain itself and at the simplest form, that’s babies being born.” So China, having a huge population and capacity, has growth potential that America just doesn’t have. This points to China overtaking America and becoming the global economy in the future. Additionally, he says that the current dynamic between America and China is a sort of symbiotic relationship where America designs products and China manufactures them. However, China has recently demonstrated interest in developing its own products, further indicating its determination to break free from American dependence and establish itself as a leading global power.
Another thing that must be taken into account when discussing the future of the global economy and trends in it, is mechanization. Keller, who had evidently given considerable thought to the matter, stated that the two industrial revolutions were the most significant transformations that our economy has experienced in the past. Not only did they make things cheaper to produce, but they shifted our entire economy in a different direction.
He brought up a theory first introduced by Alvin Toffler, which essentially posits that “the less people have to do, the more they choose to do.” So as our economy keeps mechanizing, people are doing more of what they want to do, and are actually making a decent living doing it. This trend is made clear through social media, Keller expresses, bringing up TikTok, “look at TikTok, those people are making boatloads of money, and what are they really doing? Whatever they want.” He predicts that with the cost of producing things getting so low, eventually, we will have all of our basic needs met and be able to pursue our desired lifestyles without constraints.
But what if we take mechanization to the extreme? What happens when robots and AI can outperform us at any task? This is one of the critical points in our economy where we will have to adapt and transform. Keller believes that once AI gets to a certain level of capability, it will be a privilege for humans to do work. Humans will only want to be entertained, while all of the labor in the world is performed by robots.
But there will have to be some way for humans to get their basic needs met because, with the current structure of our economy, humans are not able to get anything without a job. Keller predicts that “an income for all people funded by the government is the direction we are going.”
While this concept seems simple, the path to get there is far from it. Because currently, as AI improves, there is a boost in productivity, but there is also a loss of human jobs, more specifically, low-skill jobs. Once high-skill jobs are all that remain, having an education will become extremely valuable, which is a big problem because, as Keller conveys, “the cost of an education is only rising.” There is no simple way to solve this problem and bridge the gap between using robots as a tool for humans, and robots doing everything for humans.
The second critical point in our economy is how we will deal with climate change as it worsens. Keller believes that climate change is the most imminent and unpredictable danger for our economy. He explains that “our whole system is based on the idea that we can predict the climate. If you look at global history, about 10 thousand years ago climate became a regular thing. Every year you could predict how much rain would fall and where it would fall. All of our agricultural systems are based on a predictable climate, and climate change is getting rid of that. We don’t know how big the storms are going to be, and we don't know when they will happen. Our technology may be able to adapt to that, but it might not. We don’t know.”
But it’s not just chaos in our agricultural systems that threaten our economy, it’s also the general unpredictability that comes with climate change. He brings up another example about insurance, saying, “when I sit down and I look at where all the money is going to in my household, I see that a certain amount of it is going into food and rent… and a certain amount of it goes to insurance.”
He explains that it's the insurance companies that have to pay for climate disasters which means that in areas where they are frequent, insurance rates will skyrocket. This forces a lot of people to move. The immensely populous Bangladesh is a prime example of this. Bangladesh is at sea level, and with ongoing climate change, it is experiencing more and more floods. And when people have to move because of the climate and its concomitant insurance rates, “the economic system faces stresses, and it's hard to predict what changes have to be made.” There is a strong likelihood that these changes will ultimately be harmful to the economy.
All of these different trends and predictions for what our economy will become is a huge part of the future of the human race. Our economy is a fundamental part of our society and what makes us human, if our economy is declining so is our society, and if our economy is thriving so are we. But a lot of these projections regarding our economy paint a grim picture of the future of mankind. A picture where many lose their jobs and well-being in an unstable economy. This is one of the most important subjects that we as a species have to acknowledge because if we don’t try to solve our economy’s problems and understand how it might change, our species has a dark future ahead of us.