We'll tax the heck out of them, and then we'll use that money to fund a guaranteed income for every household. This has been catching a lot of interest because it appeals to people's innate sense for [of] social justice.
This is one of the reasons why income / profit taxes don't really work. Fundamentally this is another symptom of a world that is no longer growing because profits entail that there is more of something next year than this year, which is growth. A world that is no longer growing has zero or negative net profits, so what's there to tax? One could think of it as "stock versus flow". Wealth is stock and profits are flow. There is still wealth out there but it isn't moving much. Actually there still are some real profits being made, for now, but it's 1) coming at the expense of the masses, and 2) not being made by the corporations who make and use robots -- it's the crooked financiers and central bankers who make profits these days.
However, there is another relatively easy solution that does work, and I'm surprised it wasn't discussed. Firstly, instead of taxing profits (flow), tax wealth (stock). Don't tax the owners or inventors of the robots; instead tax the guy who made $10 billion off what the robots did to derivatives, capital flows and markets, and who "happened" to be on the right side of that trade to enrich himself. No one can say that profits aren't being made anymore when you have people like Soros and any of the unmentionable vampires at the center of the Fed scam getting rich. A wealth tax might be a bit complicated with global capital just leaving the country where the wealth taxes are being imposed but I don't actually see anything that would be a deal-breaker.
The other reason that "tax the profits of the rich and give it to the poor" doesn't work is because, as we all know, people who get freebies and don't have to do anything in return become lazy and the whole society falls apart. We all understand that. The solution to that of course is to reduce the work week which was briefly discussed. However, the following objection was raised:
... if we just cut the workweek in half, at least everybody will have half of the income. Of course, as you point out, it now takes two full-time jobs to maintain a quasi-middle-class existence. What we're really saying, if we do that, is everybody is now going to be poor.
But that's just not how it would work. If we cut the work week in half, in today's system, it might be the case. Because ultimately, the reason everyone would be / is poor is because the remaining wealth out there is concentrated into the hands of a few and has no way of making it to to masses regardless of how may days they work. The fact is that if we had a fair taxation system, as I alluded to above, then the economic re-organization that would automatically come from reducing the work week to 3 days would naturally lift everyone up so that they would be just as prosperous on 3 days as they were before on 5, all else being equal. It's like my previous criticism the other week about how you can't claim that universal healthcare and other government expenditures are unaffordable and unsustainable, using today's dollar as a metric, because today's dollar is meaningless and when the system gets reset, so will currencies and everything else, and what today looks untenable, suddenly becomes tenable.
The wealth of Americans, actually of all westerners for that matter, has been stolen by a very small number of elites. Our illusion of middle class wealth only comes from the nice toys we can buy, if we go into debt to those same elites who have stolen our wealth. And yet, mind bogglingly, somehow, people object to the idea of "taking", "taxing", "stealing" (whatever term you'd like to use) that wealth back, because apparently taxes lead to "inefficient allocation of capital", or some other esoteric free market-based rationale. I say screw the theory and focus on the elephant in the room! It was our wealth that has been stolen from us, now let's take it back! Reducing the work week is a necessary step to fair wealth allocation afterwards, but that alone will not solve the wealth inequality problem. The ONLY way that is going to happen is through, first, a bloody revolution, second, imposing a wealth "tax", and third, overhauling the labour market rules.
"My idea is I don’t need to replace or shut down the current state cartel money creation, however you want to describe it our current economic system. That can just kind of run along as it's currently running, and it will end up where we all know it will end up with financial crises and so on. But we could start a whole parallel system with a new kind of money,"
I like that idea but the problem I see is that the average person still has no wealth!!! How are they going to trade the "production of goods and services" when they don't have any means to "produce" anything and aren't given the opportunity to, because they don't own any land or capital, because the elites have gained ownership of it all? Secondly, who honestly believes that the elites will just stand back and allow for this kind of heresy? They'd shut it down before it gained traction. Just like Bitcoin is a nice idea, until it becomes a real rival to fiat money, then the elites will just shut it down or take it over for their benefit. Any solution will only work if it is structured around deleting the elite.
Unless you impose tolls on every bike lane, which I argue doesn't make for a very nice society, the fact is that the only way bike lanes are going to get built is through government taxes and expenditures because as you rightly point out, no single entity is making profit off a bike lane. You can rightly complain about the way the current government who's funding the bike lane operates, but in the end it's a government bureaucracy that's going to build it, one way or another. Sure, municipal governments are better at doing this, which is why they do it, but they have to get their money from somewhere.
Charles Hugh Smith returns to the podcast this week to discuss the theme of his new book A Radically Beneficial World: Automation, Technology and Creating Jobs for All.