Charles Hugh Smith: Fixing The Way We Work

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.

Automation and artificial intelligence are changing the landscape of work. Tens of millions of jobs are on track to be eliminated over the next decade or so by these advancing technological innovations in the US alone.

The way in which our current economy is constructed, the fruits of those cost savings are likely to go into a very small number of private pockets, while the millions of displaced workers will find themselves with no income and no work to do. It’s a huge looming problem that is not being address in national dialog right now.

But there’s opportunity to course-correct here. To use our new technologies to increase total productivity in a way that empowers rather than diminishes the individual worker.

What if we could hit the reset button on the way we create money, work, commerce and community?

This is not an idle question, for technology now enables us to hit that reset button and organize the creation of money, work, commerce and community in new ways. If we could start from scratch, what would a new system look like?

To answer that, we must understand why the current system is failing. The current system is based on five principles that are assumed to be true:

  • Money created by banks trickles down to create work for all
  • Technology creates more jobs than automation destroys
  • Centralization is the solution to large-scale economic problems
  • Expanding debt and consumption (i.e. growth) is the path to prosperity
  • Maximizing private gain organizes the economy to the benefit of all
All five have proven to be untrue. No wonder inequality is rising and opportunity is declining. Clearly, we need a new system that offers what the current system cannot: meaningful work for all.

We have the ability to design a global system that integrates money, work, commerce and community in new ways, using social/technical innovations that are already in daily use. I’ve proposed a practical blueprint of a new system that offers opportunities for meaningful work and ownership of the sources of prosperity not just to a few, but to everyone. In this system, every individual has the power to change the system for the betterment of themselves and every other participant. Being at the top of the heap is no longer a prerequisite. Everyone who is powerless in the current arrangement is empowered in this new system. Empowered to not just better themselves and their family, but better their community and the larger community of Planet Earth.

A radically beneficial world beckons—what are we waiting for?


Click the play button below to listen to Chris’ interview with Charles Hugh Smith (44m:54s)

This is a companion discussion topic for the original entry at

My observations of the labour market is that because there is so much Overhead to hire someone, fewer people are hired. And those who are hired have to work extraordinarily long hours. Meanwhile others have no work at all.
Underlying the entire automation revolution is the need for cheap transport energy. I have been watching battery developments and would not write off chemical energy storage yet. Of cause even better sources of energy are in the wings.  US  technology is in danger of being superseded by others who are less vested in yesterday's solutions.  Although Bose Taylor of SPAWAR says that their experimental results have gotten ahead of their publications.

Humanity needs some overarching goal to give them meaning. Useless eaters are not my idea of a fulfilling existence.  Therefore it is very important to embrace Dr Gerard K O'NEIL's vision and business plan to transfer the bulk of humanity to the le Grange points. If we Don't then I am confident that our illustrious leaders will use any surplus up in their traditional persuits. More war. The Emdrive is an interesting development in this regard.

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.

Arthur, good point about energy driving automation. As we all know, the current system needs more of everything to survive: more wages, more taxes, more jobs, more energy and more consumption. What we're discussing is: what kind of system could be sustainable with less of everything? It will have to be a new system because the current arrangement can't be re-engineered to survive on less of everything.

Mark, you raise many excellent points and I'm not trying to respond to each one, but rather I'm adding to the discussion you've launched.
Taxing wealth (or land, in many models) is appealing, but there are three flies in that ointment:

  1. wealth buys political power, so the political structure is captured and will never tax wealth.

  2. wealth is increasingly mobile (for the reasons I noted re: the 3rd form of capital drawing most of the gains in a Power Law distribution), which means once wealth gets taxed at a rate high enough to fund our $6.2 trillion in government expenditures, the wealthy will figure out a way to move much of their wealth.

  3. as I noted, profits are crushed by automation/commoditization. And since profits are the bedrock of wealth, if profits erode for systemic reasons, so will wealth–especially the kind you mention that is largely finance-based.

I understand your reasoning about deleting the elite, but the danger here is 1) mobilizing the elite to crush any opposition and 2) that we get a "meet the new boss, same as the old boss" new elite that's no better than the old one.

I can't really summarize my book, but clearly, real change is only enabled in crisis, when the existing arrangement ceases to function. My basic idea is, we need to have systems in place that can scale to fill the vacuum created by the implosion of the current world-system of finance, fiat, debt and welfare rather than opportunities to build capital and contribute to one's community. 

My framework is not a piecemeal 'fix," it's an integrated system. Even if nobody agrees with my system, that approach is the only real way forward. Trying to patch up a failed system is more mal-investment in my view.

What new system could actually function sustainably on less of everything? That's the question we're discussing.

I don't think that our economic system is broken, rather it's our value system that shows our collective insanity.  Think about it.  Our sick care system, penal system, food, education, water, entertainment and on and on are for profit.  Our role models are fictional, or rich, or athletes or entertainers or discuss in detail their gender confusion or sexual preferences.  Death destruction and misery will reign supreme until we can live peacefully on the planet where no thought is given to power and profit.  I suspect the species that follows ours will find us incomprehensible.
Good luck with your book CHS I hope you have solutions that will lead us to a different scenario than the one I foresee.



We have the ability to design a global system that integrates money, work, commerce and community in new ways, using social/technical innovations that are already in daily use. I've proposed a practical blueprint of a new system that offers opportunities for meaningful work and ownership of the sources of prosperity not just to a few, but to everyone. In this system, every individual has the power to change the system for the betterment of themselves and every other participant. Being at the top of the heap is no longer a prerequisite. Everyone who is powerless in the current arrangement is empowered in this new system. Empowered to not just better themselves and their family, but better their community and the larger community of Planet Earth.

A radically beneficial world beckons—what are we waiting for?

Bolded section my emphasis.

While I want so desperately to buy into your hypothesis hook, line, and sinker Charles, I know that it will just amount to kicking the "hope" can down the road a little further. Colour me seriously disillusioned. From what I can see there are select few who actually get what is going down (the enlightened 1%?), therefore the vast majority sees no reason to change to a new system. The party must go on and it will go on - after all, that is what TPTB are telling us, right?!?  People don't want to change, because they cannot fathom any other existence beyond their daily consumerist, social media orgies.

I concur with AKGranny - it is about values and sadly I don't know to many people who even know what their values are anymore, largely because they cannot come up for air long enough from their social media narcissism to even reflect on what values mean. I knew we hit peak everything the day"selfie" was named word of the year for I think it was Oxford Dictionary. Need I say more?

Charles you are one of the good ones so don't stop trying to cheer us up with your optimism! :-) I am seriously pessimistic about the ability of the average joe & jane to wake up before it is too late. I truly wish I could somehow find a way for the 99% un-enlightened to buy your books and put on their thinking/analysis/critical thinking caps in a big way. Somehow, I can't help but think, I'll score a lottery win before that happens.


If they find the energy Feedstock to enable the automation Charles then won't we have more productive capacity? We won't be in a future of less,  but a future of more.  But more for who? More for anyone with the readies to buy it. 
And by "anyone" I don't mean some flesh-and-blood human. Corporations are people too, you know.  I can see a time when humans are just not in the loop. 

And is war in the Corporate interest?  I would argue not, except for those making war toys. (robots).

The problem for corporations then becomes "How to get rid of the parasitic humans? " That is even if we come up on any boardroom agenda, which I doubt. Whether humans are tolerated will depend on whether they add to the bottom line, I guess.

Here is the latest youtube video of Asimo. (There are no wires. )

This demonstrates that we have the technology to mine the moon and send the materials to the le Grange points with linear accelerators. ( There is a minor wobble in the tidaly locked moon, but other than that  the accelerator can be fixed at the south pole where the water is.) 

All the ducks are lining up in a row to get it done. 

So money is created by the community, in response to a worker performing "useful work" for that community.  Does money ever get destroyed?  Or does it just build up in the system forever?
Martin Armstrong proposes something similar for the Federal Government.  The Feds no longer borrow money, nor do they collect taxes - they simply print new money to pay for stuff, presumably limited by law to a % of GDP.

What I wondered about with his scheme - and yours - is, doesn't the money just keep building up, year after year?  If that's true, then there is a built-in inflationary bias, similar to the current system.  Perhaps even worse.

And clearly, if you are in government, there's no feeling of "limits" or "scarcity" there, since you can simply create money to pay for government work.  Politicians, police force, teachers, firefighters - they will all get pretty good salaries.  And pensions.  Presumably, they are also paid by newly-created money too.  So when I hear you say "worker", instead, I think "government employee."  That's how it would work out.  Does it still sound as nice?

And of course every newly-printed dollar is an invisible tax on the already-existing dollar holders.  I'm going to guess inflation will be an issue.  If inflation is too severe, nobody will want to hold this money for longer than a few days.  That leads to hyperinflation.

I recognize that the profits & control advantages of money creation is too important to be left with the private bankers.  But giving that "gatekeeper" function over to the gang in government - is that any better?  I don't think so.

Perhaps some sort of direct democracy is a necessary check & balance on the whole mess.  Perhaps the people themselves are the check on government.  We'd need a new constitution, where people are constitutionally required to approve - say - annual appropriations.   We have the technology to effect direct democracy, for as much or as little control over government as we want.  How much do we want?  How much can we really pay attention to?  In addition - perhaps the initiative process (e.g. California) can be available if people really get upset.  They can choose to restructure government pay schedules if they really want to, or they can have an initiative to de-fund an entire department.

These are just idle thoughts.  Somehow, politicians can't be the gatekeepers.  People need the veto power.

Not that I particularly trust people.  They are easily swayed by false flag attacks, propaganda campaigns, and whatnot.  But this way they can't blame anyone other than themselves if things blow up.  And this allows them to change their minds once they figure out something is a bad idea.  Can you imagine an initiative to order the US army out of Afghanistan?  Or another one to eliminate the NSA snooping?  Most of them would not pass, but even the threat alone would be a serious check on government.

Money creation, direct democracy, its all linked.  Who is the gatekeeper over money creation?  That's the key question here.

Last point.  The logical end point of this process is a vast army of robots who do almost all of the dirty work - from mining, to manufacturing.  Soup to nuts, supervised AI takes care of everything, leaving us to do…what?  Forgetting about money for a moment - which is simply a marker for what sized share of the aggregate productive capacity a particular individual can lay claim to - how do we divide up the treasure here?  It makes no sense to chop it all up equally; there will still be work to be done, and that needs to be rewarded.  Someone will need to tell the AI what products to build.  It also makes no sense to exclude the vast majority of the population from it all because they have no real contribution to the manufacturing effort - because most of us won't.

But ultimately, utopia will be pretty boring if most of us don't have anything to do with all our time.

I mean, we could all become artists and writers and literary critics - but we'd probably end up fighting over really stupid things, and we'd use our robots to do it.

I must apologize for wearing my curmudgeon hat again and I mean no disrespect to CHS, but to embrace this line of thinking is to ignore history and, more fundamentally, basic natural processes. If you think that the millions of feet padding their way across the Levant, North Africa and now Europe, is not indicative of the current plight of the world, then you choose to acknowledge our privileged state here in the "developed" world and that "WE" might have a future solution. While I must applaud CHS's excellent thought and argument, my personal perspective is that I would be better served by using the $25.00 to buy beer and a pizza and invite my neighbor over for an interesting discussion on the points he raises.
Yes, the current system does leave a great deal to be desired but, what he puts forward (and I haven't read the details), seems somewhat naive, given the current state of affairs. I think our best investment, today and in the future, is to treat our neighbor decently and share the few resources that we have left with each other or go into the basement and load another box of shells. I think Mr. Smith implies the  the first option. The thought of leaving it to the politicians, is downright scary!

Remember the song, "In the year 2525" by Zager and Evans?  You may be too young, but it is about machinery doing all work and humans extremities becoming useless from lack of exercise. How prophetic.

One point I'd like to make is that in my historical research efforts locally there are many periods of massive economic upheaval.  Almost nobody remembers to layer those events into the background of what happened to people.  In my personal history, this farm was foreclosed on in 1894 (panic of 1893) and my grandparents were able to purchase it on quite favorable terms in 1899.  It seems that a pure gold standard can also have huge swings in economic activity.

I welcome everyone's skepticism, which is of course warranted by current events and history.  Nonetheless, I have thought through many of these issues in some depth over the past 18 months, so I actually have answers :slight_smile:
INFLATION: In my view, inflation occurs not from the expansion of money but from the expansion of money while the expansion of goods and services remain flat. If goods and services expand at the same rate as money, then there is no inflation. I think history backs me up on this.

Recall that the great trading fairs in pre-Renaissance Europe had insufficient gold and silver for money as a means of exchange and so they created bills of exchange, letters of credit, etc–"fiat money" or "credit money". History is replete with these examples.

I strongly suggest to everyone interested in understanding money from the groujnd up to read david Graebers' "Debt: the first 5,000 Years."

My system has a demurrage mechanism similar to airline frequent flyer miles programs should inflation start emerging in the system: money 'disappears' the way frequent flyer miles vanish if they're not used. This keep money velocity high in my system.

VALUES. The problem with values is that values are not independent of the socio-economic system.  The system creates, nurtures and incentivizes various behaviors and values. The current system actively incentivizes destructive values, and that's a core reason why it's self-destructing. This is a feature of a specific system with specific incentives and outputs.  A different system would produce and incentivize different values and outputs. We blame human nature when we should be looking at our world-system and pinpointing why we are self-destructive, greedy, corrupt, self-serving,etc.

Look, I know this sounds like the author pitching his book for a big fat profit, but at $7.45 for the ebook I barely make enough for a cup of Starbucks (in whatever cup they're using at the moment :slight_smile: The fact is, if you want to understand why the current system outputs what it does, and how a new system would output different values and results, you have to read the book.

Here's where we are: the current system will implode because it requires constant expansion to feed itself. That is impossible. So we can't just hope for miracles to save a failed system–we have to start thinking about new systems.  These systems are already emerging under the shadow of the old one–we just need to organizes them into a coherent system.

Hotrod, you raise a critically important point.  Systems such as mine have zero chance in stable, prosperous times and places.  there is no need for any alternative system if the current one seems to be working just fine. But when the current arrangement crumbles and stops working, then people suddenly realize they need a new arrangement and narrative.  If we've thought about it beforehand, we might have a new coherent narrative in place that's a viable alternative to the usual crisis-narrative, which is fascism/warlords.
As many of you know, various cycles suggest the current world-system will enter a collapse-disorder phase around 2021-2025. if this turns out to be true, we have less than a decade to think through what a different system could produce in the way of sustainable living on a small planet. Just preparing ourselves isn't enough in my view. We can do a lot better if we leverage the knowledge and systems that are already emerging on the edges of the current world-system.

Charles, I just bought the ebook and can't wait to read it.  I have considered for a long time that there are major flaws in our capitalist system, and we need to develop alternatives.  For example, when there is work to be done that society needs, and at the same time there are people that need work, why can't we connect the workers with the task so everyone benefits?  I'm not talking big government make-work jobs, either.  Consider bike paths, retaining walls, child care, irrigation channels, food systems…
An advanced-age gardener in my community tells the story of how her parents threw out potatoes in years long-past because no one could afford them.  That's where credit or barter could help. 

Arthur's comment about "useless eaters" is significant (where eaters includes mindless consumption and driving around).  Our current system encourages attitudes of entitlement while "dis-incentivizing" hard work.  If we are going to survive the upcoming system collapse-disorder, we need to change our collective thinking, values, and therefore behaviors.  We know the current system is broken - I look forward to reading a book that at least offers possible solutions for employment in the upcoming critical times (during and after collapse). 

Note that fighters are joining ISIS because it pays more than fighting for the Taliban or the Iraq military.  Meaningful and gainful work is CRITICAL to maintaining a stable society.  Since our current capitalist system is no longer providing meaningful work for the masses, let's think outside the box.


VALUES. The problem with values is that values are *not independent of the socio-economic system.*  The system creates, nurtures and incentivizes various behaviors and values. The current system actively incentivizes destructive values, and that's a core reason why it's self-destructing. This is *a feature of a specific system with specific incentives and outputs.*  A different system would produce and incentivize different values and outputs. We blame human nature when we should be looking at our world-system and pinpointing *why* we are self-destructive, greedy, corrupt, self-serving,etc.
Ok, did I just hear you say that if you just put a better system in place, people will act better?

You do know that's been tried before.  A bunch of people died.  And in the end, people pretty much acted the same way they always have.

That's a similar argument that the gold standard people use.  "If we just had a gold standard, politicians wouldn't act so profligately and the ponzi debt wouldn't be created" - ignoring the fact that we left the gold standard precisely for that reason.

I think we can bend people's behavior around the edges, but any system that doesn't take into account what I call basic human nature is most likely to fail.

CHS your book is really reasonably priced.  I don't read e-books but rather plan on leaving a well stocked library to my Great Grand-Children and will be adding yours to the collection.  In order not to pass on my curmudgeonly attitude to the young ones I think it's necessary to seek out new ideas and information.   Adapting to our changing world is important and you help all of us to to expand our thinking.
Looking forward to reading your ideas.

AK Granny

Dave, People WILL act better if a different system is in place.  Check out the Dr. Robert Sapolsky's studies of the baboon tribe, which developed a "new culture" after the aggressive males died of food poisoning.  The young baboons that entered the tribe were taught that "we don't behave that way here".  If baboons societies can change, even temporarily, perhaps there is hope that at least some of our communities can change.  Human altruism paid off for our ancestors during the long history of human evolution.  Conversely, human greed, competition, and self-centered behaviors are not paying off for the majority of our society right now.  You are only looking through the lens of the last 100 years of market capitalism.  You need a longer view - both backward and forward.  A long view forward is what Charles is offering.

Great response Charles, and thank you. You are bang on with your assertions re values, especially this:

The system creates, nurtures and incentivizes various behaviors and values.
I do applaud you for putting forth plausible solutions to our predicament. You, like many here on this site, are well ahead of the curve in terms of critical thinking and analysis of the global predicament. The majority, as we well know, are still in denial that a problem even exists, and therefore do not see any need for an alternative system.

You are doing exactly what is needed in terms of offering ideas for workarounds. These ideas do however need champions to incubate them and foster their growth, so that models of some sort will be available to us after the inevitable implosion of the current system. But who will those champions be? There are many people, activists and advocates who care passionately about these things as evidenced by the numerous blogs (like this one) and other alternative information sites. Some are more vocal than others but I think there remains across the board a tremendous unspoken fear to really put one's self out there to try to sway the masses to move away from the status quo. Those in power have amply demonstrated that they will not hesitate to quell protest of any size or form, have ridden roughshod over constitutional rights, and have and continue to take up arms against their own citizens. They are succeeding in intimidating the hell out of anyone who might stray from the herd. This of course works to inhibit potential champions who promote alternative models.

When looked at from this standpoint, it is very hard to be optimistic that, in spite of good viability, those idea(s) will ever be given a chance to grow. The current model has spawned tremendous benefit to select few, and those few will never, ever voluntarily relinquish that which they have gained. Their behaviours and values have very much been incentivized by a corrupt, broken system that has taken on a life of its own, and will have to die before any new system can take its place. Sadly, the death of this system and all that it entails will affect virtually every person on this planet.

Somewhere along the road to this predicament human integrity went missing in action. I guess I am incredibly naive, but in my world, integrity is really the only thing that matters. There are no half measures. Either you have it or you don't. Unless the people who still have integrity start standing up and being counted in a big way - by being champions - our slide down this awful hill will only accelerate. Where are the champions?



So I'm a firm believer that lots of stuff works in tribes that doesn't scale to civilizations.
Communism is a great case in point.  It works on the tribal scale - but when you attempt to make it work on a larger scale, it stops working.  Different behaviors emerge once everyone doesn't know everyone else.

So my essential question is, why is it that some things seem to work well at a tribal level, but those same things, scaled up to the civilizational level, don't work any longer?