“One side recommendation I have is: Don’t worry about squirreling money away for retirement in 10 or 20 years,” Elon Musk said on the “Moonshots with Peter Diamandis” podcast. “It won’t matter.”
The statement carries the odor of personal-finance heresy, however, it is actually an engineering assertion: that AI, industrial robotics, and inexpensive energy can take productivity beyond bounds that we are accustomed to. Within the framing of Musk, the economy ceases to be a system that allocates necessities in the form of wages and begins to resemble a utility, which is dependable, everywhere present and at a low cost at the point of consumption. He writes of an “abundance” pathway in which individuals are given an all encompassing high earnings, and goods and services are made widely accessible, not chosen and affording.
His brightest promises are literally blunt: The good future, he said, is that anybody can have whatever stuff they want, by arguing that it might be, in five years, better medical care than anybody has, and be able to have it, and that people can learn anything you want about anything, all free. When the latter assertions are taken at face value they suggest not only an increase in incomes, but an aggressive compression of cost curves of both healthcare and education such that lifetime saving strategies become destined to be rendered unfamiliar.
However it is the near term that the idea will run into what households are already living.
Numerous families reduce savings more as a buffer to necessities than as an engine of retirement even before any post-scarcity transition. As per the New York Fed figures, the third-quarter credit-card debt stood at $1.23 trillion in the US. That figure is significant here since it makes it clear why it may sound like “don’t worry about retirement” when the budgets are tight: it may sound like a prognosis, but it may read as a go-ahead to discontinue buffering risk. Even Musk himself characterizes the way to abundance as bumpy and introduces the more disruptive factor: because it implies that your job will not count. The reason that work is the entry point to benefits and security is that retirement planning has never ceased to be a proxy of control of housing, access to healthcare and autonomy.
The threat that transition poses is enhanced by the rate at which AI can duplicate knowledge work within industries. The discontinuity was well-captured by London Business School professor Ekaterina Abramova, who described the fear in the following way: One AI model can render thousands of cognitive jobs in many industries obsolete in a single night. Institutional capacity is more likely to lag such changes; Peter Orszag have referred to the discrepancy as in, “Labor markets deal well with small problems that happen fast or big problems that happen slow. They do not deal well with big shocks that happen quickly.”
A more historical way of reading automation is one countermeasure. One Morgan Stanley research team, contended that over the last 150 years, technology has transformed work and did not eliminate labor; further, that even as some jobs become automated, others will receive additional value through AI augmentation, and new, completely new jobs will be created, as AI becomes normal. That tension on the one hand with the position of Musk is no disagreement about the importance of AI; it is the speed at which the institutions can transform productivity into general security instead of narrowed margins.
Healthcare, which can be considered the make-or-break part of retirement anxiety, is not an exception and is also on a path that can bring the easy predictions to a halt. Studies of interventions that might delay the process of aging are of genuine interest, yet social opinion is skeptical: a survey published in the scholarly literature reported that two-thirds of 605 Australian adults were interested in an anti-aging pill in case it is developed, but only a third were interested in taking it. The divide emphasizes a realistic limitation of the abundant discourse: despite technological progress, adoption is influenced by trust, perceived side effects and whether individuals believe there will be benefits to a similar quality of life with an increase in gains.
Provocation of any immediate utility by Musk ought not to be a suggestion to cease saving, but a reminder of the use of saving. The central issue in an economy based heavily on AI can be the challenge of hoarding money to be used in the future, instead of remaining resilient by engaging in job redesign, retraining periods, and benefits received by people as they move across employers. It did not struggle with human behavior, according to behavioral economist Shlomo Benartzi, but rather took it and made it work. Musk has, in the future, made retirement a solved problem in engineering; it is in the present, a personal problem, a problem he has had to engineer household to household.
