Global Warming & Automation

Financial Independence is a long term play that needs to consider macro trends affecting the world now and in the future. Two such trends that I’ve recently become very interested in are Global Warming and Automation. Whilst I can’t predict what difference these trends will have on an FI portfolio I do note some behavioral overlaps between a financial independence mindset and the changes that we all need to individually make to confront the challenges of a dying ecosystem and the automation of work.

Since 1970 58% of the biomass of this planet has disappeared. Atmospheric carbon dioxide, the key driver of Global Warming, is at 411ppm (parts per million), way above the safe level of 350ppm. Automated Computer Systems looks set to replace 30% of jobs worldwide by 2029. Either by government policy or through individual actions we all need to live much more sustainably if we’re going to have any chance to avoid an ecological catastrophe in the next 100 years. We’ll also need to prepare for a future where there might not be enough jobs to go around, and a significant percentage of the population will need to find meaning in life beyond work.

 

When considering these lifestyle changes that climate change and automation will impose upon all of us it is interesting to compare them to the basic tenants of financial independence. An environmentally sustainable lifestyle means consuming less, learning to live with less and reducing your carbon footprint. The lifestyle of someone pursuing financial independence prioritizes saving over spending, leading to decreased consumption.  Choosing not to own a car is sustainable and is also a financially smart move.  Installing solar panels to mitigate electricity cost is good for the planet and good for the wallet in the long term. Growing food in the garden, flying less, buying and holding onto quality appliances and gadgets, eating less red meat,  living in a smaller house. These are all simple lifestyle changes that lead directly to a carbon footprint reduction and that also save money. In fact, it’s hard to think of a sustainable endeavor that doesn’t also have a positive financial independence outcome. It seems that there is a positive correlation between living sustainably and the pursuit of financial independence.

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Moving onto automation and the prognosis is a little less clear but all the indicators are pointing to serious labor market disruption in the next 30 years. We’re already seeing driverless cars and trucks starting to enter the market. Once this happens at scale then what will become of the 3.5 million truck drivers in the US or the 173,000 in Australia? Not to mention taxi drivers or anyone else whose job it is to turn a steering wheel.  Then there are call center operators. What will they do when a computer system can answer human inquiries better than they can? There’s a whole swath of jobs that have been identified at risk from automation. Assuming that our economic systems are able to find ways to deal with mass employment, by adopting a Universal Basic Income as an example, then large segments of society will need to find fulfillment in life absent of traditional career opportunities.

It seems that if society is to respond to the challenges of climate change and automation then people are going to have to start behaving a lot more like financial independence adherents. We’re all going to need to lower our consumption and learn to live with less. We’ll all need to save for a future where we may be forced into early retirement. We need to be thinking about how we want to meaningfully spend our time should the opportunity of full-time work be taken from us. Those practicing financial independence today have inadvertently adopted a 21st-century lifestyle that may soon be imposed upon a much larger cohort of people. As early lifestyle adopters, the FI community can offer wisdom and insights to a wider society that needs to start getting serious about these challenges. FI blogs and podcasts are an absolute treasure trove of information made by everyday people about how to live with less and find meaning outside of work. The FI message is surely more appealing to the average middle class Australian than being told that they need to stop driving, stop eating meat and learn programming else the world will end and they won’t have a job in 10 years.  The challenge is to frame the pursuit of financial independence as more than just leading a frugal life but also as an altruistic endeavor that has positive outcomes for the environment, society, and the individual. I’ll explore this framing in future blogs.

 

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