Universal Basic Income (“UBI”)

With all the talk about the impact of accelerating computing power – generating the kind of artificial intelligence (“AI”) automation that can replace even some of the most sophisticated and highly-educated professions (see my February 21^st blog, Well-Educated Professionals and Automation) – there are a lot of people trying to figure out how political and social systems will cope with a growing dearth of good jobs for highly-trained people. Inevitably, the conversation gravitates to income redistribution… socialism pure and simple. Just as there are climate change-deniers, so are there job change-deniers, people who believe that somehow we will find well-paid new jobs in a technologically advanced future.

But you just have to look at the current landscape – and the concomitant anti-incumbent, anti-establishment populism that is running scared at the changes they see around the – to understand that we are already facing job/earnings polarization where a few make lots more and most make a lot less. Some skilled workers have been permanently displaced, leaving the job market with no place to go, and massive declines in demand for certain professions (lawyers being a prime example) hint at a future for most professions. AI is generating not just the physical ability to replicate the processing power of the human brain, but we are providing new sophisticated self-learning software to apply that processing power to very sophisticated work.

The March 15^th FastCompany.com tells it like it is: “If the goal of the economy is to provide decent-paying work for everyone, that economy clearly isn't doing a good job at the moment. Real wages for most Americans haven't increased in 40 years. Real unemployment—which includes the ‘under-employed’—is above 10%. Many jobs are now part-time, flexi-time, or ‘gigs’ with no benefits and few protections. And, we spend a lot of money to subsidize so-called ‘bullshit jobs’: more than 50% of fast food workers receive some form of public assistance, for instance [like food stamps].” The powerful theme of income inequality is the biggest issue of our time. But there is nothing on the horizon, notwithstanding the abstract promises of presidential candidates from both sides of the aisle, that is likely to stem the tide of AI replacing skilled workers with increasing frequency.

The biggest questions relate to whether we can continue to pay those who own the machines, who paid good money to develop those machines, that are displacing the workers… in effect the money once paid to workers – increasingly pushed into marginal pay rates, where they even have work, as our middle class continues to contract – is now going to those who own the automated machines. Is there a point where the whole or significant part of the revenues from such machines has to be redistributed to those whose jobs have been displaced? Does society owe its population a minimum-but-well-above-subsistence income – a “universal basic income” (also known as “unconditional basic income”) if you will – where the jobs simply do not exist… or do we simply let the raw capital marketplace determine their fate?

Do people continue to receive higher-levels of education if the underlying jobs just aren’t there, and if so, who pays for that? Is such schooling merely a luxury we will no longer be able to afford? Do we just lie back and let the machines take over? And if we agree that a UBI is necessary, where do we get the money to write those checks? From those who own the machines? For civilizations which have defined self-worth in terms of occupations and wealth, what does society look like in the future where such opportunities just do not exist?

“The fundamental problem could be that work is losing its value. The thing that provided—that allowed families to prosper and individuals to build a sense-of-self—is under attack… In response, many are now calling for a ‘universal basic income’… —where the state gives everyone enough to live on. This would put a floor under the class of people we're calling the ‘precariat,’ people for whom work doesn't lead to increased financial security. It would free us from the bullshit, allowing everyone to benefit from automation, not just the lucky few. And it would leave us more time for creative, fulfilling things, enjoying the ‘abundance’ that new technology affords (think how useful and cheap computers are today and imagine what they might let everyone do in the future). There are several UBI trials planned in Finland, Switzerland, and Canada (and, indeed, several reasons why the idea is attractive).

“Critics of UBI says it's unaffordable, impractical, and liable to lead to millions of layabouts living off the government dime—and perhaps they're right. These criticisms are reasonable. But before dismissing UBI too quickly, it's important to consider the idea not in the context of our current economy, but of what the economy could become in the future. UBI is not so much an idea for now; it's an idea for an economy where capitalism isn't as socially productive as it's traditionally been.

“To understand the type of economy we have and how it's not providing for a lot of people, you need to read Postcapitalism, a profound and important book by Paul Mason, a British economist and journalist. Mason makes the case for UBI, among a larger set of changes necessitated by the failure of the current system. Presenting a long economic history showing how innovation and prosperity rises and falls in waves, he shows how our current arrangements aren't as innovative and prosperous as we tend to think (the invention of Facebook isn't as momentous as the coming of the steam engine).

“Mason says we need to move towards a ‘postcapitalist’ economy, where working for money loses its centrality, where goods, information, and intellectual property are shared, and where economic actors collaborate in new ways, whether it's credit union-type financial institutions or co-operative-type retailers. Importantly, Mason also shows how current economic orthodoxy—based around ‘free markets,’ globalization and an oversized role for the financial services industry—isn't some historical end-state, perfecting everything that went before. Rather, it's the result of a particular set of choices, starting in the 1980s, that advantage some people over others.” FastCompany.com. But can you picture such a system working here in the United States? And if so, exactly what sacrosanct political and economic structures will have to be sacrificed? What are your thoughts of the coming years and the redefined labor market?

I’m Peter Dekom, and we can add the above discussion to the admonitions from American capitalist icons like Elon Musk and Bill Gates who have been sounding the alarm for years.