Earlier this week I read Warren Buffet's 2015 letter to his shareholders. I was a bit surprised that he used the letter to chastise politicians for being so negative about the country. His use of “GDP per capita” as evidence of economic progress is a sound argument, but as he hints, an insufficient one. He says: “Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious.” He sees the “battlefield” for this (contentiousness) in Congress.
Buffett’s argument and his business model is that innovation and productivity improvements grow his business as well as the economy. What is amazing to me is he acknowledges the human toll of this: “many workers will be rendered unnecessary, their talents obsolete.” He rejects regulation of business in favor of “a variety of safety nets aimed at providing a decent life for those who are willing to work but find their specific talents judged of small value.”
And so this was lingering in my thoughts this week and I read about an idea called “Universal Basic Income” and artificial intelligence. Some economists and technology leaders worry about the consequence of artificial intelligence eliminating jobs. As jobs are eliminated, they suggest that a check (enough to cover the basics) from the government is the solution. Loss your job to AI and the government sends you a check.
The idea of “UBI” currently resides in the arena of think tanks and incubators, but given that one of the most successful business men in history admits that his success depends in part on putting people out of work and creates a need for “safety nets” a “UBI” plan does not seem so far-fetched.