Sam Altman’s UBI vision is wrong and San Francisco proves it

Alex Mihaileanu
Jul 30, 2017 · 4 min read
There’s no such thing as a free lunch and money doesn’t grow in the trees.

Whenever I hear this nonsense about the universal basic income (UBI) I tend to either smile or be sad. Because it’s wrong. And it’s not wrong because people that don’t have a problem with money want to share with others who don’t, it’s wrong on many other levels.

One of them is that free money tends to corrupt people and make them less prone to work or to find a job. The other is that after a while, people that get free money tend to believe that they deserve it although they don’t do anything for them except living. And this is wrong. It’s money that isn’t earned.

One of my former philosophy professors once said: “The biggest curse a man can endure is winning the lottery.” And he was right. A man who wins the lottery doesn’t really understand the value of the money he just won.

And there’s plenty of examples out there of people that won millions and spent all of them in a span of a few years, going back to poverty. It’s the same thing in the UBI case.

I was born — and still live — in Romania, a former communist country. There’s a joke here, since like forever, about a guy who runs from the commies and gets rich in some capitalist country, after the Revolution he starts sending money to the people from his village, like $50 a month to each person, to help them live a better life. After a few years, he sends a letter to the mayor in which he says “I’m sorry, but this month, I will only be able to send $25 per each person because my daughter is getting married.” After the mayor reads the note to the people, everyone gets mad, “He’s stealing our money!

But jokes and anecdotes aside, the real problem with the UBI is inflation. And San Francisco is the best example and I still cannot understand why Silicon Valley investors, such as Sam Altman, aren’t able to see it yet.

There are lots of stories of people that earn a more than decent living in the Bay Area but can’t afford to buy a property there because the prices skyrocketed in the last decade. San Francisco is the most expensive city in the US, the monthly average rent per person is $2.000, and this comes in the city where people actually make real money, lots of money, worked/earned money.

The thing with UBI is that free money comes with inflation. Prices will grow making the free money useless, because it would be just as before. Basically, a waste of money. UBI is not an answer, UBI is rather an experiment and it should stay like that. Like gravity for physics, supply/demand is the fundamental law in economics and messing with any of these two never ends up well. You don’t believe me? Look at Venezuela and the big wonders of socialism.

That money would better be invested in job opportunities.

I know we keep on talking about the AI revolution, about robots and automation, but every industrial revolution comes with new opportunities. When cars hit the streets, horse carriages became obsolete and the people that ran them lost their jobs. But there were other industries that put out new jobs, such road constructors or auto mechanics.

In this digital revolution, which happens way faster, lots of people will lose their jobs. What corporations can do is create other jobs for not so young people with the risk of cutting their profits until they can retire. Meanwhile, they can create investment funds that can support young people, for which it’s way simpler to learn new skills. The younger generations are already focusing on the digital industries and investing in them would also help innovation to come faster.

Some big corporations, such as Apple or Google, already started to create such funds. Well, it’s not like they can’t afford to, but it’s a big step in creating new jobs for people.

This is where guys like Sam Altman should focus, not on giving free money. Free money will never be an answer unless you live in the Star Trek universe — where there’s no more money *because obsolete*. And we still have a long way to go until we get there.

Disclaimer: When it comes to individual rights, I’m as liberal/progressive as you get, but when it comes to economics, I’m a pretty big fan of capitalism rather than socialism. Living in a country that used to be socialist and in which socialism proved to be a complete disaster — well, like in pretty much every socialist country in the world, capitalism is the only logical approach.

Before taking the socialist economics path, please study the countries that already took it. It never, never ends well. And yeah, I know what socialists say, “socialism is a great idea, but it was never applied well”. Well, that’s because there’s no right way of applying the socialist economics, it will always fail. Just read the case studies.

Journalist & visual artist, VICE Romania columnist on politics & economy. Following arts, media, tech & startups.

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