Universal Basic Income: The Answer To Technology Driven Unemployment?
We wrote an article back in June of 2016 whereby we explored this idea of a “Government Guaranteed Income” or what has also been called “Universal Income”, “Basic Income” or “Universal Basic Income” (see: http://www.ascotadvisory.com/2016/Guaranteed-Income/). But for those of you unfamiliar with the term or the concept, the basic idea is that the government simply gives everyone over the age of 18 a monthly check for life. A supposed basic amount, say US$1,000 per month, or whatever amount they come up with or decide upon. Sort of like Social Security but for everyone, not just the retired. “Minimum living income” some also have called it, whereas others call it a negative income tax (a term dating back to Milton Friedman). The term “social dividend” has also been thrown around as well. Manna from heaven, or in this case, the government. But regardless of what term you want to use, in essence every adult citizen gets a monthly check. What could go wrong?
The idea is that this would supposedly render a cost savings to the government because you would eliminate all other social welfare payments & the government bureaucracies that manage them. In other words, this so-called universal basic income would replace all other forms of public assistance, or so the theory goes. It sounds good until you run the numbers. And the Swiss did just that. What they found out was that this “universal basic income” would DOUBLE the government welfare costs, not reduce them. Of course the monthly number proposed in Switzerland was 2,500 Swiss Francs or about US$2,500 per month. As a result of the Swiss government studies and findings, when the Swiss had a public vote (referendum) back in 2016, seventy percent of the Swiss voted NO regarding the instituting of such a thing.
But you might ask why all of a sudden was this idea brought up back in 2015 / 2016? Well, keep in mind that the economic crisis of 2008 has never really gone away. After throwing (and printing) Trillions of Euros (and US Dollars in the US) at the problem via the ECB (European Central Bank) buying up all the bad bonds from the banks in Europe (as the US Federal Reserve of course had done as well), QE (quantitative easing) & various other government / central bank economic salvos, things were not looking up. Unemployment, and especially among the young (under 30), skyrocketed and stayed there. For awhile the unemployment rate among young people in Spain & Italy ratcheted up to nearly 50%, and 20% plus among the rest of the population. So, having seen futile results from all these other economic stimulus programs that benefited financial institutions directly and not the general public, the “Hail Mary” last ditch idea was to simply give everyone a monthly check (the “Hail Mary Throw” is an American football desperation reference to explain to my European readers, just in case you were baffled). After all, if consumers have no money, they can’t spend. Ergo the idea was to simply give them the money, someone else’s money, taxpayer money, but money just the same. That idea was talked about in the US as well so don’t think it is only a “European” idea, albeit it the US angle seems to be coming from a place of guilt regarding new technologies that are eliminating jobs, and could eliminate even more jobs in the future, rather than the more severe unemployment manifestations seen in Europe. However, it was in Europe that we did see much more MSM media coverage, discussion and actual voting referendums on the matter.
In the “putting one’s money where their mouth is” corner, Silicon Valley’s Y Incubator / Y Combinator announced what they called their own “Basic Income Project” back on May 31, 2016 offering between US$1,000 & US$2,000 to 100 families in Oakland, California as a “social test” project. Now, more recently in late 2017, Y Combinator announces yet again another new project to give 3,000 people across two states a Universal Basic Income. Reportedly 1,000 people will get US$1,000 per month for 5 years and 2,000 people will get US$50 per month. We have to wonder what the results were from the first project for them to do another one and change the parameters, maybe just like the Swiss found out, the results were not as originally promised. But, while you might applaud the idea of a Silicon Valley company giving away “free” money to a group of families, this was never meant to be a private corporate “give away”. No my friends, the veiled philanthropy from Silicon Valley was, and still is, meant to push government to do it.
Mr. Nathan Schneider of Vice lets the proverbial cat out of the bag via his January 6, 2015 article titled: Why the Tech Elite Is Getting Behind Universal Basic Income, https://www.vice.com/en_us/article/mv5d3y/something-for-everyone-0000546-v22n1. Mr. Schneider quotes Mr. Chris Hawkins, a young investor who made his money building software that automates office work, that opines: “The cost has to come from somewhere, and I think the most logical place to take it from is government-provided services.” Mr. Jathan Sadowski, writing for the Guardian Newspaper, reports on June 22, 2016 as well with his article titled: Why Silicon Valley is embracing universal basic income, https://www.theguardian.com/technology/2016/jun/22/silicon-valley-universal-basic-income-y-combinator In the article he quotes: “For many supporters it only makes sense that the budget for UBI (Universal Basic Income) would come from cannibalizing existing welfare. UBI would not exist as an add-on benefit. The logic is to shut down public housing, food assistance, Medicaid, and the rest, and replace them with a single check”. So again, we have the same argument applied with the initiative in Europe previously, namely as a lauded cost savings for government social welfare programs (remember the Swiss claimed they in fact did the math and the result was “Nein”). But is all this being promoted by the traditional political left leaning computer geeks out in California as some kind of “social justice” project, or is there something else going on here?
The answer to THAT question is a resounding YES, and the word is guilt, with the theme being robots. In other words, it’s about self preservation (we will get to that shortly). According to an Oxford University study back in 2013, 47% of jobs in the US could be at risk (read lost) due to AI (artificial intelligence) and robotics. In addition to that, the US White House Council of Economic Advisers estimated that for workers earning less than $20 per hour, these people will have an 83% chance of losing their jobs to robots. It’s not cheap labor in China, not outsourcing & not even “Global Warming” that puts millions of American jobs at risk. It’s the robots (and other software, tech in general). So, how do we know the techies are well aware of the social havoc (mass unemployment) their “creations” can bring? They have said so.
Ms. Elizabeth Rhodes, hired as the Research Director for the “Basic Income” project reportedly told the publication Quartz that : “If technology eliminates jobs or jobs continue to become less secure, an increasing number of people will be unable to make ends meet with earnings from employment.” Mr. Albert Wenger, a venture capital guy from New York that presumably invests in tech, says he is worried the applications he helps to create (via his own funding) is “displacing jobs with every download”. And there was awareness long before if we consider the conference held in June 2014 at the Singularity University in Silicon Valley that actually discussed the problem (fear) of “technology driven unemployment”. Mr. Jathan Sadowski writes in his Guardian article: “UBI (Universal Basic Income) becomes a consolation prize for those whose lives are disrupted. Benefits still accrue to the designers and owners of the technologies, but now with LESS GUILT and push back about the collateral damage”.
Collateral damage? Consolation prize? Benefits still accrue to the designers? That doesn’t sound like a good thing to me. Sounds like even more wealth divergence & further erosion of the middle class. But here is the real kicker, the “game plan” or unsaid hidden theme behind all of this, and it is as follows: Socializing the loses while privatizing the profits. Read that again and let it sink in (it is a globalist plank, and it was already applied in the previous banking bailouts). I will once again quote Mr. Jathan Sadowski who writes: “Silicon Valley elites can shake off critics by pointing to UBI as the solution, and one that does not restrict their profit motive”. In short, in plain vernacular, the technology “dudes” create all these artificial intelligence robots, applications & devices that will eliminate a large number of human jobs, while at the same time giving themselves the profits from selling such said new world wonders. However, they are very concerned about and fearful of 10,000 out of work taxi drivers showing up at their door with tire irons (remember & recall they are talking about driver-less vehicles, self driving cars and maybe even robotic drivers if you want to expand the possibilities out. These guys were already ticked the heck off with Uber, can you imagine what driver-less taxi’s would do?). Mark Zuckerberg was no fool when be bought up all the homes surrounding his so he could create a modern date moat and wall himself in. Regardless, they very much would like the government to send everyone a check to assuage the economic pain, keep the angry mobs at bay, and alleviate some of their own guilt in the process. That is the “why” behind Silicon Valley’s interest in UBI, tax payer funded of course and not from Silly-Con Valley profits.
Now don’t get me wrong. I am not anti-technology nor suggest we go back to kerosene lamps and the horse driven buggy. And automation plus use of robotics in manufacturing & other areas has been going on for decades already. We have seen robotic welders in auto factories replace spot welders on the assembly line years ago. And those annoying automated telephone systems that you connect to when you try calling a company with a problem (press 3 for Korean, press 7 if you currently are experiencing cardiac arrest) are all part of the “using technology to replace workers & cut costs” game that has been going on for awhile. But it seems like, it sounds like, the next wave that is coming is much worse (or better depending upon your point of view). Catherine Austin Fitts has spoken about the new “4th Industrial Revolution” that is coming, that will unleash all kinds of advanced technology to make even Buck Rogers seem like a character from the stone age. She opines that the only jobs available to humans will be service jobs requiring human intuition (that supposedly cannot be digitally duplicated no matter how man Intel chips you stick into a new & improved version of “Sophia”). But, there are two problems there. One, service jobs certainly tend to pay much, much less than other kinds of work or professions (think customer service, waitressing) and two, who is to say the robots wouldn’t be doing that kind of work also? HSBC recently announced a new “virtual assistant” AI chat-bot named “Amy” that claims to revolutionize banking customer service. We are told that “Amy” is a “customer servicing platform” that is “adept at answering most customer queries, while also providing a low cost way for banks to improve service”. So much for humans working as customer service representatives. And McDonalds’ in Asia especially has employed order taking / menu chat-bots that allows patrons to enter the restaurant, sit down right away so they can both order food and pay from their smart phone. At the moment, real humans still bring out the happy meal to the table from behind the counter, but that could change too. We could eventually see “Robbie the robot” swirling around Mickie D’s delivering your fries with a pop up ketchup dispenser in it’s little robot fingers.
To be perfectly honest about it, I don’t know where this will all end up. We can perhaps hope it turns out like the “old school” prediction of the future in Woody Allen’s 1973 film Sleeper, which at least was a comedy, complete with talking electronic dogs, Yiddish speaking tailor robots and cylindrical port-a-potty like contraptions in everyone’s home that gives a new meaning to the term “relieving one’s self” (don’t ask, go watch the movie). Although the film never really tells us about the employment situation as people apparently have jobs (or are assigned jobs by the government) and no mention of Universal Basic Income comes up at all. In the least, technology & new inventions have created new industries, new jobs and certainly made others obsolete. In the future, let’s just hope we have something to do, a way to honestly earn a living and not become wards of the state (read vassals) in order to survive.
About The Author: This article was written by John Schroder of Ascot Advisory Services. John’s firm has been helping clients in the Dominican Republic for the last 18 years to date with residency application services, naturalized citizenship filing, banking assistance, incorporation services and legal services pertaining to real estate (title transfers, legal representation at closing, sales contract review). In addition he writes articles like this one and produces a newsletter for his clients & subscribers. You can contact him by telephone at 809–756–1917 or click the about the author link above to reach a contact page to send an email directly.
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