An Intro To Basic Income
Thinking About Money In A Robot-Driven World
What if I told you that tomorrow, you got a nice juicy check for $1,000…. just for existing. You didn’t have to work for it. You didn’t steal it. You didn’t find it on the ground. It was given to you, to spend however your little heart desires. What would you say? What would you do?
Ok, you can stop laughing now. I know I might be sounding a little crazy over here but stay with me. It sounds crazy, but it’s not. Well…it might be crazy, but it’s real. It’s called basic income. Others call it universal basic Income or Unconditional basic income. We’re just going to refer to it as UBI. So, is basic income a gift from the gods? Is it the future’s form of money growing on trees? Not particularly.
According to Basicincome.org, “A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without a means-test or work requirement.” Yes, you read that correctly…. Free cash. That sounds insane by itself, so instead of diving into the intricacies of basic income, let’s build some context.
In reality, the future of work looks meek. Why? Because, one day, one of these research labs is going to unlock the power of artificial general intelligence, and once they do, a machine is going to do a large percentage of the jobs humans currently do, in a fraction of the time, with 10x the productivity. Thousands of jobs are in danger of being automated.
But when looking back at history, this isn’t the first time technological advancements have wiped out jobs. Think about the cotton mill or the industrial revolution. No one is crying for the farmers who lost all their jobs a century ago and I’m guessing no one will be crying for the truck drivers in 2100. This is an occurrence that happens during every major technological shift, and if you look around, we’re still here and there are still jobs.
The reason for this is that when technology wipes out jobs, new ones take their place. It’s a cycle. But for the very first time, the cycle could potentially end with the advent of AGI. It could cause a disruption to the cycle, or a flat-out halt to it.
This technological leap is unlike ones we’ve made in the past. We aren’t developing tools to make humans more efficient. We are developing a technology that can subsist without human intervention. We are the first species to be creating our own descendants. I fully believe what comes out of AGI research will outlive the human race.
Once DeepMind, OpenAI, or any of the other dozen AI research labs unlock the key to AGI, it’s going to be able to learn faster than a human and operate at a level humans will never be able to reach. This doesn’t look good for basic and mid-level jobs.
A few days ago, I went into my local Walmart. There were almost as many self-checkout stations as there were humans to buy my office supplies.. Go into Panera and you’re able to order from a machine without talking to a human. These are just small examples of technology slowing creeping in to take our jobs. Look at truck drivers. Or lawyers. Or CPAs. All of those professions, and many more, will look entirely different in 10 years…due to AI.
With the advancement in the development of AGI, many world technology leaders have taken notice. Elon Musk has been very vocal about his worry about AI and jobs. Mark Zuckerberg dedicated a section of his Harvard commencement speech to talking about AI and lack of jobs in the future. It’s clear that there are going to be some changes in the next decade when it comes to work. The question is, what will those changes be, and who will they affect? Some people don’t want to wait to find out. Hell, some countries don’t even want to wait. There are several solutions on the table to solve this impending job epidemic—and one of them is UBI.
So…What Is UBI?
Here is the full definition from basicincome.org:
A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without a means-test or work requirement.
That is, basic income has the following five characterisitics:
Periodic: it is paid at regular intervals (for example every month), not as a one-off grant.
Cash payment: it is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.
Individual: it is paid on an individual basis — and not, for instance, to households.
Universal: it is paid to all, without means test.
Unconditional: it is paid without a requirement to work or to demonstrate willingness-to-work.
Pretty much, it’s saying that everyone in the country, regardless of employment status, age, weight, sex, religion, etc. will receive this check. Everyone gets it, and they don’t care what you do with it.
The thinking behind basic income is that if everyone is making enough to live slightly above the poverty line as a baseline, maybe people will take time to pursue a business, go back to school, or do something productive with their time. On the other hand, it’s possible that people could have the adverse reaction: become lazy and entitled, not wanting to work, just living off the government for the rest of their life. It’s hard to know what would happen until it’s tried in real life. Luckily, that’s a thing! Basic income is being tested around the world right now, with the results coming in every day. Let’s dive into a few of the experiments.
Does Basic Income Work?
Although there are many different basic income pilots around the world, arguably the most notable pilot is the one being conducted in Finland. Finland has had their fair share of unemployment challenges. In 2015, unemployment hit 10%, which was a 15-year high and more than double that of the United States. It was time for a change, and basic income made the most sense.
As basic income has been gathering support over the last few years, it was music to people’s ears that a country was committing to experimenting with basic income. Finland started their experiment with 2,000 people, randomly selecting unemployed individuals between the ages of 25 and 28. The government cut a $690 check every month to these people for the duration of the experiment.
The world praised this as forward thinking, high tech, and inspiring. Everone had their popcorn out to see what was going to happen. After a couple of years, what was the verdict? Carnage.
Okay, okay, there wasn’t carnage—but Finland did announce in April of 2018 that it was going to stop the program…which means it didn’t expand to more people…which means it failed. What were the top reasons?
The top reason was the Finnish didn’t want to pay for it in their taxes. It turned out, having a basic income is expensive and it comes out of taxpayers pockets. As for the results of the actual experiment, the Finnish government has announced that they will release those results in mid-2019.
Fortunately, there is an organization in the States conducting a UBI experiment too. The Y Combinator Research Lab has starting testing UBI in Oakland, California. They are testing the following variables:
How will a basic income affect the participants’
- Time use?
- Mental and physical health?
- Subjective well-being?
- Financial health?
- Politics and social behaviors?
- Effect on children?
Results haven’t been released yet, but feel free to stay updated via their website. But still, even if YCR find a positive response and wants to move forward to test with a larger sample size, who the heck pays for UBI?
Who Pays For UBI?
It’s the ultimate question. If everyone in the United States gets a check for $1,000, whose pocket does it come out of? Who is responsible if all hell breaks loose after? No one knows, but that’s the challenging and exciting part of radical ideas. They produce radical results. But still, someone needs to pay.
I have a proposal: newly-found richest man on earth, Jeff Bezos! He’s worth a whopping $120+ billion.
The truth is, I don’t think even he can cover it. When I put into the calculator 12,000 × 300,000,000, I get 3.6e +12… I’m no math major, but I’m pretty sure that’s a high number. So, who pays for this?
We Do… Kinda.
With a UBI in place, there won’t be any need for social security, Medicare, Medicaid, food stamps, and dozens of welfare programs. If a UBI is implemented, it will take the place of all these expensive programs. This actually makes sense. According to this Forbes article, UBI would be $200 million cheaper than our current system. Due to this, maybe it won’t cause a giant raise in taxes. Ultimately, it’s just redistributing where our taxes go.
I think having a UBI is inevitable. Jobs are going to become more scarce as AGI starts taking them, and eventually, unemployment could reach levels seen in places like Finland—if we don’t get ahead of it. With that said, a UBI could be destructive to an individual if not managed correctly. People still need to work. They still need to have purpose and structure. My worry is that with $12,000 coming in every year to every human in the states, people will get lazy and production will go down. I do hope I’m wrong though. I hope a UBI fosters creativity and promotes entrepreneurship and learning. Do you agree? Why or why not?
Only time will tell if and when we implement a UBI. Until then, you can keep tabs on Oakland to get a glimpse into the future.
Thanks to Jérémy Chevallier for reviewing and editing this post! :)