You are here

Universal Basic Income: What's The Plural Of Apocalypse?

Op-Eds and Articles

Is homo sapiens, in the final analysis, a being incapable of living unless supported by a universal basic income (UBI)?

One of the mounting threats to liberty around the globe is that the marvels of technology are vulnerable to being exploited to normalize paternalism and dependency on government.

Technology was supposed to enable a cornucopia providing abundance (and leisure in the good sense) to all. Many do see a future in which such abundance is transcendent. Yet many in positions of leadership -- most notably tech leadership itself -- are extremely pessimistic about the automated future.

Tesla, SpaceX, and Boring Co. leader Elon Musk again this week called for a Universal Basic Income. In response to a Twitter query about whether he supported the UBI (universal basic income), Musk responded, "Universal income will be necessary over time if AI [artificial intelligence] takes over most human jobs" ("he's a socialist," CNBC notes, seemingly approvingly; which Musk affirms).

Optimistic takes on automation include the Consumer Technology Association's (CTA) policy track at the recent CES (Consumer Electronics Show) which featured, among other treatments, a session on "Turning AI into New Ways of Doing Business."

But it is undeniable that many tech titans observing the rise of automation, robotics and artificial intelligence have escalated calls for UBI. They hope, one gathers, to ease alleged social turmoil they see resulting from alarming predictions like McKinsey's that “currently demonstrated technologies could automate 45 percent of the activities people are paid to perform.”

The UBI (sometimes called guaranteed basic income or guaranteed minimum income) is one of the twin-peak responses to an assortment of “future of work” issues, such as contracting, outsourcing and the gig-economy. The other extremist policy proposal is a guaranteed government job.

While not being looked at in such terms, the UBI is actually one of the the most monumental confrontations society will face over the age-old question of the primacy of the individual vs. the state, and over the prospects for individual liberty in the world of tomorrow.

Accelerated creative destruction is real, no doubt. And it doesn't just happen to the powerful, but to individual enterprises and mom and pop operations. Many are understandably ambivalent about technology-driven contract or remote work, just as many others would prefer full-time work but are relegated to part-time by regulation that makes employers reluctant to hire. Indeed, scholars studying entrepreneurship will increasingly need to isolate trends influenced by the changing networked/automated economy on the one hand, and regulation that aggravates sub-optimal startups and employment on the other. Sometimes the two can be conflated.

Adapting policy to changes in labor markets: Social changes driven by technology and innovation in the sharing economy are accelerating and promise to have profound effects on entrepreneurship. However, those effects can be negative if regulators overreact. Korok Ray cites an ambitious projection of 40 percent of freelancing workers in 2020, compared to over 20 percent in 2014. Some are thrilled with such changes; but there is clearly discontent, evidenced in debates over the treatment of workers as employees or as contractors. Similarly, part time workers seeking full time work with benefits may not yet share enthusiasm for either the “gig” economy (matching local buyers and sellers) or even the older outsourcing economy. However the location-independent nature of a rising proportion of tomorrow’s working arrangements is real and is not going to reverse.

Naturally, too, legitimate concern exists over the potential erosion of workplace benefits. But those benefits need not have been tied to employers by law in the first place, and could be provided in other ways. One example is the opportunity for benefits exchanges to arise (itself a form of entrepreneurship) that could disentangle benefits from the jobs they to which they have been so tightly bound for so long . Likewise, Iain Murray, in “Punching the Clock on a Smartphone App?” calls for rethinking laws that “tie social goals to the employment contract.” He proposes that “rather than creating a government-mandated portable benefits vehicle, legislators should reform laws that create penalties on associations and businesses that attempt to provide such services” and “let workers and employers decide on their own terms about salaries, benefits, hours, vacation policies.”

The point is, such sensible steps, and probably many more, should come long before major social transformations (upheavals, rather) like a UBI.

Progressives across the globe often condemn corporations. But, paradoxically, the progressives’ own regulatory infatuations can compel entrepreneurs, as Murray also notes, to adopt the corporate structure, thereby “reinforcing the old management–worker divide” (Murray 2015) when it would not otherwise be necessary given technology’s potential easing of two-way contractual relationships. The less unwise interference in future workplace arrangements by policymakers, the more work entrepreneurs will be able to create. Conversely, excess regulation is an incentive to automate--and artificially increase the appeal of the UBI.

Preventing looming social-engineering threats to entrepreneurship and liberty: These and other intermediate steps to liberalize the labor and employment marketplace need to be taken before automation, robotics and worker displacement by technology become really real. The automated future is extraordinarily disconcerting for many to say the least. Labor force flexibility is the thing that matters most for healthy adaptation to automation, according to Dierdre McCloskey in "The Myth of Technological Unemployment."

But the problem for classical liberals or libertarians, if you will, is that even if the transition to automation is eminently achievable without societal upheaval and without central government expansion, that path may not be allowed by politicians seeking to exploit the chaotic environment created by changes in technology. And such opportunistic policymakers will be emboldened by alarmist tech entrepreneurs like Musk. They will pursue what provides them most power, the most votes, and that most greatly expands the pool of "interchangeables" vital to their political success (as one can read about in The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics by Bruce Bueno de Mesquita and Alastair Smith). In the U.S., a UBI will make it such that red or blue matters less and less the Electoral College.

Indeed, the UBI might be justly regarded as the entitlement to end all entitlements, and the future foundations of entrepreneurship may be on a collision course with it.

Along with Elon Musk, tech CEOs such as Sam Altman of Y Combinator and Mark Zuckerberg of Facebook have called for a UBI. The high-profile legitimization of such a program by these luminaries is music to the ears of paternalistic progressives seeking to entrench entitlements more deeply into the global middle class. American socialist Bernie Sanders is “absolutely sympathetic,” unsurprising as he also endorses single-payer health care, a wealth tax and whatever expands the state.

But the UBI’s justifications are contradictory, which only works to the favor of proponents. Some, like Musk, think the UBI necessary to placate the restless unemployed, displaced by robots and with nothing to do. On the other hand, others claim to believe a UBI would free up the mind and “unlock a huge amount of entrepreneurialism,” like Slack CEO Stewart Butterfield. Similarly Mark Zuckerberg talks of experimenting with UBI to cushion risk in an unfair world, and proclaims “organizations think profoundly differently when they're profitable than when they're in debt.”

The counter to the the view that social policy peaks via an allowance while living in the societal basement is the alternative take that need rather than comfort drives and underlies human action and entrepreneurship. My Dad always said that if somebody doesn't have a hungry streak, nothing else matters. An example of a hungry streak was Sergey Brin’s use of credit card debt (rather than the free cash of a UBI) in Google’s early days.  At this point I hesitate to inquire into Brin's view of the UBI. But the presence of the UBI, whispering into the ear of all, could easily undermine entrepreneurship much like the pursuit of disability payments in the U.S.

Alas, nations from Finland to Zambia to the U.S. are experimenting with UBI, despite 20th century welfare statism’s lesson that overall entitlement reform that reduces government rarely happens. Given history, eligibility and costs are sure to expand, and the UBI will be irreversible once widely unleashed.

It is reasonable to expect that a not-insignificant proportion of voters collecting the UBI, while enjoying freedom from the necessity to work or while plugged into virtual reality goggles, will vote for politicians promising more such income. Negative effects on entrepreneurship are a predictable consequence, but rest assured policymakers will not bother calculating that. Mobility of workers is one of the greatest advantages of the modern world, but international political pressures toward open borders while welfare statism rather than personal responsibility abounds also bear upon the wisdom of guaranteed minimum income schemes and claims that they would save on traditional welfare costs.

That an entire population under a UBI rather than just Romney's "47 percent," so to speak, would be voting for a living in addition to (or instead of?) working for one poses grave problems for the very concept of non-coercive representative democracy and the sustainability of limited government. That should give pause, and motives of political proponents should be examined closely since we know this ahead of time.

Any bipartisan normalization of dependency on so grand a scale as the UBI is a recipe for grave mischief. What's even more sad is the degree to which tech giants themselves have renounced the traditional optimism of the technology sector.

(Note: Some of this discussion first appeared in my chapter in the Fraser Institute's new book Demographics and Entrepreneurship; readers may see the volume's landing-page here.)

Originally published at Forbes