Basic Income is a Necessity

Hey guys. I wrote a big long paper during my senior year of college after I got really into the idea of basic income. It was about self-driving cars, automation, and basic income. I figured I’d post a little excerpt in light of recent events. Many of us received stimulus checks from the government last month. That actually happened! But what if it happened every month? I did not even come close to voting for Andrew Yang, but I do credit him with introducing the idea of basic income to millions of people. Hopefully you have some idea by now. Hopefully this helps too! I may sound incredibly dry at some points in this paper. It was for a class. Sorry. I took out all the parts where I wedged in terms from the class to impress the professor. Here you go:

Throughout history, with each tectonic shift in technology, certain jobs became outdated, and new jobs emerged. Pasteurization enabled grocery stores to carry milk on their shelves for weeks, which in turn displaced the milkman. Of course, as the milkman became obsolete, jobs were also created for pasteurization and distribution. As cars became more commonplace in the 20th century, jobs involving horses lowered in demand, because horses were no longer the preferred transportation. An even greater quantity of jobs emerged in the void. Cars, as the preferred form of transportation, paved the way for mechanics, auto parts stores, and body shops. Cars also created the need for highways, revolutionizing the freight industry. Electricity as a commodity created thousands of new frontiers for technology.

In a capitalist economy as we know it, technology optimizes labor, allowing more labor to be hired, which creates more jobs (ideally). Economists have identified four historical trends:

1. Technology reduces the need for human labor, increasing efficiency and shrinking employment.
2. There are more jobs for the people who drive technological change.
3. Technology creates jobs in knowledge-intensive sectors.
4. Technological change lowers expenditure on essentials, creating new demand and jobs.

While these have proven true throughout modern history, many are skeptical if this will hold for the imminent wave of artificial intelligence and automation. Factories are employing far fewer workers than they were a century ago, a fact often lamented by politicians who yearn for a retrograde edition of America. Technology wiped out factory workers. If a machine can do the work of twenty humans, why not hire software developers to program robots instead of hiring laborers? Erik Sherman writes,

“Software allows for the leverage of technical talents. The number of system architects, programmers, and technicians added is nowhere near the number of jobs eliminated, otherwise there would be no overall productivity gain.”

If capitalists can save money on the production of their products, they will. Their goal is to lower production costs and increase their profits. In the past, new advances in technology opened the door to new jobs for workers; increasing automation doesn’t maintain this promise. I can’t emphasize this enough: widespread automation is an inevitability. It will lead way to increased efficiency, lowered expenditure on essentials, and perhaps even lower prices for consumers, but not necessarily jobs. This will create issues that society is not ready to tackle.

Marc Benioff (CNBC) says there is currently “no clear path forward” on how to deal with the job displacement that will occur. For this reason, technology firms have expressed fears of backlash from workers as greater degrees of automation begin to coalesce. Some executives whose companies are on the cutting edge of technology and automation have begun to support a universal basic income as a future economic policy. They advise for it to be adopted sooner, rather than later. I agree. Reactive political measures will not be as effective. The New Deal was a reaction to the Great Depression; it strengthened the working class and provided protections to mitigate future economic disasters. We’re currently hurtling towards another economic crisis, and Universal Basic Income (UBI) is a proactive measure to protect workers. UBI is an economic policy that provides a stipend to all citizens by scraping money off the top of publicly traded companies. The stipend provides citizens with enough money to afford food and housing — an exaggerated version of the social safety net. The income would smooth out labor transitions that occur with increased automation. Critics who prefer rugged capitalism will say that this policy incentivizes laziness; if people are given everything they need, is there motivation to work? Karl Marx was adamant that without work, humans would naturally find ways to create and fill the void. Even without a traditional job, people work; people crave productivity. Economists have theorized that an automated society with a UBI could support ninety percent of the population not working, as long as ten percent continued to innovate. There is currently no evidence for basic income causing people to refuse to work; however, there is already precedent for the opposite. A trial run of basic income was tested in a community in Namibia. Via Carnegie Council:

“The village school reported higher attendance rates and that the children were better fed and more attentive. Police statistics showed a 36.5 percent drop in crime since the introduction of the grants. Poverty rates declined from 86 percent to 68 percent (97 percent to 43 percent when controlled for migration). Unemployment dropped as well, from 60 percent to 45 percent, and there was a 29 percent increase in average earned income, excluding the basic income grant. These grants can not only alleviate poverty in purely economic terms, but may also jolt the poor out of the poverty cycle, helping them find work, start their own businesses, and attend school.”

Basic income would be a reflection of a more noble view of technology. Instead of technology being utilized for increased income and higher levels of production and output, technology and automation, the technology would work for society, allowing citizens to pursue their own private interests. This isn’t to say that basic income is the only solution to the rapid expansion of technology and innovation. The point is, technology will continue to progress, and critics aren’t sure how jobs will be affected. The consensus is, there will be a large-scale restructuring of jobs unless unexpected opportunities for work begin to emerge. The good news is this: those who are pioneering the technological changes — namely, the technology executives — are also pioneering ideas for change. Self-driving cars will expedite this process — effects of the automation will filter into Americans’ every day lives. Other automation already has (ATMs, self-checkout machines, credit cards, etc.), but driving vehicles is central to Americans’ sense of autonomy. Automation will displace workers in transportation, construction, food service, retail, and manufacturing first. However, it won’t be long before the technology is sophisticated enough to render jobs in medicine, law, and finance completely obsolete. Hopefully we’ll have a robust basic income system in place.

Over 30 million people have filed jobless claims in just the past six weeks.

Thanks for reading. It means a lot.

Nick