Basic income and the technological transition

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Lately there has been some renewed discussion of the concept of "basic income" -- an unconditional flat-amount regular payment from the government to each citizen, guaranteeing a minimal level of income below which no one can fall.  The Washington Post has a good discussion of the idea here.


The unconditional nature of the payments is an important part of the concept -- everyone gets the same, whether it's a homeless person or a wage employee or Mitt Romney.  This would eliminate the most persuasive conservative objection to similar but means-tested schemes -- the claim that they would create a disincentive to work since wages from a job would just replace the government income and provide little or no net benefit to the worker (such a means-tested government income is called "minimum income", a different concept from "basic income").  If the basic income is $20,000 per year and you get a job paying $10,000 a year, your government check is not reduced; the job income is simply added on top of it, bringing your total income to $30,000 a year.  The incentive to work is still there; only the threat of abject poverty is removed.


Basic income has the advantage of simplicity.  Means-tested payments require rules, enforcement mechanisms, and a Byzantine bureaucratic system to administer same, greatly increasing the cost of the program.  A small-scale test of unconditional payments in London in 2009 yielded encouraging results.


It's highly absurd, of course, to imagine basic income getting enacted by the US government as it exists today, but at some point in the future when the Republican party is either reduced to insignificance or purged of extremists, it's not impossible that moderate conservatives could be brought on board.  President Nixon's 1969 FAP proposal and Milton Friedman's earlier negative income tax idea show that such ideas have not always been anathema on the right.  One red state, Alaska, already has basic income at a low level.  The low administrative costs of an unconditional system would be something of a selling point.


Basic income at a reasonable level would require far higher tax revenues, of course.  With today's Republican party, this is a non-starter; but if and when we get around to seriously addressing the problem of skyrocketing inequality, it will be a feature rather than a bug.


Basic income would also help us address another issue which most people are only just beginning to understand -- the technological transition of the economy.  For decades now, jobs at the lower end of the skill scale have been drying up as automation either replaces human workers or makes processes so efficient that fewer workers are needed to produce the same output.  And the trend is escalating.  Our main response has been to push for broader access to education so that more people can do the remaining more-skilled jobs.  Education is a good thing in itself, but as a response to the automation of work, this fundamentally misses the point.  Technological progress is accelerating relentlessly, and the rate at which more and more kinds of work can be done more efficiently by machines than by people is accelerating too.  It's been estimated that 45% of the jobs that exist today will be automated out of existence in the next 20 years -- in reality, I expect the process to be even faster than that -- and it won't stop there.


The logical end-point is a society where almost all production of wealth is done by machines, without any need for human labor.  (Eric Drexler's concept of molecular manufacturing is a single, possibly-feasible technology which could get us to that point all by itself.)  It would be the embodiment of what has traditionally been proclaimed impossible -- the free lunch, a society where everyone consumes but no one produces.


Our current model, based on production of wealth by human labor in exchange for pay, works.  The future model, where production of wealth is done by machines and distribution of wealth is done by some means independent of labor (which no longer exists) will also work.  The problem is managing the transition from one to the other.  Unemployment will have to be made less catastrophic as it becomes inevitable for more and more people on the way to becoming a social norm.  Mystical concepts about the "dignity of labor" and the stigma of living without working will have to be swept away.


Basic income would be an ideal mechanism for managing the transition.  Even if it starts off as an anti-poverty measure, it would normalize the concept of income independent of work.  As ever more workers are no longer able to find conventional jobs due to automation, basic income will become more politically popular and entrenched and make up a growing share of the economy.  As we reach the end of the transition and traditional work becomes obsolete, it will be able to evolve into a system for distributing the wealth whose production has become decoupled from human activity.


It's important not to give up thinking about basic income just because it's politically impossible today.  Accelerating technological progress will always be with us.  The present configuration of politics won't.


George N Romey Added Aug 6, 2017 - 8:42am
I'm for guaranteed full time employment but not basic income.  Our political leaders seem to always have the money to drop bombs on innocent countries or bailout Wall Street so surely the money is there putting people into good jobs to do really needed stuff here back home.  Dropping bombs on Syria or some other Middle Eastern country costs tens of millions an event.  Just think of the good that could be accomplished back home.
Thomas Sutrina Added Aug 6, 2017 - 9:11am
Just need to look at Venezuela  to see how well redistribution of wealth works.  Actually the society created will have classes that have different base lines of wealth just as Venezuela today has.  The people that run the government and support the government were never threatened with starvation.   They were organized, given guns to defend the class system put in place.
The founders Constitution did not allow a class system structure.  There will always be wealth classes but the key to a class society structure in the barriers between classes that minimize the capacity to change classes.  History has shown that within about 4 generations the wealth of the original family member that acquired the wealth is basically spent.  Barriers in Europe and much of the world have kept families wealth for centuries, far more then 4 generations.  The free money is meant to prevent up rising of the lower classes. Against the barriers.
Dino Manalis Added Aug 6, 2017 - 9:11am
We already have a basic income and it won't get any better, because we can't afford it!  Stop dreaming!
Infidel753 Added Aug 6, 2017 - 9:20am
George:  I don't see why guaranteed employment would be preferable or even possible when we don't even have enough work for the less-skilled population to do as is -- even less so once we reach the point where almost all work is no longer necessary.
Thomas:  basic income isn't intended to create absolute economic equality, though it would reduce the extreme inequality (unparalleled among advanced countries) the US currently suffers from.  The point is to eliminate real poverty with a minimum of bureaucracy.  All modern countries engage in redistribution of wealth in some form.  Like anything else, it can be done well or badly.
Dino:  No we don't, and yes we can.
George N Romey Added Aug 6, 2017 - 9:39am
Some of this needs to involve training.  However, a lot of the work in infrastructure is not high skilled.  How much skill does one need to swing a hammer or clean up the job site?  Long term yes we need to redefine what a work week will look like because we won't need people to work 8 hours a day.  Interim there is still plenty for people to do.  However, I see nothing changing.  There is no leadership either public or private advocating that we begin to change work to adjust to the encouragement of technology and AI.  Instead we will just become poorer and poorer.  The middle class will be a thing of the past for the exception of a few city centers.  Just look at most undeveloped countries and you will see the US 20 years down the pike.
Leroy Added Aug 6, 2017 - 10:39am
Why stop at $20,000?  Why not make it $100,000 and we all live a solid middle-class life without struggle.  While we are at, give $100,000 to each family in Africa so they can enjoy the same middle-class life style.  Same for the Middle East.  While we are at it, let's throw in free health care for all.
Thomas Sutrina Added Aug 6, 2017 - 1:11pm
Welfare is basic income.  Food stamp card is income, Obama phone, public housing is all income.   American and Europe already fund basic income.  The Romans centuries before Christ provided basic income..  Your just playing with words to make it sound different.  The government taxes gifts be they money, items, or services because that is income.  Do not play us for dumb.
Chavez in Venezuela used welfare to get power, the vote.  He took the money from the rich and companies.  The Romans did that also which is how it went from a federation to having emperors, tyrannical rulers, and of course since welfare must every be increased collapse happened of the economy.
  Chavez and the other tyrannical rulers kept taking and to do that he had to start controlling the companies.  Today we see a country that is managed by the government that does not have the goal of providing services to the people for sale and those sales produce a small profit.  Chavez's goal was power so a business loosing money was of no consequence.  
The USSR, Cuba, Argentina, any advanced Socialist (Communism is socialism) government all have the same goal and the same results, economic failure.   Even Democratic Socialist India after leaving the empire took many decades as did China to realize that the economic system attached to socialism does not work.  Both backed of as have many democratic socialist countries in Europe.   American has groups within it that push towards a more advanced Democratic Socialist state and those that back off.  We cycle.
The best way to manage welfare is to have a vibrant economy and use social pressure that will result in giving.  America is a good example of using private efforts to provide welfare.  You see there is no underlying goal of power, votes. So the welfare is better directed toward the actual needs of the people not the state.  The welfare system by the federal government started in the Progressive era (they are socialist, and actually have views that are regressive, since socialism promotes a class society with barriers between classes)  1890's and continues today.  Prior to that you will find States, cities and every church or society provided welfare and still do.  The major take over of the state welfare effort occurred during LBJ since welfare in the south especially was designed to get the poor to harvest the crops, mostly African Americans.  
Simple comparison you need to make.  Compare the members and leaders of the 1960 civil rights effort and the Obama, Al Shapton, and his two Attorney Generals.  Thomas Sowell and Walter Williams both African PHD Economist that have written quit a lot about the effect of welfare, a basic income.
George N Romey Added Aug 6, 2017 - 1:20pm
Our current private sector no longer is providing wealth other to a small sliver. Moreover we no longer produce as much of products and services of value unless you consider payday lenders of value. Social mobility is dying.
As long as the ruling elites feel no economic pain there won't be changes. Eventually they will be impacted as demand implodes even more. But welfare isn't the answer.
Infidel753 Added Aug 6, 2017 - 2:24pm
Welfare is basic income.
You didn't read the post properly.  "Basic income" has a specific, exact meaning.  The things you're referring to are government benefits of various kinds, but they're not basic income.  Basic income is (a) unconditional and (b) paid to all citizens in the same amount regardless of need.
Jeff Michka Added Aug 6, 2017 - 3:00pm
The Infidel sez: I don't see why guaranteed employment would be preferable or even possible when we don't even have enough work for the less-skilled population to do-Oh, you missed the time when elite Geo Romey and his family were lined up in ditvhes in California's I mperial valley, tears staining their cheeks when good jobs any of them would take to "make a living" went to those awful Mexicans instead of them...Ha!  Welfare?  There isn't really any welfare since Ronnie Raygun made it illegal for welfare cadillacs to be in inner cities.
Jeff Michka Added Aug 6, 2017 - 3:02pm
Infidel sez: Basic income is (a) unconditional and (b) paid to all citizens in the same amount regardless of need. - Rightists will all come apart at the seams over this!!! Can't happen! It would eliminate free dumb and liber-tea...
Thomas Sutrina Added Aug 6, 2017 - 3:34pm
Food stamps is a credit card and many of the welfare programs have limits but otherwise free choice is given.  Regulations restricts our purchases so no one has free choice in what they can purchase.  I can not purchase a gun or drugs just to name two items without being restricted by laws so Infidel### you concern is only in degree and not that important because the restriction in practice is small or negligible.  We know there is a black market to get around all the welfare restrictions.
Saint George Added Aug 6, 2017 - 6:30pm
Jobs guarantees make much more sense.
Nah. Even with a so-called "guaranteed job", the employee could still be paid a wage below subsistence. The guarantee of a job, per se, doesn't guarantee a wage that pays enough to pay rent, eat well, take well-earned vacations, send the kids to college, get caps on one's teeth when needed, buy a new car every few years, buy new clothing when necessary, etc.
Furthermore, had we implemented a guaranteed jobs program at the end of the 19th century, we'd still be traveling by horse-drawn carriage. Can't fire those carriage drivers and whip manufacturers, right? I mean, what would they do? Where would they go?
Instead of sounding like a broken record, johng, try to think before posting.
Saint George Added Aug 6, 2017 - 9:20pm
No one's interested in "macroeconomic stabilizers" because 1) they don't work as stated; 2) they disempower the people and over-empower politicians; 3) stability = stagnation.
The goal is to have an expanding economy in which new jobs — new kinds of jobs, doing new kinds of things — are created as by-products of innovation . . . because innovation is THE source of social and material progress.
Endlessly and mindlessly repeating the same kinds of actions in the same kinds of jobs that existed in 1889, just to brag that one's job is "safe" and "guaranteed", is the recipe for economic failure.
Saint George Added Aug 6, 2017 - 11:34pm
You are perhaps the most dishonest piece of shit on the internet. 
For whom do you shill, johng? Russia? You sound like an agent for Russian interests. Who is your political cadre officer? How much are you paid to troll this site? Do tell.
Curious minds want to know.
Stone-Eater Added Aug 7, 2017 - 7:41am
We won't get around basic income when morals are intact. But it can be an agenda to minimize population in the future if we don't. Because the work-earn balance is VIRTUALLY BEEN KILLED.
Agenda 2030 shows it. Not in the way that people would recognize it as positive....
Stone-Eater Added Aug 7, 2017 - 7:45am
What are the new jobs for 8 billion people ? Farming for Monsanto (Bayer). You know it. We're too many on that planet desiring too much luxury. Can never work.
Stone-Eater Added Aug 7, 2017 - 7:47am
BTW: Like it or not: The way it works and the demographic shows it there's no fucking way we can carry on like this. The whole system is bound to go up in flames.
Stone-Eater Added Aug 7, 2017 - 7:48am
Except all-out war. And you can't kill billions without destroying human life on that ball.
Leroy Added Aug 7, 2017 - 8:00am
A UBI would have one positive impact for employees if it also included basic insurance.  If your employer pisses you off, you can say, "Take this job and shove it!"  It would level the playing field between employers and employees. 
I had a Canadian colleague who decided that he had had enough.  He reasoned that since he had "free" medical care, all he had to do is make enough money to survive.  He thought he was smarter than the average Canadian bear and became a player in the stock market.  I don't know how that worked out.  An American colleague was duped into a $2,000 training course on day trading.  He quit to become a day trader.  He groveled his way back as a contractor.  He wasn't smarter than the average American bear.  The more risks that the government assumes for us, the more risks we can take.  That is evidence in the bailouts after the 2008 crash.  The banks were able to take enormous risks on my dime.
A UBI is another example of the government assuming the risks, allowing us to pursue our dreams.  Works great until it runs out of other people's money.
Saint George Added Aug 7, 2017 - 8:55am
One minute you're paranoid about inflation and the next minute you don't care.
As usual, no one here quite understands what you're talking about because your brain is mush and your mind is in a constant fog. You are bemused and confused.
But if you have in mind my previous statement that a desirable social goal to pursue is a constantly expanding economy in which new jobs — new kinds of jobs, not just more of the old jobs — appear as a by-product of innovation, then you're wrong (no surprise there). Innovation, per se, of course, is not inflationary (why would it be?) and producing more stuff using fewer resources so that those resources are freed up for deployment in further innovative uses (i.e., an expanding economy) is not inflationary but to the contrary and in general, dis-inflationary; i.e., it tends to increase purchasing power, so that each monetary unit buys more than it did previously. Goods become cheaper and more easily accessible for everyone, even for those with low incomes.
As I've said, the effect of innovation and growth is dis-inflationary, not "deflationary." If you're not clear as to the meanings of those two terms, or cannot clearly distinguish one from the other, then you might try looking up their meanings in a good, standard, economics reference.
That would not include "Das Kapital," however.
Dave Volek Added Aug 7, 2017 - 9:01am
I have gone through several political ideologies since I was old enough to think about these things. But the one ideology that has remained intact with my psyche is known as  "universal welfare," or "Universal Basic Income" or "Guaranteed Income". I would say Infidel's article sums up my position on this topic quite well.
The only thing I would add is based on the critiques of the many comments this article has on WB. We would need to monitor this social program such that it does not create a too big of a "freeloader" class--and too many crappy, but very necessary, jobs in our economy do not get done. So my premise is that such a social program should be introduced slowly. It should take about 20 years before we get to that $20,000 annual threshold of ensuring everyone has the opportunity to meet their basic needs.
For those who insist that "freeloaders" should just get a job, I say a lot of these marginal people really can't handle the rigors of a 40-hour week. They are physically or psychologically too weak to handle even what most of us would consider a simple job. It is unfair to those employers who have to hire them--then fire them later. It would be better for the economy to give marginal employees a stipend than trying to force them into a job they cannot do. 
Some of these marginal workers could probably handle a 15- or 20-hour workweek. But with their current social programs, they get cut back on benefits for taking such a job, so there is no incentive to find such work. With UW or UBI or GI, they get to keep and enjoy all their earnings from their gainful and part-time employment. And being employed part-time is good for their psyche.
George N Romey Added Aug 7, 2017 - 9:41am
My problem with Basic Universal Income is destroys the human spirit and would develop generations of lazy, troubled and poorly adjusted human beings.  That being said clearly the private job market isn't providing enough living wage jobs (sorry making $12 an hour is not a living).  This situation will only get worse with AI and it will increasingly take over the professionals jobs.
There are alternatives in the form or a shorter work week (but still full time pay because technology keeps the profit margins) and finding useful things for people to do that utilize their full skill base.  If we retreat from skirmishes and reform the tax code the money would be there.   
Thomas Sutrina Added Aug 7, 2017 - 10:49am
You got it George R.  Universal income promotes laziness.  Fact well proven with data.   The fact that people spend more then a decade on welfare.  Not you can not tell me they looked into alternatives.  Welfare is however set up to reduced ones income by trying to find income from working.  
George N Romey Added Aug 7, 2017 - 11:19am
Isn't that what the Zuckerbergs want?  Make the population lazy so they become tamed, docile human beings that will endure untold externally forced suffering.  I'm for guaranteed employment because any person physically and mentally able should have an occupation. Lets spend our resources on those sidelined due to age, health or severe disability.  
Thomas Sutrina Added Aug 7, 2017 - 7:27pm
If you mean the right as conservatives then you can only look at the administration of Reagan and the time Gingrich was speaker of the House.   The leadership of the Republican party as we see with the swamp care bills put forward are not to the right but to the left of center.  Swamp care is repeal in name only and the voters know it.  When the 2015/2016 repeal only show bill was placed on Obama's desk the GOP leadership knew they could not over ride the veto, thus a show vote.  The same bill did not pass when Paul Ryan got is wish, a Republican president that would sign it.    George W Bush (the younger) spent more then any other president before him.  that is why the Tea Party came into being.  He governed to the far left.   And his father also governed to the left of center that resulted in him not winning a second term, no new taxes.
Thomas Sutrina Added Aug 7, 2017 - 7:31pm
John G. a little secret  unemployment decreased  when Reagan was in power.  Bill Clinton lost the house after trying to pass Hillary Care and other liberal programs.  Another secret enough Reagan Republicans were in the house to push Clinton to the center because Gingrich was speaker and all spending and taxing bills start in the house.
Cullen Kehoe Added Aug 7, 2017 - 9:04pm
It's basically welfare or going on the dole but easier to administer because everybody gets it? That's the selling point? Everybody gets it so it has little overhead? 
Maybe it's a slight improvement but I don't think it's going to solve much. Obama put a quarter of the country on Food Stamps in the aftermath of the Global Financial crisis. That didn't "solve" anything but did help a lot of people get by during a few rough years. 
Tamara Wilhite Added Aug 7, 2017 - 10:03pm
We already have a sizable minority of the population on permanent welfare, like adults who were classified as disabled as children with ADD and other issues and graduated to SSDI as adults. This is aside from adults who end up on perpetual welfare programs. The end result is broken families, high crime, high rates of drug addiction, failure to complete schooling all at 4-5 times the rate of the average population.
What makes you think that guaranteed money to such a population and expanding it to more people won't turn the rest of the nation into downtown Chicago or LA?
George N Romey Added Aug 8, 2017 - 7:01am
This is the tech answer to having a population that will be idled due to AI and very skill specific jobs, of which few people will have those skills.  Turn everyone into a ward of the state eeking out a miserable existence on a tiny government dole.  Instead, reducing the full time work week but allowing for a full time job and have our community colleges serve as centers for adult education.  The first option is easy and doesn't take much effort.  The second requires great minds and a social reset.  No surprise we have people clinging onto option 1.
Dave Volek Added Aug 8, 2017 - 4:21pm
It seems social assistance is much different in the Canada than the US. I know a lot of Canadians who had to go on social assistance for a few months until they got their act together to function better in society. Without that support, they might not have got their act together.
For those Canadian I know who seem to be on more permanent social assistance, I would say that they are not very employable. It's cheaper for society to keep them on a meager income than to see many of them engage in petty crime.
If American welfare is indeed attracting chronic abusers who are capable of working, then you guys have done something wrong.
Stone-Eater Added Aug 8, 2017 - 4:32pm
Well said.
Here in Switzerland anybody who's on the dole and collecting welfare has to:
a) prove that he's looking for a job (verifiable once a months in writing to at least 13 different job centers ôr companies and presenting the results)
b) do a minimum of community work
c) cannot go abroad while collecting welfare
If he doesn't comply, tuff shit for him....
Stone-Eater Added Aug 8, 2017 - 4:38pm
BTW: Medical reasons do not count. That would be a case for IV (handicapped support insurance) But to get that you gotta be blind or paralyzed. Neither drug abuse nor any so-called burnout/ADD or any other newly pharma-invented psychologic handicap is considered ;-)
Stone-Eater Added Aug 8, 2017 - 4:44pm
BTW2: I'm all for a basic income whether you work or not (in today's situation). But: Here work is something that defines value for the community and the person itself. It's a kind of self-assurance. And when - even in times of job loss and digitalization, age discrimination etc. that attitude hasn't changed, I see no chance for a change.
Stone-Eater Added Aug 8, 2017 - 4:47pm
I wrote once an article here called: What Is Work ? Who defines what work is ? Does a housewife not work ? Do a painter, a poet or musician not work ?
They DO. The problem is that there is mostly no measurable materialistic it's not considered "work". At least here in Switzerland it's still considered like that....
John Minehan Added Aug 9, 2017 - 3:12pm
In his book Average Is Over, economist Tyler Cowan proposes something similar with the observation that those who can use free information on the web about useful skills like coding might be able to improve themselves and that hardworking and productive people might be willing to give people left behind a living, it would not be a flashy one (Cowan used the phrase "high-tech favela").
Saint George Added Aug 10, 2017 - 11:39pm
Valuenomics requires the elimination of fake value or wealth.
And if two people disagree on which values are "fake" and which are "real", how will that be resolved in your workers' paradise?
Value equals Nature
What about all those values that don't equal nature?
For example the conversion of corporations to public service non-profit entities.
Cool! So private property rights are out the window! And how do you handle non-compliant corporate owners (executives, investors, shareholders, etc.) who might prefer their corporation to be engaged in for-profit activities instead of your idea of non-profit activities? Just seize their property, right?
Scratch a lefty, find a tyrant.
Saint George Added Aug 12, 2017 - 12:30am
Under valuenomics there is NO fake value.
And if two people disagree on which values are "fake" and which are "real", how will that be resolved in your workers' paradise?
Value equals Nature
What about all those values that don't equal nature?
For example the conversion of corporations to public service non-profit entities.
Cool! So private property rights are out the window! And how do you handle non-compliant corporate owners (executives, investors, shareholders, etc.) who might prefer their corporation to be engaged in for-profit activities instead of your idea of non-profit activities? Just seize their property, right?
Dave Volek Added Aug 13, 2017 - 6:44am
Stone Eater et al:
A guaranteed income would actually have some benefits to the economy:
1) A lot of people would choose to work in the volunteer sector if they had a GI. Even this economy does not make it in the GDP calculations, it is still valuable to society.
2) With their departure from the real workforce, the suppliers of those crappy jobs would have to pay a little more to attract workers--maybe even a living wage.
3) A GI would enable a whole bunch of people to afford to become free-lancers in various trades and occupations. In this way, the various employers who need these talents on a temporary basis would have a bigger pool of talent to draw from. Otherwise they might have to hire a full-time person to have him available for part-time work. I see a lot more flexibility for businesses and government if talented people can work free-lance.
4) A lot of free-lancers would have the time and energy resources to pursue some of their artistic, but not (yet) commercial, endeavors. This makes a more contented society when more people to fullfill their dreams to some extent--instead of working full-time at a crappy job (or maybe two crappy jobs).
I think UW, GI, or BAI is the only way to go. Everyone gets a stipend. Everyone has more choices. 
Saint George Added Aug 13, 2017 - 9:50am
Under valuenomics there is NO fake value.
And if two people disagree on which values are "fake" and which are "real", how will that be resolved in your workers' paradise?
Value equals Nature
What about all those values that don't equal nature?
For example the conversion of corporations to public service non-profit entities.
Cool! So private property rights are out the window! And how do you handle non-compliant corporate owners (executives, investors, shareholders, etc.) who might prefer their corporation to be engaged in for-profit activities instead of your idea of non-profit activities? Just seize their property, right?
Saint George Added Aug 13, 2017 - 9:54am
I think UW, GI, or BAI is the only way to go. Everyone gets a stipend. Everyone has more choices. 
Do I have the choice not to pay the additional taxes required to fund the guaranteed income?
Guess not.
That's one less choice for me.