Why not a guaranteed basic income for all?

In “The German Ideology,” Karl Marx describes his ideal society as one that “makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner … without ever becoming hunter, fisherman, herdsman or critic.” And while Marx never saw this ideology take hold, a recent movement in the typically libertarian Silicon Valley is seeking to revive a universal basic income, promoting it as the next new policy thing.

This is not the first time the idea has gone mainstream. Forty years ago, conservative economists, such as Milton Friedman, embraced the idea of a “negative income tax.”  President Richard Nixon’s 1969 Family Assistance Plan would have implemented the idea, but it died in the Senate. And remember George McGovern’s proposal to give every citizen $1,000 a year? We may joke about it today, but it’s exactly what Alaska has been doing with its oil revenue for generations.

Today in the tech industry, the chorus of those calling for a basic income for all is growing. Albert Wegner of Union Square Ventures  supports the idea and to add weight to the argument, another venture firm, Y Combination, is funding a study. They are being joined by notable industry scholars such as Martin Ford

Why now, and why Silicon Valley? There are two primary reasons. The first is best explained by an estimate by Oxford economists, who say that 47 percent of occupations are susceptible to automation, including the more advanced cognitive work of lawyers and writers. And consider the fact that self-driving cars put at risk the jobs of 3.5 million truck, cab and ambulance drivers.

Tech leaders have become genuinely worried that the next generation of really smart machines will create the technological unemployment that John Maynard Keynes warned against in the 1930s. They view a guaranteed basic income as a hedge against technological unemployment. 

Of course, the threat technological unemployment is pure speculation. Previous warnings of enduring idleness caused by technology have been proven false by history. Full employment and technology-based productivity have co-existed for more than a century. It is true that people could prove to be as economically redundant as horses. But people are much more adaptable than horses.

So we probably won’t see a shortage of work. But technology will affect the nature of work. It is essential to think about ways to use technology to redesign work creatively. Properly implemented technology can complement and augment human capacities, not substitute for them.  

So, a second reason for a guaranteed income might be even more important. It is that the freedom provided by a guaranteed income is a stimulus to creativity and innovation — the corn seed of the tech industry. Venture capitalist Roy Bahat, who speaks for many in the Valley in support of such a subsidy, says, “Many who struggle to work while inventing new things might see an income floor as an open door to a world they might otherwise never have considered at all….” 

The insight here is that people working long hours at low level jobs never have the time or energy to focus on creating new products or services that could benefit society.  Even if only 10 percent of workers are freed-up to devote themselves to creative pursuits, there would be an enormous boost to the innovation economy.

As is so often the case with big ideas, the trouble begins once we move past the abstract appeal and ask how it would be implemented. Such a program would be expensive, costing somewhere between $1.5 and $3 trillion to provide a guaranteed $10,000 income — which still wouldn’t be enough for anyone to live on. 

Still, many figures on both sides of the political spectrum look favorably on this idea. Martin Luther King endorsed it. Conservative political scientist Charles Murray favors it. Libertarian economist Friedrich von Hayek likes it. The former head of the Service Employees International Union has forthcoming book endorsing the ideal. But each side also has differing approaches and reservations.

Conservatives would want to dismantle existing welfare programs, paying for the new program with savings from old ones. Meanwhile, some social conservatives argue that working out of necessity is good for character and a guaranteed income will impede progress towards a virtuous citizenry. On the left, there would be a desire to tax the wealthy, using the guaranteed income as way to reduce income inequality. Some liberals also believe the idea is a distraction from more realistic proposals for a $15 minimum wage and a policy of full employment. And both sides worry about the effect of a guaranteed income on the incentive to work.  

It is essential and timely to think about how to make technological change improve our working lives. Technology can be good for workers as well as consumers. But the concept of a basic income for all — with all its challenging practical questions —  appears ready to tip into the mainstream conversation. It should be on the agenda for the next Administration and Congress. After all, why not dream a little about the way things could be?