Over the past few years, as the facts of the automation revolution dawns on many involved in creating it, there has been increased talk of a universal basic income (UBI) coming out of Silicon Valley. This new discourse on UBI has been a favorite topic of many tech billionaires from Elon Musk to Mark Zuckerberg. Although it is important to have a discussion around this interesting economic concept that has drawn approval from Milton Friedman to left-wing economists, we have to keep in mind that UBI cannot be reduced to a simple solution to a future problem.
As I previously laid out in this column, a rapid technological change is approaching that will make a significant section of the population not simply unemployed but unemployable. This will require radical economic thinking to tackle and many more cultural adjustments. However, we cannot approach the issue of UBI from an angle that ignores the current structural, regional, racial and gender inequalities in our economy today. The Silicon Valley discourse on UBI starts from a point where inequality happens due to technological unemployability, as if there is not an imbalance of power and wealth in the economy to begin with. This discourse fails to keep in mind that rather than creating inequality, it will drastically exacerbate the inequality we have today and hit the economically disadvantaged the hardest.
The papering over of such a massive shift in the structure of the labor market through UBI is like a fig leaf covering over a raging fire. It will be preposterously insufficient. The key word here is basic: This direct cash transfer program will cover food, health and housing. The bare minimum amount of calories and heating to survive. That means many people made unemployable will be reduced to “basic” lives while the owners of artificial intelligence companies generate unlimited wealth through business models that have no labor cost. And they will live guilt free since their increased taxes will pay for the bare existence of the people now deemed useless in the labor market. This is not an acceptable solution to the automation revolution.
Considering how little benefit will be derived from so little, basic individual support, can we even justify such an expensive idea? The other critical characteristic of UBI is that it is universal; everyone will get it regardless of how hard they were affected by the automation revolution. They might get it and still retain a job with additional income. Spending billions on providing the bare minimum to everyone is not a viable solution.
When I first encountered UBI in the automation context, I became more convinced the more I read. After a point, as I understood more, I became progressively unconvinced of its utility in spreading the prosperity of the automation revolution. It is a good discussion to jump to more radical and useful ideas such as un-expiring unemployment insurance or (the even less explored but more promising) nationalization of artificial intelligence software. So the next time Elon Musk talks about the robot uprising that UBI will tackle, consider what he is missing.