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Automation and UBI

02 May 2017

Before exploring the issue of universal basic income (UBI) for this class, I guess you could say I was against it, but only by default as a self-identified right-leaning libertarian; undertaking such a vast new program would require massive bureaucratic undertaking and money sink at best.

What I’d never considered before was UBI in the context on an automated economy. It’s easy to just frame the debate under the current status quo, in which basically all able adults work, or are spouses of someone who works. And that’s the entirety of that socioeconomic contract: you sell your labor so you and your family can eat. This works because our economy has enough jobs to keep unemployment moderately low. As soon as that paradigm shifts– as soon as automatic processes replace people with any sort of scale– that model falls apart. The system (from economic and governmental perspectives) isn’t built to handle mass unemployment.

One fascinating example to consider is the potential impact of self-driving cars on the trucking industry, which, even excluding the support industry around it, employs as many as 5 million people, or about 2.5% of the working-aged population of the country. Throw in taxi drivers, bus drivers, and anyone else who drives a car for a living, and you’re looking at a very good sized subset of the population relatively suddenly displaced from work.

The readings that discussed this issue proposed a wide variety of solutions. A couple suggested the solution is to do nothing, saying we would never reach an economy that did not have manual labor abound. While I agree that much of the media around this issue has been quite alarmist (apocalyptic even) in tone, simply dismissing the issue isn’t a solution.

I think one article that skirts around some potentially interesting solutions is Ross Baird’s Silicon Valley’s Unchecked Arrogance. When I read the title, I decided I had no choice but to read the post; I might not be an SV-bred entrepreneur, but I’ve got close enough ties to the industry and area to make it at least a little personal.

Silicon Valley’s view towards the rest of the world is often one of unchecked arrogance. – Ross Baird, Silicon Valley’s Unchecked Arrogance

Watch out Ross, them’s fightin’ words. But looking at one example in particular (which you’ll recognize), you start to see his point.

Silicon Valley frequently worries, for example, that if self-driving cars are commercialized, truck and taxi drivers will be out of work. As such, a universal basic income will ensure that they’ll be happy and society will be successful. It’s a seductive idea, but they are asking the wrong questions. – Ross Baird, Silicon Valley’s Unchecked Arrogance

For context, Baird’s thesis is essentially that SV and the few innovation hubs (San Francisco, New York, Boston, and “perhaps Seattle or Washington D.C.”) are insulated from “real world” problems, and therefore create frivolous products and technologies. Furthermore, would-be innovators everywhere simply “don’t have access to resources or opportunities to solve their problems.” Let me go on the record and say that this overarching argument is more or less bogus; I’d hardly say launching satellites to bring internet access to remote corners of the world is a “frivolous” enterprise. That being said, Baird’s finer points bear closer inspection.

In particular, in the latter half of the article, Baird hits us with some thinly-veiled Marxism, which isn’t necessarily bad, or misguided, just interesting.

Uber’s founders’ experiences are as riders, not drivers. But imagine an ownership structure in which, for example, drivers could earn fractional equity in the company for each ride they gave. What if a percentage of the $50B valuation were shared among the drivers […] How do we change ownership structures to prevent Snapchat, Instagram, and Whatsapp from distributing billion-dollar windfalls among only a couple dozen people? – Ross Baird, Silicon Valley’s Unchecked Arrogance

I think, in principle on paper, this sounds like a really cool idea, which is why I included it. It removes the need for the government to fill in the gap in income caused by automation. However, the idea here is for drivers to own equity, and the whole idea here is that there won’t be drivers anymore (unless Baird is actually suggesting that SV needs to pump the brakes or even halt innovation, which I don’t think he is [though he still could be]), so the suggestion falls flat.

Ultimately, Baird is scraping the bottom of the barrel for ideas on how to mitigate the automation crisis without UBI. However, I don’t think UBI would be the end of the world. First of all, if it were a replacement, rather than a supplement to existing welfare systems, it would greatly simplify the bureaucratic overhead of our nation’s welfare system (let’s hear two “hurrah’s” for less government!). Also, being able to survive and prosper without working 40 hours a week would be a huge boon for the (likely sizeable) portion of the population who are only at work for the money (as opposed to passion/ love for the job). I think Jim Pugh sums it all up well, so I’ll leave you with his conclusion:

We need to build awareness, so that elected officials and the general population know what Basic Income is and what problems it could solve. We need policy experts to think about scenarios for how it could be practically implemented. And we eventually need to set up city- and state-wide experiments here in the United States, so that we validate its effectiveness in a real domestic environment.

I, for one, would like to know I have a Basic Income to rely on when the robots come for my job. – Jim Pugh, It’s time to start talking seriously about Basic Income

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