Why Universal Basic Income Might Be Unavoidable

And why technology will be what sets it off

Over the last few years, Universal Basic Income (UBI) has gone from being an obscure concept to a (somewhat) mainstream policy proposal. A few places are even beginning to implement some form of it.

Is UBI necessary? Is it necessary now? If not now, will it be necessary later? Under what contexts might it be necessary? If it is ever necessary, how might we implement it? These are the key questions that surround the debate regarding UBI, which receives varying levels of support.

UBI is perhaps not necessary at this moment. In spite of our current, rampant wealth inequality in much of the world, much of that could be solved by other means. Raising the minimum wage, reducing restrictions on unions, and developing our schools/infrastructure could all help close this gap in a way that is more directly compatible with the free market. When we develop proposals to solve economic issues, we always have to consider how an idea, especially a novel one, may upset the delicate balance.

History is an excellent teacher. In 1324, Mansa Musa, the ruler of the Mali Empire in West Africa, went on a large pilgrimage to Mecca, as is required of all Muslims once in their lives. With access to the bountiful mines of that region, Musa was a very wealthy king, and he decided to bring that wealth with him during the trek. As he passed through Egypt, he amazed the locals with how much gold he had, which he freely spent there or gave to the poor in acts of charity. His generosity (another key virtue in Islam) unfortunately backfired. He brought so much gold into a gold-scarce society that prices inflated, devastating the economies of Egypt and the Eastern Mediterranean. While not technically a UBI, the mass-giving by Musa does show us how something a lot like a UBI can be horribly bungled.

This is not to say any UBI is doomed to fail, only that these kinds of considerations need to be made. Musa might have actually helped his fellow Muslims, had he merely brought less gold. A gentler, less invasive UBI is perhaps the only thing that would work in the economy as it currently exists, but I also suspect that if the political will existed for UBI, such that it was actually implemented, then the other fixes to wealth inequality would probably already be in place and render UBI moot for the moment, at least as a necessity. After all, small UBI of, say, $50 per month, could always be a great subsidy to demand.

Nevertheless, as time goes on, the need for UBI will increase. This is mainly due to the fact that, as technology continues to develop, workers will be displaced. We are already seeing this. Several stores are replacing their cashiers with self-checkout stations, putting over seven million jobs in peril.

Even automated cars are showing promising results, able to drive more accurately and safely than humans. Writing for The Atlantic, Jake Pelini gives a plain and simple overview of the facts:

According to one analysis, 4 million of the nearly 11 million crashes that occur annually could potentially be avoided if distractions were eliminated. [2] But instead, we actively seek out distractions, like texting. A meta-analysis of 28 studies confirms that typing or reading on our phones while driving adversely affects stimulus detection, reaction time, lane positioning, vehicle control, and, yes, collision rate.

…while also concluding:

Compounding the problem, few of us accept that we are bad drivers. Many people overestimate their driving capabilities thanks to a cognitive bias known as the illusion of control, which is predictive of dangerous driving behavior.

Once implemented into the economy, automated vehicles could put the 3.5 million truck drivers in America out of work. Some might question whether callously throwing that many people out of work is right, but when one considers that we might be getting rid of several traffic wrecks (and there were over 4000 of those in the U.S. for large trucks and buses in 2016) and the deaths and injuries they cause, we would be moral monsters not to implement automated vehicles, particularly as at least fifth of these truck accidents can be attributed to human error.

This not only applies to truck-driving but to any trade or service where we can eliminate human fatalities. Not only will lives be saved and injuries be spared, but producers will cut costs by having machines and AI do work for free. While this is all human progress of a sort, it does lead us into an economic conundrum. These changes by companies will also deprive their ex-employees of the kind of income that gives them a consumer base. Just looking at cashiers and drivers, we can see that about 11 million jobs are already on track to disappear, and we can assume that millions more from other industries can be added to that total. What will that do to the economy, when middle-and-lower-class Americans have already been struggling for about a decade now?

In a previous article, I mention how the only alternative after this is for people to go into the entertainment industry in some capacity and make use of their human creativity. This seems to imply that UBI in some capacity is not needed, but to imply such would truthfully be a mistake.

While the entertainment industry will definitely grow and take on much of the labor to be displaced (as it has been doing), it has a cap. There are a few reasons for this. One is that we can only saturate the entertainment market so much. We could employ everyone to work on films and television shows, giving us a lot of both. People, however, only have so much time, and they are likely going to devote this to the content on the higher end of the quality curve.

The second reason follows from there: there is little room for people in this industry who lack creative talent, even when sufficiently enabled. These people who cannot entertain as well are going to need some kind of an income, for their own sake and to give producers a consumer base. At that point, taxing the wealthy for a portion of their net worth and redistributing it in the form of UBI, if only to grease the wheel of the economy, seems like the only mechanism that can address this.

The last reason is that even some of the entertainment industry will be overtaken by technology in time, lowering the cap further.

To turn our noses at UBI seems to be inviting some kind of systemic failure in the flow of goods. Yet, there are many who may just do that. Why? Because this system seems to defy the will of the free market, and for diehard capitalists, this is a tough point to negotiate. Other might fear its potential to lead to hyperinflation (the example of Mansa Musa comes back to mind).

One such capitalist might ask: Is full-scale UBI a move toward socialism or communism? Hardly. This is not a discussion of the state taking over the means of production. If anything, the opposite seems to be true: systemic UBI is taking control of the means of consumption, or at least it suggests the state is asserting that control like never before.

It is hard to say just how our economy will work out under a system of UBI. The general outlook mostly looks optimistic, but caution is always advisable, and it wise to wade before we swim. Minor forms of UBI could be implemented even now, as a form of supplementary income, not primary income. It could be relatively minor, in amounts of $50 or $100 per month, and it could be increased on a schedule over the years or as shifts in labor trends necessitate.

To begin this, however, we are going to need leadership that can actually see the wisdom of such a program with an open mind, while also having the will to fund it properly. The current, Republican administration and Congress make even an infant UBI program something that will not kick off for years to come here in the United States.

That is at least true at the national level. Recent reports indicate that Chicago may adopt a UBI program of its own, and Stockton, CA already intends to initiate such a program this year. These are useful, first steps that will give more credibility to the program, but if we really want to be able to see the positive or negative impacts of UBI on an economy as large and diverse as America’s, we are going to need to see UBI adopted at a larger scale, and to do that, we need to elect different leaders.

For the time being, UBI will remain more of an idea than a practice.