29 January 2014

Basic income and the technological transition

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 through today's teabagger-behostaged Congress, 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; 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 teabaggers won't.


Blogger joseph said...

Robert Theobald said that the goal of the economy should be 100% unemployment, let the machines do the work. We seem to have gotten there, the machine being foreign workers. If the machines do all the work, the only ones with money are those who own the machines. The problem then becomes what to do with the leisure time and how to distribute goods and services. I read Race Against the Machine. The authors posit that as technology keeps doubling, we are now on the second half of a chessboard. They say that in the future there will be new jobs. I have no idea why they are so convinced of that, it seems to me that we may be entering a time when chronic massive unemployment may be the norm. We will have to make great changes to the economy to deal with that.

29 January, 2014 20:27  
Anonymous Anonymous said...

I think you're being too optimistic about the time frame. I could see getting to an automated society in 100 or 200 years but not 20 or 30 years.

31 January, 2014 05:40  
Blogger Shaw Kenawe said...

"The work goes on, the cause endures, the hope still lives, and the dream shall never die."

31 January, 2014 18:15  
Blogger Infidel753 said...

Joseph: I'm a bit confused by your comment. With molecular manufacturing, the machines themselves would be very cheap and ownership would quickly become widely distributed.

Anon: The Technology Review time frame is theirs. More generally, this is being driven by the exponential growth of computer processing power.

Shaw: Less work, more dreams, let's hope.

01 February, 2014 06:20  
Anonymous Bacopa said...

Bertrand Russell made a lot of the same points back in 1932:


Basic income and expanded leisure time are not the result of technology, but of power. It could have all been done with 1930's, and it will never be done whatever future technology brings. As long as those who own the means of production and hold the reins of political poser want us to work to make others richer, that's exactly what we will have to do.

01 February, 2014 16:31  
Blogger Infidel753 said...

Bacopa: What technology did in the past was to increase efficiency -- to increase the amount of wealth that could be produced per unit of work. In the scenario I'm talking about, almost all wealth will be produced without any human work being involved at all. In that case, "making us work to make others richer" would no longer make any sense.

Assuming molecular manufacturing, ownership of the "means of production" would rapidly become widely diffused, not kept in a few hands. Nothing could stop that.

02 February, 2014 03:41  
Blogger Curt Welch said...

Joseph, you said you read Race Against the Machine by Erik Brynjolfsson and Andrew McAfee. You need to read their new book: "The Second Machine Age". They are no longer so sure there will be new jobs and they have an entire section devoted to talking about a Basic Income. They talk extensively about the problems of technology creating inequality.

25 February, 2014 09:09  
Blogger Curt Welch said...

People often point to the past as an argument that there will always be good paying jobs. But we are headed into a fundamental shift in society. That fundamental shift, is the point in time where machines become better than humans at everything.

Machines are improving at an exponentially increasing rates. Humans are by comparison standing still. Our ability to learn and think and do is virtually the same as it was 40,000 years ago.

In a very short period, the capability of our machines will fly right past the capability of the average human, and when it does, humans will be as obsolete as the horse in the economy. We will be the consumers, but we will no longer be producers.

People feel they are special, and magical, and this type of thinking blinds to them to hard facts of how fast machines are advancing, and how physically and mentally weak we humans really are.

We are 20 years AT MOST away from this fundamental flip where most humans won't be able to find work.

As we get closer to this, we need to increase wealth sharing, and reduce wealth hoarding.

The problem we have in society is that too many people don't understand or believe this is happening. But it will happen whether they understand it, or believe it.

What it's creating now, as we get close to the flip is growing inequality. But inequality will skyrocket to near infinity as the flip happens as as a few people gain control of the entire world, and the rest have nothing. Of course, we won't get to that point, because we will have more revolts about "corruption" as just happened in Ukraine to stop it.

But if we want to do this the right way, we should implement a Basic Income now (for the whole world), and forgo the revolts and deaths.

25 February, 2014 09:21  
Blogger Infidel753 said...

Curt: Thanks for the comments. I'd been thinking for some time about the transition to a workless society and how difficult it could be, and as soon as I read about the basic-income concept, its potential to help bridge the gap was obvious.

As for machines exceeding human capabilities, machine intelligence will vastly exceed human intelligence within a couple of decades. This is why (as I've posted elsewhere) we need to focus on integrating the two so that the new capacities become our own, rather than leading to a rival "species".

26 February, 2014 03:26  
Anonymous Anonymous said...

Was it necessary to reference teabaggery? Way to get people from all over to join in. Frankly, I can no longer concentrate on the ubi message because you simply forced me to think about your hate message instead.

26 February, 2014 09:47  
Blogger Infidel753 said...

Anon: It's an objective fact that opposition by the hard right would make basic income impossible to implement now, so in practical terms it will have to wait until the Republican party is either completely marginalized or has purged its nutcases. Teabaggers are an obstacle to the idea, therefore they are relevant to a discussion of the idea. Republicans today, especially the teabaggers, are very different from Nixon.

If you think anything I said constituted "hate", you're delusional.

26 February, 2014 10:37  
Blogger Infidel753 said...

JC: Your comment was off-topic (and rude), and is already addressed by my response to anon above.

26 February, 2014 22:54  
Blogger Gregory A. Butler said...

The only places that have managed to make a "basic income" scheme work are majority immigrant autocracies like Saudi Arabia, Abu Dhabi, Dubai, Qatar and Kuwait.

Even then, it's a "basic income" for the minority of their population that are citizens - with that "basic income" funded by the low paid hard labor of rightless downtrodden immigrant workers.

Realistically, that's the only way a scheme like this would work...and even then only for a privileged minority.

The idea that "all work will be done by robots" is a fantasy out of the Jetsons - it's not feasible technally, nor is it consistent with profit making under capitalism.

Even if it were profitable - it's not desirable!

Would you really want to sit around all day and do nothing?

Go to a methadone clinic or the courtyard of a public housing project to see that a life of idleness does to the human psyche

How about fighting for everybody to have a job at a decent wage?

Human beings need to work, and there's plenty of work to be done

28 February, 2014 06:44  
Blogger Infidel753 said...

Gregory: The idea that "all work will be done by robots" is a fantasy out of the Jetsons - it's not feasible technally

You don't know anything.

Even if it were profitable - it's not desirable!

Human beings need to work, and there's plenty of work to be done

Speak for yourself. I have plenty of things to do, and having to work for a living eats up time and energy that could be much better spent. I think most people would find the same if they didn't have to work.

People who are rich enough that they don't need to work seem to have no trouble keeping themselves occupied. Probably the biggest single factor that stops the great mass of the population from becoming more politically and socially aware and active is the fact that their time and energy is eaten up by work.

Your first three paragraphs are irrelevant since I'm talking about a time when human labor won't be necessary to produce wealth.

28 February, 2014 07:13  
Anonymous Anonymous said...

Thanks very interesting blog!

24 August, 2018 20:34  

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