Money for Nothing, the Solution for Everything
The idea of a guaranteed basic income, also referred to as unconditional or universal basic income, is starting to gain traction in many parts of the world, both in developed and developing nations. It's actually a very simple idea: Everyone in society receives a single basic income to provide for a living whether they choose to work or not.
Importantly, it's only intended to be enough for a person to survive on. In order to live well, people would still be encouraged to work hard. The money for this social welfare scheme could come from the government or some other public institution, in addition to funds or income received from other sources.
In 1930 John Maynard Keynes wrote: “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come - namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.”
The next decades did see a decline in employment in manufacturing facilitated by automation. But the growth of employment in the service sector and white collar occupations more than compensated for the displacement of industrial work, as the growth of industry had absorbed displaced farmers in the century before. As a result almost all economists and policy analysts have continued to dismiss the idea of technological unemployment and embrace the "compensatory thesis:" all innovation will create new forms of employment that at least compensates for the jobs made redundant.
In the Industrial Revolution, you could always learn some new skills and find a new, likely higher paying job. What's different this time is that we now have AI and machine learning algorithms that can replicate cognitive skills and process information much faster.
Driverless cars are improving rapidly, and it is easy to understand that they will begin to eliminate all the jobs held by truck- and taxi drivers. Tablets and kiosks in restaurants will be eliminating many of the jobs currently held by waiters and waitresses. There is a host of new tools that will start eliminating teaching positions in the near future. Desktop manufacturing and 3D printing will cut out most of the work between inventors and consumers. Similar trends are seen in factories, the construction industry, retail, etc.
This transition will ultimately be a good thing. We will generate more wealth than we ever have before, the economy will grow, and businesses will be able to do new things they've never done before. In the long term, this will create a society that potentially improves the quality of life for everyone. One of the great things about moving towards a world of abundance is that society will be able to easily afford to provide education, health care, shelter, and social services to everyone.
In the short term, however, we'll likely see displacement because we don't have the social mechanisms in place to keep up with these changes. Today the growing signs of technological unemployment and the gathering old-age dependency crisis are creating the material preconditions for campaigns for a basic income guarantee (BIG), even without disruptive technological progress in AI and longevity therapies.
Looking further ahead to the future, the prospect of a jobless economy certainly seems daunting. Many people argue that work is a necessity and that a basic income guarantee would have a corrosive effect on the social fabric. But if we can successfully manage it and put our machines to work, we could enter into an unprecedented era of material abundance while dramatically extending our leisure time. Rather than be tied to menial and demeaning work, we'd be free to engage in activities that truly interest us.
When it comes to funding BIG, various proposals include shortening the workweek, tax revenues like a VAT across all goods and services, and the elimination of other social security programs, shrinking the increasingly intrusive burden of the state. Various public resources can be monetized, as Alaska has done with the “Alaska Dividend,” properly called the Permanent Fund Dividend.
There is enormous wealth being created by technological innovations, but it is mostly being sucked up by the top 1% of the population. In a world of ever growing productivity, the problem is unequal distribution, not scarcity.