Skip to comments.Tech's favorite policy, universal basic income, is about to get its first big test
Posted on 04/18/2016 5:12:57 PM PDT by beaversmom
Over the last two years Silicon Valley has fallen in love with a striking economic theory. As former Facebook executive Sam Lessin wrote recently, "Theres been a dinner-time revival of the old conversation about the inevitable need for a guaranteed basic income in the United States." Its ironic that in the heart of winner-take-all venture capital culture, there is a growing call for a massive redistribution of wealth, but if you believe that artificial intelligence and robots will improve dramatically over the next decade, it makes sense to start planning for a society that has little need for human labor.
The idea of universal basic income (UBI) has been around for a while, and numerous studies have found that giving cash directly to the poor can be more effective than traditional welfare. But so far no one has actually implemented a program that meets all the requirements of full-fledged UBI. They either didnt cover everyone in a community, didnt give enough to meet basic needs, or didnt last very long. That changed last week, with the announcement of the first full-fledged test of universal basic income by an NGO called GiveDirectly.
The New York City-based charity will be giving 6,000 people in randomly selected Kenyan villages a steady flow of cash for the next 10 years. The amount will be similar to past GiveDirectly projects, between $255 and $400 per person, per year. Thats based on the average annual income and meant to cover basic needs like food, shelter, and healthcare. Unlike its earlier projects, these grants are universal, meaning every member of the local population will get the same amount, regardless of their employment status or financial health.
"When we started in 2009, people said what you might expect theyll waste it on alcohol, theyll stop working and that just turns out not to be true. In reality, cash transfers are more effective than many things that we do," says co-founder Michael Faye. GiveDirectly has been growing rapidly, raising over $100 million since launching, and $52 million last year alone.
Faye acknowledges that the tech sector has been a key constituency behind basic income's recent surge in momentum, and that many donors are "tech people who think robots are going to put people out of jobs." And there are plenty of things about GiveDirectly that tie it to the world of tech. Its backed by Google.org and Good Ventures. Albert Wenger of Union Square Ventures will be involved in the work on basic income. Its focused its operations on Kenya and a few other African nations because of the combination of extreme poverty and availability of electronic payment systems like M-PESA. It has also incorporated technology across its operations, including the identification of poor households and fraud detection.
But Faye cautions against pigeonholing the concept as being a favorite only among the tech set. "Basic income may have supporters in the tech world, but its historic appeal is far broader. There arent many ideas that can claim support from both Martin Luther King Jr. and Milton Friedman."
Regardless, GiveDirectlys project will provide the tech sector, and Silicon Valley dinner parties, with something thats been missing from the recent discussion around universal basic income: hard data. "Ive been intrigued by the idea for a while, and although theres been a lot of discussion, theres fairly little data about how it would work," wrote Sam Altman, president of the iconic startup incubator, Y Combinator. "I think its good to start studying this early. Im fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, were going to see some version of this at a national scale."
Do people sit around and play video games?
Y Combinator is planning to fund its own research into universal basic income, but is well behind GiveDirectly in terms of putting anything into action. Altmans vision of basic income is also a bit more existential. "It would be good to answer some of the theoretical questions now. Do people sit around and play video games, or do they create new things? Are people happy and fulfilled?" he wrote. "Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive?"
Faye hopes the impact of GiveDirectlys program will be more immediate, both for the families receiving money and for the ongoing policy discussions. The conversations happening around universal basic income in the tech world are helping to drive awareness of the idea, but are distinct from the immediate need for more effective welfare programs around the world. As Faye says, "The Pakistani government does a billion dollars of cash transfers a year and i can tell you for a fact that its not motivated by the fear of AI."
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Hmmm... I wonder where the money will come from?
Why are they pretending that this is a new idea?
Welfare has been around for 50 years. The results are dreadful.
Disastrous-what could go wrong?
Just more structured ways to piss away money.
I reject white guilt and first world guilt. No one else paid my student loans but me. No one else bought my house and paid my 7.75% loan. No one else buys my vehicles or pays my insurance or gas or food,or utilities. I had no one to help me get my jobs. I fight and scrape for every dollar I bring in.
While I scoff at most rants about income inequality, I do worry about a world were only a few thousand techie elitists control all of the robots who now make everything tangible (and perform services).
And African villagers don't consider 200 cable channels and Air Jordan sneakers to be "essentials."
So there is no incentive to connive, or lie, or pretend to be sick or injured.
They just have to wait for the check in the mail.
As mentioned in the essay, Friedman advocated something like this in the form of a "negative income tax", i.e. if you make below the poverty line your "tax" will end up being just enough money to put you at the poverty line or some acceptable level above it.
This has the advantage of being easier and cheaper to manage and not encouraging lying and cheating.
However, it does have the disadvantage of encouraging sloth.
My own favorite idea is to bring back work camps. If you're able bodied then you get assigned to a camp where you get three hots and a cot and work to fill your day.
There's plenty of stuff that needs doing. The workers will get a salary that they can save up and use to establish themselves when they're ready to get out of the camp.
Even if robots could be trained to replace the humans, we should adopt the Chinese policy and keep enough jobs non-robot to make sure that every able bodied American has enough work to fill his weekdays.
Not a valid test. The money is given voluntarily, and from outside the community. Nobody is denied keeping their own money.
Valid test: take the redistributed funds proportionally according to income, under threat of imprisonment. Watch the economy collapse fast.
I expect Kenyan villagers to start hearing from Nigerian public officials who need help in disposing of several millions of dollars of funds left with them by some mysterious individual.
In that situation, the old Basic Income idea may make a comeback.
It would lead to a lot of socialism, and I wouldn't like it, but I really worry that it might be inevitable. Part of the reason it would be inevitable is because it could be ripe for social engineering. Think of it:
People with no skills could be kept quiet at home with monthly checks.
Couples could be encouraged to marry if it took 2 welfare checks to support a family.
If monthly checks actually DECREASED with children being added, then there would be an incentive for low skill poor people to not reproduce -- eugenics under another name.
Incomes could be supplemented by high skill people who could manage to get jobs. Only these people could really afford to have kids.
The Left wants to support the poor and they want to control (limit) population. This could do it.
Stupid. Where does the money come from?
The moment you give everyone $1,000, $1,000 equals zero.
Now, $1,000 is what you get for zero effort. So, a slightly bigger effort yields more than $1,000, whereas, before, it yielded just over zero.
Soon, the 1,000 becomes worthless since all prices have risen to match the increased demand, and the exercise is a failure.
That won’t stop leftists, who will say that $1,000 wasn’t enough.
There are some conservatives who support this. You’ll have to read the details, but they claim it will be better than welfare.
Well duh! The robots will make it!
Why is the Tech world driving this? Because AI, robotics and automation technology is increasingly putting people out of jobs. Without a guaranteed basic income, no one will be able to pay for the iPhones & apps.
The stipend wasn't very much, but living costs were low there, and for many, that was their only income. The result was a disaster. There was rampant crime, alcoholism, car crashes, and sickness. There were no farms, businesses (this was before casinos, if want to call them businesses), or even super markets. Free money simply doesn't work.
When you kill any form of a persons purpose in life no matter how small it leaves behind a useless human
This a thousand times. I predict inflation will eat their income quickly and they’ll be clamoring for an increase. Money is a measure of increased value. If there is no value to your efforts then the money that represents it is of no value. I can’t believe that even Friedman would overlook this basic element of economics.
No matter how you slice it, the future is looking pretty grim.
Only by your standards. The Great Society has locked in the black vote for Democrats in a way that Lyndon Johnson only dreamed of.
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