Supporters of universal basic income (UBI) share with Marxists an almost heroic indifference to evidence.
The most ambitious trial yet, sponsored by the Finnish government, came to an end last month. “Now, following the results, all the main parties are against a universal basic income,” says Finland’s finance minister, Petteri Orpo. “The case is closed in Finland.”
It turns out giving people $600 a month with no strings attached doesn’t inspire them to set up the next Google in their garages. Instead — who’d have thought it? — they just pocket the extra cash.
Not that Finland’s example deters enthusiasts, many of whom are California tech entrepreneurs. Indeed, one such entrepreneur, Sam Altman from the startup accelerator Y Combinator, is about to launch his own trial scheme.
The argument advanced by people like Altman and Mark Zuckerberg is, as you would expect, very different in tone from the one put forward by stolid Scandinavian socialists. They see UBI as a necessary response to rapid advances in automation and artificial intelligence. Machines, they believe, will soon make almost all of us redundant. It is no longer just a question of displacing blue-collar workers. There are now algorithms that can diagnose diseases, carry out legal work, write books, compose music, and even design other algorithms.
In such a world, they ask, what place will there be for human workers? We can’t all be coders or designers of computer games, so what are the rest of us going to do? The old model, where unemployment was a temporary misfortune, and where the working majority stood ready to bail out the jobless minority, will no longer apply in a world in which jobs, as we now know them, barely exist.
The underlying assumption here is wrong. Clever people have been predicting mass unemployment as a result of new technology for centuries. When advances in agriculture allowed a smaller number of farmers to generate the same amount of food, there were fears that society would be overrun by “vagabonds” and “sturdy beggars.” Instead, the people released from the fields became the workforce that powered the Industrial Revolution, the event that, more than any other, made human beings healthier, wealthier, and longer-lived.
During the 19th century, as first the Anglosphere and then Western Europe began to generate previously unimaginable levels of wealth for their peoples, clever commentators kept insisting that the only “real” work was on the land, and that there would never be enough factory jobs to go around. Then, in the 20th century, as the old industries gave way to services, precisely the same sorts of people applied precisely the same flawed logic, only this time, they argued that manufacturing was where the “real” jobs were.
Every disruptive technology destroys some jobs and creates others. The only constant is that living standards keep rising. You can see the contradiction in President Trump’s tweets. One moment, he rages against the off-shoring of factories, the next he brags that employment has never been higher. In fact, employment is rising precisely because globalization and new technologies have made America more productive. A recent study by the World Economic Forum predicted that robots will displace 75 million jobs worldwide by 2022, which sounds scary until you read in the same study that those robots will also create 133 million new jobs.
What jobs will be created? If I could tell you that, I’d be as rich as Zuckerberg. The essence of the market is that innovation comes in unexpected ways. Who, before the event, predicted smartphones, cheap flights, or peer-to-peer property rentals?
One thing, though, is certain: Innovation will make most of us better off. Sure, we may end up spending longer hours in, say, stupendously realistic virtual universes; and that might, from the perspective of early 2019, seem like a waste of time. But only if you think about it in the sense that going to the cinema or going to the opera is a waste of time. The truth is that as technology drives down prices, we spend less laboring to furnish ourselves with the necessities. Or perhaps to put it more accurately, today’s luxuries become tomorrow’s necessities.
Consider this. Someone living on welfare today has a higher standard of living than the average worker — the average worker — in the 1930s. From the perspective of that 1930s worker, in his overalls and cloth cap, we already have UBI. And while the state makes those welfare payments, it was private sector innovation that created the wealth that enables that miracle.
And we’re just getting started.
