Seriously Considering a Universal Basic Income

Imagine there’s some minimum income you get periodically whether or not you work, whether or not you’re a good person, whether or not you do the right thing in life. —Michael Lewis


CF9-BpIUsAAwCGYIn May, Civic Hall hosted a conversation on whether the time has come for a universal basic income. The event featured a panel of experts with diverse backgrounds: Peter Barnes, co-founder of Working Assets/CREDO and the author of With Liberty and Dividends for All; Michael Lewis, a professor at the Silberman School of Social Work; Nathan Schneider, journalist and author of Thank You, Anarchy: Notes from the Occupy Apocalypse; and Albert Wenger, a partner at Union Square Ventures (USV), a New York-based early stage VC firm. The panel was moderated by Natalie Foster, a fellow at the Institute for the Future and co-founder of Peers.org.

The conversation ranged all over the place, from the reasons we need a basic income now (robots! climate change! to save democracy!), to the ways it could be made a reality (redistribution of existing public assistance! Reddit!), to the places it is already at work (Alaska! No, really, Alaska!). One thing that is clear is that universal basic income doesn’t have to be a one size fits all countries solution: just because this European country does it this way doesn’t mean the U.S. has to do it that way. In fact, in some of the possible solutions the panelists put forward, the government doesn’t have to get involved at all. As Nathan Schneider concluded, “Maybe the question is not so much whether to do basic income, but how. “

What follows are a few excerpts from their conversation, and you can listen to the full audio here:

Michael Lewis defines the basic income

The way I think about it is that a person’s income, their starting income, whether or not they work, doesn’t have to be zero. Like right now we think that people, that most of us who are able-bodied, able-minded, we get our income from work. Or if we’re kids, we get our income from those who take care of us, our caretakers. But a basic income is just an income that you get from the government, financed—it can be financed in various ways I’m sure we’ll talk about, right? But it will come from the government, and the way I think about it is imagine that we—I think you probably have an idea what social security is, right? That’s the one for the elderly, right? Imagine that program expanded to everyone, right? So it’s not just for the elderly, but it’s like social security for everyone, and so you get it whether you’re elderly, young, old, whatever.

There’s some minimum income you get periodically whether or not you work, whether or not you’re a good person.

You get it unconditionally just by virtue of being a resident in some—I mean some say citizen. I prefer resident. You get that whether or not you do the right thing in life, so you just get that as a guarantee and it’s really social security expanded to everyone. That’s how I think about it.

Albert Wenger on the robots coming for our jobs and why the time has come for a universal basic income

At Union Square Ventures, we recently invested in a company that does image recognition. A notoriously difficult task, figuring out what’s in an image. Something we think we as humans are good at. And again, it was one of those problems that like no progress, no progress, no progress, and then all of a sudden in the last couple of years, machines are better at recognizing faces than humans. So I think the reason this is a pertinent discussion now is because many human activities that people currently get paid for, currently are the source of their livelihood, that let them pay for rent, that let them pay for clothing, that let them feed their kids, et cetera, many of these activities will be executed better by machines. And what’s important to keep in mind is it doesn’t matter, it’s not an idea of machines taking over of these jobs overnight.

What matters is on the margin, when somebody makes a hiring decision, what’s the marginal substitute? Prices in markets get determined on the margin. So wage pressure will start the second you can substitute, not when everybody has been substituted. I think that’s really, really important to understand.

Peter Barnes on Alaska and benefitting from the commons

So here is an example in the United States, in a red conservative frontier state, where everybody who is a resident of Alaska gets a dividend every year, no questions asked, just the way Michael was describing. The eligibility is you have to have been a resident of Alaska for one year or more. Children are included, so a family of four gets four dividend checks.

Now, this idea of a permanent fund was invented by a Republican governor in the 1970s, and most of the governors of Alaska since then have also been Republicans and they love this idea.

Everybody in Alaska, whatever your party, loves getting dividend checks.

Now, where does the money come from? This is the question. In Alaska it comes from oil, which is kind of a unique situation because they’ve got all this oil and not very many people and so the math works out very well. But underneath that is a concept that there are certain kinds of wealth that belong to everybody equally. In Alaska’s case, it’s oil. And if you compare how Alaska treated its oil wealth to how countries all over the world have treated their oil wealth, you’ve got to agree that Alaska has done the best thing with oil wealth of any country in the world.

So my concept, which is written up in this book With Liberty and Dividends for All, is to take that Alaska model and blow it up, cover all 50 states, every American, probably, like Michael said, legal residents, not citizens, because then you get into a lot of other issues which it’s best not to get into. But basically, if you’re living in America legally, you should get a dividend that comes from wealth that belongs to all of us. Now, to make this work at a national level and not just in one state with a lot of oil, you’ve got to think a little more broadly about what other kinds of wealth actually belong to everybody.

Alaska Permanent Fund, Annual Dividend Payouts

Alaska Permanent Fund, annual dividend payouts since 1982

Nathan Schneider on why techies could get behind this

In the tech community, the appeal often seems to be kind of encapsulated in a term used by a blogger in Silicon Valley, Steve Randy Waldman. He talks about VC for the people, right? It’s a kind of innovation dividend. It gives the opportunity for more people to do more tinkering, right? And so for the world view in which more tinkering is the best possible thing, because it will mean more technology, more things to invest in, more opportunities for creating a more convenient life maybe, basic income is a means to that end. It would enable more people to maybe spend more time in those garages.

…and how some people on Reddit already have

Another approach that is just starting to emerge and I think is interesting to put on the table is one that doesn’t involve government at all. And this is the idea that maybe we can just create basic income ourselves in a kind of entrepreneurial way. A lot of the examples of this kind are coming from the world of people who are interested in bitcoin-like crypto currencies, money that can seemingly come out of cyberspace that can appear and, through adoption and use, become more valuable.

So people are thinking, okay, what do we do with this money that possible can come out of thin air, and how do we get lots of people to use this money? Well actually, basic income is a very good way of solving both of those problems. And so a number of people, many of whom are organizing themselves on Reddit, have been experimenting with different ways of getting this going. And actually, there are a couple of different models that are actually being implemented now where you can actually get tiny little amounts of bitcoin just for signing up. And these systems tend to be opt-in. You know, so it’s not something everyone with a social security number is getting. It’s something where everyone who wants to be part of this gets it. And that on the one hand offers a bit of freedom, right, where you only buy in to the system or enter the system if you really want to. You don’t need the government coercion to do it. But on the other hand, it creates kind of the specter of the sea-steading states, the designer states off in the ocean, where the rules are made by some kind of benevolent or not so benevolent dictator, and if you play by those rules, you get your basic income and maybe if you don’t, you don’t.

You can listen to the full audio transcript here: