Monday, August 21, 2017

Virgin Money

Over the past week or so, there has been an increase in interest in Universal Basic Income (UBI).  A couple more of the tech elite have added their voices to those of Elon Musk and Mark Zuckerberg in support of this Utopian economic concept: Stewart Butterfield, founder of Slack, and Richard Branson, founder of all things Virgin.

The two of them are coming at the concept from slightly different bents.  Mr. Butterfield sees it as a way to help those hurt by localized market inflation, similar to the housing market in Silicon Valley where high tech salaries have driven home prices out of reach of all of the ancillary jobs that those technocrats take for granted.  It doesn't matter how well sourced your latte's beans are if you don't have a barista available to prepare it.

Mr. Branson is looking at it from a bit more humanitarian perspective, having met with groups working in Finland to understand how that countries limited UBI program is working.  In a blog post, he states:

"In the modern world, everybody should have the opportunity to work and to thrive. Most countries can afford to make sure that everybody has their basic needs covered. One idea that could help make this a reality is a universal basic income. This concept should be further explored to see how it can work practically."
This is slightly different than both Musk and Zuckerberg who are more concerned with the fallout from workplace automation and how we all can afford basic necessities if we don't have jobs.

Awkward Pulpit

Of course, these preachers of UBI are the people who need it least.  None of these self-made men will ever need to worry about where their lattes come from.  Their housing and other basic needs are met several hundred times over.  On the surface, it seems strange for them to be expounding something where others won't have to earn it the way they did.

But only on the surface.  All of these people appear to have come to the conclusion that, while smart and hard working, they were also extremely lucky.  They all proposed the right things at the right times to the right people.  If even one of those conditions had not been met, then their companies would not have been founded.  Or, maybe founded by someone else.

Reading between the lines on their various statements, they all seem to want to let everyone have the liberty to pursue their own dreams without having to worry about where their next meal comes from.  For this, I applaud them all.  They are thought leaders whose voices will be heard.  But will those voices do more than yell the tag line that UBI is a must-have?

Who Gets It?

First, who gets it?  Is it 'everyone' as was stated in a town hall meeting with one of Zuckerberg's colleagues?  Does that mean that anyone who crosses into a political space that offers this benefit can get it?  Or, more likely, is it only for citizens?  The citizenship approach makes intuitive sense.  After all, they are the ones who pay taxes and man the army and such.  If this is the case, then the already tense immigration debate will only get harder as more people try to join those countries that offer this benefit.

How about those that have jobs?  Will they get this benefit as well?  Or will there be some income cap that cuts it off?  Both of these have their own sets of problems, effectively raising the minimum wage above that of whatever the UBI payout is in order to attract workers.

Will It Solve Poverty?

Secondly, what will it really change?  Finland is offering the equivalent of $650 a month to their test group, even if they have jobs.  That is $7,800 a year.  Which is well below the single person poverty level as set by the US Department of Health and Human Services at $11,770 per year.  It's better than nothing, but does not raise people out of poverty.  Not officially.

Another part of that is that it may raise the poverty level.  With more people with more money in the economy, the value of that dollar will decrease.  All of those staples that people rely on will simply be more expensive.  That puts everyone back right where they started, worrying about how they will pay for their next meal and the rent.

How Will We Pay For It?

This is always the one that people come back to.  UBI is too expensive to implement.  The tech giants are proposing everything from taxing the robots who replace the workforce to privatizing the interstate highway system.  Personally, I think that taxing automation makes the most sense, but it  might have the unintended consequence of slowing the pace of that automation or raising the price of those products made that way... bringing us back to the inflation issue.


I do not have answers to all of these issues and the thousands of others (will it make us all lazy?).  I do firmly believe that UBI is a necessary step into the future.  I see it not only as an answer to workplace automation, but also something that will free my daughter from the tyranny of spreadsheets and pointless meetings when she is ready to enter what is left of the workforce.  But I do not see it as a instant panacea.  Certainly not one that lives forever.

We are going to have to experiment around all of these issues.  Try things, correct them.  Try again.  We may even decide to scrap it in favor of direct handouts instead of money as UBI may lead to the concept of money becoming outmoded.

I hope of those days, but I'll still keep looking for monetary opportunities until then.

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