Robots and The Case For Basic Income

on Tuesday, Aug. 12th

Buckle up, because we’re headed for the future, and it’s going to be a bumpy ride.

Last week the Pew Research Center’s Internet Project released a report on “AI, Robotics, and the Future of Jobs,” and the basic conclusion is this: the droids are coming for your job. The idea that we are facing a robo-sourcing wave is perhaps less surprising than a proposal  that a few notable economic thinkers are honing in on: Basic Universal Income.

Before we go there, let’s dig into the Pew report. First the good news: drudgery is going bye-bye and technology usually creates new jobs to replace the ones that are lost. Yet the “reasons to be concerned” section that follows the upside is more than a little heavy:

  • Impacts from automation have thus far impacted mostly blue-collar employment; the coming wave of innovation threatens to upend white-collar work as well.
  • Certain highly-skilled workers will succeed wildly in this new environment—but far more may be displaced into lower paying service industry jobs at best, or permanent unemployment at worst.
  • Our educational system is not adequately preparing us for work of the future, and our political and economic institutions are poorly equipped to handle these hard choices.

As former Treasury Secretary Lawrence H. Summers put it in an Op-Ed for the Wall Street Journal last month, “the economic challenge of the future will not be producing enough. It will be providing enough good jobs.”

That’s the nice way of putting it.

In his write-up of the Pew Report Motherboard’s Jason Koebler digs out this gem:

 If the education system doesn’t change to start pumping out technologically savvy, creative people as the rule, not the exception, the rise of robot workers is “certain to lead to an increase in income inequality, a continued hollowing out of the middle class, and even riots, social unrest, and/or the creation of a permanent, unemployable ‘underclass,'” the Pew report concludes.

The idea of an “a permanent, unemployable ‘underclass’” might seem like a stretch at first. After all, service economy jobs might suck, but they’re often there when push comes to shove. Robots can’t take over every kind of gig imaginable.

Or can they?

Let’s just take Uber as an example. The current darling of the “sharing economy,” and the great hope for popularization of the GOP in the eyes of Grover Norquist, is on record as being interested in replacing their drivers with driverless cars.

With Uber already very good at nudging out traditional taxi services, we could be looking at the collapse of an entire service industry. This wouldn’t be so horrible, if it weren’t for the fact that so many other industries—agriculture and manufacturing to name two—have seen their workforce needs decimated by automation. Even the fast food industry isn’t safe from a robopocalypse.

What, pray tell, are we going to have people do for a living when we need so few people to actually run things? Will humans just work as teachers? Distance learning threatens some of those jobs. Hospice jobs? Japanese companies have been looking into building care taking robots.

It starts to feel like we’re being left with careers as performers, baristas and chefs: jobs that benefit deeply from a human touch and focused attention. Everything else from cab driver to executive assistant is getting left to software.

Yet we’ve seen for three decades now what happens when you gut the middle class of a consumer based capitalist economy: if you don’t have enough consumers, you have to find ways to prop up the economy.

We thought that the stagnation of real wages for the middle class and the attendant slowing down of the economy was the worst part of that. As it turns out, the worst consequence was that the financial markets, with its hunger for dollars, created the housing bubble, which kept up the appearance of growth and generated a lot of wealth for the folks at the top of the economic food chain.

Yet siphoning off the money into the hands of Goldman Sachs and company turns out to be a poor way to keep an economic engine running. Instead of “trickling down” into the real economy—bakers, not bankers— the cash gets plowed back into the capital markets, which operate like casinos.

So how do you keep a consumer economy going in a future where there are fewer and fewer jobs?

One solution that’s starting to come back into vogue: Basic.

That’s the sci-fi slang for Basic Guaranteed Income—the idea that everyone, no matter where on the economic ladder they stand, would be guaranteed a subsistence level income. Not enough to thrive but enough to make sure you had three hots and a cot. If you want something better, you’ll have to work for it.

The idea of Basic has been around since the time of philosopher Thomas More, at the least. The United States government even took up the idea back in the 1970s, as Vox writer Dylan Matthews pointed out in a recent piece about guaranteed income:

For example, Richard Nixon, during his first year as president, proposed a negative income tax that would pay around $10,000 in 2014 dollars to a family of four, and then tax it away at a 50 percent rate until families earning above $20,000 or so stopped getting anything at all.

That experiment was based in part on the ideas of the godfather of neo-conservative economics, Milton Friedman.

Yet Basic isn’t an idea that is strictly conservative, liberal, or libertarian. Martin Luther King Jr. is noted as favoring the idea of a guaranteed income. So too does David Graeber, one of the architects of the Occupy movement.

Graeber showed up in a PBS Newshour Making Sense segment about Basic. He was featured there alongside libertarian champions of the idea like Charles Murray of the American Enterprise Institute who want to see something like Basic replace all other forms of government assistance. That’s not Professor Graeber’s preferred flavor:

The amounts of money that they’re now talking about giving people aren’t enough to take care of things like health care, housing. But I think, if you guarantee those sort of basic needs, you could get rid of almost all the programs on top of that.

Basic might be the rare thing that some conservatives and liberals—especially the arch-progressive and libertarian varieties—can agree on, but there isn’t universal agreement. Far from it.

There’s a kind of folk-wisdom conservatism that despises all “hand-outs” of any kind. Theirs is a dim view of human nature, that in the NewsHour segment was repped by blogger Megan McArdle:

Having half of the population, or any significant fraction of the population say that my job is just to take, and other people go out and make that money, I think that is morally problematic. If you can live without working, some people will choose to.

I won’t argue that some people on the lower end of the economic spectrum would become as useless as the Rich Kids of Instagram from a productivity stand-point if given a chunk of cash. The point being that plenty of those who inherit fortunes are not of much use beyond being consumers either.

So many people would be able to set aside survival anxiety, and start pursing that whole “liberty and happiness” thing we’re all always going on about. If only we had some information about what happens when you drop cold hard cash into the hands of impoverished people.

Oh, look. Here come the scientists.

A group called GiveDirectly sent money to people in the developing world with no strings attached. They heard the criticism of charity veterans, who were concerned that the cash would be spent on vices. David Kestenbaum of NPR reports on what happened next:

To see whether this was actually happening, researchers did an experiment. They surveyed people in Kenya who received money from GiveDirectly, and a similar group of people who didn’t get money.

The results from the study are encouraging, says Johannes Haushofer, an economist at MIT’s Poverty Action Lab who was one of the study’s co-authors.

”We don’t see people spending money on alcohol and tobacco,” he says. “Instead we see them investing in their kids’ education, we see them investing in health care. They buy more and better food.”

These experiments are just a small sample, but the idea of Basic has a strong lure in the face of the twin issues of income inequality and long term job scarcity.

Instead of being attached to an emotional narrative about the “value of hard work” or “economic justice” we would do well to look at the reality of a world where increasing productivity has created a paradox where goods are abundant while the means to acquire them are becoming scarce.

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