$income goes to zero for that particular person at the time they lose their job, yes, but all of their prices for every good that gets automated goes down. If we repeatedly make everything cheaper, then a low income doesn't matter. Everyone is richer in the sense that a particular good is cheaper.
Also, I very highly doubt that income would reach zero. People wouldn't have to work 40 hours a week, sure, but would everyone just sit around with their thumbs up their butts not knowing how to provide value to others? I think the assertion that all income would go to the rich needs some evidence.
I think the point being missed here is that those with high incomes or wealth essentially have their lifestyles subsidised by those who are forced to take the basic jobs in order to live. Their labour is cheaper than it would be if they were truly free. Essentially, they have little negotiating power.
I'm advocating for flipping that position and seeing where it leads us.
I don't think that people would suddenly stop working entirely. I think there would be a redistribution from rich to poor. I think that's reasonable.
If you feel that the world would fall apart and people would stop doing anything useful if they weren't coerced, then I would ask the question - why do the wealthy work? They already have a basic income. What proportion of people who could retire permanently at say, age 40, actually do? I think the picture being painted of a bunch of feckless, consuming meatballs, is wildly off base.
And if guaranteed minimum income takes off everyone will be able to have an income without doing anything or at least, that's how it's supposed to work. Apparently it's the antithesis of the spirit of capitalism if the current rich accrue wealth like that but perhaps it wouldn't be viewed in quite that light if we all benefit.
I'm also not an economist. I think, though, that basic income breaks a lot of assumptions that hold for economics today, but wouldn't hold in such a scenario.
Basic income might lead to inflation. It's impossible for the basic income to become worthless, though, unless all money becomes worthless. Even if everyone gets $X a month, any other amount of money can be expressed as a multiple of X.
McDonalds in this situation could pay zero wage, if anyone wanted to work at this price. I doubt many would, though. Instead, they would pay $Y in addition to the $X that everyone already gets.
Ideally, no one works at McDonalds, because it's automated. If it can't be automated, then McDonalds has to pay people enough to make it worth working at McDonalds, not just enough to survive. This increases the price of things that aren't automated, which increases the reward for those who can figure out how to automate it.
(Objecting to this automation by pointing out how far away we are from AI / useful robots is like objecting to flight by pointing out how many joints are in a bird's wing. An automated McDonalds will look different than what we have today. Perhaps insisting on human hands preparing and serving their food will become an affection of the wealthy.)
It's not just wealthier people who will be worse off - it's everyone.
Basic income is known to create a large disincentive for work. In previous experiments (Mincome) labor supply dropped by about 10% - double what happened during the great recession.
This means that fewer working mothers can find child care, fewer laborers to mow your lawn, fewer nurses, fewer teachers, etc. No matter how much money you give to people, fewer services provided makes us all become poorer. That's simple arithmetic.
When I read this the last time it came up, I suspected that the author was walking around the edges of the Basic Income hypothesis. Theory being you can be "poor" forever (income provided for basic shelter, food, and medical attention. And anything else you want you have to work for. The basic tenant being that everyone is funded into a reasonably safe life, even people who are working. Being paid a salary is 'bonus' on top of the basic allotment.
At which point you can eliminate minimum wage and labor unions. The question of course is whether or not anyone would do some of the jobs we cannot currently outsource to robots.
It's a question of wealth distribution. Jobs have traditionally been a relatively fair way of doing this. I put in effort to produce something in the economy, my effort is acknowledged through some money, and I can trade that in for the fruits of some of your labor.
The question in the article is phrased as "what about when people can't find jobs?" However, when we get to that point, perhaps the question should in fact be "what about when people don't need to find jobs."
If automation and technology in general continues to increase like this, at some point we should be able to produce the equivalent of today's standard of living with very little human input. Hence, our current framework that incentivizes everyone to work becomes less necessary.
Should people be rewarded with a comfortable standard of living simply for being human, even if they don't do anything, in such a scenario? I tend to think yes.
Here's my proposal: We implement a Basic Income Guarantee as a fraction of GDP. It can be so small as to be negligible right now, but as human capacity to produce increases, everyone reaps the rewards.
When we're so technically proficient that the Basic Income Guarantee is enough to sustain yourself with a meager lifestyle, some may just not work and live on it. Lucky them, for living in such an era, but that's something of a reward that humans could have earned through increasing technology.
In any given economic system at any given time, there is a finite level of wealth to be shared by everyone participating in that system. (note: by 'wealth,' I mean things, not currency.) When people work, they produce things (and services), and this increases the total level of wealth within that system. When they do not work, they do not produce things, but they are still consuming things. Thus, people who do not work yet still consume in a given system reduces the overall level of wealth within that system, which reduces the level of wealth that everyone within that system can enjoy.
Thus, from a wealth standpoint, a system with less unemployment is preferable to one with more.
Proponents of basic income usually claim that when people are freed from the drudgery of working a normal job, they will be free to be creative, to take risks, to start businesses, and that this new productivity will compensate for the loss of productivity in the traditional system.
But that's all that is: a claim. It's completely worthless without some kind of data backing it up. It's akin to a preacher saying that God exists because he said that God exists. It simply has no merit.
So would the loss of productivity be compensated for by the increase in physical and mental well-being? I have no clue, nor do you, nor does anyone, because we lack data.
It's not that there would be no work or that there would be no jobs or companies staffed with people.
The point is that the average median person might not be good enough to get a job. If automation makes it so that only 20% of people are employed in any traditional sense that we recognize today; that world would be drastically different than the one we have.
In that world, we have a path where we don't get rid of money but, just use taxes on large mega companies and redistibute that money as a basic income to people without a job. This keeps capitalism and the efficiencies it brings.
With basic income, you still have advertising, you still have companies and you still have consumers buying things. There is still competition to push quality up and prices down. There is still the invisible hand of the market.
It's elegant in that it achieves the goals of eliminating both poverty and forced labor to survive without eliminating the competition that makes the world so damned efficient and effective.
I've always thought that this would have some interesting effects on society.
Sure, there are some people who would be content with basic subsistence. Some of those people might turn to crime to get their jollies. I'm not sure there is any social system that can prevent this.
A guaranteed income that paid a basic subsistence would drive up the cost of goods. Some of that would be because people at the lowest end of the wage scale can now be picky about their working conditions, driving up the cost of delivering goods and services, and generally improving working conditions. Employers would have to make mundane, dirty, low-skill work a more palatable proposition. Garbage men's wages would increase. Some of it would be because of opportunistic business practices seeking to maximize profit from goods and services and especially off of the people at the bottom. An equilibrium could be reached, but prices for goods and services wouldn't look like the do now.
Why some action is necessary:
Whether you like the Basic Income or not, something has to change. Technology, especially automation, is currently and will continue to displace low-skilled labor. At some point it will also begin to eat some skilled labor. And why shouldn't it? I can't blame industry for automating labor away. I also can't blame them for the effect that will have on the displaced labor; but, it will have a terrible effect if nothing is done. Nobody can expect those people to starve themselves. This is actually a great opportunity for humanity; if this 'surplus' labor can be directed toward further advancing society (in a positive way).
What are the alternatives?
A fragmentation of society into: Aristocracy, Worker Class, and a Loafer Class. I doubt this would be stable without an oppressive authoritarian State.
Universal income covering the very basic would still keep people making beyond minimum wage vulnerable.
Paying meaningful money would be too expensive at scale. Then few jobs could pay meaningfully more than the universal income. Why work if you get +/- not working?
Except that doesn't solve this problem (mostly: Read all the way through)
The issue isn't The Wealthy having all the money. The issue is technology that will actively remove jobs. It doesn't matter if minimum wage is 90 pounds an hour if you don't have a job. An automated train isn't The Wealthy stealing money. It is a conductor out of work because their job could be handled by a raspberry pi.
Basic Income is a theoretical concept (been implemented in small, borderline meaningless, experiments) to combat that. Everyone gets a bare minimum "salary" regardless of if they work. That covers cost of living (how much more varies). Then, those with jobs have the potential to earn a lot more (incentive to work) on top of that.
What Thomas Piketty proposes wouldn't address the lack of income to those put out of work by technology but could, possibly, help to pay for solutions that would.
I agree with the author's points. There have been, almost certainly, Einsteins who have lived and died in poverty without ever having tasted a book. I feel like a basic income for everyone is supportable and would give people falling to an unknowable fate the lift they need to go beyond surviving.
Less work seems to need to be done with tech advances today, but the only thing a job replacing robot seems to do is take the incomes of two u people and give it to the person who owns the robot. The slippery slope is that we will eventually do this for most jobs, if we survive long enough as a species, and I agree we need change to evolve as our society does.
If people's disposable income drops to basic income level because they quit their jobs, there will be less demand for non-essential consumer goods. The idea that people will voluntarily starve themselves to death because they're too lazy to work while fruit rots on or under trees is ludicrous.
Yeah, that was my point with basic income. With something like that, people without jobs wouldn't need to be homeless - the idea would be to give them enough to get by.
You're right, automation will tend to put people out of work. If they can find more skilled work that hasn't been automated yet, they're fine, but if not... we'll start to have a problem. Unless, of course, we rethink the idea that people need to work to survive.
Because honestly, if we don't need everyone to work for society to function, I don't see the value in forcing them to do so.
(And maybe, in the long run, capitalism isn't the best choice for how we ultimately run our society. That kind of change isn't happening anytime soon, however. A basic income, on the other hand, might just have a chance.)
One of the solutions to this issue, often mentioned in discussions about automation on HN, is basic income. Ie, as automation progressively makes human labor superflous to sustain the economy, a portion of the value generated by the economy is used to provide a small monthly allowance to everyone:
"Basic income has many social, political and economic advantages, but the one pertinent to this article is that it balances power in the labour market. It eliminates desperation as a reason to work, and everyone that wants a job will find a job. It can replace much workplace regulations as well. Minimum wage, maximum hours, rules for layoffs, and so on. The level of $7k-$10k is designed specifically (though guesstimated) as a target that balances exactly the bargaining power (between employers and employees) in the low skill labour market."
"Basic income is providing cash to all citizens. If the amount is in the range of $7k to $10k, it can be paid out of existing tax levels by replacing other social services, and making the benefit taxable so that high income earning citizens pay back a larger portion than poorer citizens. Basic income can also be paid in part or instead through money printing."
The idea is that everyone receives a basic income, equivalent to a (hopefully) updated minimum wage. Then if people want extra money for luxuries, then you work a job which will pay you on top of your standard basic income.
I think the way out of this is a basic income guarantee. When a basic income is provided without requiring labor and this basic income meets the needs of an individual the cost of human labor will increase (the cost of everything will increase probably). This system assumes there is enough wealth around for the government to distribute enough to everyone.
Wouldn't there always be new jobs? I mean, sure, technology has automated lots of things. But that's a good thing. We just need new kinds of jobs - ones that can't be automated. Who knows, perhaps in the future everybody can be an artist. Not sure a universal basic income would work from a mathematical point of view. Giving money to everybody would only increase the price of things.
Also, I very highly doubt that income would reach zero. People wouldn't have to work 40 hours a week, sure, but would everyone just sit around with their thumbs up their butts not knowing how to provide value to others? I think the assertion that all income would go to the rich needs some evidence.
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