It’s no longer a matter of if, but when and how


Takeaways

  1. Currently, income is linked to work. No work equals no income.
  2. What happens when billions of human beings no longer have access to work, and therefore no way to generate income?
  3. Widespread automation will revolutionize the global economy’s balance of supply and demand. Universal basic income can keep our world intact.

Within a century, most human beings worldwide will no longer need to work. And the economy will be totally fine without them, at least in terms of production.

The purpose of nearly every job is to “produce” something. This production can be categorized in two ways: as a good or as a service. A farmer produces goods such as apples, wheat, or corn. Hairdressers produce services, such as the act of cutting your hair.

In Why Your Opinions of Universal Basic Income Don’t Matter, we discussed how a vast majority of jobs—whether they produce goods or services—will be impacted by automation. According to Citigroup, an investment bank, over half of all global jobs will be eliminated due to automation based on current technologies alone.

If the purpose of a job is to “produce” something, what happens when human beings are no longer needed for production? Millions (eventually billions) of human beings will be permanently removed from the workforce. Because “work” is the primary source of income for most individuals, this dislocation results in a massive economic imbalance: we’ll still be producing the same goods and services as before, except now, most humans won’t have the income to consume them.

So we have a problem:

  1. Automation will continue the production of goods and services without the use of human labor.
  2. Without access to labor, few humans will have the necessary income to consume these goods and services.

Whatever your preferred political bent, this is a recipe for disaster. Even the most ardent capitalists understand the need for demand to support the economic system.

If work opportunities are no longer available, how do we make sure that most human beings have the income necessary to participate in the economy? Conversely, how can we ensure that the suppliers of goods and services still have capable customers to sell to?

The question now isn’t whether we agree with an automated future, but how to design policies to avoid economic collapse.

Why Some Form of Universal Basic Income (UBI) Is Inevitable

Before we talk about policy prescriptions, let’s review the issue we’re trying to navigate.

For most Americans today, work equals income. No work equals no income. If there are decreasing amounts of work available due to automation, we must find another method of distributing income.

Without another method to distribute income, there won’t be any demand for goods and services, meaning there won’t be much of an economy at all. So like it or not, we will no longer be able to link work with the amount of income someone receives.

Many who believe in the religiosity of work—that work is fundamental to life—have trouble envisioning a world without work, even if that world is already becoming a reality. If robots are replacing human labor, why can’t we make up other tasks for humans to complete? Even if those tasks accomplish little, at least we can preserve the link between work and pay, ensuring that recipients “deserve” their income.

Writing in The Long + Short, Emran Mian argues that we should “redistribute work, not wealth.” He explains further:

I don’t say that because I have some cruel fixation on making people work for a living; instead it’s because making one group of people dependent on the kindness of others denies them freedom. The way to improve the position of those needing a basic income is to redistribute work, even if that might reduce economic efficiency, rather than hand out money.

This is an honorable goal: to make sure that human beings can retain their “freedom” in a post-work society. But there are a few problems with this argument.

First, the redistribution of work would still require a vast governmental agency to determine the frequency, timing, and magnitude of each individual’s workload. Thus, maintaining the relationship between work and income likely requires a nanny state the likes America has never seen before. Providing people with superfluous tasks or assigning them a work quota doesn’t seem to be a harbinger of freedom.

Second, it conflates work with meaning. Plenty of pilot studies show that receiving a basic level of income provides sizable benefits to society. Referencing a pilot study in India, The Guardian noted that “having a basic income led to more work and labor, raised productivity and output, and reduced inequality. In particular, there was a growth in secondary, self- employed work.” Having basic access to an economy’s goods and services doesn’t reduce well-being—it increases it.

Third, and perhaps most importantly, is an issue concerning “making one group of people dependent on the kindness of others.” This argument makes some sense when unemployment rates are low. But how does it compare when over half of all global citizens are permanently out of work (as McKinsey & Company predicts)? If more than three billion people are without access to work—and thus can never again generate income—is universal basic income still a perk for moochers? What about when 90 percent of the world is without work? What about when you permanently lose access to work and income?

The argument over universal basic income should not hinge upon whether we enjoy the concept itself, but whether it is the best possible policy prescription to combat mass unemployment. Preserving the link between work and pay may seem honorable, but it will only result in a massive nanny state doling out meaningless work or the starvation of billions of people as they lose all forms of income.

There may yet be better options out there for society, and if you’re privy to one, please let us know in the comments below. But for now, universal income is the strongest proposal to ensure that the global economy is protected and human beings as a whole (including you and me) maintain their standards of living. That’s probably why Elon Musk sees it as our only path forward:

“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk told CNBC. “Yeah, I am not sure what else one would do. I think that is what would happen.”


Learn More

  1. Basic Income: A Radical Proposal for a Free Society and a Sane Economy — Harvard University Press
  2. Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream — Andy Stern
  3. What Would Happen If We Just Gave People Money? — FiveThirtyEight

  4. Sighing for Paradise to Come — The Economist
  5. Three Reasons for Universal Basic Income — The Brookings Institution

  6. Why India Is Ready for a Universal Basic Income — Foreign Affairs