July 7 JDN 2458672
There is a billboard on I-405 near where I live, put up by some financial advisor company, with that slogan on it: “Robots can’t take your job if you’re already retired.”
First, let me say this: Don’t hire a financial advisor firm; you really don’t need one. 90% of actively-managed funds perform worse than simple index funds. Buy all the stocks and let them sit. You won’t be able to retire sooner because you paid someone else to do the same thing you could have done yourself.
Yet, there is some wisdom in this statement: The best answer to technological unemployment is to make it so people don’t need to be employed. As an individual, all you could really do there is try to save up and retire early. But as a society, there is a lot more we could do.
The goal should essentially to make everyone retired, or if not everyone, then whatever portion of the population has been displaced by automation. A pension for everyone sounds a lot like a basic income.
People are strangely averse to redistribution of wealth as such (perhaps because they don’t know, or don’t want to think about, how much of our existing wealth was gained by force?), so we may not want to call our basic income a basic income.
Instead, we will call it capital income. People seem astonishingly comfortable with Jeff Bezos making more income in a minute than his median employee makes in a year, as long as it’s capital income instead of “welfare” or “redistribution of wealth”.
The basic income will instead be called something like the Perpetual Dividend of the United States, the dividends each US citizen receives for being a shareholder in the United States of America. I know this kind of terminology works, because the Permanent Fund Dividend in Alaska is a successful and enormously popular basic income. Even conservatives in Alaska dare not suggest eliminating the PFD.
And in fact it could literally be capital income: While public ownership of factories generally does not go well (see: the entire history of socialism and communism), the most sensible way to raise revenue for this program would be to tax income gained by owners of robotic factories, which, even if on the books as salary or stock options or whatever, is at its core capital income. If we wanted to make that connection even more transparent, we could tax in the form of non-voting shares in corporations, so that instead of paying a conventional corporate tax, corporations simply had to pay a portion of their profits directly to the public fund.
I’m not quite sure why people are so much more uncomfortable with redistribution of wealth than they are with the staggering levels of wealth inequality that make it so obviously necessary. Maybe it’s the feeling of “robbing Peter to pay Paul”, or “running out of other people’s money”? But obviously a basic income won’t just be free money from nowhere. We would be collecting it in taxes, the same way we fund all other government spending. Even printing money would mean paying in the form of inflation (and we definitely should not print enough money to cover a whole basic income!)
I think it may simply be that people aren’t cognizant enough of the magnitude of wealth inequality. I’m hoping that my posts on the extremes of wealth and poverty might help a bit with that. The richest people on Earth make about $10 billion per year—that’s $10,000,000,000—simply for owning things. The poorest people on Earth struggle to survive on less than $500 per year—often working constantly throughout their waking hours. Even if we believe that billionaires work harder (obviously false) or contribute more to society (certainly debatable) than other people, do we really believe that some people deserve to make 20 million times as much as others? It’s one thing to think that being a successful entrepreneur should make you rich. It’s another to believe that it should make you so rich you could buy a house for every homeless person in America.
Automation is already making this inequality worse, and there is reason to think it will continue to do so. In our current system, when the owner of a corporation automates production, he then gets to claim all the output from the robots, where previously he had to pay wages to the workers—and that’s why he does the automation, because it makes him more profit. Even if overall productivity increases, the fruits of that new production always get concentrated at the top. Unless we can find a way to change that system, we’re going to need to redistribute some of that wealth.
But if we have to call it something else, so be it. Let’s all be shareholders in America.
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[…] we had a robust social safety net—a basic income, perhaps?—this would be fine. But our culture decided somewhere along the way that people only deserve to […]