Overcoming Capitalism's Greatest Shortcoming

I was so excited to wake up today to my friend Leon Neyfakh’s well-researched summary of the concept of Universal Basic Income (UBI):http://www.bostonglobe.com/ideas/2014/02/09/should-government-pay-you-alive/aaLVJsUAc5pKh0iYTFrXpI/story.html

This idea, of delivering to every citizen (in a nation or, ultimately, in the World) an unconditioned cash transfer, has a long lineage of supporters spanning the ideological spectrum, from Martin Luther King, Jr. to Milton Friedman. I first encountered the concept when I read Phillippe Van Parijs’s work in a philosophy course during my sophomore year of college, and it struck me for its reasonableness and simplicity. If our goal is to provide every citizen with as much “real freedom” as possible, Van Parijs argued, then we must untether income from labor and give everyone a minimum income capable of supporting a healthy and safe life irrespective of their work choices or capabilities.

Put differently, UBI answers what I believe to be contemporary capitalism’s most glaring shortcoming: that the economy does not value its participants merely for being alive!

We have agreed as a society that money should be a precondition to meeting life’s basic necessities and higher possibilities: medical care, education, food, exercise, freedom to decide upon the uses of one’s time, freedom to express oneself, and so forth. And we have agreed further that labor (or luck, in the case of inheritance) should be preconditions to money. But I believe that this view is a vestige of times when scarcity circumscribed the possibilities of social life far more than it does today in the United States.

While we, of course, have limited natural and human resources available to us, productivity and the supply of economic inputs have expanded beyond imagination over the past 100 years as results of technology and empire. All throughout the economy, invention has allowed us to make more stuff with the same or fewer inputs. Automation and computation have allowed us to replace human drudgery with painless processing.

Productivity growth is, in this sense, the engine of economic progress for a society. It opens up choices for us beyond the incumbent constraints of the present order. It is, in essence, a “gift certificate” that we can collectively redeem for something cool like more free time or better art.

Over the past 100 years, I think we have largely squandered our “productivity gift certificates” on an ever-enlarged standard of living. We’ve bought bigger houses, bigger cars, bigger meals, and unspeakable amounts of useless stuff, most of which offers vanishing incremental happiness or satisfaction of needs. We’ve all been keeping up with the Joneses, but with little to show for it. And the economy can seemingly keep up with all of us, forever, producing unimaginable new forms of junk for us to desire. Interested in watches? Bottled water? Cars? Wine? Cigars? Night clubs? There are magazines for all of them, experts to refine your taste, consultants to customize and execute your purchases, web forums to sell your old things, or storage lockers to horde them. And to be clear, I’m not saying that we haven’t made some smart investments in medicine and other life-enlarging areas, but only that we’ve frittered away a huge amount on relatively low-return upgrades.

Consider what we might have done with our productivity gift certificates instead. We could have reduced everyone’s working hours. We could have made deep ongoing investments in public goods like culture (art education, community centers, etc). We could have accelerated the elimination of poverty in other places around the World.

Like many others in the technology industries, I suspect that massive productivity gains await us in the near future as automation, robotics, and computation advance. But the complement to this productivity will likely be that we need less human labor to do exactly what we do today. And I am ecstatic about that possibility, but only if we meet it with intelligent public policies.

Universal Basic Income is one answer to this transition. As non-human capital (machines, software, robots, etc) becomes more productive than the human alternatives, one idea is to take the incremental profit and use it to finance a UBI. In other words, we should all share in the value delivered by accelerating technological change, not just those who own capital. Invention should be viewed more as a public good, in other words, and all of us ought to share in its dividends.

Those put out of work by technology and those unaffected by it would commonly benefit from a monthly or annual cash benefit that could be applied to life’s various expenses. If you hated your job and wanted to cut back on the hours, your UBI would give you the freedom to do so. If you wanted to devote half of your time to learning to paint, UBI would give you the freedom to do so. If you were elderly and no longer could work, UBI would relieve the financial pressure to which the economy otherwise subjects you merely for being old.

One other powerful argument for UBI is that it finally recognizes the value of disproportionately female home-work or child-raising. These historically gendered forms of labor have always been unrecognized by the society’s economy, despite being obviously essential. In this way, UBI increases the “bargaining power” of those choosing to work outside of the formal economy, and by default enhances gender equality.

I should end by saying that I don’t think UBI is the only answer to poverty, unfreedom, or the bloated and inefficient welfare state that currently attempts to remedy them. But following the proposals of Roberto Unger, I believe we need to defeat the paralysis of no alternatives that currently condemns us to apathy. We need silicon-valley-style energy and experimentation in our economy and government. And I think UBI is an exciting and potentially unifying concept that is worth some sustained experimentation.

It would be great to know if we could eliminate poverty and increase fairness, happiness, health, and general awesomeness in a city, a state, a country, or the whole World through a policy like UBI. Now that the idea is accumulating global interest and supporters, we should push for concrete trials and policies. If practically achievable, UBI could finally remedy capitalism’s greatest shortcoming and match each individual’s moral dignity with the means to manifest it!