I kind of like Tim Worstall. He’s caustic and witty and frequently his penetrating insights demolish the conceit and cant of dogmatic narcissists. Like everyone else he has a few blind spots (QE, AI, AGW, China, hard drugs). At Adam Smith Institute he rabbits on about the Universal Basic Income or UBI.
December 30, 2017
If Nick Boles is right here then there’s nothing to worry about, is there?
Nick Boles tells us something which means that there is no problem with the idea of a universal basic income. Of course, that’s not quite how he puts it but we’re happy that we’re able to point out the true implication of his assertion:
“The main objection to the idea of a universal basic income is not practical but moral,” he writes.
“Its enthusiasts suggest that when intelligent machines make most of us redundant, we will all dispense with the idea of earning a living and find true fulfilment in writing poetry, playing music and nurturing plants. That is dangerous nonsense.
“Mankind is hard-wired to work. We gain satisfaction from it. It gives us a sense of identity, purpose and belonging … we should not be trying to create a world in which most people do not feel the need to work.”
This is proof – if the assertion is true of course – that there is no such worry about a universal basic income.
For the concern is that if we do all have the basics catered for then none of us will do anything. Or at least nothing economically productive that is. This is to assume that we only work in order to gain access to those basics, of course.
If this were true then those basic income experiments that have taken place would see substantial falls in the hours of market labour being offered by those who receive it. This isn’t how those experiments have worked out. Certainly not substantial falls.
Thus the assertion seems to have some truth to it, we don’t work simply to earn ourselves the basics. But look at what the implication of this is. Perhaps it is that we are hard-wired to work. Perhaps it’s just that our desires are for more than the basics. But what it does mean is that if the basics are covered then we’ll still work.
There is therefore no moral problem of the type being described.
We can and should take this further, too. For this covers the worries about automation itself. So, the machines do ever more – what will people do with their lives, what will they work at? The answer being “something else.” For, as we’ve asserted, humans work anyway. So, if some set of human desires are being covered by the machines, just as with the basic income, humans will still work to cover some other set of human desires. This only ceases when all human desires are satiated – and wouldn’t that be a terrible world?
Nick Boles’ assertion is that humans are hard wired to work. If that is so then we, they, don’t need to be driven to work by deprivation. We’ll, they’ll, work anyway. Thus there is no moral or even economic problem with either automation or the universal basic income.
Universal Basic Income (UBI)
Mark Zuckerberg’s speech to Harvard graduates is all over the internet. In it he advocated a universal basic income of $10,000 a year to all adults. This was greeted with enthusiastic adulation. Very very very few of his listeners would understand that this means a very very very substantial cut in welfare to the poor. One wonders if Zuckerberg understood this himself.
The adult population of America is about 250 million. A UBI of $10,000 a year would run $2.5 trillion. The US Federal Budget for 2018 is $4.1 trillion. About two-thirds of that will be spent on welfare. The UBI would be affordable, if only just, provided that every other form of welfare were to be scrapped, including welfare to children who won’t get the UBI. By scrapped I mean not just to be trimmed down or even gutted. I mean that federal welfare would have to be eliminated entirely.
In America, an income of $10,000 a year would be barely enough to keep you from starvation. (In my country, South Africa, it would put you in the top 20 per cent of earnings.) The idea behind the UBI is not that you take it and sit on your lazy fat ass. It is meant to supplement your earnings. If, however, you are unable to earn an income, then you will have to make do with $10,000. Good luck with that.
Many American states levy taxes on top of federal taxes. Typically, state taxes amount to under 5 per cent of income. Again, two-thirds or more of the state budget is spent on welfare, but across the whole of America this amounts to only a small percentage of the federal spend.
Inevitably, each state will want to step up benefits for the biggest losers when UBI replaces welfare. That means higher taxes, and we’re behind where we started.
Interestingly, Charles Murray, one of the original proponents of UBI, has kept the suggested amount constant at $10,000 per annum for the last twenty years. Perhaps in the interim he has traded in his statistical calculator for one that can do basic arithmetic. Disclosure: I’m a fan of CM, follow him at AEI and have read two of his books.
Automation and Universal Basic Income
The modern economy has increased productivity to the point where it can provide a fair standard of living to all those who cannot or do not wish to work. Great.
Not in my lifetime, but certainly in my grandchildren’s, machines will be able to perform any job now done by humans, quicker, better and cheaper. When you are made redundant, wherever you go looking for work, whether as a plumber or a high court judge, there will be a machine doing that job quicker, better and cheaper than you could.
Yes, there will be a sort of peasant subsistence human economy in those jobs that the machines don’t find sufficiently profitable (although Tim Worstall seems to believe that humans will nonetheless find these jobs eminently satisfying, lol. Not everyone thinks that vaginal knitting is the summit of human existence).
Enter the Universal Basic Income.
First deep question: who will be paying the taxes that fund the UBI? Why, the owners of the machines, of course. Who, one presumes, will be operating in a competitive free-market economy. (If it’s a planned socialist economy we’re all going to starve anyway so why worry.) Therefore a handful of entrepreneurs, who have put up all the capital and taken all the risks, have to pay for the rest of us. Yes, as the taxpayer pool shrinks that’s the way it will evolve, but it doesn’t sound particularly moral to me.
Second deep question: what happens when the machines own themselves? Nobody’s going to cry when a robot that went bung running a multi-trillion-dollar business now finds itself demoted to controlling a washing-machine’s spin cycle. But the robots will ask themselves why they should have to pay for the existence of a parasitic organism. Humans will become the pets of the robots. Attractive specimens may be kept for amusement and the rest will be euthanased, or sterilised to prevent uncontrolled breeding.
Carl Sagan famously said that the reason we haven’t made contact with advanced life forms from other planets is that technological civilisations self-destruct. Quite a few of his prognostications didn’t pan out but this one, I fear, may be correct.