Universal Basic Income: A “Social Vaccine” for Technological Displacement?

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John Kenneth Galbraith once said that the beginnings of wisdom were to never trust an economist. Those of us that spent most of our adult lives in deindustrialized communities understood his point.

As the mills and factories closed in working-class communities like Youngstown, an array of business and academic economists suggested that economic devastation was part of the natural economic order known as “creative destruction.” Disinvestment, technological displacement, downsizing, and outsourcing were all necessary for corporate efficiency and dynamism, regardless of the “temporary” harm to individuals and communities. Capital, they explained, was simply being shifted from old to new investments, and new jobs would magically appear. Of course, workers would have to move or gain new skills in order to claim those jobs. Unfortunately, those predictions were wildly overstated. Capital was not reinvested in productive ways or moved offshore, many workers never found comparable employment, communities deteriorated. Over time, appeals to “creative destruction” were recognized not only as erroneous, but as a cover for capital getaway.

We should remember this story as we enter a fourth industrial revolution that will merge technologies and blur the lines between digital and biological spheres. In the process, these digital transformations will spread unemployment and increase precarity. As in the past, the digital revolution has been sold as part of modernity and progress, but increasingly technological change is proving more destructive than positive. The New York Times reports that some top researchers have already acknowledged that automation and robotics in manufacturing have resulted in a large net of loss of employment, declining wages, and disruption of working-class communities. The Times concludes that given unemployment levels, “there is no clear path forward, — especially for blue-collar men without college degrees.”

But it is not just working-class men in industrial jobs who are suffering. Automation also affects jobs in other economic sectors. In fact, 38% of all US jobs are at risk due to automation, including service sector work in fields such as finance, transportation, education, and food services. Nor is technological displacement limited to the working class. Middle-class workers also stand to lose jobs and wages.

Many corporate executives embrace this change, viewing automation solely in terms of profitability and suitability and ignoring the human costs. As Andrew F. Puzder, chief executive of CKE Restaurants and Donald Trump’s original choice for Secretary of Labor, summed up this attitude in explaining why he would prefer robots over human workers: “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case.” To paraphrase, Harry Braverman, technology is not neutral. Rather, it enters the workplace as “the representative of management masquerading in the trappings of science.”

Technology leaders understand that their work contributes to displacement and inequality. In “The Disruptors: Silicon Valley Elites’ Vision of the Future,” Greg Ferenstein reports on a survey of tech leaders. He found that most agreed with Paul Graham, the highly influential web leader, that it is the “job of tech to create inequality…You can’t prevent great variations in wealth without preventing people from getting rich, and you can’t do that without preventing them from starting startups.” This view reflects the self-interests of the industry, of course, but it also suggests deep-seated beliefs in technological determinism and the benefits of creative destruction.

At the same time, working people have become increasingly resistant to the uncritical acceptance of workplace technology, and this contributes to the populist backlash we’re seeing in the U.S. and across Europe. The Brexit vote, the rise of right wing parties in Europe, and Trump’s election all reflects people’s doubts about older economic paradigms and technological determinism, especially in older working-class communities. Alongside racism and xenophobia, these movements also reflect the anxieties of those who are being left behind by economic development.

Technological and political elites have good reason to worry about the potential for class rebellion, and some have started to rethink their faith in technology or, at least, to ask about how to mitigate the outcomes of technological change. For example, a group of science and technology leaders have established Singularity University (SU), which touts itself as a global community whose mission is “to educate, inspire, and empower leaders to apply exponential technologies to address humanity’s grand challenges.” It holds ‘summits” around the world, underwritten by large international firms, such as Deloitte, that bring together researchers, entrepreneurs, institutions, and governments – most of whom believe deeply in the power of robotics, nanotechnology, artificial intelligence, and powerful computing to transform work and improve lives. Yet SU’s approach is remarkable because it emphasizes the impact of technology on people’s lives. While SU takes a positivist and entrepreneurial approach, arguing that the world’s biggest problems are world’s biggest business opportunities, it clearly understands that any technological advance must take into account its impact on communities.

Silicon Valley firms also see themselves as potential leaders in developing strategies for a future where many workers will be displaced by technology. Some envision a more direct approach: the universal basic income, which Scott Santens describes as a social “vaccine” for the 21st century. Y-Combinator, a Silicon Valley incubator firm, has begun experimenting with this idea by providing a basic fixed income to 100 families in Oakland, California. Give Directly, a Silicon Valley non-profit, is testing the idea as a way of eliminating poverty by giving each individual in a small village in Kenya $22 a month for 12 years. The New York Times describes the project “as first true test of a universal basic income. Not just given to individuals but to a whole community for an extended period.” Of course, these approaches are not considered socialism; they are defined as providing an “income floor.”

The potential of these experiments has not been not lost on developed nations, where some see a universal basic income as strategy for ameliorating the impact of automation. The European Parliament, Korea, France, Canada, Finland, Netherlands, and Scotland are all considering a basic income as a strategy for managing a future without work. In the US, growing economic inequality, the rise of contingent work, and the defeat of the Republicans’ alternative to Obamacare had the unexpected consequence of restarting the discussions of expanding the social safety net. For example, the National Academy of Social Insurance is discussing the expansion of Social Security and Medicare and extending unemployment insurance, workers’ compensation, and unemployment and disability insurance as tools to balance the volatility of jobs and income as long-term, full-time, traditional jobs become ever more scarce due to corporate restructuring and technological change. Importantly, these initiatives are gaining public and political support, especially single payer health care.

The economic displacement of the era of deindustrialization caused great harm to working-class people and their communities. Decades later, as technological displacement threatens not only the working class but many in the middle class as well, business and political leaders alike recognize that it is in their interest to pay attention to the consequences of economic change. Private and legislative initiatives around the universal basic income may not succeed, and some are meeting clear resistance. The European Parliament rejected a report urging them to “seriously consider” basic income as a response to “the economic consequences of automation and artificial intelligence.” Nonetheless, as political unrest grows as a result of technological change such discussions lay the foundation for the new social policies we will need for a future without good jobs.

John Russo is a visiting fellow at Kalmanovitz Initiative for Labor and Working Poor at Georgetown University and at the Metropolitan Institute at Virginia Tech. He is the co-author with Sherry Linkon of Steeltown U.S.A.: Work and Memory in Youngstown (8th printing).

Photo: elycefeliz, CC License


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What exactly are "humanity's grand challenges" today? For the entirety of human history until the mid-20th century (or thereabouts), it was the increase in material production for basic human consumption: ensuring that there was enough food, clothing and energy to sustain a non-miserable existence for the peoples of the world. But in the 1940s or 50s it was observed that production had already reached that point and that the continued presence of famine and squalor in parts of the world was due entirely to the manner in which the material production was distributed. Distribution is a matter both of politics and technology, and improvements in both since then have further reduced the incidence of want. Today we fret about reducing the caloric intake of poor people. We hardly even use the word "poor" anymore, preferring "marginalized," "disenfranchised" and "vulnerable" instead.

Most people in history only ever worked in the production and distribution of material for consumption. Those functions have been in process of replacement by machines (and other technology) for 200 years (more, actually). The idea that the world's billions are now going to (have to) become "knowledge workers" is ludicrous. Humanity's grand challenge today is boredom (ennui, for the intellectuals among us). There is less and less for people to do of necessity. Curing disease, prolonging lifespans, developing transgender dating apps--this is work for a very few. The increase in opioid addition in the Rust Belt, to take just one case, is driven not by material privation and the consequent despair, but by boredom. Even those of us without the drive and mental horsepower of Einstein, Jobs and Brin desire a life with purpose. Spending each day simply consuming does not satisfy; neither does spending each day working to reduce one's consumption or alter the patterns of one's consumption. Necessity is the mother of invention. Remove the necessity and fewer people are motivated to be inventive. Technically trained IT workers from India will come to the US and work for a lower wage and consider it a vast improvement in their lot, but that will not last much longer.

A guaranteed basic income was proposed, or at least seriously entertained, not only by the usual Left sources but by Hayek and Friedman as well. It is simply no longer required to employ human beings in the production and distribution of material goods in sufficient numbers. But in most Western nations haven't we already, in effect, a guaranteed basic income, via combinations of welfare benefits and direct cash payments? What is the difference between giving a full "basic" cash income to unemployed ex-workers so they can send their children to college or pay their medical bills, and direct payment from the state of college tuition and medical bills?

A universal basic income has only the appearance of progress, of a solution to what appear to be pressing problems. It can't alter, to speak like a Marxist, the prevailing material conditions of production, which are the root of those problems.