Elon Musk’s Long-Standing Support of Basic Income (& Thus Support of Andrew Yang)
Credit to Author: Michael Barnard| Date: Sat, 24 Aug 2019 06:50:32 +0000
Published on August 24th, 2019 | by Michael Barnard
August 24th, 2019 by Michael Barnard
Elon Musk recently threw his support behind 2020 Democratic Party presidential candidate Andrew Yang. At one level, this seems unsurprising, as Yang is a technology entrepreneur and hence someone Musk would have more affinity with than other political candidates. However, the support appears to be strongly related to Universal Basic Income (UBI), Yang’s signature platform policy, branded as the Freedom Dividend.
In a recent twitter thread related to Yang, Musk was asked about UBI.
Obviously needed
— Elon Musk (@elonmusk) August 10, 2019
Long before Musk’s endorsement of Yang and re-endorsement of UBI, Yang had pointed out that Musk was one of UBI’s supporters in a tweet from May 2019.
Supporting Universal Basic Income and championing the #FreedomDividend puts you in very good company throughout history. šš pic.twitter.com/6X258qy7zF
— Andrew Yang (@AndrewYang) May 30, 2019
In late 2016, Zach Shahan asked me to dig into the subject of UBI for CleanTechnica’s readership. It took a few months until I was ready to report, but in February 2017, we published the lengthy piece: Basic Income ā Musk Likes It, Who Else?
As the subject has achieved new relevance in the public eye, it’s time to reprint the article from 2.5 years ago ago, as it’s still fresh and accurate. Minor updates will be noted. Without further preamble…
Recently, Elon Musk was interviewed byĀ CNBCĀ and made an assertion that ran shivers up a few spines:
āThere is a pretty good chance we end up with a universal basic income, or something like that, due to automation.ā
The premise is simple at one level. Automation isĀ replacing human labour and not all humans are suited to or are needed in the remaining smaller number of jobs.Ā Studies suggest that from almost half to two-thirds of jobs globally are likely toĀ be replaced by automation over the next three decades. What will those people do? How will they buy food and shelter? How will they adapt to the changes?
There is a strong set of historical precedents that new jobs will emerge and that people will end up in them. In the US Colonial Era, 90% of working people were in the agricultural industry, and now about 2% are. Prior to the Industrial Revolution, people were working piecework with manual looms and then they were working in factories. Buggy whip manufacturing workforces were supplanted by automotive workforce jobs. The worldās GDP has grown enormously andĀ US labour participation is historically high,Ā although declining in recent years dominantly due to retiring baby boomers.
The top-of-mindĀ concern at present is for drivers. Two to three million people in the USA make a living or part of one as professional drivers. Autonomous vehicles are at theĀ bleedingĀ edge of labour displacement. Muskās statements are definitely in the context of beingĀ a leader via Tesla in autonomous cars, with the most advanced commercial offering today and a forecast ofĀ fully autonomous vehicles by end of 2017.
Autonomous vehiclesĀ is an example of a more interesting type of job replacement than weāve seen historically. Looking at the list of jobs expected to be displaced, they are mostly jobs which could be explained to people a hundred years ago or two hundred years ago. Before there were truck drivers, there were horse and mule cart drivers. But now those types of jobs will be disappearing.
Looking through theĀ Oxford and Deloitte list of occupations at riskĀ due to artificial intelligence is humbling. Their list ofĀ several hundred jobs has around 200 (including ties) which are at aĀ 50% or greater chance of disappearing in the next two decades. The jobs at the top of the list in the graphic embedded on the right are perhaps unsurprising, but what about the following?
Drivers donāt even show up on the list untilĀ under 80% likelihood.
For universal basic income advocates (also known as unconditional basic income and basic income guarantee), the answer is simple. Their preferred policy mechanism of a basic income is a panacea for social ills of all sorts, and now with automation, itās even more of a panacea.
This is actually a harder question to answer than it should perhaps be, and the reason why will be more fully explained in the next section around competing motives for providing one. That said, it has some or all of the following characteristics:
One of the key pieces of evidence that itās all a bit ideological in nature is that a great deal of commentary related to basic income is in the form of insisting that some particular test of it isnāt really basic income, but a bastardized, corrupted, or incorrect implementation of it.
Itās worth assessing who has been supportive of a basic income for years or decades and what they value out of it, and evenĀ what they mean when they say it. When I started looking into this in earnest a couple of months ago, I rapidly found that two sets of ideologies were strongly supportive of basic incomes in one form or another: Libertarians and Socialists. Those are capitalized intentionally, because this is not the domain of people with leanings, but full-on ideologues. The resultingĀ alliancesĀ are uneasy and Iāll expand on the Finnish example a bit later to show why.
As a pragmatic centrist living outside of the USA, my tendencies are the left of the US centre of course, so keep that in mind. Also keep in mind that someĀ Libertarians reject the thought that they are right wingers and think that they are magically centrist pragmatists, just as many Socialist commentators from other countries exist in milieus where their perspectives are seen as obvious and basic.
What Libertarians and Socialists think of when they talk about basic income can be shown by a series of somewhat opposing statements.
Letās look briefly at each of these in turn, but before we do, Iād like you to hold in mind the proviso that these are tendencies and generalities of the two groups, not perfect statements. The other thing to hold in mind is that there are Libertarian ideologues strongly against basic income, just as there are Socialists against it. It is not universally supported by anyone, and Iāll close with a perspective by renowned French economist Thomas Piketty, whose work Capital in the 21st CenturyĀ was required reading in 2014.
Socialist commentaries on basic incomeās part to play in the rapidity of change tends to be from the perspective of conservingĀ human dignity and the basics of life in the face of rapid shifts of capital to new ventures. On the other side, Libertarians look at basic income as an intelligent securityĀ mechanism to support people as they take entrepreneurial chances in emerging markets and technologies, insufficient to fund those new ventures but making sure that they wonāt starve as they do it.
These are both admirable impulses but do represent the more paternalisticĀ perspective of Socialism vs the individualist and entrepreneurial perspective of Libertarians. And to be clear, they represent reasonable perspectives on what a group of people would actually do in the event of disruptive change. Some will naturally be entrepreneurially attracted to the change, some will resist it far past the point where itās reasonable and be left behind, and the rest will be at various points along the continuum.
This is a matter of degree, not an eitherāor position. Some Libertarian proposals Iāve reviewed clearly want to do away with every social program that isnāt basic income, effectively eliminating innumerable federal, state and municipal government jobs with a single transfer from the federal level. (This is similar to Libertarian support for a carbon price which comes with the proviso of removal of all or most regulation.) More sensible ones focus solely on fiscal transfer programs such as unemployment and food stamps. Most Socialist responses are much more sympathetic and aware of the diversity of need of the disadvantaged, and typically have a much smaller shopping list of existing services that they would displace.
In general, Socialist approaches to basic income focus on the unconditional basic income or basic income guarantee variants, in which people in need or transition receive the money from the state for a guaranteed period or for life. The intent is a redistribution of wealth from the rich to the poor, not causing potentially inflationary pressure by giving the already well off more money. Libertarians tend to favour universal basic income in which everyone gets it and itās partially clawed back from the rich in taxes (which they want to cut to the bone regardless).
Thereās a two-speed perspective to this. Both Socialists and Libertarians haveĀ advocates of a scarcity perspective and have advocates for a world-of-plenty perspective. Socialists strongly believe that itās possible for individuals to have too much and that itās wrong for individuals to have too little. Libertarians strongly believe that everyone should get whatever they can.
This leads to a variance in proposed implementations between the ideologies and a strong tendency to sweep complexity of implementation under the rug on both sides.
This is a fairly obvious split in the position. Libertarians want to make government much, much smaller and achieve fewer of the goals that government takes upon itself. Socialists want governments to be more pervasive. As the design of basic income programs and policies progress, this dichotomy is one of the hardest to overcome as itās one of the most pronounced splits.
Pooling of resources among basic income earners gets a fair amount of play on both sides. In the case of Socialists, the ideal of the commune gets a fair amount of air time, while in Libertarian circles, alternative lifestyleĀ communities including survivalists tend to be the flavour. However, in general, Socialists spend more time talking about family units, extended family units, and group living, while Libertarians talk a lot more about the freedom of the individual. This plays into questions of how big the basic income needs to be, of course.
While Libertarians frequently espouse a reduction in the military and an isolationist policy, in practice they are much more interested in cutting social programs than they are in cutting military budgets. Socialist commentators are interested in expanding social budgets by including basic income among the tools for wealth redistribution and cutting military budgets. This is especially clear in foreign observers of the USA who see the outrageously large military budgets in that country.
This is a fascinating cultural variant between Socialist and Libertarian schools of thought regarding basic income.Ā Much of this is country-based, with Sweden, Norway, Finland, and France theorists promoting quality of life and leisure vs countries which were once under Calvinist influence such as Germany and the USA. OneĀ Socialist criticismĀ of the current Finnish experiment thought another Socialist had gone too far, and offered his more moderate perspective:
āThe result is a predictable beast built upon the sorrowful soil of a Protestant work ethic that fetishises work incentives and bemoans the metaphysical sinfulness of laziness.ā
As moderate statements go, this still reads as a fairly extreme perspective.
In reality, of course, some people love work, some people love leisure, and the Nordic perspective is better expressed as work hard and efficiently during working hours so that you can apply yourself diligently to leisure as rapidly as possible. But the perspective of the diligent Calvinist emerges much more among Libertarians than among Socialists.
This one is purely ideological in nature, of course. Socialism is founded upon ensuring that the worker is well rewarded for their labour and protected from capital flight. This is done under basic income by taking money from the rich and corporations and giving it to the working class and poor. Libertarians, however, view labour mobility as a basic premise and see basic income as a means of enabling labour to retrain and move itself to where the work is.
This frequently leads to the two groups talking past one another as they try to find compromises that will enable their shared interest in seeing a basic income come to fruition.
This overlaps with the leisure vs work ethicĀ cultural divide, but is separate I think.
āIt is important to remember Albert Camusā rejection of the phrase āwork ethicā on the grounds that ethics are about choices, and for most people, work is not a choice. It is a necessity.ā
One of the criticisms from Socialists about proposed or actual implementations of basic income is that they would force people into bad or unfulfilling jobs instead of enabling them to self-actualize. And on the other side of the equation, a feature of Libertarian discussions is that nothing has value unless there is a market willing to pay for it, and so there is no inherent value in most poetry and art for example.
This is a serious split between adherents of the ideology that leads to potentially ugly compromises.
Both ideologies have perspectives on basic income which are fundamentally utopian, and both deny it. The Socialists believe that this will make humans fundamentally better people and the Libertarians assertĀ it will eliminate inner city crime. Neither is true, of course.
Itās a tool in the toolkit that will address some of the challenges in means-tested social support which inhibits some people from getting jobs. It reduces poverty among people at least capable of getting bank accounts and so reduces the impetus to crime somewhat. It wouldĀ enable a subset of people to explore new ideas and allow some people to sit at home and play video games and drink cheap beer.
Humanity is far too diverse for anything to have a common outcome.
Right now, Finland is conducting one of the larger experiments with basic income, but it hasĀ very interesting roots and variances which start to explain why they are doing what they are doing and with whom.
To start with, Finland isnāt picking a random subset of their population, they are picking 2,000 unemployed people who live in the now moribund technical centre which used to be anchored by Nokia. The specific hope is to unlock technical innovation and entrepreneurship among people currently inhibited by potential loss of other state benefits. This puts the initiative more on the Libertarian side of the scale, which is reasonable given the governing coalition in Finland right now, reasonably well expressed in this Socialist commentary,Ā The UBI Bait and Switch:
āCentre won the 2015 election, securing 21 percent of the vote. Closely behind Centre were the conservative National Coalition Party (NCP) and the ethno-nationalist Finns Party, both of whom won about 18 percent. Shortly after the election, Centre ā which has entered both left-leaning and right-leaning coalition governments in the past ā announced that it had formed a bourgeois government, with SipilƤ as prime minister and NCP and the Finns as junior partners.ā
The article complains that the initiative was aboutĀ increasing employment not giving workers the ability to not workĀ or about reducing inequality and poverty. And yet thatās what the centre-right (by European standards) party ran on and the citizens voted for.
Update: The two-year Finnish experiment has come to an end. The results were, at best, mixed and leave much to be desired in separating out what works and doesn’t. A differently structured basic income experiment in Ontario, Canada was cancelled after a year when the center-left government was displaced by a populist conservative government.
To bring this back to Musk, a lot of people in Silicon Valley are Libertarians by default or by specific intent and focus. Thereās a myth of the Silicon Valley inventor toiling in his garage, but thereās the reality that a lack of security significantly inhibits technical innovation and entrepreneurialism. Thereās a running joke that being a tech entrepreneur is a millionairesā hobby.
MuskĀ is influenced by people he speaks to there, and while heās very interested and deep in automation (and solar and rockets), heās got a lot more received casual knowledge on other topics. Heās more aware of this than most billionaires of course, but heās also comparing himself to and influenced byĀ Peter Thiel, who is a very hardĀ Libertarian ideologue.
The most reasonable perspective on basic income comes from one of the worldās leading economists on the challenges of inequality.Ā PikettyĀ holds a handful of prestigious academic positions in France and the UK and was author of theĀ most read economics book of 2014.
Heās been making waves in the world of basic income recently with a shortĀ series of blog posts. He rightly points out that basic income is insufficient by itself. It canāt be funded without very significant new forms of revenue, and his solution includesĀ increased taxation on the rich at the levels that used to existĀ in the USA prior to Reagan.
Heās clearly positioned on the Socialist end of the scale of discussion, but heās got a broader perspective than most basic income proponents:
āIf we wish to live in a fair and just society we have to formulate more ambitious objectives which cover the distribution of income and wealth in its entirety and, consequently, the distribution of access to power and opportunities. Our ambition must be that of a society based on a fair return to labour, in other words, a fair wage and not simply a basic income.ā
He points out that educational opportunity inequality needs to be addressed, that trade unions need to be supported and strengthened, and that intergenerational wealth transfers need to be taxed at a high level. In other words, he recognizes that basic income is a tool in a toolkit, whether you agree with the other tools in hisĀ kit or not.
It might be. Society is transforming more rapidly than ever before, leaving less time for individuals, families, and communities to adapt. The change means that business needs different skills than it did a few short years ago, and needs people with those skills. In general, work is getting more complex, not simpler, and we need to prepare as a global society and as countries for that rapidity of change and increase in complexity.
But there will be no purity in any basic income implementation. The relatively opposing perspective of primary theorists will ensure that every attempt outside of theĀ most narrowĀ will be laden with multiple and often contradictory value propositions. The attempts will have to deal with the innumerable variances in local implementations of safety nets of various types. The attempts will have to deal with existing systems offered at the federal, sub-federal, and municipal levels. This sort of complexity will take a long time to work through and will result in different implementations everywhere.
There areĀ nine experiments or potentially emerging experimentsĀ in basic income going on globally right now.Ā It will be very interesting to see how different groups claim success or failure for them.
Additional reading:
Michael Barnard is Chief Strategist with TFIE Strategy Inc. He works with startups, existing businesses and investors to identify opportunities for significant bottom line growth and cost takeout in our rapidly transforming world. He is editor of The Future is Electric, a Medium publication. He regularly publishes analyses of low-carbon technology and policy in sites including Newsweek, Slate, Forbes, Huffington Post, Quartz, CleanTechnica and RenewEconomy, and his work is regularly included in textbooks. Third-party articles on his analyses and interviews have been published in dozens of news sites globally and have reached #1 on Reddit Science. Much of his work originates on Quora.com, where Mike has been a Top Writer annually since 2012. He’s available for consulting engagements, speaking engagements and Board positions.