December 13, 2018

Old Dog, Old Trick, New Showtime

Blockchain consultant and futurist Michael Spencer called it a conspiracy by the 0.01 percenters to enslave the rest of us for good.[1] A growing number of those 0.01 percenters have already supported it, but they’re not alone: this poll conducted shortly after the 2016 election showed that half of Americans supported it as well. A parade of think tanks (here’s one) and other professional skeptics (more than I can cite with hyperlinks in a single sentence) have given it a thorough vetting and mostly concluded yeah well maybe it’s worth a try.

What is “it”? This idea: give the poor what they lack — money. Ensure everyone a livable income while getting rid of the expensive and draconian welfare system. And just to be fair, go ahead and give everyone else money, too, even the billionaires.

The idea mostly goes by the name “universal basic income” (UBI). It’s rooted in the futuristic fear that technology will eventually put humans out of work. That’s not an old fear: UBI is “far from a new idea,” says Martin Ford, another Silicon Valley entrepreneur and a popular TED talker, in his New York Times Bestselling Rise of the Robots: Technology and the Threat of a Jobless Future.

In the context of the contemporary American political landscape . . . a guaranteed income is likely to be disparaged as “socialism” and a massive expansion of the welfare state. The idea’s historical origins, however, suggest something quite different. While a basic income has been embraced by economists and intellectuals on both sides of the political spectrum, the idea has been advocated especially forcefully by conservatives and libertarians.

Friedrich Hayek, who has become an iconic figure among today’s conservatives, was a strong proponent of the idea. In his three-volume work. Law, Legislation and Liberty, published between 1973 and 1979, Hayek suggested that a guaranteed income would be a legitimate government policy designed to provide against adversity, and that the need for this type of safety net is the direct result of the transition to a more open and mobile society where many individuals can no longer rely on traditional support systems:

There is, however, yet another class of common risks with regard to which the need for government action has until recently not been generally admitted. . . . The problem here is chiefly the fate of those who for various reasons cannot make their living in the market . . . that is, all people suffering from adverse conditions which may affect anyone and against which most individuals cannot alone make adequate protection but in which a society that has reached a certain level of wealth can afford to provide for all.

LBJ foresaw the possibility of massive technological unemployment back in the 60s and appointed an “Ad Hoc Committee on the Triple Revolution” to study the topic. The Committee included co-Nobel Prize winners Friedrich Hayek and Swedish economist and sociologist Gunnar Myrdal.[2] Rise of the Robots describes the Committee’s findings:

“Cybernation” (or automation) would soon result in an economy where “potentially unlimited output can be achieved by systems of machines which will require little cooperation from human beings.” The result would be massive unemployment, soaring inequality, and, ultimately, falling demand for goods and services as consumers increasingly lacked the purchasing power necessary to continue driving economic growth.

The Ad Hoc Committee went on to propose a radical solution: the eventual implementation of a guaranteed minimum income made possible by the “economy of abundance” such widespread automation would create, and which would “take the place of the patchwork of welfare measures” that were then in place to address poverty.

The Triple Revolution report was released to the media and sent to President Johnson, the secretary of labor, and congressional leaders in March 1964. An accompanying cover letter warned ominously that if something akin to the report’s proposed solutions was not implemented, “the nation will be thrown into unprecedented economic and social disorder.” A front-page story with extensive quotations from the report appeared in the next day’s New York Times, and numerous other newspapers and magazines ran stories and editorials (most of which were critical), in some cases even printing the entire text of the report.

The Triple Revolution marked what was perhaps the crest of a wave of worry about the impact of automation that had arisen following World War II. The specter of mass joblessness as machines displaced workers had incited fear many times in the past — going all the way back to Britain’s Luddite uprising in 1812 — but in the 1950s the 60s, the concern was especially acute and was articulated by some of the United States’ most prominent and intellectually capable individuals.

Four months after the Johnson administration received the Triple Revolution report, the president signed a bill creating the National Commission on Technology, Automation, and Economic Progress. In his remarks at the bills signing ceremony, Johnson said that “automation can be the ally of our prosperity if we will just look ahead, if we will understand what is to come, and if we will set our course wisely after proper planning for the future.” The newly formed Commission then . . . quickly faded into obscurity.

A few years later, Richard Nixon introduced UBI legislation that he called “The most significant piece of social legislation in our nation’s history.” That legislation also faded into obscurity — more on that another time.

Thus, UBI is an old idea responding to an old fear: how do we make a living if we can’t work for it? A half century after LBJ and Nixon, that fear is all too real, and lots of people think it might be time for the historical UBI solution to make its appearance.

But not everyone is jumping on the UBI bandwagon. The very thought that jobs might not be the source of our sustenance is the rallying cry of UBI’s most strident opponents.

More on UBI next time.

[1] Spencer followed with a similarly scathing assessment in this article.

[2] Myrdal’s study of race relations was influential in Brown v. Board of Education. He was also an architect of the Swedish social democratic welfare state. Hayek and Myrdal were jointly awarded the Nobel Prize in Economics in 1974.

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