When it comes to the topic of UBI, or Freedom dividends as Andrew Yang wants to call it, I find there is a very interesting aspect that seems to be ignored. What I’m referring to is the long-term impact that UBI could end up playing on society. Let’s take off our libertarian hats for a moment and instead try to tackle this just looking at the potential impact it could have. So we’re not going to dive into how welfare programs, in general, require taxation or how we feel about taxation, and we’re not going to get into the Keynesian arguments and why some of those are wrong. Instead of what I want to look at is how certain aspects of the UBI argument will play out.
First and foremost, one of the more common arguments in support of UBI is the fears of automation. This comes up because people feel that with certain jobs continuously being replaced by more and more advanced robotics that many jobs are just going to completely disappear. Historically, however, this is not been the case. What usually happens with automation or immigration or jobs going overseas or any of the standard things that we hear that say that jobs are disappearing, in reality, leads to more jobs instead. Let’s take a look at the old fashioned lamplighters.
These people used to go around and would light the candles that made up the street lights. The argument could be made that with the founding of oil lamps the candle makers lost their jobs and then with the coming of electricity the lamplighters lost their jobs because the lights became automatic. Instead, this blew up to a completely new type of industry which resulted in tons of jobs being created for the type of bulbs, the electrical work, designing the different systems to automatically deploy them, and so on. So, in reality, we know that automation, in general, creates more jobs than it eliminates. Now, these jobs are generally more specified and require a higher level of skill than the jobs that preceded it that were automated out, but we’ll get back to that in a moment.
A common argument against UBI is that it will lead to people no longer desiring work. Effectively, the idea here is that with our basic survival needs met we won’t pursue labor any further as it will be unnecessary. Why work if everything is covered after all? Personally, I disagree with this notion, and our websites are a perfect example. We get tons of guest submissions each and every week, and every one of them has been cited and clearly crafted to be worthy of submission. We don’t pay guest writers. Right there is a perfect example of people being willing to work for free. The key bit, and this is something that UBI proponents will note, is that people will pursue their own desires and passions.
Instead of slaving away over a grill at the local McDonald’s you can let Flippy the Burger-Flipping Robot take care of that and use the UBI to put your energies towards your passions which, in turn, leads to even better levels of productivity. The mechanics of funding a UBI aside, I could see the reason for supporting this kind of labor model in society, but we do need to look at the funding aspect a little first.
Using say Yang’s $1000/month we can see that it’ll be a nice supplement to people’s regular income, but that fails to solve anything when we see the Value Added Taxes (VATs) and other methods of accruing the taxes to pay for it that those costs will be moved over to the general public through these hikes. When we also account for this supposedly countering unemployment in the future that just means fewer people paying taxes so the burden becomes more concentrated and the notion of money trading hands becomes artificial at best. This also doesn’t deliver on the promise of freeing people from unpreferable labor since that $1000 wouldn’t be enough to cover costs on its own.
The $1000 Yangbucks© form of UBI is really catchy as a marketing slogan, though it poses its own economic problems considering that tradition welfare isn’t going away in its place. When we think of the purpose of a UBI for covering the costs of living, we need to take our thought experiment outward to a full realization of UBI.
Let’s assume we’ve reached a point where the bulk of unlikable jobs are covered via automation or have been outsourced, and we have high enough of a base UBI to cover the needs of everyone (rent, food). What happens there? Well to start, people won’t be able to simply jump into high-end positions or become masters of their crafts overnight. More time to pursue it might mean that they’ll end up honing those skills, but it doesn’t mean that they’ll be near the top of the chain, especially with others having the same kind of time for it.
What I see happening is that unless newer fields emerge that are of interest to people (since this scenario has enough base costs covered to not really need to work), and assuming this somehow doesn’t turn into some form of Star Trek socialism, I believe that we’ll move from a service economy into more of an entertainment economy.
Using Think Liberty as an example again, I think that if we reach that kind of point where menial labor is dealt with and unavailable as a way to earn income, that’ll leave people who are looking for funds for luxuries not covered by the UBI, or just something fruitful for their day out and away from yet another Netflix marathon to create their own paths.
The only path that people can kinda just jump into is marketing and content production. We’ve all see people trying to sell Tupperware or essential oil packages or the like, and the bulk of people aren’t buying it. What people do consume is media, and tastes for media are entirely based on the individual enjoying it. Sure, we have quality expectations in a general sense, but the internet has proven that pretty much anyone can make some kind of content that others will enjoy.
With the advent of a media and entertainment economy, we’ll run into a key issue that UBI could have in this hypothetical of ours: time. Time will become the only real resource we truly need to worry about if a total life cost system were to take place, and let’s make no mistakes that that’s the end of the road for UBI. Between general societal advancement covering more base jobs and what would likely be a progressive system, we’ll reach a point where all but luxuries are dealt with going down this road (assuming the entire system doesn’t completely collapse and result in mass inflation as most opponents suggest).
What I’ll call the “action economy” is going to be the true future of any society that’s gotten past the survival barrier. Even in our own economy, we see this happening productivity focuses increasing, and most of our technology is geared towards speed and easy of completing tasks rather than, say, higher and higher quality at the expense of precious time.
Now keep in mind that this all assumes that it actually works without any of the foreseen negatives that tons of economic models showcase as being a downfall for the system. I personally don’t believe that UBI could work, but I think it’s implications, even and especially if somehow reached voluntarily, are worth exploring.
This eventual future of an action based economy I do think is inevitable. Technological advances are going to make some baseline issues regarding survival no longer an issue, like how HVAC technology increased our survival in the winter. I also think when certain things such as food become cheaper and easier to manufacture we’ll reach a point where worrying about that will also become obsolete. The result will be similar to the future I painted, with or without a form of UBI.
The key takeaway here is that our future is changing. Just as the agricultural economy gave way for the manufacturing one, and that fell before our service economy, we will witness another economic death in our lifetimes. The question is only whether or not we’ll see it coming, and if so, will we be ready?