As we reflect on Labor Day, and the role of people in the production and consumption of goods, I look back again at socialism, universal income, and the coming robot apocalypse.
In 2015, I approached a socialistic proposal in Universal Income (November 2016). The idea is that the government would provide a payment each month to everyone. No strings, no quid pro quo, just receive a monthly check from the government. That post includes some rudimentary calculations of what such a proposal could mean to the U.S. budget. A fundamental question left unanswered then was where the funding would come from. Playing on an old Doritos ad that suggested you "crunch all you want, we'll make more," I have periodically suggested a new motto for our federal government budget "Spend all you want, we'll print more."
In 2015, I approached a socialistic proposal in Universal Income (November 2016). The idea is that the government would provide a payment each month to everyone. No strings, no quid pro quo, just receive a monthly check from the government. That post includes some rudimentary calculations of what such a proposal could mean to the U.S. budget. A fundamental question left unanswered then was where the funding would come from. Playing on an old Doritos ad that suggested you "crunch all you want, we'll make more," I have periodically suggested a new motto for our federal government budget "Spend all you want, we'll print more."
This universal income was back in the news recently, as The Independent reported that 40% of British People currently support the idea. A British politician announced their intention to pursue a program of establishing universal income. The proposal is to begin with "locally led" program trials, focused on stemming "rising economic insecurity." The article explains that generally, this would replace "welfare" and "means-tested benefits," with a simple "unconditional flat-rate payment to all citizens." Note that focus on "all."
In July, CBS News questioned Will it Work? It notes the coming robotic apocalypse, with a focus on service jobs. The feature of the article is a robotic barista in San Francisco. There is effusive praise for the effectiveness and efficiency of the robot barista. CBS says it is "not a bad-looking future," and then equivocates "unless you are a human barista" (is everything in life about whose ox is being gored?) It then notes one estimate that 30% of current employment is susceptible to replacement by technology.
While the barista issue is news to me, I have seen a robotic bartender firsthand. I have watched people gather to watch as patrons use touch screens to specify their order. They are frankly mesmerized as the robotic arm swings into motion follows its programming, and produces some complex concoction. During the time I watched, no one ordered anything mundane like scotch on the rocks or a shot of tequila. The public's interest was obvious, from the slew of observers that abstained from ordering and yet stopped to watch and take selfies.
CBS interviewed a former labor secretary, under President Clinton. He contends that the idea of universal income is fraught with "mysteries and potential flaws." However, despite the challenges, he contends that "it's inevitable" that we will have to "seriously consider" universal income. Thus, he does not seem to contend it must be adopted, but that it must be discussed. There is a concession by CBS that the concept is not novel, noting that this "Utopian" ideal dates to the 16th century, and has been discussed more recently by leaders such as Richard Nixon and Martin Luther King.
Universal Income, "a guaranteed minimum income for all people and for all families of our country," according to King (again note that "all"). But a professor at the University of California Berkeley notes that "it's not free." She contends that to finance "basic income for truly poor people," there would have to be a "significant amount of additional revenue." Note that without fanfare or explanation, the discussion swings from "universal," something "for all people," and refocuses upon the "truly poor." Not for "all people," but a program for the "truly poor" would require significant revenue. Despite her view of cost for this limited focus, the Berkeley economist does not address what the cost would be for "all."
It is important to remember that the government has no money, earns no money, and produces no money. Government is a consumer of money, taking it forcefully from those who do produce it (you). The government can only give away with one hand what it confiscates with the other. Government can borrow money, print money, and take money. However, it does not historically make money (earn income by producing). There must be income to facilitate re-distribution. And, that is the real "challenge" and "flaw" that has yet to be explained adequately and perhaps has not even been sufficiently questioned or discussed.
If everyone is provided with some level of support, with "everyone," or "all," being the definition of "universal," who would produce anything, in order to generate taxation to fund the largesse? For simplicity, a family might elect such a program. In a home where there is one income, from a "breadwinner," imagine that the bills (mortgage, utilities, food) must be paid, just as our nation must have defense, infrastructure, etc.). The family might be in a paradigm where each has chores or tasks, and in exchange, each receives income from what remains after those mandatory bills.
With the advent of "free" labor from robots, the family members decide that there will be a "universal" income. That is, the "remains" of income will be distributed to all "family members" equally. Thus, the advent of robotics will not inure to anyone's detriment. This all seems perfectly logical perhaps, until the "breadwinner" decides that she/he too would rather have universal income than work and bring home the bread. When the breadwinner quits producing income for the family, from whence does the support (mortgage, utilities, defense or infrastructure) come? And, more to this specific point, from where does the remainder for funding universal income for all family members come?
Of course, that does not per se mean that universal income is not viable. That one breadwinner might be able to quit producing and elect instead to consume. But that could remain viable because this hypothetical family is but one among many. So long as there remains some other population of producers, from which taxes can still be extracted, then distribution to and within that one household or family might still continue. The question is what happens when those receiving distributions outnumber the producers?
Finland recently ended an experiment in universal income. According to on opinion piece in the Orlando Sentinel, the Finland experience is relevant while discussions in that direction continue here. Notably, it references that some very rich Americans have "expressed support" for the concept. Then it explains Finland attempted to provide "2,000 unemployed people with $685 a month whether they found work or not." And, that program has now ended.
Why did the Finland foray into universal income cease? The Sentinel piece describes that
In July, CBS News questioned Will it Work? It notes the coming robotic apocalypse, with a focus on service jobs. The feature of the article is a robotic barista in San Francisco. There is effusive praise for the effectiveness and efficiency of the robot barista. CBS says it is "not a bad-looking future," and then equivocates "unless you are a human barista" (is everything in life about whose ox is being gored?) It then notes one estimate that 30% of current employment is susceptible to replacement by technology.
While the barista issue is news to me, I have seen a robotic bartender firsthand. I have watched people gather to watch as patrons use touch screens to specify their order. They are frankly mesmerized as the robotic arm swings into motion follows its programming, and produces some complex concoction. During the time I watched, no one ordered anything mundane like scotch on the rocks or a shot of tequila. The public's interest was obvious, from the slew of observers that abstained from ordering and yet stopped to watch and take selfies.
CBS interviewed a former labor secretary, under President Clinton. He contends that the idea of universal income is fraught with "mysteries and potential flaws." However, despite the challenges, he contends that "it's inevitable" that we will have to "seriously consider" universal income. Thus, he does not seem to contend it must be adopted, but that it must be discussed. There is a concession by CBS that the concept is not novel, noting that this "Utopian" ideal dates to the 16th century, and has been discussed more recently by leaders such as Richard Nixon and Martin Luther King.
Universal Income, "a guaranteed minimum income for all people and for all families of our country," according to King (again note that "all"). But a professor at the University of California Berkeley notes that "it's not free." She contends that to finance "basic income for truly poor people," there would have to be a "significant amount of additional revenue." Note that without fanfare or explanation, the discussion swings from "universal," something "for all people," and refocuses upon the "truly poor." Not for "all people," but a program for the "truly poor" would require significant revenue. Despite her view of cost for this limited focus, the Berkeley economist does not address what the cost would be for "all."
It is important to remember that the government has no money, earns no money, and produces no money. Government is a consumer of money, taking it forcefully from those who do produce it (you). The government can only give away with one hand what it confiscates with the other. Government can borrow money, print money, and take money. However, it does not historically make money (earn income by producing). There must be income to facilitate re-distribution. And, that is the real "challenge" and "flaw" that has yet to be explained adequately and perhaps has not even been sufficiently questioned or discussed.
If everyone is provided with some level of support, with "everyone," or "all," being the definition of "universal," who would produce anything, in order to generate taxation to fund the largesse? For simplicity, a family might elect such a program. In a home where there is one income, from a "breadwinner," imagine that the bills (mortgage, utilities, food) must be paid, just as our nation must have defense, infrastructure, etc.). The family might be in a paradigm where each has chores or tasks, and in exchange, each receives income from what remains after those mandatory bills.
With the advent of "free" labor from robots, the family members decide that there will be a "universal" income. That is, the "remains" of income will be distributed to all "family members" equally. Thus, the advent of robotics will not inure to anyone's detriment. This all seems perfectly logical perhaps, until the "breadwinner" decides that she/he too would rather have universal income than work and bring home the bread. When the breadwinner quits producing income for the family, from whence does the support (mortgage, utilities, defense or infrastructure) come? And, more to this specific point, from where does the remainder for funding universal income for all family members come?
Of course, that does not per se mean that universal income is not viable. That one breadwinner might be able to quit producing and elect instead to consume. But that could remain viable because this hypothetical family is but one among many. So long as there remains some other population of producers, from which taxes can still be extracted, then distribution to and within that one household or family might still continue. The question is what happens when those receiving distributions outnumber the producers?
Finland recently ended an experiment in universal income. According to on opinion piece in the Orlando Sentinel, the Finland experience is relevant while discussions in that direction continue here. Notably, it references that some very rich Americans have "expressed support" for the concept. Then it explains Finland attempted to provide "2,000 unemployed people with $685 a month whether they found work or not." And, that program has now ended.
Why did the Finland foray into universal income cease? The Sentinel piece describes that
"Proponents said the program wasn’t comprehensive enough to gauge its merits. Critics say it would have required a 30 percent tax increase on an already over-taxed population to be viable."
That is troublesome from both perspectives. One perspective laments that not enough money was distributed or not enough people were beneficiaries. The conclusion apparently being that universal income cannot be evaluated based upon the obvious mathematical failure of the micro-experiment (the one family example above). The other perspective laments that the cost of the program is too high. Its conclusion apparently being that it is greedy or inappropriate to resist contributing another 30% of ones income in support of our fellow man. Neither perspective is seemingly satisfied with the outcome.
Considering this concept, I am reminded for some reason of Marie Antoinette. Supposedly, upon being told that her subjects were starving and lacked bread, she replied "Let them eat cake." This response is often used to illustrate the frustration of the proletariat, a disconnect of perspectives, and tone-deafness in leadership. There is debate as to whether she said the "cake" line, with some contending it was brioche (perhaps a distinction without a difference). Whether she said it or not, things did not work out too well for Marie in the end. And, societal change followed her reign in France.
The subject of universal income continues to garner attention, discussion, and even proposals. Wired recently published an opinion piece referring to the "paradox" of universal income (UBI). This author claims that conservatives and liberals alike are among the proponents and the critics. He contends that each perspective expresses different perceived benefits and detriments. The article contends that income distribution is a significant American problem, despite decades of wealth redistribution in both "direct cash payments or some sort of negative income tax." It is apparently taken for granted that income redistribution is positive.
As an aside, the mention of a "negative income tax" is intriguing. One exists in America, called the "earned income tax credit." Voltaire, who lived when Antoinette did, is quoted as saying that "the Holy Roman Empire is neither Holy, nor Roman, nor an Empire." There have been those who have been equally and similarly as critical of the phrase "earned income tax credit."
Whether distributing funds as welfare, workfare, or a tax "rebate" of taxes never collected, America has a significant history of wealth re-distribution through taxation and spending. Despite that significant history, Wired contends that income disparity remains a significant economic effect today.
It is perhaps that history of income distribution that people rely upon in discussing how income can be redistributed with seemingly much less discussion of whether income should be redistributed. The population of Americans who remember a time before Lyndon Johnson's Great Society (1965) is diminishing. The population that knew America before Franklin Roosevelt's Work Progress Administration (1939) is even thinner. An adult worker (18 or older) in 1939 was born in 1921 or before and is 97 years old or older today. Most Americans have coexisted their entire lives with some form of socialism.
The Wired author admits he has "avoided actually having a firm opinion about UBI for years." As the debate continues, he has concluded that now is the "time to get my head around it." It seems historically inevitable that socialism will remain a subject of discussion in modern America, and as inevitable that the robots are coming. The likelihood remains that universal income or other wealth redistribution will remain part of those debates. And so, it seems the Wired author's decision to get his "head around it" may represent sound advice. Perhaps it is time that we all decided to get our "heads around it" as the debate continues?
Considering this concept, I am reminded for some reason of Marie Antoinette. Supposedly, upon being told that her subjects were starving and lacked bread, she replied "Let them eat cake." This response is often used to illustrate the frustration of the proletariat, a disconnect of perspectives, and tone-deafness in leadership. There is debate as to whether she said the "cake" line, with some contending it was brioche (perhaps a distinction without a difference). Whether she said it or not, things did not work out too well for Marie in the end. And, societal change followed her reign in France.
The subject of universal income continues to garner attention, discussion, and even proposals. Wired recently published an opinion piece referring to the "paradox" of universal income (UBI). This author claims that conservatives and liberals alike are among the proponents and the critics. He contends that each perspective expresses different perceived benefits and detriments. The article contends that income distribution is a significant American problem, despite decades of wealth redistribution in both "direct cash payments or some sort of negative income tax." It is apparently taken for granted that income redistribution is positive.
As an aside, the mention of a "negative income tax" is intriguing. One exists in America, called the "earned income tax credit." Voltaire, who lived when Antoinette did, is quoted as saying that "the Holy Roman Empire is neither Holy, nor Roman, nor an Empire." There have been those who have been equally and similarly as critical of the phrase "earned income tax credit."
Whether distributing funds as welfare, workfare, or a tax "rebate" of taxes never collected, America has a significant history of wealth re-distribution through taxation and spending. Despite that significant history, Wired contends that income disparity remains a significant economic effect today.
It is perhaps that history of income distribution that people rely upon in discussing how income can be redistributed with seemingly much less discussion of whether income should be redistributed. The population of Americans who remember a time before Lyndon Johnson's Great Society (1965) is diminishing. The population that knew America before Franklin Roosevelt's Work Progress Administration (1939) is even thinner. An adult worker (18 or older) in 1939 was born in 1921 or before and is 97 years old or older today. Most Americans have coexisted their entire lives with some form of socialism.
The Wired author admits he has "avoided actually having a firm opinion about UBI for years." As the debate continues, he has concluded that now is the "time to get my head around it." It seems historically inevitable that socialism will remain a subject of discussion in modern America, and as inevitable that the robots are coming. The likelihood remains that universal income or other wealth redistribution will remain part of those debates. And so, it seems the Wired author's decision to get his "head around it" may represent sound advice. Perhaps it is time that we all decided to get our "heads around it" as the debate continues?
