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Elon Musk has suggested Universal Basic Income (UBI) is 'the' solution to automation:

The agitation that comes along with automation, and possibly the most nerve wracking aspect of it, is the loss of jobs. In an economy where people rely on a paycheck for goods or services rendered, taking away the opportunity to do the service means taking away the paycheck.

Fortunately, working for money is not an inherent part of nature. It is a construct, created by people, that can be changed by people. Elon Musk has touched on what many others have also pondered and some have enacted: Basic Income.

"People will have time to do other things and more complex things, more interesting things," said Musk. "[They will] certainly have more leisure time." (source)

He also explains how it would move us towards UBI in this video.


What are the cons of UBI being a solution to automation?

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  • I voted to close as opinion based, but actually, the main problem with the question is it's too broad. "is it a solution" depends 100% on your initial set of assumptions, mainly the level of technology available (and consequently, the cost of producing goods). It's a valid solution in Star Trek post-scarcity economy with cheap abundant fuel and replicators. It's not a valid solution in New York City in 2017 (where minimal rent is several hundred dollars/month) – user4012 Jun 7 '17 at 14:06
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    Various comments deleted. Please don't try to answer the question with comments. If you would like to answer, write a real answer which adheres to our quality standards. – Philipp Jun 7 '17 at 14:37
  • Perhaps you could better define "valid solution" or what constitutes evidence. Poll data suggesting a sizable faction in some country is not opposed to it? A country with a history of using it? A detailed projection by a government agency? – user9389 Jun 7 '17 at 15:26
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    @Philipp On many sites, long strings of comments are moved to chat, so there's still a record. Any chance you could undelete and move to chat just so it's all still there? – barrycarter Jun 7 '17 at 15:37
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What are the cons of UBI being a solution to automation?

  1. Automation is not, in and of itself, a problem. It does not need to be "solved" as such. Some of the side effects of automation can be considered problems and may be solved by a Universal basic income (UBI).

  2. UBI addresses loss of income from employment losses. But it doesn't resolve other issues, like loss of self esteem or depression from not having a vocation. That's not to say that they are insoluble problems. It's just that UBI doesn't solve them.

  3. UBI is expensive. We would need an awful lot of automation to afford it. In particular, we need to automate the production and maintenance of robots. It would be more accurate to say that automation is the solution to funding a UBI.

  4. UBI is resource intensive. It's not yet proven that we can support our desired lifestyle. Labor is a chokepoint, but it is not the only one. What about energy? Land?

  5. UBI would need to be global. Otherwise unemployed people would move from non-UBI areas to UBI areas whenever they ran out of support. Global UBI would require global taxation and a global government. Many countries don't seem ready for that. E.g. the United Kingdom and Switzerland can't even agree to be part of a European union much less a global one.

We remain nowhere close to automation causing job losses to the point that jobs simply can't be replaced at all. We haven't automated such critical services as law enforcement, fire fighting, nor emergency medical. Nor have we automated production of food, housing, clean water, heat, and electricity.

In order to provide a UBI, we need to automate necessities so that we can provide them to everyone. Until we do that, a UBI won't work, as people switching away from work will cause production to drop. When production drops, prices increase. Then the UBI is too low.

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    The things you note as being non-automated are pretty much all skilled labor. Especially emergency medical. Such skills are non-trivial to acquire, needing time and money and natural gifts. The usual "problem" that UBI proponents suppose is that automation reduces available unskilled labor jobs specifically, which has long been a major source of employment for the young and lower classes. Which are the demographics most devastated financially and emotionally by lapses in income. And with no money they can't invest in and pursue becoming skilled labor. – zibadawa timmy Jun 8 '17 at 0:57
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    +1 for the first paragraph. Automation has been going on since the industrial revolution. – henning Jun 8 '17 at 5:26
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    With regards to point five, isn't that what borders are for? – PointlessSpike Jun 8 '17 at 12:50
  • Well, Switzerland already had all the problems solved, they could introduce UBI, they've just chose otherwise. – Agent_L Jun 8 '17 at 14:19
  • @zibadawatimmy what is your source for claiming young are the demographic devastated most? I would consider old to be the demographic devastated most, as with age ability to acquire skills lowers and health problems increase = more expenses and way less ability to sustain income in case of unemployment – Gnudiff Mar 22 at 11:08
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UBI is not a solution to the 'problems of automation', because those problems don't exist outside of people with narrow vision and ignorance of history.

Automation has been around for a long time, dating back to the first human who figured out that cultivating crops could produce more food than their family could consume, giving them a surplus they could sell. They had to invent money to deal with the problems of selling the surplus in a barter economy... what a problem to have.

And people have been saying that automation will put everyone out of work for a long time. Ned Ludd wasn't the first to think that, he's just the one who was derisively immortalized for saying it.

Henry Ford came up with an automated method of putting cars together, where previously, cars had hand assembled one at a time. Required a lot less people, with a lot less training, to build a car, and that resulted in a car that was 1/5 the cost of the average car in 1910. Did that put people out of work? No, the cheaper automobile with it's fast on demand transportation, actually made a lot of new jobs possible. Gas stations to fuel the cars, steel to construct the cars, service centers to fix the cars, and jobs doing things that weren't economically feasable without cheap fast transportation, like traveling salesperson, delivery person, etc...

Continuing with the auto theme, the affordable all electric car will be reality within the next decade, possibly the next five years, eventually threatening to put oil production, refineries, gas stations and auto service centers out of business and costing jobs. New jobs will appear... making the things that people will be buying with all the money they save by not having to buy gasoline, and sending all that money to Arab oil barons or Russian oligarchs.

e-commerce threatens to put brick and mortar shops out of business. It creates delivery jobs, website developer jobs, and inventory management jobs, too.

I could go on like this all day. Humanity has been going on like this for centuries.

So, to restate the answer the question - UBI is not a solution to automation, because no solution has ever been needed to automation in the past, and will never be needed. For every job eliminated, a new one doing something that wasn't possible or economically feasable in the past, is created.

I'm surprised that someone with the vision of Musk can't see that.

  • I am unclear how cultivating crops is an example of automation? Are using automation as a synonym for efficiency? – PV22 Jun 8 '17 at 18:53
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    Compared to gathering seeds as they grow in the wild, which is what the early humans did, cultivating crops is automating the process of getting food. Far more efficient than just going out and hunting at random. When one human had an excess, they could trade the excess to another human who was doing something other than gathering food, like building plows, or taming cattle to pull the plows, or making pots to store the grain, for even more efficient production of food. That is how humans began to advance beyond spending all of their time trying to find food. – tj1000 Jun 8 '17 at 19:27
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It's a question of allocation. Based on the thoughts and research of Milton Friedman, it would undoubtedly be better than giving people goods or services which they may or may not want in the quantity offered. That is, if I gave you $5,000 instead of $5,000 worth of housing, would you spend all the $5,000 on housing? You might, but it would be rare that housing meets the optimal.

The main downside, aside from a lack of available research and data, is there is no guarantee that this would result in a better or worse outcome than a market system with no social welfare programs. Obviously, many people would opt to have what they consider to be better social equity through transfer payments. If you have that view, Musk's suggestions is probably the best possible economic outcome and social outcome combination.

There are several factors we can't know until a system of this nature is implemented though:

  1. At what level will a large enough percent of people decide to stop working that we fall behind the current system?
  2. What kind of safety net will be supported based on people who throw away the cash payments? Can the government actually keep its hands tied behind its back after someone spends all their income recklessly?
  3. Are there other negative social effects to people not having to work for a basic income?
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The answer is in the second paragraph that you set as the example.

Fortunately, working for money is not an inherent part of nature. It is a construct, created by people, that can be changed by people

This is misleading because the focus is "money". But people do not work for money, people work to live as in food, shelter, and comfort. Money was constructed by people it is true, but only as a proxy for the work. When look at it the way, working is very natural. In fact, there is a squirrel outside my window hiding acorns, a hawk hunting chipmunks as well as a bird making a nest. There is nothing more natural than working for what you need

Automation is another word for maximizing production, so that a single minder of an automated process can produce the same as more people without automation. And, as anyone who has sat through macro-economics class will know that production equals wealth

So now we have this wealth from automation that prehaps we can just take from the automation-minder person and give to everyone else so they can have UBI...Happiness. Except that some of those getting UBI will be intriguing and will get the UBI of more people and once again, the wealth will go to the clever

There are so many other red-flags, like where will the UBI for the stupid or the mentally slow go to? At what standard of living will we set the UBI to. Will those who are extremely wealthy, like Musk, lower their standard of living. If we are not all equal then that means that the UBI will be worth zero which is the same thing those who do not work get now.

Finally, the truth is in the Musk and others like him do not walk the walk. Why have they not implemented UBI at their companies? The Janitor should have the same reward as the engineers so that the Janitor can persue his dream of "dancing with the stars"? And another thing, if automation is becoming such a universal problem, why isn't the Janitor automated?

  • I would like to note that the premise of your answer is based on a quote in the article not my own words. – Bradley Wilson Jun 8 '17 at 1:38
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    I'm not sure how your last paragraph relates. You may be confusing UBI with communism. – IllusiveBrian Jun 8 '17 at 3:35
  • Actually, those who do not work now (under certain conditions) can get welfare payments under the right circumstances. So your statement that the UBI will be worth zero if we're not all equal has no backing at all. Additionally, there's a limit on standard of living, whereas there's no limit on wealth. There's a bigger difference in standard of living between $10,000 a year and $30,000 a year than there is between $110,000 and $130,000. – PointlessSpike Jun 8 '17 at 13:00
  • Yes, I agree under the current system that is true. Under UBI, getting $30,000 will be the same as getting $10,000 because that person's production has not changed, therefore, his buying power will not change. It is the same trap that occurs with minimum wage and communism, if the squirrel gathers 10 acorns is does not matter that you give him 3 points and acorn or 1, it is still 10 acorns – Frank Cedeno Jun 8 '17 at 14:49
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One argument that I don't think has been made is that this is an unnecessary solution given that automation will potentially create such abundance that, given the "invisible hand" effects of capitalism, will result in the steady pushing down of the costs of many goods. The argument could be made that, by eliminating significant labor costs and increasing productivity, the supply side of economics would be increased. To balance that surplus, demand incentives would come into effect, which would drive prices down.

With a UBI, more people will be able to instantaneously achieve a higher standard of living, but the cost would still remain. Instead, the focus should be on making the standard of living affordable, which automation will do over time.

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The largest single problem with UBI being a solution to automation is that it could, very well, be a self-fulfilling prophecy. There's a widespread belief by technologists that automation will replace most jobs, but there's a long history of that having been feared but not coming to pass

In 1589, Queen Elizabeth I refused to grant a patent to William Lee for his invention of the stocking frame knitting machine, which sped up the production of wool hosiery. "Thou aimest high, Master Lee," she declared. "Consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin by depriving them of employment, thus making them beggars." In the early 19th century, English textile workers calling themselves Luddites famously sought to protect their livelihoods by smashing industrial weaving machines.

The economist John Maynard Keynes warned in 1930 that the "means of economising the use of labour [is] outrunning the pace at which we can find new uses for labour," resulting in the "new disease" of "technological unemployment." In 1961, Time warned: "Today's new industries have comparatively few jobs for the unskilled or semiskilled, just the class of workers whose jobs are being eliminated by automation." A 1989 study by the International Metalworkers Federation forecasted that within 30 years, as little as 2 percent of the world's current labor force "will be needed to produce all the goods necessary for total demand." That prediction has just two years left to come true.

What could be equally as likely is that UBI lets us create a permanent underclass of people that we literally never have to employ because of UBI. While that could produce a positive effect of having politicians no longer stumping on "Jobs! Jobs! Jobs!", it could also lead to a chronic unemployment, which may be detrimental to the recipients themselves.

Almost one in four (38 percent) lost self-respect, and 24 percent sought professional help for depression, compared with 29 percent and 10 percent of the short-term unemployed.

While the UBI solves part of the "social safety net" problem by removing strings other programs have, it wouldn't remove the desire to work for some (perhaps many) people. It's not clear at all (on a large scale) what that would do to society. I could easily see people resting on their laurels in job creation and incentives to do so, assured that the unemployed still have their UBI.

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With regards to the US, the credible evidence suggest the exact opposite. For example, the only difference between UBI and minimum wage is that you don't need a job. The most evil thing that was ever created was the minimum wage. The real minimum wage is $0.00. When people are guaranteed a specific wage(from a job or UBI), the cost of living will adjust to meet that wage, thus effectively canceling any sort of perceived benefit.

Most times it is even detrimental. Several examples.

https://www.forbes.com/sites/timworstall/2016/02/19/seattles-15-minimum-wage-jobs-down-unemployment-up-this-isnt-working-is-it/#16cd6d092b5c

http://www.businessinsider.com/minimum-wage-leads-to-job-losses-2017-3

All efforts in the past to attempt to set the bar for wage income(traditionally hikes to the minimum wage, now UBI), generally has caused a loss of jobs/opportunity.

Automation is not bad. As society builds forward momentum into the future, its citizens must as well. STEM fields are the future. The expected minimum education that a citizen must acquire is more important than the expected minimum wage they must earn.

As automation moves further along, the more menial jobs will slowly fade out of existence, and the STEM field will dominate. It is a natural progression.

  • UBI is not minimum wage. – user9389 Jun 7 '17 at 19:24
  • The only difference between minimum wage and UBI is that you don't have to have a job. – Lanet Rino Jun 7 '17 at 19:28
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    Which is still a meaningful distinction in the context of automation-proofing without bothering to dispute the factualness of the relation. – user9389 Jun 7 '17 at 19:37
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    @LanetRino - it eliminates jobs, net. If it was merely a trade-off of any kind, there really would be no point for businesses to create higher-level, higher cost jobs to replace manual ones. – PoloHoleSet Jun 8 '17 at 13:25
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    1) It may be a reasonable political goal to drive out certain jobs: Child labor, very dangerous and unhealthy work, prostitution, you name it. 2) Whether or not wage setting above the "pure market price" just leads to wage push inflation depends on various factors, inter alia the level of the wage floor, the openness and institutions of the political economy, and the gains in labor productivity. Your model is too simplistic. – henning Jun 8 '17 at 14:34

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