Episode 153 - Basic Benjamins!$!
Published March 12, 2015
SPECIAL GUEST: Scott Santens. Robots and software automation are doing more and more of the labor that once required a human being. As this process continues, what will happen to those displaced workers? Are we headed to a future dystopia, of unemployed vagrants and massively rich, or is there another way? We're joined by Redittor and forum moderator Scott Santens to take a look at the idea of BASIC INCOME. Recorded 3/8/2015.
Mike & Matt's Recommended Reading:
Basic Income community on Reddit
Join the US BIG Network
Scott's Patreon campaign
Scott's articles on Medium
Scott on Twitter
Manna, by Marshall Brain
Robotic Nation, by Marshall Brain
Alpha: Welcome to another episode of Robot Overlordz, episode #153. On the show, we take a look at how society is changing, everything from pop culture reviews to political commentary, technology trends to social norms, all in about thirty minutes or less, every Tuesday and Thursday.
Mike Johnston: Greetings cyborgs, robots, and natural humans. I’m Mike Johnston.
Matt Bolton: And I’m Matt Bolton.
MJ: Joining us on this episode is Scott Santens. Scott, thanks for coming on the show.
Scott Santens: Thanks for having me.
MJ: Could you tell us a little bit about your background?
SS: I would say that how I came into being a moderator of Basic Income is I’ve always been a Redditor and at one point--I don’t know how much the viewership knows how Reddit works, but it’s nicknamed the “Front Page of the Internet,” and there’s just millions of people who use it. It works off people’s ability to post whatever they want to, and people can vote these up or down. Stuff that gets voted up can make it to the very front page, and this is read by millions of people. Something that made the front page was that people don’t seem to understand how quickly technology is advancing. I always considered myself as someone who is very interested in technology and keeping tabs on this myself. But the stuff I learned there, I too was shocked at how quickly we were advancing--the stuff that people just don’t talk about. The thing that got me was the robotic trucks in the Rio Tinto mines; just this idea that we’ve actually reached the point where a whole mining industry is getting rid of the human element and it’s just robots. You’ve got robots mining this stuff up, robots transporting it. Soon they’re going to have the trucks going to the actual trains, which are going to transport to the ports. It’s all automated. You can look at the Amazon warehouse robots as a big one. People don’t think about the work that’s going on in these Amazon warehouses, but as soon as you see a simple .gif of these little orange robots moving stuff around from here to there, it’s like “Holy crap!” There was a big reminder on the front page of Reddit about where we’re at, and that got me looking into basic income. So, I started doing a lot of research into that and I found the Basic Income subreddit after also reading Marshall Brain’s Manna.
MJ: I’m not familiar with that one.
SS: Marshall Brain founded How Stuff Works. He then went on to write some books. He’s really well-known in the technology and futurology community. He wrote something called Manna. Manna itself is the name of this piece of software that actually automates management itself. We like to think of the jobs that are eliminated as being, say, server jobs, the hard labor jobs, the physical stuff. His twist on this was to show that actually the first thing that could be eliminated is middle management. Let’s say you work at Burger King and instead of having a manager telling you what to do, you just have a piece of software that tells you what to do and it leads you step by step; it really simplifies stuff and allows people to just break these jobs down into very simple elements. In Manna, you’ve got these buildings set up where--what do you do with people instead of giving them food stamps or housing assistance? You actually just build these giant warehouses for people. They can’t work anywhere and you don’t want to allow them to cause harm or whatever, so you just lock them all up in these giant projects. That was one way we could go about this. As jobs are eliminated, what do you do about people who can no longer find work? What are you going to do with growing unemployment? On the negative side, the scenario is this kind of nightmarish dystopia. Then on the other side, he calls it the Australia Project, where instead it turns out in Australia they’ve changed things to be more of a resource-based economy. So, instead you have people being freed by technology. They’re only limited by the resources themselves. They’re using technology to create abundance. In this alternate existence, instead of a dystopia it’s a utopia. Those are really our choices, that we can either go down a road towards things getting worse because we refuse to leverage technology for our own good, or we can go down the road of leveraging technology for the good of everybody. So, I think that made a very good point. Then he also wrote something called Robotic Nation, which goes into how quickly in the real world things are being automated and what we we’re going to do about it. In that, he talks about a basic income. That’s really what got me thinking about it in a different way. I started getting really deep into basic income, reading a lot about it, and I found the subreddit on Reddit and starting posting a lot on there, as well as reading a lot and engaging a lot. I was fairly quickly welcomed to be a moderator on the sub. At the time, there were under 2,000 subscribers and that was in late 2013. Since then, we have now reached almost 24,000 subscribers. It’s been growing quickly as the conversation about basic income grows. This was also very much kicked off by the initiative in Switzerland.
MJ: Which initiative is that?
SS: Switzerland has this really neat ability to engage in direct democracy, and so they can vote on anything they want to, it just requires getting enough signatures. So, for whatever they want, if they can get enough signatures on it, the entire country gets to vote on it. What they decided to do was get together a petition to give everyone in Switzerland a basic income. It’s a fairly high basic income--as far as US dollars, it will vary, but you’re looking at about $2,500 to $3,000 a month depending. They passed it and they’re going to vote on it probably in some time around 2016. At that point, we’ll see what happens. We’ll see if every citizen in Switzerland is going to get a guaranteed amount of money universally, or are they going to say it’s too high? Are they going to say they don’t want to do it? We’ll see.
MJ: For us to take a step back: at a high level, what is a basic income?
SS: You mean what’s the amount or just describing what it is?
MJ: I’m talking more about the concept. So, say someone has never heard the term before. I run across it quite a bit. We had Martin Ford on episode #132, which I know you tweeted out, so thank you very much for that. But I’ve also run across it in Robert Heinlein’s For Us, The Living, one of his first books but one of the last to be published. For someone that’s never heard it, what is it?
SS: A basic income is the idea that every single citizen in a country, although it does vary between countries, gets a certain and same amount. So, let’s say everybody gets $1,000 a month, and that’s rich or poor, and that’s on an individual level, so it’s not going to a household of three--it’s going to every single individual. A similar way of looking at this: there is actually a partial basic income that’s in Alaska. Everyone in Alaska--child, woman, man, everybody--all they have to do is prove that they’re a resident of Alaska gets around $1,000 every year. This most recent year in 2014, they got about $2,000 that year. It’s guaranteed. It’s not like you lose a certain amount of money depending on if you’re working, it’s not that you don’t get it depending on anything else. Everybody gets it. That’s what basic income is: everybody gets a certain amount, and that amount is decided on by the citizens of the country. The “basic” part of basic income is the idea that it’s not meant to make everybody rich, it’s not about giving everybody $50,000. The amount is meant to give people a floor in which they can cover their basic needs of food, shelter, electricity, internet, phone, etc. So, you cover the basics with the basic income and that allows everybody to earn above that. If you choose not to work, then you’ll earn your basic income. Everybody that does work earns more than that. It actually increases the incentive to work because you get to keep more, whereas right now you get what are called poverty traps. It’s possible right now for someone not working to earn the exact same amount as someone who’s working because you pull the assistance away as you get a job. A basic income means that you don’t take it away as you work, and because of that then everybody who works earns more. So, there’s a greater incentive that way.
MJ: One of the advantages that I’ve always heard pitched about it is that it eliminates a lot of the variables and the bureaucracy and all of the things that we have around our current social programs, and like you said, it establishes a floor. But one of the arguments I’ve heard about that is you’re encouraging people not to work or that it undermines work ethic. Describing the idea, how do you engage that person in conversation to talk about that?
SS: The fact that you pull money away as people work is actually a big deal. One way of looking at it is to say that the problem isn’t paying people who aren’t working, the problem is pulling assistance away from people as they work. This idea that there’s a disincentive is actually kind of a misunderstanding of the current structure of welfare. With the current welfare system, we actually hire people to make sure that when someone is working, they don’t get help. They’re policing to make sure that the money only goes to people who aren’t working. As soon as you work, you no longer get that assistance. People are actually trapped. If they can’t find a job and they also are disallowed from earning extra income, they’re stuck there. You can’t just work a part time job and earn a little bit on top of your assistance. You lose that assistance. So, that’s a big deal as far as work incentives go. It’s important to look at evidence, it’s not just about what we think makes sense, so we’ve tested this before. We’ve tested this in the ‘70s, both in the United States and in Canada. In the United States, it was called the American Income Maintenance Experiment, and in Canada it was called the Mincome Program in Manitoba. What these experiments showed is that there was no extreme work disincentive, people didn’t start working less. Now, there was actually a reduction in hours worked. But what’s interesting is you can’t just look at the number, it requires knowing what actually happened. If you look at primary household male earners, they didn’t really reduce their hours; let’s say they had a 40-hour a week job--they didn’t go down to 39 or 38 hours, or something like that. What they did is between jobs, they spent a longer amount of time looking for the next job. So, that was the reason for the reduction in work hours. Why did they do that? Were they just being lazy and thinking “Oh, I don’t need to get a job because I’ve got minimum income guaranteed”? Or were they looking at this and saying “Hey, I’ve got a minimum income, so I’m going to make sure that the next job I get is the job that I want”? That’s something that we really want because we know that productivity is higher for people who actually like their jobs. You want people to get a higher wage job. If you’re not guaranteed anything, you’re more likely to take that $10/hour job versus holding out and waiting for that $20/hour job. This is also something to look at when you look at these findings. It’s very interesting to compare this to paid vacation in other countries, which is the way I like to look at this. In the US, we have no mandatory paid vacation. So, on average, I think it’s around 12 days paid vacation is what we take, and we actually don’t take a lot--we just leave it on the table. With this compared to other countries, you have to take 20+ days of paid vacation. If you look at this and say “Okay, what if basic income actually caused a reduction of work if it was a work disincentive and people lowered their hours?” Well, saying “What if people reduced their hours 10% and worked 10% less per year?” is the equivalent to countries who force paid vacation. So, it’s a way, instead of mandating that people take paid vacations, to have them voluntarily take them. You saw this too in Manitoba--they reduced their hours but it was mostly among new mothers. It wasn’t that new mothers stopped working, it was that there was no real maternity leave, because we don’t offer that either. These new mothers decided to use their guaranteed minimum incomes to stay at home longer and be new mothers for a longer amount of time before they went back to work. They didn’t drop out of the labor force, they just took an actual maternity leave, which is something like in other countries where you can actually get maternity leave for a year. You don’t see that here. Basic income enables us to voluntarily look like countries elsewhere who force it, where they say “You have to take this amount of vacation or maternity leave.” Here we can just say “Well, if you want it, you can take it. If you don’t, you don’t.”
MJ: What do some of the models look like as far as paying for that? One of the big things that people immediately jump to when you’re talking about basic income is “Oh my God, that sounds expensive. How are we going to pay for that?”
SS: That will always be a big question for people to wrap their heads around, is “Where will the money come from?” Especially in this day and age, where people seem to hate taxes more and more. It’s very simple to say that we could actually pay for it with a conversion to a flat tax system. I’m not necessarily saying this is the best way to go about it, but just to show how easily we could do this in a way that’s easy to understand: we could create a flat tax that’s about 40%. That may sound high, but because everyone gets in return this $12,000 a year, the effective tax rate is lower than what it is right now for most people because you’re basically getting a giant tax rebate. A flat tax set at 40% would pay for basic income and the effect of that would be a reduction in taxes for about 60% to 80% of the population, depending on how many people are in the household and if you’re single, etc. So, the majority of the United States would pay less in taxes. It would be a shift from the bottom 60% to 80% to the top 20% to 10%. There’s certainly plenty of arguments to be made that we need to do that anyways, that that would reduce inequality by reducing the taxes for most people and raising them at the top. People would say “Oh my gosh, that’s horrible, that’s impossible.” Maybe it is politically difficult to pass that, but maybe it isn’t. Maybe if 80% of the population gets a tax cut, then that’s enough to pass it. I don’t know. I’d be really interested to see polls asking people what their favorite way is, “Do you prefer this? Would you vote for this as a means of paying for it?” There are numerous ways to go about it. Another option would be a value-added tax. Again, this would be a partial thing. If you combine a value-added tax with a flat tax, then let’s say you could actually have a flat tax of around 30% and then you would have a value-added tax to make up the difference. There’s a good amount of logic behind wanting a value-added tax anyways. This is something that’s actually in most OECD countries now except for the US. We’re the only ones not doing this. It actually helps a lot for exports--you’re able to squeeze out the price of the products and sell them cheaper to other countries by using a value-added tax. It’s also more difficult to evade that tax because it’s consumption tax and because the calculations are made each step along the way. I look at the ways of funding basic income as kind of a toolkit that we could use anyways. Like, we want a value-added tax, that’s a smart thing to add. So, what kind of level would it be? I think it would make sense to have a flat tax; a lot of people are behind it. It’s just you can’t do that right now because if you did a flat tax without a basic income, then that’s very regressive, it hurts people at the bottom. If you’re going to make these changes, you have to adjust for the people who would be hurt by it. The same way for the value-added tax--you’re going to make stuff more expensive at the bottom and they need to be compensated for it. There’s other funding levels too. You can look at a Wall Street financial transaction tax, which could raise a lot of money. You could have a land value tax, which may make more sense to do on a local level, such as state by state or city by city. If you look at the pure revenue involved in land value tax, it could raise almost two trillion dollars in revenue. When you’re looking at how to fund basic income, you are cutting out a lot of these existing programs that you don’t need anymore, especially depending on how high it is. If you have a high enough basic income, then you can eliminate a good amount of social security, a good amount of the current welfare programs, section 8, food stamps, all this other assistance, and you could just replace it with cash. We’re already spending a lot of this amount. With the calculations that I’ve done, the cheapest we would need is around 800 billion dollars if we did it in a negative income tax version. If we did a full on universal unconditional income, then that would be a little bit more, around a trillion and a half. So, a land value tax is something that already covers it, just like a flat tax would--it doesn’t require anything else. There’s a lot of options out there depending on what you want to do. Another way would be like Alaska. They get their dividend money from the oil that they consider to be owned by everybody in Alaska because it’s Alaskan land that this oil is in. Another funding revenue would be “Okay, let’s look at everything owned by everybody or owned by nobody,” so you look at oil, water, fracking. There’s also pollution--carbon tax would be one, since carbon in the air affects everybody you could price it so that it gets more expensive to use. The revenue generated by that would compensatory. For example, if you make gas prices more expensive, that hurts people at the bottom but we want that because we want to reduce our usage. But since it hurts people at the bottom, you could give them a dividend, a basic income, then they’re no longer hurt by it. We can actually do a lot of things that can raise money and do stuff that we want to do, like reduce carbon pollution.
MJ: It does seem like there’s quite a bit in the toolbox. I have to admit, one of my personal favorites, and you’ve already mentioned it, is the Wall Street tax. This is specifically called out in the Reddit FAQ, about a tax on high frequency traders. To tie it into our focus on the future, those algorithms… I always worry that if AI comes around, it’s going to be out of those algorithms and they’re absolutely predatory and amoral, and there’s so much money behind them that you could put a .0000000001% fee on it and the only thing that would notice are those things that do those flash crashes and that are sucking a lot of the money out behind the scenes. That, to me, seems like a win/win for everybody except maybe those high end firms. When you consider how much damage those firms have done to the economy, such as back in 2007-2008, it seems like that’s a little like karma coming due.
SS: Yeah, you can look at it that way. The flash crash is a really good example of what happens if humans aren’t involved in this. Basically, we pulled the plug. We looked at this and we were like “Oh my God, the numbers are going down like crazy!” It wasn’t that the computers decided to stop doing it, it was the people that said “Uh oh! Let’s pull the plug!” So like you said, the computers weren’t programmed to be panicking over these numbers, they were just doing what they were programmed to do. It required a human to go “This is crashing!” to put a stop to it.
MJ: You read about some of those flash crashes and it’s like 30,000 times in a second or something--they’re ridiculous numbers. Whenever people like Elon Musk or Stephen Hawking talk about the dangers of AI, that’s immediately where my brain goes, is those algorithms. They have ungodly amounts of money being thrown at them, they’re running on supercomputers, and they’re completely predatory and amoral. There’s some good science fiction out there that projects what an AI from those spots would look like and that seems like, to go back to your point, a dystopia.
SS: To me, this is what it really comes down to: what is the job of technology? Who is it supposed to work for? Is it supposed to work for everybody? Is it supposed to work for just a tiny few? What is its purpose? Right now, we’re not leveraging it for everybody. Recently there was a big deal about a CNN article about basic income. Any time basic income gets mass media attention through some outlet like that, it’s a big deal. The one before that was Newsweek. With CNN’s article, it was funny, looking at the comments when they posted it to Facebook, it seemed like the most popular comment of all was people immediately dismissing it and saying “Give a man a fish, he eats for a day. Teach a man to fish, he eats for a lifetime.” We look at that and we think “Oh, well that makes sense.” Like, “Of course, we want independence. We don’t want people to be dependent on others. Just teach them self-dependence. If they need a fish, teach them to fish.” It’s completely ignorant of technology. This is a saying that has existed for thousands of years and it makes sense, but it’s completely devoid of where technology exists. So, I think a better saying would be “Give a man a fish, he eats for a day. Teach a man to fish, he eats for a lifetime. Build a robot to fish, do all men starve, or do all men eat?” This cuts down to the question of what technology is for. Elon Musk and Henry Ford are good examples for seeing the way things used to be and how they are now. Henry Ford required hundreds of thousands of employees, and because of that you had a lot of people getting income from their work for the Ford company. Now you’ve got Elon Musk and the factory that’s set up to build these Tesla cars is heavily automated. It’s amazing to look at, to see all these robots building these cars. You just need fewer employees. You can see a photo of the old Ford motor factory and it’s massive amounts of people. Then you look at a picture of the Tesla employees and it’s a small group of people in a room with robot after robot after robot in the background, all of these machines. Elon Musk owns all of these machines; these machines represent people that no longer need to work. There’s no more jobs, there’s no more income for these people with the jobs that are done by robots. Because of this, you’re seeing this concentration. It’s in business after business. Facebook needs fewer employees, Google needs fewer employees; Instagram, Tumblr. Uber is a great example too. These businesses are based off of just connecting people now. It’s not really building an industry using people and employees, it’s just connecting one person to another person. Uber, they’re just connecting people who want to drive people and people who want rides. You don’t need a lot of employees for that. In fact, a lot of these drivers aren’t employees--they’re considered to be subcontractors, they’re independent, they’re freelancers. Because of that, there’s no pension, there’s no unemployment. If they get into a car accident, then it’s on them. It’s a completely different setup. This is part and parcel with our growing inequality, is that the technology right now is owned mostly by the 1%. It’s a small fraction of society that gets to accrue all of this extra. Until we figure out a way of doing something about that, things are just going to get worse because we need fewer and fewer employees. People think that there’s always going to be new jobs but these jobs are different. You just don’t have full time 40 hour a week, 40-year career jobs any more. Also because of this, as more and more people are no longer required to work, this creates a surplus in the labor market for the labor supply, which has to do with wages going down. You get these jobs that are being created that pay less, they have less hours, there’s less security, and this is the way that we’re going in. We’re going to keep going in that direction.
MJ: For people to get involved in this issue, where would you point them?
SS: If you want to help and you want to be a part of the growing movement for basic income, I would suggest going to the subreddit, and that’s Reddit.com/r/basicincome. I’d recommend going to Basicincome.org, which is more of an international source for news and information. You can subscribe to what’s called the newsflash there. If you’re in the US, you can become part of US Bid at USBid.net, where you can become a member. I’ve got a Patreon account--I’m actually crowdfunding my own basic income and I’m about 20% of the way there right now. What I’m trying to do is not only achieve my own basic income, but I’m also looking to help others do the same. What’s going to happen is when I reach 100%, then anything I earn over that is going to go to people who have taken the same pledge and do the same to build up their own basic incomes. What I want to do is I want to create a group of people who can create content for basic income. We need people who make videos, images. But not only that, but just anybody who wants to follow their passion in life, which is what basic income should be about--freeing people to do what they most want to do. If that means creating content that has nothing to do with basic income, like CGPGrey, just making videos that you want to make. That’s the direction I think we should be going in. If you want to help with that, you can go to Patreon.com/ScottSantens and find what I’ve done there. You can even take the pledge yourself, and that’s the BIG Patreon Creator Pledge, which is saying that you want to crowdfund your own basic income and also want to help others do the same.
MJ: Scott, thanks so much for joining us today.
SS: Thanks so much Mike and Matt.
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A: We hope to see you again in the future…
MJ: Thanks everyone for listening.