Picture: Deep Dog at the Beach by Botgirl Questi, 2014, CC-BY-NC 2.0
On June 6th 2018, Trent McConaghy, founder of Ocean Protocol and BigchainDB states in his article “Nature 2.0, The Cradle of Civilization Gets an Upgrade”, that a combination of Artificial Intelligence (AI) and Blockchain can result in a future of abundance. Profits from self-owning machines can pay for a Universal Basic Income (UBI), according to this expert in the field of automation.
A Blockchain is a database with new characteristics compared to traditional databases, as McConaghy explains:
- “It’s decentralized — no single entity owns or controls it. There’s no single point of failure
- It’s immutable — once you’ve written into it, it’s there for good. (unless intentionally changed)
- And it has assets – you own something if you have the private key. “
Furthermore, Blockchains can not only be used for data storage, but also for processing data and communications. Blockchains, like Bitcoin, can be seen as information-centric Public Utility Networks (PUNs), states McConaghy, and “as “trust machines” these minimize the human trust (in banks) needed to operate. In doing so, these allow ever larger organizations of people to interact without trust issues arising. McConaghy says that the most important characteristic of blockchains is “incentives”. According to him, “a person can design a network that gets people to do stuff, by rewarding them with tokens.”
Then he takes us a step further and explains that Blockchains can also be designed as a Decentralized Autonomous Organization (DAO), which is a computational process which runs autonomously on a decentralized infrastructure. McConaghy explains: “A DAO is autonomous code that can own stuff.”
Trent also refers that AI and DAO combined can generate value by making and selling art, using Genetic Programming (GP) (as in this example), or Deep Dreams (a twist of Neural Networks). It can be achieved when a computer program ‘orders’ an artwork to be generated, sells it on a digital marketplace for crypto currencies and repeats the process (generating a new artwork). Over time, it accumulates wealth, without any human controlling it, while evolving with its own GP coding.
“This is possible with today’s technology” and AI-DAO’s can get rights using today’s law, McConaghy states. The impact of the combination of AI and DAO is huge because it combines database resources with autonomous decision-making. Making and selling art is only one example, but self-ownership can be done with self-driving cars and even roads, windfarms and energy grids, according to McConaghy. He concludes by stating:
“Many dream of Universal Basic Income (UBI), because it can address worries about job loss in the face of AI, and help more people to chase their dreams and self-actualize. Blockchains make the distribution side straightforward. Anyone that provides some proof of being human (even if imperfect) gets an equal amount of income arriving to the UBI chain. The challenge is how to pay for it. Nature 2.0 gives a solution to this! In short: profits from self-owning machines pay into the UBI chain.”
More information at:
Trent McConaghy, “Nature 2.0: The Cradle of Civilization Gets an Upgrade”, Medium, June 6th 2018
Special thanks to André Coelho for reviewing this article.
On October 30th 2017, the Canadian Association of Social Workers (CASW) released a position paper recommending a Universal Basic Income Guarantee (UBIG) of $20,000 for all individuals, regardless of income. CASW’s UBIG fulfils the definition of a Basic Income. CASW argues that a UBIG is superior to a Negative Income Tax, which is being tested in other experiments (1).
CASW argues that a universal demogrant model, or UBIG, is “a cost-effective and socially responsible mechanism through which Canada can ensure dignity for all”.
CASW states there have been many federal promises to end poverty in Canada over the past 30 years, in many different forms, including Canada’s support for the United Nations’ Sustainable Development Goals which specifies the need to “end poverty in all its forms everywhere”. Yet in 2016, 4 million Canadians (12.9%) were living in poverty and child poverty rates even increased between 1989 and 2013.
According to CASW, conditional and heavily monitored programs are insufficient and expensive. The combined income support-related expenditures of all federal, provincial, and municipal levels of the Canadian government cost just over $185 billion. Furthermore, their implementation causes a great deal of stress given their unreliable nature, with individuals reporting stress brought on by stigma, marginalization and feelings of disempowerment and hopelessness.
CASW claims that “current social assistance systems in Canada are inadequate and contribute to a cycle of poverty”.
Poverty is a well-known social determinant of physical and mental health. CASW illustrates this with several UBI-related examples from Canada:
- a difference of more than 20 years in life-expectancy between the high-income and low-income population in Hamilton, Ontario;
- a reduction of 8.5% on hospitalization during the Mincome basic income pilot project in Dauphin, Manitoba (2);
- people between 55 and 64 years of age are 50% more likely to experience food insecurity compared to seniors 65 years or older who receive the Old Age Security pension.
From CASW’s perspective, the strengthening of Old Age Security (OAS) and the introduction of the Canada Child Benefit were solid steps towards realizing a UBIG in Canada. Programs like the OAS, which are universal in nature and have few eligibility criteria, are quite inexpensive to operate. In 2013, the total cost of operating the OAS program was 0.3% of the total annual program cost. In contrast, the total administrative cost of Employment Insurance, a program with a high degree of gate-keeping and extensive eligibility criteria, was 8.1% of the total annual program cost.
According to CASW, this cost-saving potential is a fundamental strength of the UBIG which would operate under significantly fewer operational and administrative costs than, for example, a negative income tax model.
CASW further argues that the so-called “benefit trap”, that makes the adoption of part-time work unattractive and is often used to argue against a basic income guarantee, in fact only exists within the negative income tax model. Therefore, the true benefits of a basic income guarantee cannot be realized within the negative income tax model which has formed the basis of all of the pilot projects run so far in Canada.
In addition, a universal demogrant model involves significant benefits to the middle classes giving it a wider support base compared to a program that only targets low-income households. It will therefore have more likelihood of success.
CASW recommends a UBIG of $20,000 per year with the possibility of additional fully-remunerated casual, part-time, or full-time employment. Individuals with disabilities would receive an extra $6,000 tax free per year. The UBIG should replace only traditional welfare or social assistance programs – not all existing social programming. One’s net income will then be taxed according to progressive tax brackets. This model encourages participation in the labour market.
(1) – A Negative Income Tax does not pay an unconditional income to every individual. Instead, it tops up earnings below a threshold, and charges tax on earnings above the threshold. The administration of a Negative Income Tax poses more challenges than the administration of a Basic Income.
(2) – This is a significant amount considering the Canadian Institute for Health Information in 2014 put the total health expenditure in Canada as upwards of $200 billion.
More information at:
Colleen Kennelly, “Universal Basic Income Guarantee: The Next ‘BIG’ Thing in Canadian Social Policy”, Canadian Association of Social Workers (CASW), October 2017
Picture: Two sides of the same Loonie … (10/100), Jamie McCaffrey, CC BY-NC 2.0
Picture: Pocket Calculator by Matt Joyce 2011, CC-BY-SA 2.0
On November 16th 2017, Vereniging Basisinkomen (the Dutch Affiliate of the Basic Income Earth Network) launched a calculation tool on its website, where people can calculate themselves if a Universal Basic Income (UBI) in The Netherlands is affordable and how it can be financed.
Four different types of UBI can be chosen from: €400, €1000 or €1400 per month for each adult (18+) and a fourth type: €650 for each adult, €300 for each child (18-) and an additional €600 for each household. According to Vereniging Basisinkomen, the latter variant would put an end to the poverty trap caused by the current system in the Netherlands, where people may end up gaining less than 5% after a salary raise of 50%.
Once the choice for one of the types of UBI is made, people can then choose what sources to use in order to finance it. The tool allows a broad variety of choices such as income tax, VAT, abolishment of existing subsidies, savings on expenses on healthcare and civil servants, transformation of the mortgage system, different types of taxation on assets and resources etc.
All types of UBI can be made affordable in the tool depending on how the parameters are adjusted. At the end of the calculation, the effects on seven different groups of people are shown in a table, where the user can can see that the higher incomes will be net payers.
Vereniging Basisinkomen is already planning to develop a version 2.0 of the calculation tool, where people will be able to see what a UBI would mean for their personal situation.
On November 14th 2017, Antoinette Hertsenberg (from the Dutch television program Radar) handed over a petition to the Dutch Parliament (signed by 113.344 people), asking for an experiment with a basic income for people over 55 years old who are unemployed.
The petition was started after Radar called attention to the fact that only 3% of the unemployed 55+ have a chance to find a paid job in the Netherlands, 6 months ago.
The handing over of the petition was a large event; many members of Parliament were present, representing almost all political parties. In reaction to the petition, the Socialist Party (SP) asked for a debate in Parliament on the topic, in contrast to what happened in the preceding year, in which a debate about another petition on basic income was refused.
A lot of media attention was given to the petition, reigniting discussion on basic income in the Netherlands.
Pedro Alves, “Netherlands: Basic Income petition in the Netherlands for people over 55 years old was signed more than 50000 times“, Basic Income News, July 6th 2017
Covering the philosophy of freedom, an explanation of universal basic income and the economics behind it, Karl Widerquist, vice-chair (at the time of the interview he still was co-chair) of Basic Income Earth Network (BIEN), was interviewed by Sam Barton from Talk of Today in Australia.
During the interview, Widerquist talks about what it means to be a fully free person and argues people should regain their freedom from forced labour. “If you are a free person, you can choose to be given and follow orders for 40 hours a week, but you can also choose not to,” Widerquist states. Many people can only survive by paying for resources that are owned by others, and according to Widerquist, people should be “compensated financially for that so they don’t have to work for others if they don’t want to.” As most people can choose their employer, the labour force cannot be compared with slavery, but “to say you are fully free, you have to be free from oppression”, and many people are not, Widerquist argues.
Widerquist explains a Universal Basic Income (UBI) as a means to create a market economy where income doesn’t start at zero and where you can get a higher income from a job on top of that. Some wages will rise as a result of UBI according to Wilderquist. But at the moment, “there are so many people that need their jobs to survive that employers put the wages down.”
UBI can replace a lot of programs that don’t work so well. It will have to be high enough to meet people’s basic needs, but people with special needs, such as paraplegics, will have to get some additional support, as they will need more to meet their basic needs. Other things, such as campaign contributions, can be cancelled in order to finance UBI according to Wilderquist.
Whether or not UBI will cause inflation depends on the balance between taxing and spending, which is a task of the government, with or without UBI.
Info and links
Full interview podcast
Special thanks to Josh Martin and Dawn Howard for reviewing this article