by Tyler Prochazka | Mar 24, 2017 | Opinion
This past presidential cycle, libertarian presidential candidate Gary Johnson suggested to BI News that he was “open” to the universal basic income. Johnson’s 2012 running mate Judge Jim Gray recently laid out a proposal for broad reform and simplification of the tax code, as well as providing a guaranteed annual stipend of $15,000. The stipend would be gradually taxed away by 50 cents for each dollar. Those making $30,000 and above would not receive the stipend.
Gray said that his policy would effectively address poverty and is consistent with “liberty” and “compassion.” At the same time, it would remove the poverty traps that people in poverty face.
“Unlike today’s welfare and social security systems, this system always has incentives to work and earn the extra dollar,” Gray said.
The full interview can be found below.
What inspired this idea for the monthly stipend?
I don’t recall specifically. But I have always believed that institutions should regularly be revisited with an eye toward increasing their social incentives. Our tax system is terribly complex and in many ways harmful. If it could be reformed and simplified, that would be a wonderful occasion to address all welfare issues and, along the way, address our homeless problems as well.
Where would the funding come from to pay for the $15,000 stipend?
Abolish all other welfare programs, and all the bureaucracies that go along with them. That should leave plenty of money to support this stipend.
Would there be any targeted programs that would remain, or would they be entirely replaced with the stipend system? For example, medical programs, or programs for the disabled.
The stipend would have to be weighted to address people with truly special needs. In addition, I would also employ a voucher system to facilitate people purchasing health insurance of the private market, based upon a sliding scale for need.
Can you explain the relationship between your proposal and expanding liberty?
Welfare systems are extremely intrusive, and in many ways inequitable. This system would be implemented voluntarily, which is consistent with Liberty, and would be far less judgmental and intrusive – all of which is fully consistent with Liberty.
You said we should have this safety net because “that is who we are.” What did you mean by that?
I believe we Americans are compassionate people. If given a choice to provide for those in need, Americans would choose to assist – as long as they believed this was a workable system, and everyone understood this is not an “entitlement,” but simply compassionate.
How will the private sector respond to this stipend program? What new opportunities or businesses may arise that are not possible now?
Really good questions! I believe the private sector will fully support it, for reasons provided above. And this system would also provide opportunities for people to become involved in the arts, public volunteerism and experimentation with other business opportunities, because it would provide them a back-up safety net to hedge against failure.
Do you think the $15k would encourage laziness? How would people respond to not being forced to work?
We will always have incentives to laziness. But, unlike today’s welfare and social security systems, this system always has incentives to work and earn the extra dollar. Our present systems punish working because recipients lose more money by working than they gain. And it also encourages attempts to “game the system.”
Update 3/27: Clarified the stipend will be taxed away up to $30,000.
by Tyler Prochazka | Feb 22, 2017 | Opinion
Bill Gates made headlines when he suggested robots that take human jobs should be taxed at a similar rate as humans. The money, he said, could slow the rate of automation, and be used to fund government jobs.
Gates could not be more wrongheaded on this proposal.
The problem with Gates’ idea is that it assumes robots taking human jobs is something to be discouraged. The opposite is true. We should welcome robots doing more tasks for humans, thus freeing up humans to engage in other fulfilling endeavors.
Imagine the government took Gates’ approach with Microsoft computers to prevent their machines from taking jobs. Humanity would be worse off because of the unrealized productivity, connectivity, and convenience that would be impossible without computers.
The crucial component in response to automation that Gates does not mention is the Universal Basic Income (UBI). UBI will ensure that those who lose their jobs to robots will have a flexible cash grant that could be used for training, education, or to pursue whatever the individual’s passion may be.
There is a legitimate worry that the companies that own the robots will accumulate most of the wealth, and the rest will be left behind. A basic income addresses this automation cliff more effectively than attempting to delay inevitable automation with taxation.
It is possible in the future, humans will be able to scale back their work hours, while still receiving a comparable overall income through UBI because robots would be doing the bulk of humanity’s work. An individual could spend more time on volunteering, entrepreneurship, their family, civic engagement, and creative endeavors.
The greater the dividend humanity receives from robots because of their higher productivity, the larger the basic income can be without disrupting the economy.
Gates and others are stuck in the mindset that humans are meant to spend eight hours a day, five days a week in a traditional work environment. Robots are threatening to upend the system, which should be welcomed as it opens new possibilities for what people can do with their time.
Just because someone receives a wage from a company does not mean they are maximizing their potential for themselves and what they can provide to society. For example, is a single mother doing more for society by working twelve hour shifts, or spending more time raising her child?
As automation intensifies and countries inevitably start to implement basic income, many will continue to work full-time in the traditional system. Others will work part-time. And still more will find different ways to contribute to society. There is a basic human drive to develop one’s self and bring positive change to the world.
Traditional work will not necessarily cultivate each person’s true comparative advantage. The irony is that robots taking more jobs will give us more freedom to choose our best path, if coupled with an unconditional basic income.
Instead of taxing robots, we should tax activities that we want to discourage. For example, activities that harm the environment, such as fossil fuel use, animal agriculture, and resource extraction. Land ownership could also be taxed at a higher level. This could raise the same amount of revenue from wealthy individuals as Gates’ suggested robot tax in order to fund UBI and other government services, without discouraging the positive good of robotic development.
The dramatic expansion of automated jobs is going to remake the economic order and will require governments around the world to respond. The biggest mistake will be fighting this change and attempting to preserve the same system we have now, instead of using the opportunity to drastically improve it.
Image: Red Maxwell, Flickr, Ted Talk: 2009.
by Tyler Prochazka | Feb 18, 2017 | Opinion
China’s spectacular growth in the past thirty years has begun to slow down in recent years. Emerging signs suggest that China is woefully unprepared for the fallout from exponentially rising automation of manufacturing jobs. While businesses are still going to sites like https://gembah.com/guides/manufacturing-in-china-like-a-pro/ to find the best way they can manufacture their products, the factories in China need to make sure they are prepared for the increased automation that will be coming to the manufacturing industry in the coming years.
The former Supreme Leader Deng Xiaoping of the People’s Republic of China (PRC) orchestrated the country’s economic miracle through a dramatic increase in exports to the rest of the world. For the next several decades, China reoriented the world economy, and many companies stationed their factories within China to take advantage of the cheap labor. Many of these factories might be making use of system integration software soon to increase the efficiency of their factories. I hear it reduces a lot of admin work and increases productivity. As wages rise and the population ages, the value of the original bargain is starting to erode.
In absolute terms, China is leading the world in the number of robots used for production. Over the next decade, China will start to catch up to other advanced economies in terms of per capita robots. By 2019, China may even nearly double its number of robots. At the same time, robots will complete increasingly complex tasks, threatening an even wider range of jobs for humans. Inevitably, this will cause many low-skilled workers in China (and around the world) to lose their jobs. And absent incredibly disruptive government intervention that would likely do more harm than good, these low-skilled jobs will never come back.
Young people in China are more educated than ever, and are increasingly less likely to want to pursue factory jobs anyway. Automation can help propel China toward a more innovative and service-based economy by freeing up labor for these higher value pursuits. In the meantime, though, college-educated Chinese are having difficulty finding jobs as China’s economy readjusts. Without a proper safety net in place, China risks facing social unrest as automation begins to accelerate.
As it stands, China’s main welfare program dibao is too bureaucratic and ineffective to handle the influx of unemployed individuals because of all of the conditions attached to the program. When addressing automation, China’s best solution may be to universalize the dibao to create a universal basic income. This would allow for a smooth transition away from China’s reliance on human-led manufacturing. The need for product inspection in China is highly important for manufacturers, as they must make sure everything is made to the highest specifications. Using a China inspection service can help prevent issues and malfunctioning products, hopefully, this form of checking is not looked over when the change to more automated manufacturing is completed. China acts as a pillar for world economic growth. The basic income would not only stave off the most destabilizing aspects of the coming automation revolution in China, but it is also crucial for the stability of the international economy.
by Tyler Prochazka | Feb 7, 2017 | News
The first basic income conference focused on the Asia Pacific region is being prepared for March 18 in Taipei, Taiwan.
National Chengchi University’s College of Social Sciences is the main organizer of the event. Basic Income News features editor Tyler Prochazka is helping to organize the conference with co-chair, James Davis, student of Columbia University, and activist Ping Xu. NCCU’s International Master’s Program in Asia Pacific Studies is also an assistant organizer for the event.
Prominent basic income activist Enno Schmidt has confirmed he will attend. Other scholars from China, India, Australia, Japan, Korea, New Zealand and the United States are preparing presentations.
The conference will be live-streamed on the Basic Income Action Committee’s Facebook page.
Davis has interviewed Schmidt and Andy Stern, former president of the Service Employees International Union (SEIU). Davis’ recorded interviews will be screened at the conference. Davis is scheduling additional interviews with other scholars and activists for the screening.
Prochazka received an Alumni Development Grant from the U.S. Department of State’s Critical Language Scholarship program to assist in funding the conference.
Xu will is also planning to take part in a presentation with Taiwanese officials, and begin research into a village as a location for a potential future basic income trial.
The RSVP for the event can be found here.
Corrections: This article was updated on March 11, 2017 to clarify information on organization and Ping Xu’s planned activities in Taiwan.
by Tyler Prochazka | Feb 6, 2017 | News
Activists in Taiwan have scheduled a meeting with a representative from Taiwan’s Executive Yuan (the executive branch) in which they will present the idea of a basic income pilot program in one of Taiwan’s cities.
UBI Taiwan will give the presentation on March 9 to present an idea for a pilot program.
Jay Hsu of UBI Taiwan will give the presentation. The location of the presentation is not yet determined.
UBI Taiwan submitted the proposal for presentation on January 20 to the Executive Yuan, and received confirmation that they were invited to present the proposal last week.
Taiwan will also hold the first Universal Basic Income in the Asia Pacific International Conference on March 18. Prominent activist Enno Schmidt has confirmed that he will attend the conference.
Updated 5/23/17: Removed references to Audrey Tang and Ping Xu, who were not part of the presentation.
