Techdirt Podcast Episode 16: Rethinking Work, Income & Leisure: Albert Wenger On Basic Income

from the BIG-ideas dept

Recently, there's been a growing discussion around the concept of a basic income guarantee and its potential to completely change how we think about work, income and leisure. Would it change the world for the better, or create more economic problems than it solves? Albert Wenger from Union Square Ventures joins us this week to discuss the potential of this revolutionary idea.

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Filed Under: albert wenger, basic income guarantee, economics, podcast

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  1. icon
    Nicholas Batik (profile), 18 Mar 2015 @ 3:31pm

    A Nice Idea, but...

    At first blush, this idea seems to hold merit - supporting those in need at the basic level so no one suffers. The problem is, this has been tried in a variety of forms which result in one or more of the following outcomes:

    1. disincentivizes work
    2. stagnates creativity
    3. results in inflationary pressures
    4. will expand an entitlement mentality
    5. ignores the nature of "value"

    Let's take these in order.

    1. Disincentivizes work

    Years ago my dad told me to get a job. It wasn't until he cut off my allowance that I actually got serious about it. This provided a valuable life lesson for me. Others have similarly observed that many on unemployment don't seriously start applying for work until the benefits run out.

    A friend grew up on a beach in Hawaii. When she got hungry, she when into the forest and picked fruit. This is a perfect example of a modern aboriginal life style. Unfortunately, this only works if you live in a location where you can sustain yourself. Few people live thusly. Most need to acquire sustinence and shelter from someone (paid) or something (installed, serviced, and upgraded).

    The phrase "Tragedy of the Commons" came from the first year of the Pilgrims' settlement where they decided to “Share everything, share the work, and we’ll share the harvest.” The net result was everyone scaled back on their labors, complaining about other people reaping the benefit of their work, and assuming others would make up their shortfall.

    This speaks to a basic human reality - people won't work unless they have to.

    2. Stagnates creativity

    Necessity is the mother of invention. In the book The Obstacle Is the Way, Ryan Holiday describes how struggle and difficulty is the impetus behind creative solutions. Compare, for example, the level of innovation and entrepreneurship in the U.S. as compared to socialist countries.

    Automation and mechanization can free us from the drudgery of undesirable jobs, but not from the need to innovate.

    It is in fact the unfortunate nature of those jobs that stimulated the creative efforts to automate them. The assumption with BIG is that if we take away stress and discomfort we will free people to create, but the reality is more like the example of the hunter tribe described in the podcast - 3 hours of hunting followed by a life of leisure.

    Furthermore, advances in innovation and creativity need a large number of participants. As people opt out of work in favor of pursing fun, fewer people will be available for the long, hard hours of focused creativity that most real advancements need.

    3. Results in inflationary pressures

    Every place where an industry or service has been subsidized, or loans guaranteed or "incentivized" with public money, the price has gone up. It is not hard to understand this basic cycle: if an ordinary individual can afford $1,000 for a semester of school, that is what the tuition will be, but if Student Aid is available for $10,000 per semester, not surprisingly, the tuition will become $10,000.

    There are too many examples in too many industries to list, so google it. Here's a place to start

    4. Will expand an entitlement mentality

    In the book Systemantics: How Systems Work and Especially How They Fail, John Gall details how systems will never voluntarily disassemble themselves, and always strives to grow. Name a single government program that has gotten smaller.

    We have probably all experience the "entitlement mentality." When signing up for cable or phone service with the 1-year price-saver special, did you get angry when your bill went up at the end of the year? You knew that it would - you read and signed the agreement. Yet we all feel that flush of anger and feeling of being ripped-off when the provider does exactly what they said they would do, and we agreed to.

    And what are we angry about? We are "entitled" to that lower price! Nope, not really, but the feeling is very real, and those feeling, associated with all forms of entitlements, have lead to riots, arson and looting, followed by politicians promising better subsidies and entitlements.

    Consider that a flat sceen TV, cable, and cell phones are now considered a "necessity" in today's welfare programs.

    5. Ignores the nature of "value"

    David Gerrold's book A Matter For Men: The War Against the Chtorr had one of the best treatises on the nature of the value of labor. If people value your product or service, they are happy to pay for it. Conversely, if nobody wants what you offer, it has no value.

    Much of the discussion around providing basic living subsidies for people assumes that it will free them to create. Yet if we consider the nature of value, if they create something of value, there will be a sustaining market for it. The only time someone would need their creative efforts subsidized is if what they create hold no value for anyone, perhaps themselves included.

    William Gibson famously said The future is already here — it's just not very evenly distributed. We must understand from this that while we are looking at a world of automation guaranteeing leisure, much of the rest of the world is struggling with simple survival. They are the ones most in need of our innovations, and the value that provides to them, so unless we are willing to engage in difficult work, we will never be able to create a better world for those who need it most.

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