NEW YORK, March 9 — In the utopian (dystopian?) future projected by technological visionaries, few people would have to work. Wealth would be generated by millions upon millions of sophisticated machines. But how would people earn a living?
Silicon Valley has an answer: A universal basic income, or UBI. But what does that have to do with today’s job market, with many Americans squeezed by globaliSation and technological change?
Two business columnists for The New York Times, Farhad Manjoo, who writes State of the Art on Thursdays, and Eduardo Porter, author of Economic Scene on Wednesdays, have just taken on these issues in different ways. The Times brought them together for a conversation to help sharpen the debate about America’s economic future.
Eduardo Porter: I read your very interesting column about the universal basic income, the quasi-magical tool to ensure some basic standard of living for everybody when there are no more jobs for people to do. What strikes me about this notion is that it relies on a view of the future that seems to have jelled into a certainty, at least among the technorati on the West Coast.
But the economic numbers that we see today don’t support this view. If robots were eating our lunch, it would show up as fast productivity growth. But as Robert Gordon points out in his new book, The Rise and Fall of American Growth, productivity has slowed sharply. He argues pretty convincingly that future productivity growth will remain fairly modest, much slower than during the burst of American prosperity in mid-20th century.
A problem I have with the idea of a universal basic income — as opposed to, say, wage subsidies or wage insurance to top up the earnings of people who lose their job and must settle for a new job at a lower wage — is that it relies on an unlikely future. It’s not a future with a lot of crummy work for low pay, but essentially a future with little or no paid work at all.
The former seems to me a not unreasonable forecast — we’ve been losing good jobs for decades, while low-wage employment in the service sector has grown. But no paid work? That’s more a dream (or a nightmare) than a forecast. Even George Jetson takes his briefcase to work every day.
Farhad Manjoo: Because I’m scared that they’ll unleash their bots on me, I should start by defending the techies a bit before I end up agreeing with you.
So, first, I don’t think it’s quite right to say that the proponents of UBI are envisioning a future of no paid work at all. I think they see less paid work than we have today — after software eats the world, they say it’s possible we’ll end up with a society in which there’s not enough work for everyone, and especially not a lot of good work.
They see a future in which a small group of highly skilled tech workers reign supreme, while the rest of the job world resembles the piecemeal, transitional work we see coming out of tech today (Uber drivers, Etsy shopkeepers, people who scrape by on other people’s platforms).
Why does that future call for instituting a basic income instead of the smaller and more feasible labour-policy ideas that you outline? I think they see two reasons. First, techies have a philosophical bent toward big ideas, and UBI is very big.
They see software not just altering the labour market at the margins but fundamentally changing everything about human society. While there will be some work, for most nonprogrammers work will be insecure and unreliable. People could have long stretches of not working at all — and UBI is alone among proposals that would allow you to get a subsidy even if you’re not working at all.
Porter: I know what you mean by thinking big. Many of these new technology entrepreneurs think more like engineers than social scientists. In the same breath they will extol the benefits of individual liberty and the market economy and propose some vast reorganisation of society following an ambitious blueprint cooked up by an intellectual elite.
A few months ago I interviewed Albert Wenger, the venture capitalist you cite in your column. He also told me about his vision of a future world in which work would be superfluous. It made me think of Aldous Huxley’s Brave New World or George Orwell’s Animal Farm.
If there are, in fact, jobs to be had, a universal basic income may not be the best choice of policy. The lack of good work is probably best addressed by making the work better — better paid and more skilled — and equipping workers to perform it, rather than offering a universal payment unrelated to work.
The challenge of less work could just lead to fewer working hours. Others are already moving in this direction. People work much less in many other rich countries: Norwegians work 20 per cent fewer hours per year than Americans; Germans 25 per cent fewer. They have taken much more of their wealth in the form of leisure rather than money. But they still work for a living.
And, by the way, I’ve read about robots that can programme. So maybe the programmers aren’t safe either.
Manjoo: One key factor in the push for UBI, I think, is the idea that it could help reorder social expectations. At the moment we are all defined by work; Western society generally, but especially American society, keeps social score according to what people do and how much they make for it. The dreamiest proponents of UBI see that changing as work goes away. It will be OK, under this policy, to choose a life of learning instead of a low-paying bad job.
Porter: To my mind, a universal basic income functions properly only in a world with little or no paid work because the odds of anybody taking a job when his or her needs are already being met are going to be fairly low. The discussion, I guess, really depends on how high this universal basic income would be. How many of our needs would it satisfy? We already sort of have a universal basic income guarantee. It’s called food stamps, or SNAP. But it’s impossible for people to live on food stamps alone.
This brings to mind something else. You give the techies credit for seriously proposing this as an optimal solution to wrenching technological and economic change. But in a way, isn’t it a cop-out? They’re just passing the bag to the political system. Telling Congress, “You fix it.”
If the idea of robots taking over sounds like science fiction, the idea of the American government agreeing to tax capitalists enough to hand out checks to support the entire working class is in an entirely new category of fantasy.
Manjoo: Yes, this is perhaps the biggest criticism of UBI: It all sounds too fantastical! It’s straight from sci-fi. And you’re right; many of these proponents aren’t shy about being inspired by fantasies of the future.
But paradoxically, they also see UBI as more politically feasible than some of the other policy proposals you call for. One of the reasons some libertarians and conservatives like UBI is that it is a very simple, efficient and universal form of welfare — everyone gets a monthly check, even the rich, and the government isn’t going to tell you what to spend it on.
Its very universality breaks through political opposition. And I should note that it’s not only techies who are for it — Andy Stern, the former head of the SEIU, will soon publish a book calling for a basic income.
Still, like you, I’m sceptical that we’ll see anything close to this sort of proposal anytime soon. Even Bernie Sanders isn’t proposing it. The techies, as usual, are either way ahead of everyone, or they’re living in some other universe. Often it’s hard to tell which is which.
But let’s get back to the question of productivity. You’re right that software hasn’t produced the sort of productivity gains many had said it would. But why do you disagree with the techies that automation is just off beyond the horizon?
Porter: I guess some enormous discontinuity right around the corner might vastly expand our prosperity. Joel Mokyr, an economic historian that knows much more than I do about the evolution of technology, argues that the tools and techniques we have developed in recent times — from gene sequencing to electron microscopes to computers that can analyse data at enormous speeds — are about to open up vast new frontiers of possibility. We will be able to invent materials to precisely fit the specifications of our homes and cars and tools, rather than make our homes, cars and tools with whatever materials are available.
The question is whether this could produce another burst of productivity like the one we experienced between 1920 and 1970, which — by the way — was much greater than the mini-productivity boom produced by information technology in the 1990s.
While I don’t have a crystal ball, I do know that investors don’t seem to think so.
Long-term interest rates have been gradually declining for a fairly long time. This would suggest that investors do not expect a very high rate of return on their future investments. R&D intensity is slowing down, and the rate at which new businesses are formed is also slowing.
Little in these dynamics suggests a high-tech utopia — or dystopia, for that matter — in the offing. — The New York Times
