Money For Nothing For Everyone

“There is something more powerful than the brute force of bayonets: it is the idea whose time has come.” And so last weekend I visited the Basic Income Createathon–held, appropriately enough, at Brigade in San Francisco–to witness the early stirrings of a movement whose central goal may seem strange and radical … but which I expect to eventually transform the life of billions.

Universal Basic Income 101: “a form of social security system in which all citizens or residents of a country regularly receive an unconditional sum of money, in addition to any income received from elsewhere,” to quote Wikipedia. An idea that has erupted into the zeitgeist of late; as Maciej Ceglowski observed, at the O’Reilly Next Economy Summit only a few blocks away from the Createathon:

Andy Stern talking about universal basic income, everyone gets a check for $1K/month. Old idea getting new attention

— Pinboard (@Pinboard) November 13, 2015

I have argued over the last several years that as software eats the world, it will transform Mediocristan into Extremistan, moving more and more of us into a power-law economy in which a minority of winners do extremely well … while the majority face becoming part of the precariat. In such a world, a universal basic income will become sheer necessity.

Let me just pause to hamstring those whose knee-jerk reaction to the whole notion is to cry out “Evil Communist Handout begone!” A basic income, or (essentially the same thing) a “negative income tax” was proposed long ago by Milton Friedman and Friedrich Hayek, both beloved by those well-known left-wing pinko socialists Reagan and Thatcher. Meanwhile, “he who does not work shall not eat” was an idea widely promulgated by none other than Vladimir Ilyich Lenin, father of the Soviet Union. Whose side are you on? Also,

https://twitter.com/StartupLJackson/status/647804691682693120

So let’s talk about the Createathon.

Its devotees and true believers divided into groups, each of which worked on a proposal to promote, promulgate, or prototype this (currently) weird, new, and contentious notion. This having occurred in present-day San Francisco, the first group of course led with the blockchain.

Group Income and Group Currency

Specifically, a proposal for Group Income, a “voluntary automated decentralized income transfer” — ie, a system wherein a group of people all agree to share their income such that everyone in the group receives at least an agreed-upon basic amount. The grotty mechanics will be automatically and algorithmically handled on the (Ethereum) blockchain.

While I don’t think this would work for a truly universal basic income — in the same way that Obamacare needs the mandate, basic income requires taxation — it’s a terrific idea with many advantages. It could be implemented / tested today, which would be a really fascinating experiment. It could, at least in principle, scale to a very large number of, er, “group income groups.” (The proposal’s originator, one Greg Slepak, clarified to me later that it’s intended for smallish groups of about a hundred, or at least less than Dunbar’s number. Imagine each group, to vastly oversimplify, as a kind of distributed kibbutz.)

Best of all, Group Income is actually a watered-down, simplified, compromised, mainstreamed version of a much weirder and more radical idea, Group Currency, in which each of these groups would maintain their own currency. While I have issues with both notions – I don’t think they scale; I think they reinforce the already immense benefits of pre-existing social ties in communities that include high earners; and, being a good Canadian, I don’t share the implicit deep-seated aversion to coercive taxation — kudos to Slepak for thinking way outside the proverbial box. Go ahead, call him a crazy idealist. You should be so lucky as to be so crazy.

A Basic Income Plan For San Francisco

…was the next proposal which caught my attention. Its proponents were admirably practical about the nitty-gritty details of how to administer such a plan, how the neediest individuals could acquire ID and bank accounts, etc. They suggested, wisely to my mind, that society should start with quite a small basic income; “first create the pipes, then think about increasing the flow” — they suggested $100, paid for by a land tax on 2nd or investment homes within the city.

Alas, they seemed bizarrely fixated on the notion that rent would simply increase by the amount of any basic income, which I just don’t see as long as it gets taxed back from those who earn a sufficiently high income, and their notions kind of fell apart in the face of the Bay Area’s insane housing costs and housing policy. Which admittedly is an awfully tough nut to crack.

Proposed solution is to greatly strengthen rent control, which, ummm. Let's just say that even Paul Krugman would not approve.

— Jon Evans (@rezendi) November 15, 2015

To The Devil, His Advocates

The next group itemized all the arguments against basic income for the purpose of being able to refute them. Needless to say they had a whole lot of fun with this:

"We can't afford it. People will be lazy. People will spend the money on booze, drugs, and hookers. Socialism! Communism!"

— Jon Evans (@rezendi) November 15, 2015

But I suspect it’s the fears they summarized, rather than the outrage above, that gives most thoughtful people pause:

Fears: economic collapse, social collapse, identity loss, unfairness, loss of virtue / ethic of work, loss of coming-of-age transition, etc.

— Jon Evans (@rezendi) November 15, 2015

…which, again, why the notion of “start small, and/or with voluntary groups; perform experiments, collect data, and consider the evidence” is so appealing to me. (Of course it usually is. I am an engineer.) However, the next group pointed out that a move to a basic income wouldn’t be such a wrenching change, using

The Mathematics Of Plenty

They created a (beta, or maybe alpha; it takes forever to render) site, bettertaxes.org, that itemizes the existing taxes and social spending of the US government, and the financial evolution that would be required to implement a universal basic income in America. Spoiler alert: a nationwide “minimum income” of $1000 / month would cost about as much as Medicare does today.

Is that too expensive? I’m sure many people will argue it is. Will it still be too expensive 10 years from now if the US economy grows by a third in that time? How much economic growth is forestalled by the fear of abject poverty and/or complete inability to take economic risks or foster creativity and innovation caused by abject poverty? How much more efficient is direct giving, compared to today’s complex, wasteful, bureaucratic transfer programs? I strongly suspect we shall see. (And this applies to foreign aid as much as it does to internal transfers…)

You Too Can Earn A Basic Income, Today!

One of the leading lights of basic income is one Scott Santens, who makes a kind of one-man basic income of $1000/month through his Patreon, and uses that money to promote the movement.

As of next year, you can do the same! Sort of. The last group with a concrete proposal spend the weekend creating and launching an IndieGogo campaign to raffle off one (1) invidual basic income; if/when funded, it will be used to give one person, chosen by raffle, an income of $1,250 a month for one year, no strings attached. I was impressed:

I like this one quite a bit: tangible, practical, iterative, immediate, semiotically powerful.

— Jon Evans (@rezendi) November 15, 2015

But — disclaimer/disclosure — one of the people behind this campaign is an old friend. So don’t take my word for it. Instead, take that of, say, Union Square Ventures partner Albert Wenger:

If you support #basicincome here is a great project to create more awareness in the US https://t.co/PTqd3hdXYB

— Albert Wenger 🌎🔥⌛ (@albertwenger) November 16, 2015

Cometh The Hour, Cometh The Meme

Are any of these proposals singlehandedly going to change the world? Probably not. But are they small measurable steps towards fundamental change? I suspect they are. I suspect now is the time for such a change to begin.

Don’t worry; it’s not just me who says so —

"It’s also time to start a conversation about the deeper changes that will be necessary over the longer term" https://t.co/AvDdIWWXkx

— Jon Evans (@rezendi) November 16, 2015

Click through and you’ll find a stirring open letter signed by legendary VCs Steve Jurvetson and Vinod Khosla, many an MIT professor, and five Economics Nobel winners, among others. It states:

The digital revolution is the best economic news on the planet. But the evidence is clear that this progress is accompanied by some thorny challenges. The majority of US households have seen little if any income growth for over 20 years, the percentage of national income that’s paid out in wages has declined sharply in the US since 2000, and the American middle class, which is one of our country’s great creations, is being hollowed out […]

It’s also time to start a conversation about the deeper changes that will be necessary over the longer term — to our tax and transfer system, to the nature and extent of our public investment, and even to how democracy can and should function in a networked world.

Indeed. We live in a time of immense, frequently wrenching, often wonderful, transformative change. As technology revises our lives, our socioeconomic system will change accordingly. That’s not a manifesto; that’s very nearly a tautology. Any belief in the sacred importance, eternal nature, or even relevance of the current status quo seems increasingly strange and blinkered.

As we move from Mediocristan to Extremistan, we’ll inevitably need something to protect, and foster, people who find themselves on the wrong side of a power law. Something very like a basic income isn’t just a good idea; it is, if you ask me, an inevitability. I just hope we move towards it soon, simply because it’s a good idea, rather than waiting until it becomes a stark and painful necessity.