Basic income: Silicon Valley resolves to disrupt poverty

Silicon Valley leaders have jumped on the bandwagon for basic income, but they are more part of the problem than solution

Basic income: Silicon Valley resolves to disrupt poverty

An interesting development has arisen: Universal basic income has become the darling of Silicon Valley. But before you get up and dance to "Money for Nothing," brush up on what Greek mythology has to say about Trojans who wheel gift horses into the city.

Technologists -- from Tim O'Reilly to venture capitalist Albert Wenger to authors and entrepreneurs such as Peter Diamandis and Martin Ford -- suddenly seem eager for government to hand out cash to us ordinary folks. Some, such as Sam Altman, are even putting their money where their mouth is. The president of startup incubator Y Combinator is funding a five-year study in Oakland on the effects of giving people enough money to live on, no strings attached.

What gives? When Silicon Valley leaders speak out, "it is usually to disparage the homeless, celebrate colonialism, or complain about the hapless city regulators who are out to strangle the fragile artisans who gave us Uber and Airbnb," as The Guardian wrote.

Basic income bromance

In the '60s and '70s, when this country was caught up in a War on Poverty, basic income was an idea that had the support of people ranging from economist and libertarian hero Milton Friedman to Martin Luther King Jr. to Richard Nixon. Now the idea is undergoing a revival -- and not only in Finland, the Netherlands, and Canada, which are all implementing experiments with basic income.

Silicon Valley's embrace of the concept seems at first blush to be fueled by a belief that technology -- specifically breakthroughs in automation, AI, and machine learning -- could soon make people as obsolete as workhorses. In such a future, basic income will be necessary to stave off a Luddite uprising.

"Don't destroy the robots," says Professor Jeffrey D. Sachs of Columbia University. "But recognize that not everybody would be better off as a result of market forces. With redistribution everybody could be made better off."

Of course, not all experts are convinced of humanity's impending redundancy. According to the New York Times, for every analysis forecasting that half of all jobs in the United States will be replaced by new technology there are others finding no such evidence.

What can't be denied is the widening gap between rich and poor in the United States. Tech's supporters of basic income often point to this growing gap as proof that accelerating technology creates inequality. According to this theory, The Guardian says, capitalism is meritocratic and technology enriches "those exceptional few who are smart enough to perform tasks that are too complex or creative to automate, while impoverishing the rest." 

But if technology really is to blame for this growing gap, why has wage growth stagnated for pretty much all workers -- Wall Street excluded? People in IT earn about as much today in inflation-adjusted dollars as they did in the late 1990s.

Good cop or bad cop?

Inequality isn't the inevitable by-product of technology, The Guardian argues. If it were, other industrialized countries would have levels of inequality comparable to the United States -- which they don't. Instead, Silicon Valley's embrace of basic income is "the Trojan horse that would allow tech companies to position themselves as progressive, even caring -- the good cop to Wall Street's bad cop" when what's probably needed is a transformation of the tax code.

Don't fool yourself: Tech investors don't expect to pony up and fund these basic income payouts. Heck, many are pioneers of tax avoidance schemes to avoid paying any taxes at all.

Nor do they propose putting an end to their gold rush on personal data. We are all currently giving away our data for free to tech giants. Telecom data alone is currently worth $24 billion per year, on its way to $79 billion in 2020, according to estimates by 451 Research.

What if instead of asking the needy to foot the bill, through the elimination of government programs like public housing, food stamps, and Medicaid -- as Libertarians and conservatives propose -- the basic income was structured like a dividend from tech companies for our "natural resources," like Alaska does with its oil taxes and profits?

Spread the wealth

If Silicon Valley really wants to take steps toward the introduction of basic income, "why not make us, the users, the owners of our own data?" proposes Evgeny Morozov, author of "The Net Delusion: The Dark Side of Internet Freedom." "Think of a mechanism whereby ... data that now accrues almost exclusively to the big tech firms, would compensate citizens for their data with some kind of basic income, that might be either direct (cash) or indirect (free services such as transportation)."

This will never happen, Morozov says, "because data is the very asset that makes Silicon Valley impossible to disrupt -- and it knows it .... Somehow our tech elites want us to believe that governments will scrape enough cash together to make [basic incomes] happen. Who will pay for it, though? Clearly, it won't be the radical moguls of Silicon Valley: They prefer to park their cash offshore."

The tech industry has fed on a steady stream of public goods ever since the U.S. military funded Silicon Valley into existence, The Guardian says. "Those goods might be government research, mined for profitable inventions, or the contents of your Gmail inbox and Facebook feed, mined for advertising revenue. What matters is they're free, and they're free because we give them away. If the robots ever arrive, their arrival will be bankrolled by our taxes, our attention, our data."

Ben Tarnoff calls a basic income policy under these circumstances "the crumbs left by the bully who steals your sandwich." It seems there really is no free lunch.

Copyright © 2016 IDG Communications, Inc.

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