Universal Basic Income (UBI)

This topic is about economics in a world of advancing productivity due to AI.

Given: AI will displace vast numbers of jobs for humans.

Given: advancing AI will not be cheap. Very large and expensive amounts of compute will be required. Cost savings will come largely - entirely? - from productivity gains leading to fewer paying jobs for humans. The dominant means of distributing wealth downward will shrivel. Wealth will be concentrated.

Discussion: UBI has been proposed as a solution for distributing AI-generated wealth downward.

In the very long run, that solution might work. But in the shorter term, there’s a problem. The wealth-generating potential for AI will come from price reductions.

Example: Tesla’s FSD intends to displace taxi and truck-driving jobs with far lower fares/cost per mile. Millions of taxi and trucking jobs will be lost. But lower fares means reduced tax revenues for these industries. Where will the revenue come from to pay UBI to displaced workers?

In the long term, we might hope to see AI create new wealth that did not exist before - making UBI easier to afford, through taxation. But the low-hanging fruit is payroll. That is what will be slashed first to generate profits for owners of capital. And that means falling revenue for governments. It means reduced consumption for consumers. It means depression-level economic doldrums. It means enormous wealth concentration. It means enormous social disruption and dissatisfaction.

Thoughts?

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We need to be able to visualize radical ideas for moving towards this future. I’ve got plenty of ideas but what if we could create some world sims that would help us visualize potential scenarios and solutions?
I’m normally pondering how we could convert wild areas into manicured food forests, or how we could create roaming tribes on solar powered tricycle houses, but for now the simplest idea I can think of that would address the coming collapse in jobs and income:
Minimize property tax. If what’s coming is unavoidable - how do we make it easier for people to keep their lives and famlies together through the initial phase?
One reason I bring this up is because of a story I was told by a gal who lives here in the USA now, but grew up in Iraq. She told me that before the invasion, it was a wonderful place. People didn’t have to work much because there was no property tax, and food was easy enough to grow. She said Saddam was moving to get off the USD, and that’s probably part of why their country was destroyed.

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Universal Basic Income is a simple statement to what could be looked at as a problem around resource alignment. Ai can be used to determine the deploying of resources, both support staff and goods and services. By simply tracking real-time data of a part of the population that is clearly focused on a particular path, you can incentivize the behaviors you want repeated while giving consequences to the behaviors you don’t want repeated. I founded State of the Heart Recovery three years ago and we are assisting hundreds of people on their journey of recovery through healing, empowerment, and sobriety. If we utilize the predictive capacity of the ai we can find the “sobriety algorithm”. Once we can beta test a tool with this demographic we should be able to apply it to many other paths that people choose to embark on. I hope this makes sense, I am not used to writing and do a much better job exprfessing myself through talking. Please let me know if you have skills in the ai side of things and have an interest in the social side of things. Thanks.

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UBI is a good idea regardless of the AI aspect. But yes, I smell bullshit from lightyears away when I hear those super rich nerds say “job losses? UBI then!”… Because we have already been growing massively more productive decade after decade after decade, and could already implement some form of UBI, and yet we don’t.

Of course big companies will continue to grow and won’t share unless forced to. And the idea that workers will somehow benefit from losing their only bargaining tool seems staggeringly naive.

That said, there is an argument maybe that if the overwhelming majority of jobs go away, then we just have to figure this out because those companies do need customers?

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Even if you can create a UBI in an post-AGI world, it creates a permanent underclass.

If none of us can outcompete an AI, then there will be no social mobility. So once you’re on the UBI you’re never getting out. All that does is undercut social pressure enough so the rich get to keep their existing wealth disparity, if not widen it as the AIs they own go on to create infinite wealth.

Negative taxation is better in a way, because it costs less and so can be implemented sooner and in more places. However it still largely has the same effect once human effort has no monetary value.

No, much better to overhaul the economic model so that all value is redirected for good, not just the scraps.

It used to be that governments collected coins as tax to pay for things, but thats not actually how it works any more. Fiat currency has essentially reverse the process.

Governments can print as much money as they want at any time. The limit on their printing is that making more money reduces the value of money, causing inflation. When governments apply a tax, they aren’t really collecting coins, they’re just shifting numbers out of people’s bank accounts, and effectively destroying that amount of currency within the market.

This create a balancing act, where we can create enough money to pay for whatever we want, as long as we’re willing to find somewhere in the economy to destroy the equivalent amount.

This distinction is crucial to a post-AGI economy, as it shifts the parameters of the problem we’re solving and enables innovative solutions

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UBI should be easily affordable if AI produces the kinds of productivity gains computers did in the 80s.

I think it’s more a question of sustainability; even if clean energy production and climate change are negated by fission reactors, the environmental pollution from all the waste would be awful.

Governments could solve this by impose spending restrictions on UBI or start heavily taxing pollution (and any other undesirable externalities), but given the current relationship between politicians and big business I think it would require some pretty significant pressure from below to ever come about.

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Interesting point on negative taxation/money printing, but it would take a bloc as big as the US or EU to lead on it and not get cowed by the markets/capital flight.

Not sure about about old money necessarily shoring up their position though… I think Sam Altman recent run-in with the board said a lot about where power lies atm. And whatever side of the political spectrum you’re on, I think most people would agree that the likes of Altman, Bezos, Musk et al seem to have a pretty strong social conscience, certainly more so than hedge-fund managers acting solely in the interest of their clients. I mean at least our business leaders have some pride at stake, unlike our trust-fund babies and politicians.

If it’s the geek that inherits the earth I think we’ll be alright.

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The term “Universal High Income” (UHI), coined by Elon Musk, may be more appropriate than Universal Basic Income when discussing how to distribute the potential abundance of wealth created by advanced AI systems. If AI truly unleashes transformative economic productivity, the goal should be to ensure those gains are shared equitably across society, raising living standards significantly for all - not just providing a basic subsistence level.

However, the crucial challenge lies in determining effective mechanisms to achieve that broad-based distribution of AI-generated wealth and productivity. One approach that warrants serious consideration is making the core AI systems open source, while still maintaining adequate governance and control measures. This could help prevent the monopolization of AI capabilities by big tech companies, which risks exacerbating current wealth inequalities even further.

Additionally, as more companies reduce their human workforce through automation while maintaining or increasing productivity, a new form of “automation tax” may be necessary. This tax could be levied on companies based on the degree of human labor displacement caused by AI/automation. Revenues from such an automation tax could help fund the UHI program and subsidize displaced workers.

By decentralizing access to transformative AI technologies and implementing innovative tax policies like an automation tax, we may have a better chance of ensuring the economic windfalls get distributed more evenly throughout the population. Nevertheless, the details of how to structure and safely govern such open source AI frameworks and optimally implement automation taxes remain complex issues that require careful multi-stakeholder cooperation and forward-thinking policies.

Ultimately, if we can solve the ethical and operational challenges around democratizing transformative AI capabilities responsibly while enacting new equitable tax models, it could pave the way towards an era of shared prosperity instead of entrenching wealth disparities. But make no mistake - navigating this will be one of the great governance tests we face this century.

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To avoid a sudden disruptive economic shock, I’m expecting states to adopt stricter labor policies regarding layoffs - similar to France’s policies. Corporations will reduce payroll primarily by attrition rather than sudden layoffs so the economic consequences will be felt over a decade, giving society time chance to adjust. Corporations will be motivated to find other useful work for the employees that have become redundant by AI.
The solution would:

  • Buffer the effects on real estate, which would be devastated by sudden massive layoffs. (Ultimately, I could see HUD buying and managing homes that would be occupied by the “UBI class”.)
  • Not help part-time and temp workers. And small companies may be exempt.

Someone commented here that the UBI would create a permanent under-class. I’m not sure that’s true. While the “UBI class” will be lower than the “Employed class”, people in the “UBI class” could still acquire skills to find employment in the few professions not replaced by AI.

Another question that I have is: “How long will society be willing to provide resources to the ‘UBI class’ if they’re simply spending their days playing videogames?” We need to find a way for the “UBI class” to provide some benefit to society.

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There’s a lot of discussion here around “how to fund UBI” without the recognition that the entire U.S. tax code is broken (and yes, this whole discussion has been focused on how the U.S. operates). If the doomsayers are right (I don’t know that I disagree with them), and half of the workforce is unemployed because automation has reduced the number of jobs that require their efforts, than we will need an entire re-thinking of how society operates.

The founding principle to UBI, as far as I can tell, is that each adult in a society gets a monthly check that provides them with enough money to at least provide themselves and their non-UBI dependents (e.g. children) with basic shelter, food, and necessary services (utilities, et al). This check arrives whether you’re working or not, have “plenty” of money in the bank or not; if you meet basic criteria (i.e. adult citizen), you get the check.

So the question is how much money is that? I can tell you that in the U.S. we don’t have enough housing for everyone who needs a house, whether or not they can afford to pay for it. And if it’s left to commercial housing providers (investors who build apartment complexes), the “fair market value” for minimum housing will be 45% of whatever the UBI check is. That leaves 55% of the check for people to cover all their other expenses for a month. Prices will rise until there’s not enough money in that UBI check to pay rent, and people will begin to starve. That is modern Capitalism: if there is money flowing in an economy, the basic goal of Capitalism is to capture it.

To the person who talked about taxing labor displacement, how do you determine that? If an automaker builds a new, fully-automated plant, how do you determine how much labor was displaced? None was. You can’t use a “pre-AI” standard, because then you’re going to end up finding where to draw the line when you feel good about the level of automation not displacing someone. Or you’re going back to taxing anyone who doesn’t employ scribes to copy documents.

I have a concern about one of the early posts in this thread that used the term to refer to distribution as “downward”. So long as we conceive of people receiving UBI as “the bottom”, then we’ll never change sufficiently to have a long-term sustainable society. We need to re-think how we differentiate between a society’s citizenry and the ability of that society to have production.

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What about the concept of having “single-payer living expenses”? For people with health insurance (in the U.S.; I don’t know how it works elsewhere), when they get medical services, the provider submits the bill to the insurance company, there’s a negotiation between the provider and the insurer, then there’s settlement (the provider usually gets paid something that may or may not be the billed amount), and if there’s any unpaid balance, the provider refers the remaining bill to the consumer. There are laws around what the consumer can be billed for, and what providers can charge, so the providers can’t (theoretically) abuse consumers. There’s been a lot of talk in the U.S. about migrating to a single-payer healthcare system for basic necessities, so everyone (at least citizens) can get basic healthcare and it gets billed to a central government-run payor who transacts the vast majority of claims. Non-covered services would be referred to a supplemental insurance provider.

So what if we implemented a similar system for living expenses? So there’s a standard limit for housing services (let’s say -arbitrarily- $1,000 per month), and the landlord or mortgage company submits a claim for rent recovery to a central payor. The same happens for utilities. Anything over the amount is left to the consumer to pay. Citizens get a stipend (maybe $1000 per month) to cover food and optional expenses. The amounts are based on a constantly-updated cost-of-living calculation that’s rooted in nationwide amalgamated pricing, so people who choose to live in expensive areas do so with the recognition that they’re going to have out-of-pocket expenses that might require them to have a job.

I’m sure there are holes in this idea. What do you all think?

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Land should be taxed, not the improvements on the land.

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If a lot of people are jobless - trending over time to the majority, I fear - it will create a very tough dilemma for governments. Tax revenues will fall, while need for a social safety net will rise.

Arguably, property taxes are progressive; the richer you are, the more you pay. Broad property tax relief will disproportionately benefit the rich.

I would suggest instead a value exclusion, so that property ownership below a value threshold is left untaxed.

That won’t solve the coming collision between falling tax revenues and rising social desperation, of course.

Changing the subject, I can’t think of a more dystopian idea than converting wilderness into robot-managed agricultural operations. That will certainly accelerate species extinctions. I think we need to protect as much wilderness as we can. We will have farms, of course. We have to eat, too. But we should balance that need against another need: we must exist within an ecosystem of millions of the other life forms. Kill those off and we threaten ourselves.

When you pick the winners and losers in wilderness, and skim off useful food items, it’s no longer wilderness. Diversity will crash.

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Did you watch the video before dismissing the idea of not taxing improvements on land, just the land?

I dismissed blanket property tax relief, and suggested instead setting a floor, below which property taxes are not imposed.

I did not dismiss the idea of tax relief for improvements to land. Set a threshold. If the combined value of land and improvements are below the threshold, don’t assess taxes.

No video, or argument, or expert testimony will convince me to spare the rich from taxation.

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While I think UBI will be a necessary stepping stone, I think the end goal should be an egalitarian society, where resources are shared equally among everyone, and money eventually seizes to exist.

I understand this is very controversial and especially people thinking about starting a business right now do not even want to consider this as an option, plus the very nature of capitalism rebels against this idea with an intimidating roar.

BUT: That’s how I see it. That’s what people will ask for. If the majority lose their jobs, they will not settle for a bit of money every month to get the basics. Maybe for a while. Then, they will start looking up to those who accumulated all the wealth and don’t intend to part with it. While not having a way to compete with it. It might very well come to it, that we will overthrow capitalism at that point.

Speculation, of course!

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I’m not against taxing the wealthy. As a homeowner, however, I reject the idea that taxes should go up because the perceived value of the house goes up. We don’t tax stock holdings when their market value goes up.

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In a scenario where AI is completely in charge of the economy at every level, from barista to the boardroom, and everyone is at home sitting on their ass, money, as we know it today, would cease to have any value. What’s the point of it if everything is free and limitless? Wealth would be measured by ownership and control of AI. A new currency could be based on that, if it was felt necessary to maintain some sort of currency for sociological reasons. The obvious name for that new currency would be the Token.

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I did an interview once with somebody who is an expert on universal basic income, and one of the most interesting things was how if you give money to a bunch of people who don’t have disposable income right now they actually buy all sorts of stuff you might not expect and the market efficiencies kick in. This is the signal that tells industry what they really need to produce, it’s a signal of what consumers want to buy and proof they are willing to buy it. This is missing as the poor become poorer.

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Yes, and that makes total sense in the current economic paradigm. But not a heck of a lot in the next economic paradigm, which will be completely AGI, from top to bottom.

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