AI 'godfather' says universal basic income will be needed

Ancient problems require ancient solutions

For Universal Basic Income (UBI) to work, the state would have to control the prices of universal basic needs, otherwise the capitalist class would raise prices to absorb it. But state-provided goods & services and state-imposed prices are antithetical to our current hyper-privatized, hyper-financialized neoliberal capitalism.

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Adam Simpson: […] You write about rent as it relates to land. […] I’ve seen, for instance, Thomas Paine associated with ground rent and its obvious inequality, the notion that someone has a right to a piece of land that obviously no one can really “own.” He argues for distributing that to everyone in the form of a universal basic income. That seems to be a popular idea now, particularly in Silicon Valley as well as other places. I wanted to know your perspective on universal basic income.

Michael Hudson: I think it’s a misnomer. There’s no problem with giving more people enough income to live. Even archaic societies operated on the mutual-aid principle. There’s a lot of pressure for the Federal Reserve to create a trillion dollars by giving everybody an extra $500. Why are they willing to do that? Because most people would use the $500 to pay the banks – so the banks wouldn’t have to lose money and default as a result of their reckless and unproductive lending. The problem’s not only income, but what people have to spend it on. Paine didn’t talk about universal income, he talked about everybody should have the right to a place to live, a means of their own self-support. That’s independent from income. Once you economize and financialize it, you put in a distortion.

You don’t want to give people income to buy what really should be public goods and services outside of the market. You don’t want to give people more income simply to pay monopolistic public utilities for extortionate charges for water, sewer, electricity, cable TV and education. These are things that should be removed from the marketplace, not giving people the income to buy overpriced and monopolized real estate and infrastructure services that should be public in the first place.

Adam Simpson: I completely agree. That’s my criticism of this ongoing universal basic income debate. It might be a good idea if we solve a lot of other things first. One of them being financial parasites, because in my mind people talk about a trickle-down economy. I get a sense right now that we have what more or less amounts to a trickle-up economy. At the end of the day the rich are going to get theirs. The idea of providing universal basic income or a stimulus, eventually it’s going to work their way up to the top of the system.

Michael Hudson: The key to any such analysis is circular flow. If you give people income, what do they spend it on? As I said, people have to spend 75% of their income on things other than the goods and services they produce. You don’t want to give them services to bloat this [Finance, Insurance, and Real Estate (FIRE)] sector that is sucking income upward to the 5%. You don’t want to give more people income just to pay higher rents and bank loans to the 5% at the top. You want to do the opposite.

I agree we need ubi or something more dramatic but there's been various decent arguments for how things could work without it.

The most popular is probably a continuation of what happened all through the rest of the industrial revolution. Like how the price of cloth fell when autolooms took peoples jobs, this caused demand to increase and created whole new industries - fashion, fashion blogging, etc, etc. It's easy to think that there's nothing new left but that's because new things are harder to imagine.

There's also a lot of talk about a return to more localized business models, the falling cost of services resulting in smaller communities being able to be self sufficient. The same logic goes on a larger scale also, governments able to offer more complete services at much lower prices reduces the cost of living and avoids the privation and poverty which caused such unrest in previous eras of low employment. Higher standards of living and more opportunities to engage meaningfully with the world or enjoy distractions will result in less political urgency, especially as solutions roll out globally reducing pressures that cause migration, etc.

The doomer model pushed by tabloids and drama merchants just hand waves away everything that doesn't satisfy their urge for bad news, they want us to imagine a world where hyper efficient robots have stolen everyone's jobs but it's 1925, we're suffering after a failed world war and there's no bread... it makes no sense.

We can already see the effects of technology making life cheaper, even this international conversation would have been too expensive for me to participate in fifty years ago. Education resources are actually free now for all but the most obscure subjects, it's hard to think of anything you can't learn free. Entertainment also, creative tools, all sorts of things are available to everyone on the planet - anyone trying to pretend this isn't a huge thing simply isn't being serious.

There's a lot of really complex stuff that goes Into models for how things will unfold and people talk about it all at great length, I feel a lot of people avoid these topics like antivax groups avoid learning about actual science because they don't want things to be complex, they want to feel special and you can only do that when you're certain of your opion because you actively avoided learning any confounding arguments.

i feel you but the solution is not placing your trust in people who don't know about the subject at hand.

In a way it is already acting like a CEO, LLMs basically just repeat what everyone else they read was saying, just like CEOs do with the latest hyped thing.

What do you think a CEO does?