Virgin CEO Richard Branson is the newest addition to a growing number of tech entrepreneurs and Silicon Valley executives who are renewing the push for Universal Basic Income (UBI).
In a Universal Basic Income system, everyone is entitled to a free standard salary just for being alive. Think of it like a massive welfare system.
Today’s push for UBI comes from the fear that automation will one day leave a significant percentage of Americans permanently unemployed.
“There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation,” predicts Tesla CEO Elon Musk.
UBI is a misguided and childish solution to long-term unemployment that fails to take into account the problems it would cause. Let’s take a look at Saudi Arabia, which has long depended on its oil wealth to fund a large percentage of unemployed Saudis who aren’t looking for jobs.
The system established a reliable source of income for the unemployed, but it also creates a population that is entirely resistant to the idea of working.
“Efforts by the Saudi government to diversify the economy have been hamstrung by the difficulty of getting Saudis to trade in their free income willingly for paid labor,” writes The Wall Street Journal’s Dan Nidess.
UBI eventually divides a given population into “productive” and “unproductive” classes. This divide, coupled with a hereditary monarchy and strict religious laws, has made Saudi Arabia “a fertile recruiting ground for extremists,” continues Nidess.
UBI advocates are quick to argue that a guaranteed income would encourage people to take more financial risks and to follow their dreams.
“Giving people even a very small safety net would unlock a huge amount of entrepreneurialism,” insists Slack CEO Stewart Butterfield.
I agree with Nidess when he says, “UBI addresses the material needs of citizens while undermining their aspirations.”
Just think about it: would the average unemployed UBI recipient be motivated to seek further education to get a better job? Or would he stay at home and play video games, content with his government-provided salary?
Author’s Note: Universal Basic Income undermines the very heart of democracy. Experts have been warning us for decades that robots will one day take our jobs, yet we seem to have no unemployment problem in the United states.
Editor’s Note: I first came across the UBI types at an economic conference about 12 years ago. At that time, I couldn’t believe I was in a room full of economists who couldn’t do basic math. I still marvel that otherwise educated people could understand so little about economics, math and human nature, any of which make this concept absurd.