Universal Basic Income to De-Risk Entrepreneurship / Take Next Step in Society
I’ve been thinking about what makes modern humans “human.” Throughout history, humanity has taken tremendous strides to forming governments, laws, cooperation vs. dog-eat-dog through trade and commerce, establishing basic human rights, and various other ways that has made life astronomically better than our fellow “animals.”
Because of these advancements in our evolving state of capitalism, our living standard is improving incredibly - not only by having cooler “stuff” but also by having guaranteed rights that have in turn given us better / more opportunities for innovation.
Now with AI, I assume that once we fully embrace it — it will make us exponentially more productive, and eventually, we’ll be able to (emphasis on the mere potential to) create a somewhat endless supply of food and water through incredible recycling mechanisms / sustainability.
Related - what if we got to a point where we eliminated scarcity and also provided everyone with a universal basic income?
Perhaps this would encourage greater entrepreneurship as people would have a guaranteed income to fall back on.
Perhaps this is the next step in making us more innovative / “human.”
Very radical ideas that are not fully fleshed out as I don’t want to write a novel - but I wouldn’t deem them as entirely impossible.
After all, years ago traditional ideas were assumed perpetual for humanity but then we realized that we as humans can do better.
Thoughts?
You're asking the top .01% to give up a fraction of their wealth to support billions globally.
In other words, it's not gonna happen
Good point - unfortunately these bloodsuckers think the world is better by them sitting on their wealth.
Hinders humanity’s potential.
A lot of these top 0.01% donate a lot and are philanthropic. Maybe they're not giving out billions but many still give something back to society.
Lets be real, if you were in the same situation - wouldn't you consider saving a good chunk of your net worth for generational wealth? Richest family I personally know lives lavishly but have been involved with philanthropic work for a very long time.
If the global economy were to go through restructuring I think that a universal base income is very much possible right now. In terms of how sustainable that is, I have no clue.
Back in my schooling days, they called that socialism.
In contrast, I have no idea how the current growing inequality is sustainable.
Its not.
This could be a modified version of capitalism vs. socialism (or modified socialism).
Regardless of how we “bucket” this - I think we have tremendous potential if we embrace these ideas.
Orrr we could just enter the inevitable revolution / societal collapse that is closer than we think…
If this neosocialist world existed, people would be less likely to form communities around something and be ambitious. Think about WSO. I joined this place to solve the problem of breaking into IB and it worked because I could chat with others regarding the same pain point. Break throughs are made because of scarcity. Take away scarcity and you take away a reason to try for more.
There will always be “scarcity” in terms of “wants” given our human nature.
I’m saying that if we eliminated scarcity of “the basics” — and everyone could focus on “higher, more human” things like starting a business / conducting medical research / inventing cooler shit / etc. — then the living standard on earth would increase much more (more human capital invested in innovation)…and there you have it, we advance in society and become better.
You've clearly been thinking about this, how do we reconcile other developed economies who do provide to a limited extent the coverage of basics relative to their innovation or entrepreneurship? Scandinavian countries, for example, have considerably higher floors - healthcare, education, etc. are all covered - which I'd argue are largely the basics that bankrupt people or put many in fragile positions. There's plenty of support mechanisms as well, along with high tax rates to boot. Those other countries don't touch the level of innovation, entrepreneurship, etc. that you see in the US. To be clear, I'm not saying it doesn't exist or there aren't benefits that help innovation across the globe - but not much matches the sheer concentration and size of what you see in the US.
I think about the US and there are considerable advantages we have - huge capital stock, free flowing investment, first mover advantages, etc. but there's a clear trend of innovation throughout the last 150 years that is distinct from other places. We have IP protection (though that's gotten looser over time), a legal system that works most of the time, installed education base, immigration brining new ideas/perspectives/talent (though... we should probably get back to this one), and an economic model that produces more downside but virtually unlimited upside. You can even go bankrupt and get a second chance here - hell, half the investors might even give you MORE money after you fail to try your next idea.
I think to your point, we need to re-prioritize what we value from innovation in the future. EV's, blockchain, technology, AI - they are all fantastic innovations. The catch is we need to go back in time to strip mining South America and China for the tangible materials needed to support them. They also require significant energy inputs - which are absolutely solvable, but need a re-think in what we want from our energy grid. Same with our education systems and where we are deploying our human capital. It doesn't do any good to cover the basics for people, if they've been taught to think inside the box for 20 years. This sets aside the old trope, that I won't bore you with, that necessity is the mother of all invention. I think these conversations die when you get to that cheesy of a quote.
That's a rambling way of getting to the point that risk is inherent to what you are describing. Innovation carries risk with it. Financial, social, emotional, physical, and plenty of others.
How can you be sure that fully embrace the AI will provide us a basically infinite supply of resources? I’m sorry but this is simple not possible since the natural resources are finite and not infinite, no matter which production process you will use.
On another side, the universal basic income could be used to allow people to at least try an entrepreneurial path (even if we all know that 90% of the people - it is a personal assumption, no data here of course- will simply use this income for consumption and not for production/investment)
I feel like the last time we gave a bunch of money no strings attached to people was 2020-2021 and we ended up with "innovations" like NFTs and a bunch of crypto scams.
Have there been smart but down-on-their-luck people in history who, with the right resources, may have changed the world for the better? We'll never know but I would certainly agree those individuals have definitely existed. But I generally believe that the people who are determined to change the world will find resources to get there, and throwing too much money too generally at a problem like entrepreneurship and innovation will only serve to distort markets for everyone.
Imagine a world where incomes are 100x greater, where people can afford things that kings could only dream of, where infant mortality was slashed to nothing, where deadly common diseases were nearly eradicated, where you could travel the global with ease and communicate with anyone for almost nothing, where you didn't spend 80 hours a week in a factory or the farm...
Imagine just what we could do.....oh yeah that's right. We're already there.
I've become convinced that human beings will be up to the same ole shit no matter how much our standards of living improve. Envy, inequality, greed. it will all still be around.
Truly fascinating how much we are obsessed with de-risking… from loose monetary policy (can’t accept asset prices fall and will do anything to prevent it) to the backstopping of corporate failures. In recent decades.
Risk is a feature (not bug as your proposition would suggest) of entrepreneurship
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