Can a Universal Basic Income Inspire Innovation? Mark Zuckerberg Thinks So
The surge in automation is driving a decline in the U.S. manufacturing sector. Jobs in sectors like ridesharing are only temporary for workers, as companies like Uber have big plans to develop fleets of self-driving cars. And white-collar jobs are hardly immune; artificial intelligence has started to replace some white-collar workers in Japan. Despite the good macroeconomic statistics, finding and keeping a job is what keeps millions of Americans awake night after night. Can a universal basic income help solve future problems as jobs become scarcer? One minor party candidate for California’s governorship has suggested such a policy; and pilot programs are underway in Canada, Finland and Kenya as more citizens have become receptive of the idea. But the concept is still in its nascent stages, as not everyone is convinced a UBI can provide enough answers. Last summer, Switzerland’s citizens rejected a referendum that would have paid every national a $2,500 monthly supplement. But could a UBI be about more than just letting citizens get by? The pilot in Finland suggests such a policy can help decrease stress and have a positive effect on citizens’ mental health. Other supporters of a UBI insist it could actually inspire innovation by reducing people’s aversion to risk. The more vocal supporters of a UBI represent a diverse group of business leaders: Elon Musk, Pierre Omidyar, financiers Bill Gross and Albert Wenger, and business publisher Tim O’Reilly have all promoted or even financed various iterations of a universal income. On that point, Facebook co-founder and CEO Mark Zuckerberg touted the potential benefits of a UBI during a commencement address he gave at Harvard University last week. “We don’t do nearly enough to make sure that everyone can take lots of different shots,” said Zuckerberg, whose graduation speech had more of a campaign rally tone than a plea for graduates to move out and change the world. The problem is that things really are not changing much on the business front in the U.S. Fewer citizens are taking a “shot” at striking out on their own. Despite the constant calls we hear from businesses about “innovation,” entrepreneurship in the U.S. has been on a long, downward trend. The nation once noted for startups is not cranking them out at the pace of even a generation ago, when the Internet boom created a new wave of business and job creation. Several factors can explain this shift: increased business consolidation in many sectors, the hangover from the 2008-2009 financial crisis, and the fact that younger citizens are often more risk adverse – or, more importantly, they just do not have the resources to run with a new idea. The reality of starting a family or taking care of a sick family member can result in the tabling of one’s ambitions, including a delay in implementing that business plan. The U.S. also has a culture of punishing failure, whether it is in the arts, athletics, business or politics. Such an attitude is quite the opposite of countries like Israel, arguably the world’s “startup nation,” where failure is actually celebrated and viewed as the fuel behind many of its new businesses. So, does Silicon Valley have the answer to our uncertain economic future? The Bay Area’s business culture, which has long sported a libertarian streak, is actually one of the more vocal proponents of a UBI. To some observers, including Jathan Sadowski of the Guardian, the technology sector's motives are dubious: After all, if people receive a monthly stipend, they can continue to drive for Lyft and Uber or find house-cleaning gigs via apps like TaskRabbit. “Thinking of UBI as a financial innovation represents the ‘businessification’ of government,” Sadowski wrote last year. But Zuckerberg argued that a UBI could give potential entrepreneurs and innovators the peace of mind to start a new venture and pursue their creative ambitions, which, if successful, could actually become profitable. “We should explore ideas like a universal income to make sure that everyone has a cushion to try new ideas,” he told Harvard’s graduates. “When you don’t have the freedom to take your idea and turn it into a historic enterprise, we all lose.” Image credit: Alessio Jacona/Flickr Published earlier today on Triple Pundit.