Why Silicon Valley is embracing universal basic income
by Jathan Sadowski
IN A PILOT study influential incubator Y Combinator will hand over cash monthly to 100 families in Oakland, California. What’s UBI’s payoff for tech entrepreneurs?
Silicon Valley has, paradoxically, become one of the most vocal proponents of universal basic income (UBI). Venture capitalist Marc Andreessen, web guru Tim O’Reilly and a cadre of other Silicon Valley denizens have expressed support for the “social vaccine of the 21st century”, and influential incubator Y Combinator announced on 31 May that it will be conducting its own basic income experiment with a pilot study of 100 families in Oakland, California – a short hop over the San Francisco bay.
Y Combinator will give each family between $1,000 and $2,000 a month, for between six months to a year, to be spent on anything anywhere. Oakland, as Y Combinator says, is “a city of great social and economic diversity, and it has both concentrated wealth and considerable inequality”. It might earn the tech sector some goodwill from locals suffering Oakland’s gentrification by invading techies, but Y Combinator also hopes to collect valuable data from the pilot on how to implement, manage and scale further UBI initiatives.
UBI is one of those rare social programs that has a radical flair, while also finding support across the political spectrum from libertarians to socialists. Silicon Valley’s flavor is, of course, thoroughly technological, embracing tech advances to achieve abundance in a manner that bears some resemblance to “fully automated luxury communism”. This modern take on Marx argues we should not fear robots taking away our jobs and making us obsolete. We should embrace them! They will deliver us into the post-work future where robots produce while we consume, create and relax – but only if we seize control of the technology.
So how does UBI fit into this Valleyian vision of the future?
First, UBI subsidizes disruptive technologies. “The motivation behind the project is to begin exploring alternatives to the existing social safety net,” Elizabeth Rhodes, the research director for Y Combinator’s UBI project, told Quartz. “If technology eliminates jobs or jobs continue to become less secure, an increasing number of people will be unable to make ends meet with earnings from employment.”
UBI becomes a consolation prize for those whose lives are disrupted. Benefits still accrue to the designers and owners of the technologies, but now with less guilt and pushback about the collateral damage.
Rather than steer technology towards social progress by promoting projects that contribute to public benefit and human flourishing – not just reflect the desires of privileged groups – Silicon Valley elites can shake off critics by pointing to UBI as the solution, and one that does not restrict their profit motive.
UBI can, in some ways, be seen as welfare for capitalists. Now, more people can drive for Uber and work for TaskRabbit – at even lower wages! – because UBI subsidizes the meager paychecks earned by hustling for the sharing economy. The tech companies take home the profit and face even less pressure to pay a living wage to their non-employee employees.
Second, support for UBI is framed in terms of human capital. Steve Waldman, a well-known programmer and economics writer, praises UBI by referring to it as “VC for the people”. VC, venture capital, invites people to embrace their inner entrepreneurs, he believes. Thus, UBI is not (only) a moral response to economic harms or a political response to social injustice, but a sound financial investment in the startup-of-you. A way of producing more makers, risk-takers, and move-fast-breakers – the type of people that tech culture values above all others.
Thinking of UBI as a financial innovation represents the “businessification” of government; now we talk about the “return on investment” of social policy, rather than outcomes in terms of public good. When social policy is evaluated using economic standards you get starkly different policies, different expectations, and different beneficiaries.
Third, the version of UBI backed by Silicon Valley – and others who lean libertarian and conservative – is a regressive redistribution. With UBI gaining popularity it is not hard to find people making “the case for free money”, as the New Yorker recently put it. Of course, the money is not free. It has to come from somewhere, but where? For many supporters it only makes sense that the budget for UBI would come from cannibalizing existing welfare. UBI would not exist as an add-on benefit. The logic is to shut down “public housing, food assistance, Medicaid, and the rest, and replace them with a single check”, writes Nathan Schneider in Vice. The welfare system can finally be eliminated and the state bureaucracy consolidated into an efficient, simple solution for poverty.
No wonder that technocrats and Tea Partiers can come together in support of UBI.
Now here is the regressive part: since UBI is a lump sum for everybody, and if it is funded from the remains of welfare, then the poor would be footing the bill for the UBI paycheck that middle and upper class people receive. The universal quality means it is a salve applied to everybody, not just those burned by economic inequality. “If it’s truly universal, it could help destigmatize government assistance,” argues James Surowiecki. True enough, the simplicity of this “set it and forget it” welfare could make it an easier political sell.
However, it is cruel to call for regressive measures like dismantling welfare to establish UBI and then demand a piece for yourself – or else stigmatize the assistance. UBI can help give people more stability in their life, the workplace and society. But it should work in tandem with targeted aid motivated by equity over blind equality. The hungry should get a bigger slice of the pie.
UBI programs are not necessarily antagonistic to capitalism, but rather can be used to support an economic system that squeezes profit from every facet of society. UBI can undoubtedly help ease the suffering of people – way too many people – who daily deal with empty wallets, hungry bellies, uncertain work and overdue rent.
But the trouble comes when UBI is used as a way of merely making techno-capitalism more tolerable for people, when it is administered like a painkiller that numbs the pain and masks the symptoms of economic injustice without addressing the root causes of exploitation and inequality. We cannot treat UBI like an endpoint; it should be a stepping stone to fixing core issues.
Why do the wealthy and elite support seemingly radical social programs? Have they grown enlightened and concerned with the plight of everyone else? Is this a mea culpa designed to make exploitation more bearable, a bit of comfort to soften the crushing pressure of life?
Or is it a stealthy way for them to backdoor their own politics and values, while also protecting their positions in society?