Detaching the case for a basic income from post-scarcity nonsense

A popular argument for the introduction of a Universal Basic Income is that it will become necessary in the face of increasing automation. As machines can perform ever more tasks, the demand for human labour will fall, inevitably resulting in increasing unemployment. Taken to a purported logical conclusion, at some point the economy can be entirely automated removing the need for work entirely even as cheap mass production continues, resulting in post-scarcity.  Without some other major reform, such as Universal Basic Services, proponents suggest a UBI is necessary to ensure everyone can have their needs met in a world where working for an income is impossible.

This is somewhat fantastical. Post-scarcity may or may not be theoretically possible. Even if it were, though, it is not something policy should be concerned with in the here and now. Current technology and realistic projections suggest that although a significant number of jobs are at risk (around 30% in the UK), we are very far from automating all jobs.

It would be extremely difficult to successfully, let alone efficiently, automate certain jobs, particularly those requiring creativity, empathy, or a human face. This applies across a range of industries and professions. In many cases, AI will serve as a tool for workers, rather than their replacement. Just because doctors can use diagnostic machines, doesn’t mean the doctor is redundant.  In any case, the process will be incremental and gradual, rather than there being a shock moment where humans are suddenly economically redundant.

It is also probably false that the number of jobs will fall significantly. The myth that innovation destroys jobs has popped up intermittently at least since the Luddites raged against the Spinning Jenny. What actually happens is that whilst certain jobs are destroyed new ones replace them. The total number of jobs is unaffected. Ultimately, arguments to the contrary are reducible to the lump of labour fallacy.

There’s no reason to think that even mass automation would be any different. Although demand for assembly line or fast food workers may fall, demand for coders will increase. Further, new, and maybe unpredictable, demands will develop as existing needs and wants are satisfied at lower cost, leading to the expansion of (perhaps surprising) industries and the creation of new, yet to be conceived, ones. Consider that we no longer need switchboard operators whilst no one in 1950 had much interest in having a smartphone.

This does not undermine the case for a UBI. Even if automation were not happening, it would be part of a desirable reform of welfare. It would be more efficient to replace the current system of benefits with a UBI, especially if it were in the form of a Negative Income Tax. Going further, it would be desirable to replace as much state welfare provision as possible with simply giving people money. Asides from removing layers of bureaucracy it would allow for greater autonomy and responsibility than direct state provision.

Given that (some) automation is happening and that the labour market has been disrupted by developments like the gig economy, there is an additional impetus for a UBI. There are distinctions between contemporary automation and historic disruptive innovations. The speed with of job creation and destruction has increased (consider the recent emergence of cab hailing apps and the prospect of driverless cars in the not-too-distant future).  

The difference between jobs may have increased. Where labour is increasingly specialised, the difference between skills needed to perform different jobs has increased. Switching from one unskilled/semi-skilled position to another is (comparatively) easier and cheaper than switching from a semi-skilled or skilled position to a, perhaps radically, different skilled role. Whilst a former hand weaver required training to be able to work machinery, this could be done relatively straightforwardly and on-the-job. Transitioning from driving a taxi to coding requires more formal and theoretical training.

If there is a real threat from automation, it is the prospect of higher structural unemployment. One “solution” is stifling innovation, whether through attacking the gig economy or “taxing robots”. This would be unfortunate and unnecessary. Whilst other policies, such as updating education and expanding it for adults, may have a role, a UBI would be useful. Especially if it is structured as a NIT, ensuring that extra work always pays, the risks to both the individual worker and the economy of long-term unemployment can be mitigated, without undermining innovation and labour market flexibility.