Do you want one thousand dollars?

The allure and viability of Universal Basic Income

UBI, or Universal Basic Income, is something that you've probably heard of - but if not, you'll hear a lot about it in the coming years.

The idea of the proposal is simple - everyone receives enough money to live comfortably, unconditionally. There is no means test, i.e, there is no test of eligibility. If you exist, you get money. It doesn't matter whether you're a starving farmer or a big tech executive making millions of dollars. You'd both get the same amount of money.

We can stretch this definition further, and assert that everyone from all over the world gets the same amount of money, according to this utopian proposal.

This makes even less sense, as somewhere in Africa where the poverty rate is $2 of income per day, $1000 a month can go a lot further than in US, where the poverty rate is $20 per day. An obvious question might be - "Why does the poor African get $1000 per month, when he could effectively live the same lifestyle as the poor American with only $300 of income?"

Let’s ignore this question for now, and assume that we’ll give to everyone equally. We’ll come back to this later. There are bigger questions that we’ll tackle first in this essay like -

What’s needed if everyone from around the world has to get $1000 a month?

That's 12k for each person annually, which comes out to about 96 trillion dollars a year. Nobody has that amount of money, but let's assume that we'll get that money from somewhere other than money-printing from governments (which leads to obvious inflation).

We've chosen $1000 here, as it's the amount you'd have to provide as UBI in USA, which means it's more than enough for everyone else all over the world.

So, what are the good things that can happen because of this?

II.

If you're fortunate enough to be reading this essay, you're not working inside a coal mine somewhere. You don't have to wake up in the morning thinking about where you'll find the money to feed yourself and your family. The constant stress of getting enough money to survive is probably absent in your life.

But for the vast majority of the world, the lack of money plays an active role. Billions of people work jobs they hate just to get money. Millions struggle to eat twice a day, just because they don't make enough money. And hundreds of thousands resort to criminal activities because they're forced by their circumstances to do so.

Now, I'm not saying that UBI will instantly stop all crime even if it’s common sense to assume that it might reduce it. In fact, the original motivation for UBI came from an English statesman named Thomas More in 1561. In an answer to the statement "No penalty on earth will stop people from stealing, if it's their only way of getting food" he wrote -

"Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody's under the frightful necessity of becoming first a thief, and then a corpse."

Almost 500 years later, we haven't yet conducted any nation-wide experiments to verify whether Mr. More was right. The correct answer is- we don't know what will happen and whether that’s overwhelmingly positive or negative.

But if we empathise for a moment - we can predict that some things will happen based on just common sense.

UBI will certainly reduce the constant stress of money for a majority of the population. People would know for a fact that they can afford a meal, their rent and maybe even raise a family without worrying about their next paycheck.

Some would try to start new businesses. Some would skill up to find new jobs. Some would create art, some would save and invest, some would indulge in more pleasures than they could, some would support others who need more than what they're getting, and so on.

By removing the constant stress of money, you're effectively freeing up people to explore a higher self within themselves, empowering them to reach their full potential. The button clicker at an Amazon warehouse might decide to start a business instead. The homeless person at the side of the street might realise that he still has a chance at living a fulfilling life and pursuing his dreams.

All these things are arguably good, and the second order positive effects are probably greater.

People will probably prioritise their health more. From having the time to exercise and the ability to afford gyms to getting regular medical checkups, it's not a stretch to say this can reduce hospital visitations drastically.

Art and the consumption of art may increase - as people pursuing these pursuits may do so freely without worrying about having a job to pay the bills.

Tourism will thrive as people will travel more, especially those with already greater incomes who can save up the extra cash.

People going from doing whatever job they can get to pay the bills, to searching for the right job for them would mean businesses would have to make existing jobs more employee-friendly, which means every workplace will be more pleasant in this world.

Overall, it is not hard to imagine a better world. A better world with fewer problems than what we currently have, just because the primary stressor of most people's lives doesn't exist anymore. Fewer cases of suicide, less homelessness, children in every household getting proper nourishment and care, the list goes on and on.

Now, this doesn't mean everything's sunshine and rainbows. There could be some problems with UBI, and I know while reading the above paragraphs you've already thought of a few.

People might just decide to indulge in alcohol and drugs, and just waste all the money, leading to no improvement in their lifestyle at all. A recent research program funded by Sam Altman of OpenAI found that when they gave 5000 people $1000 a month for 3 years, recipients mostly spent the cash on life necessities, got a bit choosier in their employment, and made more use of medical care. If there was any negative, it was that married people who received UBI worked 15 minutes lesser per week than they used to, which to be fair, is vastly more positive than the predictions of most naysayers.

This doesn't prove that on deploying UBI on a massive scale, a percentage of people will not choose alcohol, drugs or just get really lazy and do nothing, but it is a hopeful sign.

But now, we have to address the 96 trillion dollar hole, that we've conveniently forgotten all this while.

Who pays for UBI?

II.

Here's where we have to modify the definitions of UBI to even make it work. It's a shame because right now, there's no way to fill that 96 trillion dollar hole every year. As society gets more prosperous, perhaps there might be - but there are reasons to believe it won’t.

We already produce enough food to feed every person below the poverty level. But there is no incentive to feed people that can't pay for it, so the food just doesn't get packaged and transported to those who desperately need it.

And incentives are something we'll come back to again and again, but for now, let's modify the definitions of UBI to make it more equitable.

We begin with trying to incorporate poverty as one of the variables. In the United States a person is counted as being in poverty if they live on less than roughly $24.55 per day.

The official poverty rate in 2022 was 11.5 percent, with 37.9 million people in poverty.

Let's assume it's 35 million people, and thus, we can reduce our 96 trillion dollar UBI fund to a mere 35 billion dollars.

You can think of a lot of government initiatives that can be cut to finance this, and it's just too easy at this point. The US government spends 300 Billion a year on prison systems alone.

Just reallocating 10% of that can finance a version of UBI for those below the poverty line. If the reduction in crime works out as predicted, there are almost no losers here.

But what about the rest of the world? Surely, the US government doesn't have to finance the UBI programs in Ethiopia and Bangladesh, right?

Here again, I think the value of research is underrated. Every government has more money which you're underestimating, and every one of them is squandering this capital in ways that is obviously stupid, over just financing a basic UBI program.

Many nations already have some version of welfare, free healthcare and free education, so an UBI program is certainly possible. Andrew Yang is the only popular US politicians I can think of - who had UBI as a major policy proposal, but he shouldn’t be the only one. In the coming years, we’ll see more and more politicians arguing for UBI-like policies, and hopefully, they’re debated well and aren’t funded by reckless printing.

There are other ways to finance UBI - like a negative income tax where you get paid if you earn below a certain threshold of yearly income, while those above that threshold don't get paid but instead have to pay normal income taxes.

In an ideal world, those below that threshold would soon climb over it instead of trying to game the system to stay below it as much as possible for the benefits, but this again is a better approach than deliberately doing nothing.

There's only one problem with this approach.

III.

Trusting the government to pay you your livelihood has other consequences, but a simplistic way to look at it is - you shouldn't want to trust one single entity with paying you an UBI especially when that entity is "The Government".

If they can starve you when you criticise them, the government practically owns you and your freedom. Remember that "Government" is just a word for a group of people like you and me, who are, hopefully, elected by people. No government wins by 100% of the votes, which means there will always be a percentage of people who criticise the ruling government and that is perfectly healthy to do so.

Critiquing the entity who will pay you all the money you'll earn this year isn't exactly the brightest idea, and even if we assume that people will continue to do so, the tides of democracy just has to elect someone who is willing to abuse their power to strangle dissent.

This is, by far, the biggest critique of an UBI in my opinion, and since we're well aware of the corrupting nature of power, it's not hard to imagine such a scenario being weaponised especially when the citizens are dependent on the income.

A way to solve this is through an additional tax on large corporations by an international entity. The Fortune 500's combined profit last year was over 3 trillion dollars. Even 10% of that is enough to run an effective UBI program for those below the poverty level, in multiple nations worldwide. Since it's an international entity that is not "The Government", there is a lower chance of this getting weaponised against dissenting masses.

So, it's possible and yet not so simple. Fortune 500 companies won't just decide to get a portion of their profits away to some entity from the goodness of their hearts and they shouldn't be expected to.

The international entity may just end up as evil who, by virtue of trying to do good with incentives, end up installing systems where your online interactions or your carbon-consumption, or whatever random metric they decide is chosen as a factor of whether you get UBI or not ~ regardless of your poverty level.

This paints a grim picture, but it was already grim when we decided to modify the definition of universal from being everyone to just those below poverty.

If only those in poverty can have it, it's not truly unconditional UBI. How or even if it gets distributed among households where one partner works and has a high income and the other doesn't is still up for debate.

And one of the primary questions of how it gets distributed throughout the world if the money is unchanged, which was one of the questions I asked in the first paragraph of this essay, is still unresolved. I can imagine that there will be a certain migration of people from more expensive neighbourhoods to less expensive rural areas where it is possible to live off the $1000. If it’s started in specific areas, it’ll certainly cause a migration of people to those areas even if they don’t receive it - as they can seek employment in the services of those who do.

Over time, accelerating globalization might negate the need for location-specific pricing of UBI. There have been basic-income pilot projects all over the world conducted on a smaller scale - and most haven’t shown any adverse effects. The wikipedia page of UBI has a list of most of such projects, and this is a page that you should send to anyone who argues against UBI because of the collective damage they predict it might bring.

We haven't yet addressed the naive criticisms against UBI. Let’s do that.

IV.

The first naive criticism is things costing more because of UBI. If money printing isn’t the primary source of UBI, that just won’t happen.

“If a thing that used to cost $1000 before UBI now costs $2000 after UBI, it doesn’t make sense?!”

It doesn’t, because you don’t understand free markets. Things won’t just start costing more because people have more income. Different companies won’t just decide to cooperate & collectively raise prices, and individual companies can’t raise prices drastically without risking their business to competitors. The economy might even have the capacity to increase production to meet the increasing demand generated by UBI, as UBI could enable businesses to create more jobs and invest more in innovation, and it could incentivize the creation of more businesses by enabling entrepreneurs to take more risk.

Now that the naive criticism is out of the way, let’s look at the most important one -

"I worked as a cashier / bartender / (enter any entry level job here), I worked my way up to where I am. If I had UBI, I wouldn't have had to do that, and I would've stayed at that income level forever."

For those of us without a trust fund, we've all had to experience starting from zero. We've all worked that job that we don't wish on our worst enemies, like a lousy customer support job where trying to pacify constantly yelling customers is a part of one's daily life, or a data entry job where you all you have to do is copy and paste things on a screen for 8 hours hoping your mind will learn to deal with the constant boredom it brings.

Entry level jobs are usually jobs with high vacancies because people are always quitting to do something better or quitting just because they're too tired to live that same day all over again.

There are many who go from earning a minimum wage in this job to becoming very successful later in their lives, and just like it is the struggle that you smile upon the most in times of victory, people often look back fondly at those days where they got up and went to work even when they didn't want to.

Unfortunately, people forget that every honest job and every one working an honest job should be celebrated - and thus, the worst part of every minimum wage job is also the low status that society associates with them.

But these jobs are also the first step in the door for millions of people, and once you start going to work, adjusting to a routine, understand and learn how the world works, it starts opening up doors where you can climb the ladder better. Thus, every one of these jobs serve a critical role, not only as a function for the businesses but for society at large where it teaches those who join them useful skills that they can then carry on to a new job.

The reactions to this reality is especially interesting.

In a poetic way, every person who suffers either wants no one else to suffer (like a hero), or wants everyone else to suffer (like a villain) - and without passing judgement on any of these archetypes, we will regularly see people arguing that they want everyone to start from zero in one of these jobs because they did the same, or they want no one else to suffer like them and can’t wait for AI to automate such jobs away.

Not every minimum wage entry level job is bad, per se. Some are genuinely fulfilling and it's easy to find people who spend their whole lives happily working in these roles. If you ask such people what they'd do if there was UBI, they'd probably still choose to go to work.

But for the vast majority of people who hate going to these jobs, would they still do it if an UBI paid more than what their entry level job is providing?

The honest answer to this question for most people is no. Some would say yes to maximise their income and I respect that, but for most people, the answer is no.

Several things can happen at this stage. The entry-level jobs would have to increase their salaries to attract talent, which they would do if they cannot hire for these critical yet currently not well paid roles. Working conditions would be improved and employers would scramble to make sure people still choose to work there.

The people who choose the UBI income over the minimum wage crappy job - what would they do? Would they sit on the couch all day and watch Netflix? Would they get addicted on drugs and alcohol and waste their lives away? Or would they work towards getting some better job, starting a business, going back to school, start pursuing a hobby, or create art instead?

The cynical view is to assume that they'll do worse, and by missing the lessons that one gets from working in such roles they're depriving themselves of the struggle necessary to attain greatness later in their lives. I empathise with such a world view, and it's pretty common among those who worked such a job and then became successful later, but I do not think that this is the correct answer.

Like I've argued before, I think people not doing a job that they don't want to do is better, not just for them but for all. Them missing out on a painful experience shouldn't be a loss, but as every human being knows, the feelings of struggle and pain are universal and they'll get to experience similar levels of struggle and pain in any job or decision they take, as will we all. But in doing something that matters personally to someone, the feelings of pain and struggle are much better handled.

The crucial difference is that by giving everyone agency and choice over what to do to thrive - not just survive in this world, you instantly unlock human potential for a vast majority of the human population. Life in survival mode is a life wasted, and I'm sure that by removing the stresses of money from the lives of people, we'll see a gradual uptick of not just new businesses being started by people but new scientific discoveries made by those who went back to school and pursued their natural interests in fields they're passionate about.

To the cynical mind, this sounds like virtue signalling. And most comments about UBI, unfortunately is. You can say "I want people to suffer less" as much as you want, but unless you're doing something about it- all you're doing is signalling virtue.

Maybe, even I, who spent the last 3000 words arguing for UBI, am doing the same thing. But there's an important reason why I'm talking about UBI now, and I predict that very soon, a lot of people will be talking about UBI in some form or another.

V.

In one of my previous essays, I outlined Sam Altman's vision for the world - and it is a world where AGI is a part of our reality. We can argue about whether AGI is possible or not, and I've certainly done that in the past - but in this essay, I'll predict a simple thing: Millions of jobs will be lost in the coming years, as a result of AI progress. Millions of jobs may be created, but overall, the age of the mindless work may be coming to an end.

Roughly 15 million people in the world are employed in call centres. All those jobs are an API call away to a multimodal LLM that can definitively do that job better, and more enthusiastically than the average call centre worker. They can work longer hours, and they’ll never punch the computer screen one day out of sheer frustration.

Being a translator is soon going to become unnecessary as AI can already work better and longer, and more accurately than any translator.

Self driving cars, which almost always feels like they're too far and not ready for our roads - may soon replace every driver of every vehicle, from commercial delivery ones like Uber, Doordash, Amazon, to public ones like buses & trains. In very short amount of time, they'll go from being not being ready for traffic to being provably safer than trusting human drivers.

Most knowledge work that don’t require specific-knowledge, years of expertise for correct intuition, that is, any knowledge work that can be done by a highly impulsive teenager is at-risk. The junior code-reviewer, the intern who reaches out to business prospects with personalized messages, the social media intern who makes and posts memes, the spreadsheet kid who only knows a few formulas really well - all of these can be done by the AI we have today, and the AI we have today is going to continue to improve to do more jobs better.

None of this will happen overnight, but all of this will happen gradually.

I've argued before in my essay God is not a bird, that just scaling deep learning won't get us to AGI. But algorithmic improvements will. Whether that's more efficient search within the training data leading to better reasoning, or something that mimics the learning process better than transformers, we will soon learn what it feels like to live in the most important decade of human history.

Consider yourself learning a subject from a textbook. You don't just flip through the text, reading every page and attempt to learn on the fly. You learn, solve some examples, internalise the concepts, practice problems, rate your progress and then move on to the next chapter. When AI training algorithms start doing the same thing, instead of just training of massive amounts of data from the internet, i.e, when large language models start to accurately mimic the processes of reasoning, taking their time to think and learn, before responding in ways indistinguishable from a human learning a topic, such a system is more than capable for the vast majority of jobs we have.

Given that we're seeing massive price decreases all across the board, it's almost certain that algorithmic improvements will continue. As the best minds in the world continue to work at this, each new iteration will be indistinguishable as a worker doing a job that was previously thought to be only for humans.

Everyone losing these jobs will find better things to do, better jobs to accommodate them in, but as time passes and more job functions and roles get taken up by AI agents who do them better ~ the need for an UBI safety net will continue to grow.

I can imagine a very optimistic future where new jobs and roles open up in a perfect equilibrium to accommodate those losing their jobs due to AI disrupting their industry, but a more realistic scenario paints a slightly grim picture. The productivity per person will increase - but the masses losing their jobs would quickly need to adapt.

If this was a fairer world, either the price of goods would be so low that people would not need to worry as they searched for new jobs, or people would already have an UBI that takes care of their basic necessities. It's not wishful thinking to imagine otherwise - a civilisation that's on the verge of creating AGI must have already built a UBI for themselves.

This perfect civilisation also has no wars, and no child starves to death, but we're not a perfect civilisation. But that doesn't mean we can't strive to be.

Sam Altman, in his infinite faith for his vision of AGI, already prepares for a world where UBI works. That is why he started Worldcoin, where your humanity is proven through an iris scan and wealth is distributed in the form of World($WLD) tokens.

I don't think that worldcoin has cracked the code for UBI, but it's a vision I respect. Worldcoin isn't dependent on any government, and it's not discriminating based on geographical factors (yet).

It's UBI in the way UBI should be, unconditional and without any means test, which means it's not only divided among those who need it but divided among everyone.

There are privacy concerns on everyone's eyeballs being scanned, and bigger questions about why VCs got token allocations anyway. The UBI Orb device isn't the only way to identify people - they also collect email addresses and phone numbers, at which point you have to wonder why they don't just ditch the orb altogether and go with a normal KYC process like government issued IDs.

Either way, worldcoin seems to be the most successful of UBI programs out there, and one that doesn't depend on the government at all.

The perfect version of such a project would attempt to fill the 96 trillion dollar hole, which Worldcoin doesn't.

Who pays for this?

One answer to this question is OpenAI. There was apparently a clause when OpenAI was founded that profits would be capped at a certain threshold and the excess funds would be redistributed to humanity at large. Worldcoin was probably the mechanism by which they planned to carry out this distribution.

Unlike depending on the government, here, you're depending on a private company - one that's arguably the most powerful private company in the world. Is this scenario better? I don't know, but it sure beats starving to death whether it’s a government responsible for your UBI or a single global entity or a private company or a company that might be a non-profit or a for-profit, depending on how much they need to raise.

I do want to see more experimentation in the private UBI space - maybe even ones using blockchains who can figure out a way to either fill that 96 trillion dollar hole, or they figure out a game theoretic solution that's somewhat satisfactory to all participants, and hopefully, all of humanity.

Either way, this is a problem that must be addressed now, rather than later, because it’s increasingly looking like we don’t have much time. AI that’s capable of replacing humans is here, and they’re only going to get better.

When we imagine the future of superintelligence, we imagine a world where AI has solved everything.

The ASI, when it exists, can simply tell us how to solve our UBI problem, but we aren’t getting there overnight.

This means we have to do what AI can’t do today, and fortunately, it’s something we’ve done over and over again throughout our history.

We must save ourselves.