Any leader’s most important jobs include deciding which crazy ideas to take seriously. This is most apparent with technology. The Internet? Twitter? Candy Crush Saga? All obviously crazy, except they weren’t. The same principle applies to economics, culture, and social trends, with the example of the moment being Finland’s clearly insane proposal to give every citizen €800 (about $875) a month – a so-called universal basic income. For now, it’s only a proposal, but it’s a serious one; Finnish Prime Minister Juha Sipilä supports it. I suspect this is one of those crackpot ideas that government and business leaders need to keep an eye on.
The reason is that if it ever becomes a widely credible policy option, it won’t be for the reasons Finland is considering it, which is to simplify a vast and complex social welfare system. Instead, it will be because alarming predictions about the effect of technology on employment start showing signs of coming true.
Of course that’s another crazy notion—that technology is now advancing so fast that it will, for the first time in history, begin to eliminate jobs faster than it’s creating them. This is the Luddite fallacy, and for 200 years it has been spectacularly wrong. Its wrongness is one of the firmest orthodoxies in economics. Except that now, a number of well known economists ranging from left-of-center Larry Summers to right-of-center Tyler Cowen are beginning to wonder if it isn’t wrong anymore. Plenty of established technologists, such as Internet pioneer Michael Roberts and NASA program manager Mark Nall, are wondering the same thing.
A small group of academics don’t wonder. They’re convinced we’re headed for a “post-work economy” in which technology takes over so many jobs, including high-paying jobs, and does them so much better and more efficiently than humans do, that large numbers of people won’t be able to find work that will support them. These academics conclude that the inevitable policy response will be—guess what—a universal basic income, paid out of the profits of the businesses that earn lots of money while employing almost no one.
Making the case that the post-workers are nuts is a lot easier right now, with the U.S. unemployment rate at 5%, than making the case that they’re right. But consider that U.S. median wages have been stagnant for years and that real-world executives like former Treasury Secretary and Goldman Sachs CEO Henry Paulson argue that technology is an important part of the reason. Then think ahead to the next recession, when unemployment rises and highly visibly technologies like self-driving cars start taking over significant numbers of jobs. We’d still be a long way from instituting a universal basic income, but the concept could move from the fringe to the center.
The key word is “could.” I still think it’s one of those crazy ideas that actually is crazy. I’d bet that it won’t happen in our kids’ lifetimes. But even if it begins to join the mainstream conversation, business leaders had better know what it means for them and be ready to talk about it. Because if there’s one thing we’ve learned from impossible successes like Tinder and World of Warcraft, it’s that you never know.
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