15 de July, 2018
As an economist and as an investor, I’ve always been intrigued by the impact new technologies have on the overall economy. Too often, the focus is mostly on the impact a certain technology might have on its own market (and not on THE market), but it goes much beyond: a number of new technologies can affect macroeconomic KPIs, geopolitical scenarios, as well as social behaviors.
An example I can talk properly about is Tinder: over the 3 years I’ve been working with the app across Latin America, I managed to see how much it has changed people’s behaviour, as well as how it generated much economic output through an increased number of dates. Recently, I’ve been able also to see how Zen app improves people’s mood and consequently overall well-being, and I’m curious to see how that (even in a minimal amount) can trickle down in the future by lowering the financial burden on the health system (especially for cardiovascular and psychiatric issues).
What about the impact then of Artificial Intelligence (AI) and automation on the overall economy, and especially on the labor market? Many jobs have already been substituted, and areas such as customer care and retail checkout are under much pressure by bots, apps and robots (see the Amazon Go store in Seattle, the first with a “grab-and-go” experience), as well as many other blue collar roles. This might put a lot of pressure on employment, making it mathematically impossible for a big chunk of the population to have a job (especially in a world of rising population).
Two people I’m a very big fan of, namely Elon Musk and Klaus Schwab (the founder of the World Economic Forum) are proponents of a Universal Minimum Income in response to this. As of yesterday, Finland announced it will start testing this on 2000 unemployed people for 2 years and then see whether to expand it to the wider unemployed population.
But what exactly is this all about? A universal basic income is a form of welfare where all citizens receive an UNCONDITIONAL sum of money from the Government or other public institutions. The unconditionality is key, since, differently from unemployment benefits, the income is received “no matter what”.
At first you hear universal minimum income and you think Karl Marx. But how comes then that Schwab, a prominent Keynesian economist, is a proponent of such a benefit? Well, if we go back in time, we see that in 1928 Keynes predicted that in 100 years, technology would advance so much that it would replace labor. We are now 11 years away from 2028, but we can already predict he was pretty much right. Therefore, sooner or later, we do need to find a stance on this issue.
The drawbacks of such a minimum income are related to its unconditionality (it can distort behaviour), as well as the burden they put on Governments’ resources (especially in times of fiscal tightening). But also, we can’t just stare and not act: the price to be paid in terms of income inequality and poverty will be too high to pay.
Therefore I believe that the companies that own the patents and trademarks of these technologies must take a stance: the Government alone will not be able to bear this burden, therefore there must be enough political will to make part of these companies’ profits redistributed to citizens to form such Universal Minimum Income, enabling society to better spend their free time on voluntary or creative efforts, and avoid the negative aspects of non-paid unemployment (criminality, poverty, etc.).
So, what’s your own take on this? This is an issue we can overlook anymore.
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