Why Universal Basic Income Is A Ridiculous Idea

You know what the most ridiculous idea I’ve ever heard is?

And, the crazy thing is, I keep hearing my entrepreneurial friends talk about this. People I respect, people that I admire, I hear are proponents of this idea of a universal basic income.

The idea that the government should just dole out cash.

Like, if robots take over all the world, we’re going to need the government to take care of us and give out a universal basic income for people so that everybody can live while the robots run our lives.

Universal basic income is this ridiculous idea that is based on this fundamental flaw that innovation destroys more than it creates. And nothing could be further from the truth.

And, all we have to do is look at things like the sharing economy. The gig economy.

I mean, if you’re a taxi driver, Uber, obviously, is a threat to you. It’s why we have people lobbying government.

Here in Austin, Texas, we have government getting in the way of Uber. Lyft and Uber are no longer here in Austin because of the lobbyists and the regulations getting in the way of creative destruction.

But, did Uber and Lyft destroy more opportunities or did they create more opportunities?

I don’t know anybody who would say that it destroyed more than it created.

We have more people who can live a life on their terms as a result of having access to Uber and Lyft than we ever had before. I rode in a cab, like, six times before Uber and Lyft and then, I did it every day.

The idea that when robots take over the world, if that ever happens and maybe it will, that that will destroy more opportunities than it creates is absolutely absurd.

That doesn’t factor in the things that we can’t even see right now. The resources that will be freed up. The opportunities that will be created that we don’t even know exist, right now.

The other thing that it doesn’t factor in is if we have robots creating everything, you know what does to prices? It makes prices plummet.

It creates more abundance than ever. It creates greater access to food. It creates greater access to transportation and the costs go through the floor.

This is, by the way, why we have greater access to food and housing and medical care. Regardless of what the government and the media tries to make you believe, we have more access to that at every income level than we’ve ever had before.

It’s because of entrepreneurship, because of creative destruction.

If we have that continuing at an exponential level, if we have absolute abundance and we have this idea where robots and AI can create everything at almost no prices at all, that does two things:

It frees up all kinds of intellectual capital so that we can create whatever we want.

We won’t need the government to guarantee basic incomes because we’ll have all of this abundance, prices will be through the floor.

We’ll have the ability to create whatever we want. It will then be a responsibility of individuals to be more entrepreneurial, which we already see happening.

If you had asked people, if the internet puts people, puts retail out of business, is that a good thing or a bad thing?

And, everybody said, oh, we need to stop the internet because it’s going to destroy retail, they didn’t factor in all of the blogging, the opportunities on YouTube, the businesses that would be created, the tech startups that would happen. All the opportunity that grew out of that destruction was never factored into it.

When you have innovation destroy things, that is an indication of a very healthy economy.

It is an indication of new opportunities that we’ve never seen before as a society. And, if we have AI and robotic technology, that just means more opportunity, not less. It means we need less government intervention, not more.

It means that we are creating things that have never existed before. And we’re on a better path than ever and we have less need for government to come in and be involved in your life, not more, for them to guarantee some income.

It’s absolutely ridiculous that just because we’re creating things that we think that that’s going to destroy more than it actually creates. Nothing could be further from the truth.

We should encourage innovation and get the government the hell out of our way, not have the government coming in and guaranteeing incomes.

And, all we need to do, is look at the sharing economy, the gig economy and look at all the opportunities that that has created. That is a good example of what happens when we have new innovation.

Capitalism for the win, screw government.

VIDEO: Government Makes It Easy For Rich People To Get Richer
Does the Sharing Economy Really Hurt Workers?
Small Business Uncertainty: How Much Government Do We Want?

Share This Post

Share on facebook
Share on twitter
Share on linkedin

Subscribe and listen to our latest episodes

9 thoughts on “Why Universal Basic Income Is A Ridiculous Idea”

  1. Your main point is wrong: people who is calling for a UBI are not doing it because “innovation destroys more than it creates”. I know a lot of people that support UBI (including myself) and none of them say such thing.

    More and more people are considering UBI because clearly we have problems. For first time since its foundation in 1774, the next generation of American will be poorer and will die sooner than their parents. For first time in US history all the social indicators are worsening even when the economy has growth a lot. Is not even a matter of race or immigration, the children of white families are also more ignorant, poorer and with worst health that their parents.That rise two questions:

    1) How that happened?
    2) What kind of society we want?
    2) How can we reach that society?

    The demotions of the social indicators in US has a very recent history, clearly started at the end of the 70’s and were worst and worst since then. From 1930 to 1975 US society collected a lot of taxes to build a well-being state. The society did so because the intellectual environment at the time was shaped under Marxism, and the Marxism successfully built a case against the ethics of Capitalism. The book “Can Capitalism Survive?” (wrote for someone who hated communism) describes how efficiently the Marxism pictured Capitalism as a brutal and immoral system even inside the middle classes of USA and England. So, US built a huge welfare system because the intellectual and political class inside America demanded it. People remember the years from 1949 to 1979 as the golden years of America because all had money and men just needed to work from 9 to 5 to buy a huge house before been 30yo, two cars and holidays in Acapulco meanwhile women talked care of the children without work. But to 1975 the atmosphere drastically changed. Marxism collapsed (even when USSR would exist for another fifteen years) and then the neo-liberal ideology was born: the welfare state is bad, taxes are bad, regulations are bad. Without all that obstacles companies would create more well paid jobs and everybody would have a lot of more money. So the ideological pendulum turned to the other way. And then the disaster had take up: wages depressed, inequality in US raised until a Third World level, welfare programs were cancelled and all the social indicators fall down. People now work more hours and gain less money than in 1979. Mental health and suicide have worsening and many studios show that economic factors have a role in the process. Then, the problem is not that “innovation destroys more than it creates”, the problem is that the money is kept in fewer and fewer hands every year.

    So, what can we learn from all this events? First, that capitalism (as promised) creates lots and lots of innovation and wealth. Second, without any re-distributive mechanism of money, the concentration of wealth and power starts to hurts the society. That address us to the second question: what kind of society we want?

    Most of us want a society fair, educated, prosperous and healthy, and now, almost at 2017, we are more away from that goal that we were in 1979. The Neoliberal age is finishing and the ideological pendulum is turned to the opposite path. So, in many ways, UBI is just a return to the previous condition where the government collected a bunch of taxes and use the money to invest in what is the most important: the own society.

    As many in US it looks like you have an American trait: a deep hate to the government. For people like me, who are not from US, that is weird: nobody says “damn government building this wide and well planned road!” or “stupid government putting satellites in the space so I can watch TV, I hate it so much!” Americans look incapable to accept that any government has a high grade of legitimacy if is organised under democratic participation. The government (Mordor’s branch office) is not gonna give me an UBI, we as society, can organise the government in a particular, democratic and scientific way in order to redistribute the money and try to reach the society that we want. UBI is totally compatible with capitalism and, surprisingly, was an option promoted for the GOP in the 60’s to fight the socialist agenda.

    BTW, the math of UBI is very simple: to give $1000 dollars a month to every American above 21 yo, you need 2.7 trillion. The average tax revenue in the developed economies is 38%, US economy is 18.5 trillion, that is 6.47 trillion. Plenty of money.

    Now my recommendation was to start giving UBI only to ten million of people chosen by lottery and do a ten years research about the impact of UBI in those people.

    • The main reason this generation will be poorer than their parents is because they accepted the terms of foolish student loans to earn degrees that provide no marketable skills. Being in mortgage level debt before you enter the workforce is a sure way to stay poor.

      • You didn’t have to deal with that situation, because when you were going to college, the cost was much, much lower relative to your income.

        • I didn’t go to college. Beyond high school I am self educated. This was a blessing because I was able to teach myself how to think instead of paying someone else to teach me WHAT to think.

          • Any good college teaches its students how to think. I’m sorry that you’ve got a misinformed set of assumptions about American universities.

          • Reality does not support your statement. Many college educated people cannot think of any reason why a person would reject leftism other than that person’s inherent racism, sexism, and homophobia.

            Knowing how to think includes being able to accept opinions contrary to yours without personally attacking the person with differing opinions or trying to silence them. A very large number of US universities encourage their students to shout down and personally attack students and university guests who do not share the university’s views. This is not teaching these students HOW to think, it is teaching them WHAT ti think.

            If any good college teaches its students how to think, it follows that many US universities are not good universities. The irrational politically correct SJW nonsense that pervades many US universities supports my position and weakens yours.

      • Incomplete view Drew. The number 1 job the working class does right now is transportation. We already have driverless cars on the horizon that suggest millions of Americans will be displaced in the labor force, same goes for Truck drivers. I suppose delivery drivers will be spared until the harder problem of getting packages to the right spot is solved… at least for the heavier freight as the flying drones will take care of the latter.

        Amazon is testing a store with Cameras that identify what a person takes off the shelf and auto charges them as they leave the store. No cashiers.

        Manufacturing has become increasingly automated over the years, and on and on it goes. These factors work in conjunction with the rest of the world rising out of the ashes of WWII for manufacturing, in some cases cheap labor reigns supreme in China that the US cannot hope to compete with in many areas. Productivity has gone up, Americans are more productive than they have ever been, and yet are still gaining a shrinking share of the income gains. Why?

        Well, for one, if you can displace a thousand workers with a combination of machines or moving a factory overseas with cheaper labor costs, that increases the profits for the company and shareholders while reducing the value of labor for many more. That is why things are worse.

        I get it Drew, you likely drink up a steady diet of conservative talk radio where the SUM TOTAL of all the economic ills are related to tax policy, big government regulations, and liberal colleges eating up too much costs. That is NOT enough Drew. There are many more variables that go into an economy, and your answers barely scratch the surface of the total picture.

        The UBI is the only scheme I have heard of that could conceivably reverse some of the negative trends if it is engineered correctly, but we still need to test.

  2. My understanding is that the purpose of a UBI is that it would replace welfare, disability, social security, etc. It would basically be a smooth curve, eliminating cases where people fall through the cracks. Thus you wouldnt have scenarios where you get a $400 welfare check while working in a McDonald’s and if you get a $100 raise you “earn too much” and lose the entire 400, hence be worse off.

Leave a Comment

The 8 Figures Exit Formula

How to build an eight figure business in twelve months or less,

AND sell the business for millions of dollars so that you can invest the profits for passive income.

The Capitalism Conference

Join The Global Summit For Entrepreneurial Empire Builders.

This is the only room Where Today’s Top 1% Of Entrepreneurs Will Give You An Inside Look At How They Grew Their 8-And-9-Figure Empires.

Join the Capitalism.com Newsletter

Want to avoid costly mistakes in the rapidly changing economic arena by staying ahead of trends & following timeless strategies that are proven to work?

Just drop your name and email below to subscribe to our newsletter!