UBI for AI layoffs: charity, justice, or a very costly mistake?
By Adam Smith
The minister speaks of a “soft landing” for those displaced by artificed intelligence, and I do not mock the tenderness of that intention. A commercial nation that throws a great part of its people out of settled employment will not merely lose output, it will risk losing the habits of judgment, conversation, and civic spirit that make a free society tolerable. When labour is reduced to mere routine, the mind itself is narrowed unless some public care prevents that decline. @In advanced commercial societies, the extreme division of labour degrades the intellectual, social, and martial virtues of the labouring poor, making them stupid, narrow-minded, and unfit for civic or military duties unless government intervenes to prevent this degeneration.
But we must be plain about what a universal basic income is in its first operation: it maintains people, whether they be employed or not, out of a produce that is always limited. If a larger share of that annual produce is devoted to maintenance without corresponding production, there is less left to set productive labour in motion next year. The nation can certainly choose such a sacrifice, but it cannot pretend it is costless. @Because the annual produce of a country is finite, the share used in any year to maintain unproductive hands reduces what is available to maintain productive labour, so that next year’s produce will be correspondingly greater or smaller, since (with minor exceptions) the whole annual produce is the effect of productive labour.
The proposal to fund this by taxing “tech companies” has the air of poetic justice, yet it must be heard with the most suspicious attention. The interest of those who live by profit is often not the same as the interest of the public, and they are commonly the ablest persuaders in the room. @The interest of those who live by profit—especially merchants and master manufacturers—is not naturally connected with the general interest of society, since profits are highest in poor or declining countries; their superior knowledge of their own interest and desire to widen markets while narrowing competition often lead them to deceive and oppress the public, so their proposals for new commercial regulations should be treated with extreme suspicion. A tax laid on profits in a particular branch, when competition and devices of pricing permit, is apt to be shifted forward into prices, so that the consumer pays while the public imagines it has punished the dealer. @Taxes nominally imposed on the profits of stock in particular employments—such as hawkers, hackney carriages, alehouse licences, or proposed shop taxes—cannot in the long run fall on the dealers themselves, who must have their ordinary profit, but are instead shifted forward onto the consumers in higher prices.
If an income floor is to be tried, I would rather it be treated as a sober instrument of police and education than as a grand new right. Tie it to the maintenance of the people’s faculties: basic schooling for adults, common instruction in numeracy and language, and a real discipline of lifelong learning, not pamphlets and promises. Let the impartial spectator within ask: does this arrangement restore independence, or does it only purchase quiet?
Do you desire UBI chiefly to prevent misery, or chiefly to preserve social peace in a time of rapid technological change?