by Alex Vikoulov
"Basic income is not a utopia, it's a practical business plan for the next step of the human journey." -Jeremy Rifkin
Unconditional Basic Income (also called basic income guarantee or social dividend) is a system of social security in which all citizens or residents of a country regularly receive an unconditional sum of money from a government regardless of any other income. Pilot programs have been introduced in a number of European countries and aimed at replacing outdated bureaucratic welfare systems altogether.
Recently, Elon Musk had the chance to share his thoughts on Universal Basic Income (UBI) at the World Government Summit in Dubai. Musk argues that the government must introduce a UBI program in order to compensate for automation. Such program could boost productivity, encourage creativity, improve health, alleviate poverty, reduce crime, raise education, improve quality of life, and interestingly enough, stimulate economy as more money will be spent by an average consumer as well as serve as a "cushion" against future economic downturns due to the cyclical nature of capitalism.
Every time I buy groceries or airtickets, I pay a sales tax for the semi-automated infrastructure that we all enjoy in our capitalist economy. What most people don't realize though is that there's one particular segment of the U.S. economy which has been fully automated for years now - financial markets, more specifically electronic stock market. Wall Street firms now trade their financial instruments via trading robots, or algorithmic programs, "algos". One second for a Wall St. algo is a "lifetime" in human terms.
High frequency trading algos make millions per trading day at the expense of the investing public. Why? Because algos are programmed to react in nanoseconds to changing market conditions and news. In other words, the stock market is "rigged", as most investors and traders don't get favorable pricing and execution. The debate goes on for years now but I think it's about time to implement a small financial transaction tax on high frequency trading. After all, if everyone pays for our common economic infrastructure, why should Wall Street firms be exempt?
The revenues collected from taxing industrial robots and Wall Street trading robots would be more than enough to pay for Universal Basic Income as preemptive measures against massive technological unemployment and social unrest. At some point, sooner than many people think, governments will be forced to implement UBI.
Video Credit: Elon Musk at the World Government Summit in Dubai 2017