Published June 03, 2017

Doug Casey on Universal Basic Income

Justin’s note: It’s time for a universal basic income (UBI).

At least, that’s what Mark Zuckerberg thinks.

Zuckerberg is the founder and CEO of social media giant Facebook. Last week, he spoke in favor of a universal basic income while delivering the commencement speech at Harvard’s graduation ceremony.

According to Zuckerberg, this generation owes a UBI to society:

Every generation expands its definition of equality, now it’s time for our generation to define a new social contract. We should have a society that measures progress, not by economics metrics like GDP, but by how many of us have a role we find meaningful. We should explore ideas like Universal Basic Income to make sure everyone has a cushion to try new ideas.

A UBI would have serious ramifications for society.

After reading about this, I wanted to get Doug Casey's take on the matter. Below is a transcript of our conversation…


Justin: Doug, what do you make of Zuckerberg’s suggestion? Is it time for a UBI?

Doug: It’s incredibly stupid from absolutely every point of view. He makes statements like “every generation expands its definition of equality,” as if it was a fact. Which it’s not. And as if it’s a good thing, which it’s not. He talks of “a new social contract”—which is code for somebody on high telling you what to do.

If “society”—whoever that’s supposed to be—were to push for any values, equality shouldn’t be among them. Equality only exists before the law. People are unique, and therefore naturally unequal. We’re not like ants or blades of grass. Equality is not only impossible, it’s not even desirable. A proper goal to strive for is freedom, which is possible and desirable.

These people don’t seem to compute that no one has a right to anything just because they exist.

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Now, they’ll say, “Well, it’s not being taken from somebody else because a robot is producing it.” But somebody created the robot. Somebody invested in that robot. Somebody owns the robot. And when production is diverted from further wealth creation and given over to consumption, that’s likely a misallocation of capital. The same basic argument could have been made with every labor saving device that’s ever been invented—the plow, the loom, the steam engine. A million things. If you immediately consume—as opposed to save—any excess of production, it’s impossible to grow in wealth. That’s point number one.

But that’s mainly an economic argument, and few people understand economics—so it won’t convince anyone. People don’t think when it comes to these things. They feel. Let me address even more important flaws in the Zuck’s reasoning.

Recall that wonderful IBM meme: “Machines should work, people should think.” It’s absolutely true. But a problem arises when people take the unearned. And there are a lot of people that, if they don’t have to produce, won’t produce. They become what Lenin used to call “useless mouths.”

Zuckerberg says he wants to see that “everyone has a cushion to try new ideas.” He’s making a political speech, not describing reality, and apparently has zero understanding of human nature. 99% of people will spend their “cushion” and their free time following celebrities or chasing the opposite sex, not researching “new ideas.”

Justin: But aren’t robots taking people’s jobs? What are most people supposed to do if this trend continues?

Doug: People say, “When robots are producing everything, we’re not going to need factory workers. We may not need most jobs because of artificial intelligence, which will do most things that aren’t creative. Most things will be done by robots.” And I’d say that’s wonderful. However it doesn’t mean that people will all become supernumeraries. We’re all basically lazy—it’s genetic. Both our bodies and our psyches are programmed to conserve energy. It’s a key to survival. But should people be encouraged, via a UBI, to become Eloi, being fed by robot Morlocks? Incidentally, I hope the term “UBI” doesn’t become a meme—the thought is often father to the reality.

If a machine can replace you: Great! It means you were doing dog work, robot work. That’s why 90% of the population no longer have to work in the fields every day. I have no doubt that, in the future, the average man will have more options than Zuckerberg does now, because the world will become vastly wealthier—just as the average man today lives vastly better than any medieval king. And it’s going to happen soon. But it’s not going to happen because someone on top is distributing alms to the peasants.

The key question is this: Absolutely every human being—you and me and everybody else—has an infinite number of desires. If you have one Ferrari, maybe you want 10 because they’re fun to collect. If you have a summer house, maybe you want a winter house. Desires are unlimited. Everybody wants everything. Everybody wants more. Unless you’re an ascetic monk—but that’s another topic. So there’s zero need for unemployment. You could work 24/7 fulfilling the wants of other humans. They’re infinite.

What I’m trying to say is there’s an infinite demand for goods and services, and it can never be fulfilled—I don’t care how many robots you have. And I’d like to see a billion of them…

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Furthermore, giving people a subsistence income—a UBI—has been tried extensively in Europe and the US. Saudi Arabia basically has a UBI, and it’s a social and political time bomb, in part because of it. Since Johnson’s Great Society programs of the '60s, you can get free food, free schooling, free housing, free medical care—through scores of welfare programs. All those things have done is cement their “beneficiaries”—mainly poor blacks—to the bottom of society. Most of the poor people in the ghettoes and trailer parks already have UBIs—it’s called welfare. It hasn’t improved things; it’s destroyed society wherever it was implemented. So far UBI hasn’t created a class of artists and philosophers, it’s created a class of derelicts and criminals.

It’s a matter of psychology even more than economics. Unearned stuff doesn’t just destroy most poor people, it also destroys most rich people. Has the UBI, in the form of large inheritances, made the kids of the rich into better or happier people? Sometimes—if their parents have good values. But usually not. They’re “enabled” to become spoiled brats, of no use to either themselves or other people.

If a true UBI was put into effect, productive people are going to find it degrading, and unproductive people are going to take advantage of it. More important, it’s immoral, because you’re taking production from some people and giving it to others that have done nothing in return to deserve it. That creates resentment. Simply being alive doesn’t give you the right to demand things from other people.

It’s a scary thought that somebody like Zuckerberg—who, frankly, is just a guy with some business skills who got lucky—is positioning himself to run for president. If people think that Trump is bad, wait until somebody like Zuckerberg gets into office.

Justin: Zuckerberg isn’t the only billionaire championing for a universal basic income, either.

Tesla founder and CEO Elon Musk also thinks we should have it. According to Musk, UBI is needed now because we’re entering “post-scarcity economy.” Do you think a post-scarcity economy is even possible?

Doug: I have no doubt that—barring World War 3, or serious socialism—it’s definitely going to be possible to provide a subsistence for everybody. At somebody’s expense. I suspect Musk is right when he says that some day we’ll have replicators, like those on Star Trek. Nanotech may make that possible, and a real Cornucopia might come into existence. But it’s a question of motivation as to whether people produce, or vegetate. If people don’t have to produce, perhaps they’re going to become even more zombielike and more robotic than they are today. Will the average person turn his mind to great art and philosophy and literature? That’s doubtful, based on what’s happened so far with welfare.

The most important thing to look at, however, is not the technical ramifications of UBI—whether it’s technically possible. A bigger question is who allocates these things. Because, obviously, it’s going to direct more power to the government. They’ll determine how the fruits of all this get distributed.

It’s not, however, going to make for a more equal society. It’s going to make a more unequal society. But the inequality won’t be based upon productive people getting things by working and saving. It will be based on how much political pull they have. These people love to politicize things.

So, to wrap this up, a guaranteed income, a UBI, not only won’t solve the so-called equality problem, it’s actually going to create more social antagonism. Because more resources will be diverted to the State, so the State can give everyone what they think is a “just” UBI. The best case is that it will only slow down progress—because unearned income will be directed towards unproductive people, probably encouraging them to be even more unproductive. The worst case is that it will accelerate the collapse of civilization as both rich and poor are turned into HG Wells’ Eloi, given goodies by technocratic Morlocks like Musk and Zuckerberg.

The UBI, if it’s implemented somehow, has the potential to reverse the Ascent of Man. It’s a stupid and retrograde idea from every point of view. But a surprising number of really stupid ideas have been produced by smart people. They see themselves as visionary problem solvers, but they’re really just busybodies.

Justin: Brilliant insights as always, Doug. Thank you for your time.

Doug: My pleasure, Justin.


Justin's note: If you haven't seen it yet, Doug Casey has just released his most controversial prediction yet. It involves a shocking currency ban (not gold) that may soon take effect. Already, Fed members have met in private to discuss this matter. And the savings of millions could be devalued if this goes into effect. To watch the interview and discover the four steps Doug is taking to prepare, click here.