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Bill Gross thinks we have two choices: give money away or leave everyone screwed.
In his latest investment outlook, published Wednesday, Gross explores what to him seems to be the inevitability of universal basic income.
The robots have come for our jobs, and the decline in labor participation is, for Gross, a clear sign that this trend is not something we should fight but rather something we should accept.
It’s all over but the handouts.
Here’s Gross (emphasis mine):
We should spend money where it’s needed most – our collapsing infrastructure for instance, health care for an aging generation and perhaps on a revolutionary new idea called UBI – Universal Basic Income. If more and more workers are going to be displaced by robots, then they will need money to live on, will they not?
And if that strikes you as a form of socialism, I would suggest we get used to it. Even Donald Trump claims he won’t leave anyone out on the street – a liberal Republican thought if there ever was one. And they are on the street you know. Check out any major downtown in the U.S. if you want to see our future culture. Not the stadiums with the box seats; the streets with the tents and grocery carts.
But the concept of UBI is not really new or foreign to capitalistic cultures like that of the U.S. We already have sort of a UBI floor. It’s called food stamps and the earned-income tax credit, but those alone will not keep the growing jobless and homeless off city and suburban streets. The question is how high this UBI should be and how to pay for it, not whether it’s coming in the next decade. It is.
So it’s settled then: free money for everyone.
Gross argues that more conservatives than liberals support the idea, and he is struck by how much Silicon Valley-types love the idea of universal basic income. (Y Combinator’s Sam Altman is perhaps the face of the idea and is funding a study to explore the impacts of a universal basic income.)
Gross’ cynicism, on the Silicon Valley front at least, is that you need to give people money because all those iPhones won’t buy themselves.
Gross also argues that he’s really not even sure what the holdup is: We already give people money in the form of programs like welfare and the earned income tax credit. Which is basically true!
The problem for UBI – and this goes a bit beyond the confines of Gross’ letter – is that in the US we have attached a stigma to receiving certain types of government assistance, and the sociopolitical hurdles to a basic income program are very high.
Elsewhere in his outlook, the usual targets end up on Gross’ bad side: central banks, politicians, and more or less the entire modern capitalism project.
Also young people.
“Who could say that an older generation was any less an ideal than the succeeding one?” Gross writes. “My experience of the divide between Boomers and Xers is like that; I recognize that youth will be served, but not always for the better.”
And so on and so forth.