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In order to comprehend the importance of UBI, you really need to understand the rise of A.I., Algorithms and Automation. You might want to start there.

UBI Explained – One version of UBI proposes that every citizen above 21 years old received $1,000 per month (after tax) to do whatever you want with it. You don’t need to do anything to deserve it besides be alive and be a citizen.

Most of UBI conversations boil down to the fear of worst case scenarios. Let’s explore them…

Pro-UBI fear, if we don’t implement UBI then we will face economic turmoil. Algorithms/Automation/A.I. will not only replace physical jobs (think truck drivers) but it will also replace cognitive jobs (think human analysts). This is one of the biggest differentiators of the A.I. revolution as compared to the Industrial Revolution. When this happens, the lower and middle classes will be crippled, resulting in unprecedented amounts of unemployment. Instead of people being ‘unemployed’ there will be the birth of a new ‘unemployable’ class where a whole class of people do not possess any skills to be employed.

Anti-UBI fear, by giving citizens a free handout of $1,000/month they will be disincentive to work. Instead of creating innovation it will backfire, resulting in a large percentage of the population spending their handout on booze/drugs, sit in the basement and play video-games. This will result in massive amounts of people not working, stagnating the economy.

Both scenarios are possible. While there have been a few small UBI tests done (Present day Alaska, pockets in Finland, Canada in the 1970’s) it is unfair to extrapolate that data to see how it would affect urban, suburban and rural areas across the US. But when comparing the downsides, I would argue that a full economic collapse is a far greater negative consequence as compared to a percentage of unmotivated and noncontributing citizens.

Furthermore, many economics believe that UBI will breed innovation. By having a safety blanket of income, UBI would incentivize more individuals to take the leap into entrepreneurship and, naturally, some of the individuals will be successful. If this happens then all we’d need to understand is if the economic positive (of new and created entrepreneurship) outweighs the free-loaders (videogame, drug users). Will it? Once again, without a crystal ball its hard to say. However, based on today’s economic structure it would probably only take one ‘Uber’ to counteract a nation of freeloaders.

Its important to note that $1,000/mo is not a lot of money. It’s below the poverty line. Behavioral economists have mentioned that this will not be enough to have people quit their jobs and it will be supplemental to their jobs.

But how can we pay for it? If we gave each citizen above 21 years old $1,000/mo, that would be $2.36 trillion (197 million citizens @ $12k/year). However, this program wouldn’t necessarily be additive and could serve as a replacement program. Programs like unemployment, social security and SNAP not only have enormous budgets but also require very high levels of administration. Example, for Unemployment there are officials who monitor individuals making sure they are applying for jobs, interviewing, being fired justly, etc. UBI does not require this level of administration. If you’re alive and over 21 years old, you get a monthly check. Social Security is set to payout $1 trillion this year so it seems well within the realm of possibility that we could fund a ~$2.5 trillion initiative

So, what’s the rush? If the jobs aren’t gone now and they aren’t going away tomorrow, why do we need to implement this program now? Simply put, I don’t think we need to, however, technology advances exponentially and politics moves at a snails pace. We’ve already seen tremendous advancements in self-driving car technology which represents one small sliver of what will soon be affected. As we see the technological writing on the wall, I believe it makes sense to start testing UBI programs, learning how people react to it (i.e. the Pro-UBI and Anti-UBI fear arguments) so we’re not unleashing $2.36 trillion on the American people with no idea of what the outcome would be.

In summation, The effectiveness will come down to if the positives (innovation, increased spending) outweighing the negatives (freeloaders, booze/drugs). A minimal UBI of $1k/mo would keep citizens under the poverty line, keeping them working jobs, contributing to society and affording them the ability to live comfortable lives.

It’s Always Your Fault

I credit this one to David Heinemeier Hansson and Jocko Willink (who refers to it as Extreme Ownership). The premise is simple enough; everything that happens to you is partially your fault. Examples help…

• You fail a math test. This is probably 98% your fault. You had time to study, you knew the material the test was on, and you were able bodied. Maybe you got sick that week which hurt your ability to study but you also procrastinated. All in all, it’s almost entirely your fault.
• Your Employee Steals From You. Many people may blame the employee in this scenario but, as the business owner in this fictitious example, I would hold you accountable. You hired the employee, you trained them, you perhaps pay them less than their fair due, you ignored their unhappiness and there were tell-tale signs that they were about you steal… Sure, the employee betrayed your trust but that is not 100% on them, it also very much on you.

So, what’s the purpose of this? Are you supposed to be a masochist about everything in your life? Not exactly.

The purpose of this philosophy is to create feedback loops. Think of it this way; you’re a part of all the systems that you’re a part of. Bad luck generally means that there’s a small chance of something going wrong and it went wrong. However, when there’s a high degree that something can go wrong and it goes wrong, that’s not bad luck. That’s bad planning, design, etc. If you call it bad luck, you’re not learning anything to prevent similar outcomes in the future. By taking ownership of a certain amount of responsibility for the outcome, you can review/analyze the outcome and avoid a similar fate in the future. Furthermore, you may be able to apply the same line of logic to other tangential circumstances.

In the Employee Stealing example, now you know how to avoid this circumstance in the future. Since it was your fault, you can start uncovering ways to avoid this pain-point in the future. This might be interviewing more candidates, only hiring friends/family, pay your managers more, install cameras, etc. The goal is to learn and improve from a unfortunate scenario.

Making mistakes is okay but not learning from them is not. Don’t make them twice. It’s more actionable to figure out what you could have done differently to prevent it or like things from happening again.

Maybe So, Maybe Not. We’ll See.

This is from a Chinese Proverb. This story goes something like this…

A farmer and his son had a beloved stallion who helped the family earn a living. One day, the horse ran away and their neighbors exclaimed, “Your horse ran away, what terrible luck!” The farmer replied, “Maybe so, maybe not. We’ll see.”

A few days later, the horse returned home, leading a few wild mares back to the farm as well. The neighbors shouted out, “Your horse has returned, and brought several horses home with him. What great luck!” The farmer replied, “Maybe so, maybe not. We’ll see.”

Later that week, the farmer’s son was trying to break one of the mares and she threw him to the ground, breaking his leg. The villagers cried, “Your son broke his leg, what terrible luck!” The farmer replied, “Maybe so, maybe not. We’ll see.”

A few weeks later, soldiers from the national army marched through town, recruiting all the able-bodied boys for the army. They did not take the farmer’s son, still recovering from his injury. Friends shouted, “Your boy is spared, what tremendous luck!” To which the farmer replied, “Maybe so, maybe not. We’ll see.”

The moral of this story, is no event, in and of itself, can truly be judged as good or bad, lucky or unlucky, fortunate or unfortunate, but that only time will tell the whole story. Additionally, no one really lives long enough to find out the ‘whole story,’ so it could be considered a great waste of time to judge minor inconveniences as misfortunes or to invest tons of energy into things that look outstanding on the surface, but may not pay off in the end. The wiser thing is to live life in moderation, keeping as even a temperament as possible, taking all things in stride, whether they originally appear to be ‘good’ or ‘bad.’ Life is much more comfortable and comforting if we merely accept what we’re given and make the best of our life circumstances. Rather than always having to pass judgement on things and declare them as good or bad, it would be better to just sit back and say, “It will be interesting to see what happens.”