Basic income and other ways to fix capitalism | Federico Pistono | TEDxHaarlem

Translator: Michele Gianella Proofreader: Robert Tucker Goedenavond Haarlem. You feel good, right? So, who of you here today had lunch, breakfast or whatever? Great, we're lucky. Because there are around a billion people on the planet who live in absolute poverty and do not have this privilege. Getting a meal can be a fantastic thing. And even in industrialized nations, with highly developed countries, there are about 15 percent who live below the poverty line, like in the United States or even Italy. Now, the story we tell ourselves to justify this kind of thing isn't really convincing, because it's reassuring, but it's not real.

And it's no surprise that we like stories, we evolved listening to stories, and that's how our brains have developed for hundreds of thousands of years. And some of these stories became bestsellers, one of them was the great epic of

capitalism

versus socialism. And of course, we all know the story; Well, it depends on who you ask or who told it to you. And it also works the

other

way around. (Laughter) And these stories, if you really dig deep, are just fairy tales, because the reality is very different: there is not a single truly 100% capitalist country in the world, just as there is no truly socialist country in the world. .

They are all many variations of the two and of

other

ideological systems and other types of societies. But the richest and healthiest countries are those that have learned to combine the best of themselves by looking at evidence and results rather than just sticking to an ideology and telling themselves a reassuring story. We have some of the best examples of this in the Scandinavian countries and some of the more continental countries in Europe, and I could even include the Netherlands with some respect. It is important that we tell ourselves credible stories and not fairy tales, because fairy tales are very dangerous and can cause unnecessary suffering or death to hundreds of millions of people, as we have seen in the past.

Now we have many challenges and one of them is unemployment. But instead of telling you a story or a fairy tale, let's look at the data. So here is a graph showing the employment-population relationship in the US and in OECD countries the statistics are very similar. And this is corporate profits over the same period of time. Now, if you put the two things together and look at the recovery rate (the gray lines are recessions, and in the recovery rate you see the degree of recovery), you will see very, very surprising results. We have corporate profits at an all-time high, unemployment is at its lowest level in several decades, and when you take into account that women entered the workforce only around that period, we are actually in the lowest point in history, and we are in the most superficial period of recovery.

We are in what, in economic terms, is almost called the unemployment recovery. Now, there are some studies out of the Oxford Martin School and my colleagues at MIT that suggest that half of all jobs in the US are subject to automation: robots and other AI and smart programs. And research just published in Europe also suggests the same results. Now, I actually ran the same thought experiment and did my own research two years before at the Oxford Martin School and MIT, and I had exactly the same predictions. And one of the big criticisms I received was: Sure, technology displaces jobs, robots steal jobs, but in the end you al

ways

create new jobs because you have new opportunities, new sectors, and there is al

ways

time to recover and find new ways of doing things. .

I said, "Okay, that might be true, but let's look at the data, let's look at the historical perspective and the time frame." So I took all the occupations and listed them by number of workers, from top to bottom. And I asked myself a very simple question: What kinds of occupations were invented in, say, the next fifty or sixty years? Because if technology only displaces jobs temporarily, then there should be plenty of new occupations being invented of late. I actually had to scroll down quite a bit: number 33, computer programmers. It was actually invented 65 years ago. So the reality is that the new jobs are very few, highly skilled, very sophisticated, very difficult to do and very few people can do them.

And certainly not the 45-year-old truck drivers, perhaps 70 or 80 million of them, who will be totally displaced in the next five to seven years. And another hundreds of millions of people in other professions. Let's think then of a 45-year-old truck driver who has to compete with a 17-year-old Ukrainian genius who writes four applications a day on his computer. Not very credible. And if you look at another trend, today's multi-billion dollar companies employ fewer and fewer people and have higher revenue per employee. If you take Apple, Google, Facebook and Amazon and combine them, they are worth more than a trillion dollars combined, but they only create 150,000 jobs.

And newer companies generate even more revenue per employee because they are worth billions in a very short period of time and employ a few dozen or at most a few hundred people. This is the new economy, this is reality, and what it leads to is more inequality. Now, I'm not claiming that this is the only reason for inequality, but it certainly exacerbates any level of inequality you may have. And if we look at the global panorama of inequality, the situation is quite serious. You divide the population into 25 percentiles and you see that the bottom 75% own less than 20% of all the wealth.

And the richest 2% have about 55% of all wealth. And the richest 85 people, not 85% or 85 million, 85 people, own as much as the poorest 3 billion. This is reality and it is getting worse and worse. This is worse than medieval times during the feudal era. This leads to the disappearance of the middle class, which is very bad because a prosperous society has a very strong middle class, for example in the Netherlands. And we know from Thomas Piketty's groundbreaking research that return on capital - essentially, the money you have sitting there because you have it, or because you own real estate or other property - generates much more money than work.

So those with more capital will only earn more in this type of system. And it is a problem that works at a structural level. This creates structural inequality, which is very different from temporal inequality or cyclical inequality; It means it is in the system. So the story we tell ourselves, or better yet, the fairy tale, is that this process is not only inevitable, but it is the nature of

capitalism

and there is nothing we can do about it. Because things are just the way they are. Now, of course, we all know that this is nonsense because there are countries that have successfully redistributed wealth through policies and all kinds of innovations, such as Germany and South Korea, which have redistributed wealth quite successfully and have a very strong middle sector. class, but they are also doing quite well financially and in the global market.

So it's not impossible, but it is very difficult. Still, no one has a long-term solution to structural technological unemployment, which is just on the horizon and, in fact, we are already experiencing some of it in some countries. One of the proposed solutions is an unconditional

basic

income

. So, first of all, what is it? Well, very simple, it's free money for everyone. That's the simple version. The most elaborate is a lump sum of

income

that is distributed unconditionally, without conditions, to every person in a country, every month. Now, I realize we might be plagued by selection bias (this is a TED crowd), but I'm going to ask this question anyway.

So if you think having a

basic

income and giving free money to everyone is a good idea, raise your hand. Okay, almost 50/50 perfectly. Excellent. Now, fortunately, there is a lot of public debate about this topic, and it is good because it is a very old idea, and now it has been revived in the imagination and in the spirit of the people. The problem I have noticed with public debate is that it is based largely on ideology and moral argument. So whether you agree or not, that doesn't interest me much. I'm interested in the fact that no one is having a real discussion, very few are having a real discussion about this topic.

Or they agree for some ideological reasons, some idea they have about what people might do, or whether it's morally right; or you may not agree because you think it's atrocious, or that it's not going to work, or that you can't just give people money for whatever reason. We are all forgetting the most important thing, which is to ask the right questions, questions like: How much will it cost? and: How will you pay for it? How can you finance it? Would people stop working if they only received one income? and: Will it really solve the problem? This is the main question.

And what is the problem we are trying to solve? Because we must focus on the objective, not on the story or the fairy tale that we tell ourselves, and to which we are very attached, and defend. We should think about what the objective is. So: What is the objective? Otherwise it will be like arguing with capitalism and socialism for another hundred years. We don't have that time. So what is the objective? It is difficult to reach a consensus, but I believe that a good starting point is from article 25 of the United Nations International Declaration of Human Rights, which establishes that everyone has the right to a standard of living adequate to enjoy Health & Wellness. -be your own family, including food, clothing, housing, medical care, necessary social services, etc.

So the question is: does a basic income meet this objective or not? Because if so, I don't think your ideology really matters, because you're actually accomplishing the goal. And if it doesn't, it doesn't matter how good the idea sounds: if it doesn't work, it doesn't work! So the only way to know if it really works is to observe the experiments, and no one really cites the experiments or the results, they just pass them on and say, "Oh, we've done the experiments and we know it works." It works and it's fixed." No, it's not decided, because these are the countries where we've done the experiments, okay?

It may sound promising, but between 14 countries and there are actually 200 countries on the planet, it's a reality check. for everyone. Only three of them were truly unconditional basic income, and only two had more than 1,000 people in the study. Well, here's the reality: we don't have much evidence either for or against basic income. We know, because we haven't done enough experiments. So let's look at these two experiments. In Canada, in the 1970s, for five years, about 10,000 people received about $500 a month. to work. And it turns out: Actually no, no, people worked just as well. Only two categories worked a little less: women who took long maternity leaves, which I think is good, spend more time with their children; and young people worked less, but there was a higher high school completion rate among young people, which means they stayed in school longer instead of going to work right away, which I also think is good.

And then an unexpected result: a lower hospitalization rate. This is one of the things you discover when you actually do experiments and see what happens in the real world, instead of just making it all up in your head. The second experiment was in India, much more recent, three years, 2011-13, about 6,000 people, with a control group of another 6,000, received about $4 a month. It may not seem like much, but in rural India this is actually 40% of subsistence. Yes, not everyone has 1,000 euros lying around like that. The results were very promising. There was better nutrition and food sufficiency, better livestock, there was no increase in public evils such as alcohol, prostitution and drugs, there was a reduction in diseases, many more people went to school, especially girls, who are normally marginalized in society.

That's why it's great that many girls went to school. And people, very counterintuitively, were three times more likely to be entrepreneurs and start their own business. So people actually worked harder, took more risks, and there was more innovation. So this is the reality. Now, these results are promising, but by no means conclusive. Because these experiments are very small and very few. And to achieve our goal, we actually have to ask some other questions and answer them. For example: What about the rent? Let's suppose then that starting tomorrow each of us receives 1,000 euros per month. Thus, 1,000 euros magically appear in your bank account, every month, on the same day.

Well, what about the rent? If you do not own a home, you have a landlord or landlady. What prevents them, apart from policies or other mechanisms, from raising the rent exactly 1,000 euros? Because that's what the market dictates:Rent as much as possible, as much as people can afford. If you do the same for everyone, well, that actually just increases inequality because more capital is being transferred to those who already have it, thanks to Piketty's research. So this basic income would actually increase inequality and poverty, and destroy the middle class even faster. So if we get rid of most social programs and just say that people are free to do whatever they want with their income so we don't need all this bureaucracy, there could be a push to privatize a lot of things. , because so many social programs or government participation are not needed.

Well, we know what happens when healthcare is privatized. It's a very bad idea, quality goes down, prices go up and everything goes to waste. So whatever solution we come up with, we must remember that it will not be a panacea, because things must be contextualized and, if implemented, they must be comprehensive, in a comprehensive package of broader reforms, to look across the entire ecosystem. and the broader implications of what you're doing. And they must be different in each country, because different countries have different social contexts, social adaptations and social norms, and not all have the same cultural level.

Therefore, it will never be a one-size-fits-all solution. And the problem is that we don't have enough experiments. We need more data, but above all we need better data. In particular, we need experiments, and I call on everyone who is a policymaker or works at the university and who has some power to influence things, to start trials, to talk to me, to talk to other people in the research community. basic income. . And let's do them, with at least 10,000 people, with a control group so you know what you're counting. It must be truly unconditional: everyone receives it, without conditions of any kind, otherwise it will not work.

It has to be for more than two years, because what people do if they know it will be long term is very different: they make plans for the future. If they know it will only last 6 months, they won't see the social dynamics that really play out in a complex society. And it must be a true basic income, not a fraction of a percentage, like 10% or 40% of the poverty line; It must be, many economists suggest, about half the median income, or something like that. And finally, we need detailed feasibility studies, because there are now some preliminary studies that suggest it could work financially, but we don't really know because no one has done extensive research that looks at all the implications, all the way. in economic activity in the broadest sense, considering the broader picture.

So we need to get in touch with universities, with professors, with economists, with policy makers, with experts and with businessmen, yes, with businessmen, because there are new technologies and new innovations that can help us simplify bureaucracy, because now it is easier . than ever to carry out a basic income experiment thanks to technologies such as blockchain and cryptocurrencies. And in developing countries mobile payments are very successful, such as in Kenya. There are now many groups trying to implement basic income through cryptocurrencies and the Swiss in Switzerland will vote on a basic income in a public referendum this year.

Now I have the feeling that it is not going to be approved, because they have not done a feasibility study and the discussion is at an ideological level. Therefore, many people are not convinced, rightly so, because no one has taken the time to conduct a proper experiment or study. So there are some worrying trends we need to think about. We have an aging population, fewer people can pay taxes and more people need a pension; growing inequality; we have the perspective of technological structural unemployment; and the disappearing middle class. All this is very worrying. And if we just tell ourselves stories and fairy tales, that this is how things are, that nothing is going to change and that we can't do anything about it, it will be like the climate change debate, where we just go around and around. in circles, and there isn't really a debate, the facts are out the window and it's just ideology.

It will be a disaster if we treat it the same way. So we need a serious and real public debate, analyzing the data, analyzing the evidence, reaching out to experts, civil society, policy makers, everyone, to have a real public debate, so that we can find solutions together, so that we can achieve our goal of providing a high standard of living for all, the 7.2 billion of us, who shared this incredible experience for a very brief moment, on this pale blue dot, floating above the sky. And, in the words of the great Carl Sagan, there is perhaps no better demonstration of the folly of human vanity than the distant image of our little world.

To me, it underscores our responsibility to treat each other more kindly and to preserve and cherish the pale blue dot, the only home we have ever known. Thank you. (Applause)