UBI or Universal Basic Income is a system under which every citizen would get an unconditional, non-means-tested pay-out from the state.
It has some supporters on the Right and, of course, the Left (free money, innit?), but the policy’s most influential base of support is in Silicon Valley (as commented upon in a previous UnPacked).
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Why would the tech millionaires and billionaires be so keen? Haven’t they got enough money of their own?
Well, yes, they have. However, it’s not themselves they’re immediately worried about – it’s us, their loyal customers.
The big tech companies have got so big so fast because they’re really good at extracting money from the markets they ‘serve’. Digital networks have an inbuilt tendency towards monopoly (see Metcalfe’s law). Networks also facilitate centralised control over information flows, thus further enhancing the monopoly effect. Then there’s the geographical ambiguity of doing business online, which lends itself to world-class proficiency in tax avoidance.
For all these reasons and others, the tech giants are sitting on vast piles of capital that can be deployed to crush the competition in just about any market they choose to expand into – establishing yet more monopolies.
These companies are in an extraordinarily strong position and they know it. That’s how they can swan around demanding favours from national and local governments – just look at how towns and cities compete for the privilege of hosting tech company HQs. Indeed, entire nations bend over backwards to accommodate their digital highnesses: the Irish government, for instance, is fighting a European court case for the right not to collect more tax from Apple.
Writing about the growing power of the tech lords, Douglas Rushkoff begins with small example of their sense of entitlement:
“Silicon Valley firms are the only corporations I know that ask for private talks for free.”
That’s in his experience, of course – and tech is hardly the only industry where businesses try to pay writers and other creatives in the mysterious currency of ‘profile’. And, yet, given their increasing control over information flows, few other industries are in a better position to expect favours.
And, yet, as Rushkoff argues, big tech’s extractive business model has a long-term sustainability problem:
“Digital monopolists drain all their markets at once and more completely than their analog predecessors. Soon, consumers simply can’t consume enough to keep the revenues flowing in. Even the prospect of stockpiling everyone’s data, like Facebook or Google do, begins to lose its allure if none of the people behind the data have any money to spend.”
And that’s where UBI comes in: boosting our spending power so we can keep feeding it into tech-dominated markets:
“Think of it: The government prints more money or perhaps — god forbid — it taxes some corporate profits, then it showers the cash down on the people so they can continue to spend. As a result, more and more capital accumulates at the top. And with that capital comes more power to dictate the terms governing human existence.”
Rushkoff points out that a UBI-based economy would turn us “from stakeholders or even citizens to mere consumers”. If, ultimately, any value that we can create as producers is creamed-off by the tech lords (or, alternatively our role as producers is rendered obsolete by automation), then we’ll all be reduced to the same level, the UBI-dependents of the state.
But there’s an even more disturbing scenario. Instead of waiting for the state to create artificial demand by paying out UBI, the tech companies could do it themselves – issuing their own proprietary currencies and doling it out to their customers.
After all, if they are the ones who control the means of production – and what they produce is needed and/or wanted – then their corporate scrip would have value. In this scenario, each tech company would become a private communist state controlling not just production, but also determining, for each individual, the means of consumption: on whatever basis it sees fit and with whatever conditions it chooses to impose.
Of course, things won’t ever get to that point. Democratically elected governments won’t allow the tech giants to acquire that much power over production, let alone consumption. Even if the internal logic of the big tech business model is towards ever-greater monopolisation, at some stage in the process governments will intervene.
So, if not now, when?