Some residents of Oakland are about to get a basic income

A big, bold experiment.

Basic income is having a moment. First Finland announced it would launch an ambitious experiment to see if it would work to give everyone in a specified area a set amount of cash every year from the government, no strings attached. Now the Silicon Valley seed investment firm Y Combinator has announced details of a basic income experiment it’s funding in Oakland.

Four months after saying that the company was interested in funding a pilot, YC announced that it will begin with a short-term project in Oakland. “In our pilot, the income will be unconditional; we’re going to give it to participants for the duration of the study, no matter what,” the company stated. “People will be able to volunteer, work, not work, move to another country — anything. We hope basic income promotes freedom, and we want to see how people experience that freedom.” If the pilot is successful, YC will follow up with a larger-scale, long-term main study.

The evaluation will be led by Elizabeth Rhodes, a recent PhD from the University of Michigan in social work and political science. YC notes that other contenders for the position included “tenured professors from Oxford, Columbia, and Harvard.”

Basic income as an insurance policy for the robot takeover

robots
Two robots, wary of the future they will rule.
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Y Combinator — a startup incubator that counts Dropbox, Airbnb, and Reddit among its alumni — seems mostly interested in basic income as a response to technological unemployment. In the future, the reasoning goes, enough work will be automated that demand for all but the highest skilled labor will collapse, leaving a small group of programmers and capitalists with all the coconuts and most people with nothing.

I’m skeptical this is ever going to happen (Matt Yglesias makes a good case against the hypothesis here), but basic income is one way to make sure everyone survives structural employment changes in the future.

“I’m fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we’re going to see some version of [a basic income] at a national scale,” YC president Sam Altman wrote in his initial announcement of the experiment.

This, interestingly enough, is also the rationale used by many radical leftist thinkers to justify a universal basic income. Under one view, delightfully named “fully automated luxury communism,” humanity will overcome capitalism by having machines do most of the labor and then distributing the proceeds fairly across a public that will be able to work far less.

Radical theorists Nick Srnicek and Alex Williams wrote in their recently published book Inventing the Future, “The technological infrastructure of the twenty-first century is producing the resources by which a very different political and economic system could be achieved.”

Basic income has always brought together ideologically divergent supporters; in the early 1970s, libertarian economist Milton Friedman and 1972 Democratic nominee George McGovern both advocated versions of the plan. But a coalition combining avowed anti-capitalists with literal venture capitalists for the project of basic income is still pretty startling.

What Y Combinator’s study could add

Just when I thought I was out…
Life under a basic income?
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Y Combinator’s interests here are nonetheless pretty unique. Most past basic income studies — ably reviewed by my colleague Noah Kulwin at Re/code here — have focused on the question of whether the policy reduces work — which was thought of as a bad thing.

The best past experiment, in the Canadian town of Dauphin in the 1970s, was considered promising because it suggested the policy didn’t discourage people from working much; only teenagers and new moms (two groups who might be better off not working anyway) reported working less. By contrast, more poorly conducted US studies suggesting that a negative income tax (a variant of basic income that phases out as people earn more from their jobs) discouraged work were taken as a mark against basic income.

However, if YC’s concern is caring for people after technology has wiped out all their work, then “does basic income keep you from working” isn’t a very interesting question.

Altman writes that he wants to know, “Do people sit around and play video games, or do they create new things? Are people happy and fulfilled? Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive? “

These are harder questions to answer. If someone relies on their basic income to create a gorgeous sculpture, how do we measure if that “benefits society far more” than what they were doing before? What if the sculpture is super ugly but it brings the person who made it incredible amounts of joy? Figuring out reliable, non-bullshit metrics for the criteria Altman’s proposing is really tough.

But the questions Altman and Rhodes want to answer are in any case different from those posed by most basic income studies to date.

This is a golden age of basic income experiments

Behold, the power of workers!
The Three Smiths Statue, Helsinki’s most awesome public sculpture.
Rob Hurson

The Y Combinator study is one of four notable basic income trials of the late 2010s.

Right now there are two notable experiments in rich countries in the works. The first, in the Dutch city of Utrecht, suffers from the same key flaw as the US study by only targeting existing beneficiaries. The second, much more promising experiment is Finland’s, which is testing a whole bunch of approaches. The researchers are trying a pure basic income, a partial basic income paired with some existing welfare benefits, a negative income tax, and some other ideas.

They’re also aiming to test the idea not just by randomly selecting a group of people across the country to get benefits, but also by having some areas where a big chunk of residents or even all of them receive the benefit. That lets you see what happens to an entire community when a basic income policy is introduced.

Having a whole town get benefits could have cascading effects as households escape poverty, as some people use the income guarantee as insurance so they can take risks and form companies, as universities see increased enrollment, etc. Dauphin is really the only place we’ve had a study on that scale so far, so Finland’s experiment is adding a lot.

Finally, GiveDirectly, a charity that gives cash directly to desperately poor people, is planning to launch a large-scale experiment of basic income in Kenya, with about 6,000 people getting full basic incomes and more than 15,000 getting at least some form of cash transfer. The study promises to be much, much cheaper than the rich country experiments, as each person getting a basic income will receive only $250 to $400 a year— a pittance by US standards, but as much as or more than the recipients ordinarily make annually.

These three trials are similar in many ways to what Y Combinator is proposing, especially the Finland one. But they’re addressing different questions.

Finland and Utrecht want to know if a basic income is a more efficient way of delivering assistance to poor people than their existing policies; they’re not particularly interested in ushering in a post-work future.

The GiveDirectly program is trying to figure out if basic income is a viable way to lift people in developing countries out of extreme poverty. That’s probably the most promising use of a basic income from a humanitarian perspective. Giving $1,000 to someone living on $2 or less in Rwanda effects a much bigger standard of living increase than giving $1,000 to a poor person in the US.

But none of the three experiments is interested in the kinds of questions — “Does basic income make for a more creative society liberated from the constraints of cash?” “Does basic income increase happiness through greater leisure?” — that Y Combinator wants to answer. If done rigorously, the firm’s study could wind up making a useful, original contribution to the basic income movement.

Hope for a post-work future is a big part of why basic income has become popular. It makes sense to test whether basic income can make the best parts of that vision real.