Universal Income could help markets self-regulate better
Universal Income could help markets self-regulate better
One of the most-cited benefits of of ‘free-market’ capitalism is that it creates better value for consumers through darwinistic competition.You buy a phone from Nokia at a certain price and get a certain value out of it. Apple sees how huge that market is, and is incentivized to take a share of that market. So it makes its own phone. It creates more desirable features and advertises it in a way that it takes most of the market share away from Nokia. Consumers now have a better phone. What happens to Nokia?In the current model, it must either have amazing enough leadership to detect and adapt to the changing market, or bow out gracefully into oblivion. If the second option happens, all the employees get reallocated by The Market to something more profitable. If they can’t be, then that’s just the cost of progress.The problem is that no one wants to be ‘reallocated’ or have their personal livelihood lost to ‘the cost of progress’ and will use every means available to avoid it. We know this from history and psychology, but, time and again, we pretend like it won’t happen. Japanese manufacturers created better processes for building cars, but instead of gracefully bowing out into oblivion as The Market demanded, workers in Detroit stubbornly insisted on getting a liveable salary via the only means available to them. They got their wages, but as a result, and we had decades of sub-par cars.When technology made it possible to do our taxes automatically, TurboTax and H&R Block made it illegal. Again, stubbornly refusing to vanish into oblivion because they’re human and wanted money to pay for things. Understandible from their side, but we lose thousands of hours a year to tax frustration and continue to subsidize an entirely useless industry because of it.The coal industry, most of banking, military contractors, many jobs in general exist not because they create value to the consumer or to society (often the opposite), but because the people working those industries just want money to pay for continued life and comfort.Of course, the leaders of these companies and industries probably aren’t in danger of being so poor that they can’t meet their basic needs. But going far enough down on the corporate ladder, we see some of their employees are. They will tolerate unfair wages, hostile work environments, and even voluntarily withhold ethical violations because the guaranteed income from a questionable job is worth more than the no-income from losing their job.So, for us to reap the benefits of ‘free-market’ theory, organizations that are shown to be inefficient, unfair, unethical, unnecessary or otherwise “broken” need to be allowed to easily vanish into oblivion. We see they don’t vanish because the people in them want some income and will manipulate regulations, public opinion, markets and just about anything else to keep it.This means it’s up to us to find the price point where a critical majority of employees of a broken organization will be OK allowing it to fade away, rather than fighting to keep it alive for the sake of a liveable wage.In my opinion, this is the greatest advantage of Universal Basic Income, and one that’s most often overlooked. For the ‘free-market’ to be beneficial, we need corporations to die regularly and frequently, but, through income, we’ve tied individual survival to corporate survival, and in doing so, pitted the ‘free-market’ directly against the human will to live¹.If we take that powerful force out of the equation, we allow the possibility of dysfunctional and broken industries to dismantle and reform themselves. This won’t eliminate greed as a motive, but will set a limit on how much greedy actors can accomplish when they aren’t threatening their employees and coworkers’ livelihoods.¹: When I say ‘the will to live’, I don’t mean just literal biological survival or the momentary burst of adrenalin when confronting a bear, but also a minimal standard of living free from major financial stress factors. This is different from welfare in that welfare is not optimized to eliminate useless jobs, but designed to be difficult and only used sparingly as a ‘last resort’. Seeing the amount of harmful industries people will put up with rather than going on welfare shows how successful of a deterrent it has been.