Basic income and the new golden age of capitalism | Floyd Marinescu | TEDxWindsor

According to Floyd Marinescu, technology created the middle class and now it is destroying it. A universal basic income could preserve and expand a middle class way of life for everyone, bringing in an era of human prosperity and wellbeing worthy of being called a new golden age of capitalism - but only if we can come to see that technology is our shared inheritance.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community.

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I grew up in a house
with domestic violence.

Sometimes, as a child,

we didn't know from day to day
if our mother was going to live or die.

If my birthmother - or my stepmother,
afterwards - had money,

they could have left
and taken me with them.

Or I'm certain

the power dynamic in the house
would have been different,

as it would've been known,

there would've been more respect

knowing that they had the freedom,
the options to leave.

Freedom is what we'll buy
ourselves, as a society,

if we can implement a universal
and unconditional basic income

in the form of monthly cash payments
going to every citizen.

Do we really have freedom
if we don't have options to choose,

the option to say no
to an unsafe environment,

whether it be in the family,
or the workplace,

or against your own government?

The means to protest, to stand up,

or to walk away, or in some cases to run?

Now, I've no regrets
about how I was raised.

I love my father, and I'm lucky
to have two women I can call mother.

We've done a lot of healing work
to get to where we are today.

But I'm really worried

because I can see how financial pressures

played a triggering
and an enabling role in the violence.

I'm very worried,

because I'm seeing that job displacement

is pushing an increasing number
of families in Western countries

into worse financial pressures
than I went through.

[Job Displacement]

Technological job displacement

is when the cost
of your job, of your work,

trends down to an unfeasible level,

maybe because you're competing
against machines or offshore labor,

so much so that if you get fired,
you can't find that job anywhere else.

It no longer exists.

Families, communities
that are relying on your incomes

start to shrink and are damaged,

because in most cases,
people whose jobs are displaced

end up taking lower income work
or not working at all.

I'm here to tell you that technology
is the brilliant child of capitalism.

It created the middle class,
but now it's destroying it.

I think universal basic income

is how we can preserve
and expand the middle class,

but only if we can come to see
that technology is our shared inheritance.

Most of human history
was like "Game of Thrones."

Most of us lived in miserable conditions,

while a few of us hoarded all the wealth

and anointed themselves
with birthright privileges.

The middle class was a creation

of the technological advancements
of the Industrial Revolution -

just a blip in human history,
very recent, very fragile -

which chased people from low-income work
to higher-income work

allowing us the means,
the income for some comforts,

but more importantly,

for the political power
to shape governments

to invest more in the needs
of the common man.

What we call the modern middle class
was created during a period

that economists are fond of calling
"The Golden Age of Capitalism."

This was a period when wages
were growing together with productivity.

Imagine that.

The more businesses needed to sell,
the more they needed to hire people

to produce the things
that they were making,

that put upwards demand on wages,

which meant people had more money
to spend back into those businesses.

This was also a period

when the top one percent of us
were actually seeing a decline in income

every year after year,
for decades in Western countries.

Imagine that.

The bigger the economy got,

the more of those gains went
went to the majority of us.

Sounds fair, right?

I believe it is this period
of inclusive growth

that has given us our idea
that working hard will get you ahead.

Because in that period, it did.

For a brief period in human history,

the majority of the gains
from technological advancement

were going to the majority of us.

But what if the rise of the middle class
is just a coincidence in time,

a coincidence for when people
were so essential

to the work of delivering
all these new technological advancements?

[Coincidences?]

I believe that we saw
these coincidences start to break down

around the early 1970s,

shortly after mainframe computers
were making their way

into Western companies,
corporations everywhere,

as manufacturing robots
were making their way onto factory floors

shortly before, and with the advent,
of personal computing.

This period of time
is called the great decoupling.

The great decoupling that decoupled
the value of human work from productivity.

Clearly, humans were less valuable
as computers could do more and more

of the repetitive work
that careers were made of.

And much of the work we do
is repetitive and routine.

So it's not that over a period of decades
that many people were fired,

as businesses became more productive,
but rather how many were never hired,

which created the absence
of that upwards pressure on wages

we saw during the golden age.

Technology created globalization,

the global economy,
the globalized supply chain,

which also put downward pressure on wages

because we couldn't complete
with hundreds of millions

and now billions of people
around the world

that can do the same work we can
for less than can be lived off here.

My father and uncle
had their careers displaced

in Ontario's automotive
manufacturing parts sector

shortly after China
entered the scene in the mid-'90s.

We couldn't compete with that,
and the businesses that remained,

the tool shops that remained
after the carnage,

were the ones that were managed
to automate, to stay competitive.

That's why during that period,

six times more jobs
were lost to automation than trade.

But the globalization of today
is beyond the reach of tariffs.

The globalization of today
is about online jobs.

Even small businesses can hire
virtual assistants in the Philippines

for four dollars an hour.

Businesses like mine
would not have existed 25 years ago.

We make income all over the world.

We're completely remote, no offices,
and because of that, we can hire anywhere.

So half of my staff is employed
in developing countries.

Why? Because I can afford
more people that way.

[Unions Leverage Weakened]

Unions lost their leverage

because of the combination
of automation and globalization together,

and their unions were always pivotal
in increasing wage growth.

Now I'm really worried,

because if you could look
at the share of national income,

the amount of the income produced
every year in the United States -

or in any country, any Western
country's quite similar -

you see the share going
to the top one percent of us

increasing year after year
since the great decoupling.

I'm a beneficiary of that
as a member of the one percent,

and this really bothers me.

If you look at the green line,
it's going down.

The bottom half of us
are making less and less and less

of the share of national
income every year.

With that green line going down,
we see a parallel line

of decreased annual economic growth,
a slowing of growth.

We also see, I believe,
a decrease in political power

as governments
no longer have to prioritize

the needs of common men, of common people.

So, it's not at all an exaggeration.

If you draw those lines out
a few decades into the future,

I'm afraid to consider
where that will lead us.

The top one percent could be making
35 cents of every dollar,

the bottom half of us
could be making 6 cents.

That's not capitalism anymore,
folks - that's feudalism.

That's right back to the
Game of Thrones that we left.

That's right back to there'll be

a new global peasant class
that has smartphones,

but a new nobility that has all the power
and shapes governments in their image.

We should all be
very concerned about this.

[Artificial Intelligence]

Artificial intelligence
will just make it go faster,

and no one is predicting the creation
of a lot of high-paying jobs

to replace, to create
a new middle class to step into

as in the golden age.

In fact, many economists are saying

we're going to have
so many productivity enhancements,

but we're going to have
a lot more low-paying jobs.

Frankly, it is this theory

that explains the economics
of the last 40 years.

The middle class has been hollowing out.

The world's top economists in the world

are very concerned about
the hollowing in middle class,

and I'm able to show it
to you in pictures.

This is a study showing the City
of Toronto between 1970 and 2005.

In 1970, the yellow represents
middle-class neighborhoods,

the blue represents
high-income neighborhoods,

and the red is low-income neighborhoods.

2005, you can see
the hollowing in the middle class,

mostly low-income neighborhoods.

The middle class almost disappeared -

they didn't go anywhere,
they were displaced.

And the blue-income
neighborhoods got bigger,

as of course there are
more high-income jobs,

but not enough programming jobs,

nor can everyone be a programmer.

What we see here, this pattern in Toronto,

is replicated across the world,

between cities -

some cities have been on the losing end
of automation and globalization -

and between regions.

It's funny -

look at the blue, imagine
you're thinking of the blue states,

San Francisco, New York, LA,
where all the brain power is going;

and the red is the red states,

how they've been on the losing end
of automation and globalization,

and they're angry.

We can see the impact of that
by seeing an increase in deaths of despair

among white middle-aged people
in the United States

whose jobs have been displaced.

The coincidences in time,

when more high-income work
was being created

to replace low-income work,

are starting to break down.

I think a universal basic income
is part of the solution,

because it will preserve
and in fact expand the middle class.

Expand the middle class
not in terms of us having two car garages,

but things that matter,

where everyone can have
psychological safety,

the ability to make long-term plans,

the ability to afford
healthy food for their children.

We should just implement this basic income
and then just wait it out.

Wait it out as money is appearing
in our bank accounts every month

just enough to cover basic needs,

provide us with that
middle-class way of thinking,

because eventually technology
makes everything cheaper.

Everything from the cost
of food, transportation,

pretty much consumer goods;

it's already been
getting cheaper over decades.

We can all enjoy
a middle-class way of life.

And the existing middle class
will also be preserved.

Why? Because basic income
is an economic stimulus.

Those who have the least spend the most
of the share of what they have.

All that money goes
right back into the economy,

stimulating corporate revenue,
stimulating job creation.

We can have all this,
but we need to see basic income

not as a social program
that helps people in poor circumstances,

but rather a public utility
that helps us all.

How having a healthy economy
is a need common to us all.

We should see it
as the water in the pipes,

circulating money to keep
our economy healthy for everyone,

expanding the middle class
and bringing wellbeing to everyone.

So while the first golden age
of capitalism was called that,

in part because it created
the middle class,

this next evolution of capitalism
may also be called the golden age.

Why? Because we will have expanded
the middle-class lifestyle for everyone.

But only if we can come to see
that technology is our shared inheritance.

It's meant to uplift everyone.

In 1930, the economist
John Maynard Keynes -

this is a man whose ideas

basically created
the golden age of capitalism -

said that by the year 2030

technological productivity
should have been so great

that by now we're all
only working 15 hours a week.

There's not much more work to do.

He said we could enjoy
this life of leisure.

Well, how are we going to get there?

Basic income will get us there.

Why? Because if the economy in the future
is creating all these low-income jobs,

all these people could choose
to work 15 hours a week

with one of those jobs.

Innovation stands
on the shoulders of giants.

The Internet is the best example of that.

How many of today's wealthy people
would have what they have -

certainly not me -

if it wasn't for the Internet
and the public financing that created it?

The public financing

that paid for the educations
of all of its users, creators,

frankly everyone in this room

who had free schooling
through high school,

all the things around us,
everywhere you look.

Go outside, and our interdependence
is screaming at us.

We just see

the basis of our modern wealth
is built on contributions from the past,

including scientists
and philosophers and politicians,

who are probably rolling
in their graves right now

to see that the gains from their ingenuity

is being concentrated so much
in the hands of so few.

If we can accept that technology
is the shared inheritance of humanity,

then we can see

that at least some of the gains of it
belong to all of us,

and the time in history

where a job could be the main vehicle
in sharing in that gain

may be gone,

a coincidence of the past.

Imagine a society

that would have these things,
have a basic income, have this dividend.

In fact, we should call it a dividend.

Why? Because if you believe

that we deserve a share
of the technological gains,

then it makes us
stakeholders in our economy.

A dividend is an amount of money
you get from an investment.

We are all invested in our economy,
we're invested in our country.

So if we can do that,
imagine what would be available to us.

A more functional democracy.

Why can't we solve climate change?

When's the last time you heard
of a major infrastructure investment

to catapult society to new level?

Why? Because when people
are financially insecure,

they vote out of fear,

and we're more prey to fear mongers
and people who preach hate.

Behavioral economics research has proven

that people who are financially insecure
make poorer long-term decisions.

I believe that if we implement
this basic income,

we can alleviate the kind of anxiety.

I believe that if we can free
our hearts from fear,

we can free our minds
to hope and dream again.

We will see a government
held more accountable

to its people, who [now] have
the means to protest,

have the means to engage in politics,

and have the expectation and the hopes

of more long-term
decision-making and voting.

A society that's not afraid to fail
will also innovate more,

and innovation is the basis
of our prosperity,

an enhancement of the human experience.

The word "capital"
in capitalism - it's not just money.

It's our appetite
and our tolerance to risk.

Many people in this room
have a great appetite for risk,

but low tolerance to it.

When 47 percent of Canadians

can't find $200 in case of an emergency

and 60 percent of Americans
can't find $500.

We are at record low levels
of risk tolerance today,

and we're in period for the last 10 years

where more businesses are closing
than opening every year.

If we want to see
more economic breakthroughs,

faster growth, more innovation,

we need to recapture the risk tolerance
available in all of us;

us humans are a natural
resource of innovation.

We need to unlock that.

A basic income is how we can do that

by guaranteeing basic needs
so people can dream again and take risks.

We can finally remove the barriers

that are preventing people

from pursuing jobs
of higher purpose and impact

that may not be feasible
in a pure market system.

But with the basic income,
in combination with these,

it could be enough to live,
because not everyone wants to get rich.

Some people care about caregiving,
caring for elders;

caring for their children a bit longer
if one don't go back to work right away,

community service,

early stage research
in mathematics and science,

starving artists, small business,
nonprofit work, mentoring, and counseling.

All of these jobs add value to our society

and currently are being discounted
in a pure market system;

but with a dividend
from our technological gain,

we can finally unlock this human potential

and see this part of the human heart
be exposed within our economic system.

So imagine, what if we had done it,

what if we already had it back in 1968,
when the US Congress passed it twice?

The Republicans,
under Richard Nixon, were for it.

It failed in the Senate
by just a couple of votes,

because Democrats thought
it wasn't generous enough.

That's the same year -

For those who think this is socialism,

this is the same year that the US
sent half a million troops to Vietnam

to stop the spread of communism,

and 1,000 economists
in 1968 signed a letter

saying basic income is good
and it's compatible with American values.

Also during this time,

Martin Luther King
was starting to campaign

to end poverty for all races,

and he was demanding

that the US government guarantee
a middle-class income for all families.

That's shortly before he was assassinated.

Imagine if a man of his stature,
of his persistence,

kept that organization going -

maybe we would have had a basic income.

And what would it have been like
for your communities?

Imagine lessening the impact,
a dent on racial inequality.

Imagine lessening the suffering
from technological job displacements.

Imagine if we could
have resisted climate change

because we could all be free
to think long-term.

Imagine what the impact
on my own family would have been.

My whole life might have been different.

If we can realize that technological gains
are the shared inheritance of humanity,

then we should go forward
and move towards a freedom dividend.

Again, I call it a "freedom dividend,"
paid for by technology,

to give us all - to guarantee
our personal freedoms,

guarantee that we have the power
to hold our government accountable to us,

not only to the one percent.

Freedom that gives us options,
real options in life,

like the option to pursue
your potential in life,

not be held back by material constraints
or unsafe environments.

We have to make a decision:
what kind of future will we head on?

Because the future we're heading on to now
is more like that on the left,

where technological automation
is concentrated,

the kind of scarcity
that leads to more wars, revolutions,

to more people blaming themselves,

dying - literally - from shame
that is not deserved.

And that on the right,

where we share a little bit more
to create abundance for all.

We have a government
that invests in our needs,

where anyone can reach their potential.

I'd rather live in society on the right,

so I invite you to join me.

Thank you very much.

(Applause) (Cheers)