UBI is Terrifying

We need to talk about the scenario AI optimists keep pointing to when you press them on mass unemployment. This is the version of the future where everything supposedly works out. In this narrative governments recognize the crisis early and implement Universal Basic Income before millions become destitute (but in reality, I can’t think of a crisis the U.S. was prepared for before it occurred… however, I’ll still entertain this narrative…) and humanity transitions into a post work society where AI handles production while humans pursue meaning and creativity.

The people building these systems are already selling this vision explicitly. Sam Altman, the CEO of OpenAI, wrote in his essay Moore’s Law for Everything that we need to design a system that embraces this technological future. He wrote that we must tax the assets that will make up most of the value and distribute that wealth to citizens. He specifically argued that "a great future isn’t complicated: we need technology to create more wealth, and policy to distribute it fairly."

Even Geoffrey Hinton, the godfather of AI who left Google to warn the world, was blunt about the economic fallout in his 60 Minutes interview. He said "I am very worried that AI will take lots of mundane jobs and make the rich richer and the poor poorer." His hope is that society will intervene, but his fear is evident in his own words.

The pitch sounds almost utopian when they describe it. We are told we will enter an era of universal peace and human flourishing. I want you to really think through what this best case actually looks like on the ground. I want you to imagine it in a country like the United States that has built its entire identity around individualism and competition and the dignity of earning your own way. I am not convinced the best case is actually all that good. I am certain the transition would be far more painful than anyone in Silicon Valley wants to admit.

Let us start with the optimistic assumption that Congress actually overcomes partisan gridlock and implements UBI. We will assume a generous figure of $2,000 per month per adult. This would likely be funded by taxes on AI company profits and a value added tax.

We must be honest about what $2,000 a month actually is. That is $24,000 a year. For a single person that is barely above the federal poverty line. For a family it is worse. A couple would receive $48,000 combined. That sounds manageable until you remember that it is pretax and has to cover rent and utilities and food and healthcare and transportation. In most American cities you are looking at $1,500 to $2,000 a month just for a modest apartment. That leaves very little for everything else. This is not comfortable abundance or liberation. It is subsistence.

The political reality is that the number will not be higher. Getting even that much through Congress would require overcoming massive opposition from fiscal conservatives and business interests. The number that emerges from that political process will be barely enough to survive. You will have 50 million Americans who spent their lives believing that self worth comes from work suddenly receiving checks that keep them just above the poverty line while the economy has decided it does not need them anymore.

You likely cannot afford to live where you used to live because housing costs in employment centers are designed for people with jobs. You might move back to a deindustrialized town where rent is cheap because nobody wants to live there anymore. You might end up in subsidized housing created for the UBI dependent population. You will be in a neighborhood full of other people who also have nothing to do and no money to do it with. You cannot afford healthcare beyond basic coverage or travel or new clothes. One broken car or unexpected expense forces you to choose between food and rent.

This is supposed to be the liberation from drudgery that lets you pursue your dreams. The reality is that you are financially stressed every single day. You have no economic security and no buffer against disaster. Everyone knows you are living on government assistance because you have no economic value.

The psychological research on unemployment is brutal. It links job loss to loss of identity and depression and increased substance abuse and higher suicide rates. That data comes from unemployment that is considered temporary. We are now talking about unemployment that is permanent and structural. You are doing it on poverty wages in a country where everything is priced for people who used to make middle class salaries.

Bill Gates recognized this friction years ago. He argued in an interview with Quartz that we simply cannot replace workers without replacing the tax revenue. He said "right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, and all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level." But notice that the speed of adoption is not slowing down to wait for these taxes. The race is accelerating.

We have spent 250 years building a culture where your worth is measured by your productivity. You are not just taking that away. You are telling people explicitly that they have no economic value. Roughly half the population still believes that poverty is a moral failure. The political backlash would be savage. One faction would call UBI socialism and demand that out of work professionals learn new skills even as those jobs disappear. Another faction would call the amount cruel and demand it be doubled. A third faction would question why anyone should work at all.

We would see competing movements spiral into resentment. Some people might embrace their liberation from work to pursue art or education. But they would be doing it while stressed about money and living in cheap housing without the resources to buy materials. Others would spiral into purposelessness and addiction. Most would land somewhere in between. They would try to figure out who they are when their occupation no longer defines them and they can barely afford to exist.

Consider a manufacturing town in Ohio where a plant automates completely. The workers lose their jobs and go on UBI. The local economy collapses because people on $2,000 a month do not eat at restaurants or buy new cars. The retail stores close because their customers now shop exclusively at discount dollar stores. The social structures built around work dissolve. The union hall and the company softball league disappear. Most people will stay home and watch screens. They will gain weight on cheap processed food. They will drink more because alcohol is an affordable escape.

We have seen what happens to communities when the economic base disappears. The opioid epidemic hit hardest in places where good jobs vanished. Over 500,000 Americans died from opioid overdoses between 1999 and 2020. The difference is that those people still believed jobs should exist. Imagine that despair combined with the knowledge that society has decided your labor has no value at all. You are not unemployed. You are obsolete.

The political pressure will be constant. One faction will demand the UBI be increased to a livable amount while another demands it be cut. You will face annual budget fights where your ability to eat depends on which party controls Congress. The companies paying the taxes to fund this will lobby relentlessly to reduce their burden. They will threaten to move operations overseas. When you are economically unnecessary and living on government transfers funded by corporate taxes you have very little leverage to demand more.

You end up with a permanent underclass living on barely enough to survive. Meanwhile the tiny fraction of people still economically necessary live in a completely different world of savings and status and purpose. The gap between those two groups is existential. One group has lives while the other has subsidized survival.

Let us look forward to 2050. Capitalism as we know it will be fundamentally altered. When UBI at poverty wages replaces salaries as the primary source of income the loop between labor and purchasing power breaks. Private corporations will own the entire productive economy while most humans survive on government transfer payments. You have created a permanent dependency relationship where a tiny ownership class controls production and the government acts as intermediary.

This is not capitalism and it is not socialism. It is corporate feudalism with a poverty level safety net. A few companies will control the vast majority of AI infrastructure. They will employ only specialized technicians. Everyone else is a customer receiving UBI checks. These companies will have infinite resources for lobbying and shaping public opinion. The UBI dependent population has votes but no economic power. Nothing stops those companies from dictating terms to governments.

Mustafa Suleyman, the cofounder of DeepMind and CEO of Microsoft AI, warned about this power dynamic in his book The Coming Wave. He wrote "if the coming wave really is as scalable and as powerful as I believe, it will also represent a redistribution of power on a historic scale." He argues that without containment "the result is not just a more unequal world but a world where the very possibility of a shared reality disintegrates."

Elections might still happen but the range of acceptable outcomes will narrow. Any candidate who threatens the power structure will be buried under opposition. The UBI dependent population will be too busy surviving to organize effective resistance. They cannot afford the lawyers and campaign infrastructure needed to challenge entrenched power.

The AI optimists claim this leads to universal peace. They argue that if basic needs are met conflict will diminish. But basic needs are barely being met in this scenario. People are struggling for survival in a different way. Status competition does not go away just because everyone has enough calories to stay alive. Humans are hierarchical. If you eliminate careers and wealth accumulation as avenues for competition it shifts to other metrics.

We might compete over social media influence or physical attractiveness or arbitrary community status. Humans will stratify around whatever metrics remain. Studies of lottery winners show that happiness returns to baseline levels quickly. The hedonic treadmill is real. UBI might eliminate starvation but it will not eliminate envy or resentment.

Viktor Frankl wrote that meaning comes from responsibility and from being needed. What happens when society tells you that you are not needed? Some people will construct their own meaning. They will write novels or build community gardens. But the data on unemployment shows that most people struggle. Prolonged joblessness leads to isolation and anxiety even when money is not the primary issue.

In 2050 most households will likely consist of people sleeping late because there is no reason to get up. They will eat cheap processed food while scrolling through AI personalized entertainment. They will live in rundown apartments because they cannot afford repairs. Virtual reality will become the primary escape because it offers the feeling of achievement and purpose that reality no longer provides. It will be the digital opium of the masses.

This is the pasture. Humans are fed and sheltered and entertained but they are fundamentally passive. They are disconnected from the systems that govern their lives. We are talking about the collapse of shared meaning systems. Work provided social connection and routine and identity for millennia. Replace it with poverty level subsistence and you remove the structure holding society together.

Creativity usually requires resources. The great works of art and science came from people striving to solve problems or prove themselves. They had the materials and education to pursue their work. When you remove economic necessity and replace it with subsistence poverty you get desperation rather than innovation.

Democracy functions on the premise that citizens have shared interests in the economy. When most people are economically unnecessary that loop breaks. The political system becomes a binary struggle between the owners of production and the recipients of redistribution. The disparity in wealth will be unimaginable. Even today the richest few own more than the bottom half of the country. In a world where the ownership class is the only class with economic function that gap widens until it becomes a different species entirely.

We could end up with a technocratic oligarchy that maintains the appearance of democracy. UBI keeps the masses pacified enough to prevent revolution. Surveillance AI ensures compliance. It is soft authoritarianism. The system perpetuates itself through the financial desperation of the majority.

The AI CEOs selling this vision are people who derive enormous meaning from their work. Dario Amodei of Anthropic is leading one of the most important companies in the world. He and his peers live lives suffused with purpose and challenge. They have unlimited resources. When they tell you that you will be fine without work they are imagining a world where they do not have to work but keep their wealth and status. They are not imagining what it is like to have nothing to contribute while living in poverty.

We need to grapple with hard realities if we want a different outcome. We need UBI that allows for dignity rather than just survival. We need new sources of meaning that are not tied to economic productivity. We need to preserve human agency even as economic power concentrates. This might require public ownership of critical AI systems or aggressive wealth redistribution that goes far beyond current political imagination.

We must question whether eliminating human labor is actually a desirable goal. We should be asking how to use AI to augment human capability rather than replace it. We need to keep humans in the loop of production and decision making.

The best case scenario assumes humans can be happy without being needed. It assumes we can thrive while living in poverty as long as we have screens to watch. If that assumption is wrong then the best case is a path to civilizational decline. We will have a population that is increasingly passive and dependent. We will lose the traits that made us capable of building civilization.

Peace without purpose is just waiting to die. Peace enforced by poverty is oppression. This is a slow fade into irrelevance where a tiny elite controls everything and everyone else exists in a state of permanent dependency. The authorities in this case are the very people whose fortunes depend on mass AI adoption. They are telling you everything will work out fine while offering you poverty as a solution.

Don’t be fooled…