Mark Cuban gets it right – basic income is ‘one of the worst possible responses’

Automation has been accelerating in the last couple of years. Due to governments around the world raising minimum wages, regulations and taxes, companies are responding by turning to technology, particularly in the form of robots and automation.

Since many fear that robots will replace workers and lead to widespread unemployment, there have been calls to adopt a universal basic income (UBI), and to help fund it by taxing companies that add robots to the workplace.

But is that the best response? No, says one world renowned billionaire entrepreneur.

Mark Cuban, the reality television star and owner of the NBA franchise the Dallas Mavericks, warned last week that “automation is going to cause unemployment and we need to prepare for it.” When asked if he supported the UBI, he replied that it is “one of the worst possible responses.”

This is a policy that, in theory, replaces the welfare state and gives everyone an income just for breathing. A growing number of jurisdictions are testing it out, including Finland and Ontario. Voters in Switzerland recently rejected a referendum to adopt such a policy.

Indeed, robots have been gradually replacing workers for the past century. Rather than employees holding wrenches, they’re equipped with tablets. If you go farther than that, you will notice that mechanization has been prevalent throughout history. Everything from the printing press to the wheel, from metal saws to irrigation channels, much of what has been developed hasn’t led to massive and permanent unemployment. They have been tools to enhance productivity levels, while allowing human workers to exploit their own human capital for other demands of the labor market.

Yes, it is rather likely that, despite rising levels of automation, the labor force participation rate will not crater to 20, 30, 40 or even 50 percent.

Simply put: those who call for a basic income guarantee are just a bunch of Luddites.

Photo by: TechCrunch509306865DH00026_TechCrunch

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  1. I was hoping that someone would elaborate further into Mark Cuban’s comments about UBI rather than just saying “he gets it” followed by “UBI proponents are just Luddites”.

    You might as well has said “hurr durr UBI is bad” and be done with it.

    Now, I’m not saying whether UBI proponents and detractors are correspondingly right and wrong (or viceversa) since the truth always lies somewhere in the middle.

    But man, put some meat in your arguments. Don’t just parrot other people’s words without at least elaborating what your thoughts are on the subject, with facts and citations to bolster your damned claims!

    • Lespinal: What drives an economy? in a very rendered down scope of things, production, and trade. Without one or the other, stagnation occurs. Now, the problem here does not lie in production, but in trade. Say all the factories of the world no longer have humans, but robots. Humans collect their income from the “UBI” (which is collected from the companies). The companies have to pay their electric bills, gas bills, water bills, maintenance on the robots, and then give the government enough money away (aka be taxed ) so that people don’t have to work, but can buy their products. So.. They put in tons of effort and resources to give their product away for free. Sounds a lot like slavery.. But no, it’s not. They will just choose to stop losing their wealth and shutter their factory. Which then stops the other component of the economy (productivity). The UBI not only wrecks trade, but production. Nothing is free. If you tax the rich on their production too high, they will stop producing.

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