‘Universal Basic Capital’ Solution to AI Job Loss? - The Atlantic

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Under one plausible theory of technological development, artificial intelligence will turn the economy into a dystopian split screen. As AI becomes capable of replacing an ever larger share of human work, the companies selling it will grow astronomically, turning a handful of investors and technologists into the richest individuals in human history while creating a permanent underclass of former workers replaced by machines.<br>To head off that scenario and the consequences it could have for our political and social order, a growing number of figures in both Washington and Silicon Valley have begun advocating a policy idea known as “universal basic capital.” The specific proposals vary, but the basic intuition is simple: If the wealth generated by artificial intelligence will accrue only to the owners of AI companies, then the way to avoid catastrophic levels of inequality is to give everyone an ownership stake in those companies. The idea has been endorsed by figures as ideologically diverse as Bernie Sanders, Gavin Newsom, Steve Bannon, Sam Altman, and even Donald Trump.<br>Designed the right way, the policy could provide a much-needed hedge against a future AI dystopia. It wouldn’t prevent workers from losing their jobs to machines, but it could guarantee that they share in at least some of the economic upside of the technology. Unfortunately, the version of the idea with the most momentum is very much not designed the right way. Were it to be implemented, it would invite its own kind of disaster.<br>As the name suggests, universal basic capital is a new twist on a slightly older concept: universal basic income. Under a UBI scheme, the government would raise taxes on the profits of wealthy companies and then distribute the proceeds in the form of checks mailed out to every American. During the 2020 Democratic primary, Andrew Yang became a political celebrity by running a single-issue campaign devoted to implementing the policy before mass AI-triggered job loss.<br>But massively raising both taxes and welfare payments is a political nonstarter. Universal basic capital avoids that problem, at least in theory. Instead of a monthly check, every American would be given an account containing a chunk of equity invested in a broad portfolio. The value of that account would compound over time as the market rises. Crucially, whether or not people receive that money wouldn’t depend on future tax revenues or be vulnerable to shifting political winds; once you have been given the equity, it’s yours. (The accounts could be funded in several ways, such as a onetime levy on the market capitalization of large companies, to be paid for in stock instead of cash.)<br>Rogé Karma: So, about that AI bubble<br>Most important, the policy might actually have a puncher’s chance at gaining bipartisan support. The One Big Beautiful Bill, which passed last year with near-unanimous Republican support in Congress, already established a micro-version of universal basic capital in the form of “Trump Accounts” that provide every child born from 2025 to 2028 with a $1,000 brokerage account at birth. By way of explaining the policy’s conservative appeal, Republican Senator Ted Cruz argued that universal stock ownership would “make every new child a capitalist.” In a December op-ed, the Republican Ohio gubernatorial candidate Vivek Ramaswamy proposed building on that idea for the AI age by establishing an “American dream birthright” in the form of a $10,000 account invested in the S&P 500. “Instead of lambasting millionaires,” Ramaswamy wrote of young Americans, “they would be on the way to becoming millionaires.”<br>“The great strength of universal basic capital is that it is so hard to pin down ideologically,” Nathan Gardels, a co-founder of the Berggruen Institute, a tech-focused think tank, told me. “It doesn’t fall neatly into the kinds of partisan divides we’re used to dealing with on these issues.”<br>The other case for universal basic capital is that it would have benefits even if the worst fears of an AI job apocalypse never come to pass. AI might very well create a lot of wealth without putting huge swaths of the population out of work. Even in that future, however, broad capital ownership would go a long way toward making sure that everyone shares in the benefits of technological progress. The richest 10 percent of Americans currently own about 90 percent of stocks, while the bottom half owns less than 1 percent. If that distribution were to remain constant, then the AI boom would produce a socially and politically toxic level of wealth inequality even if it didn’t destroy a single job.<br>And even if AI turns out to be a financial bubble that results in a stock-market correction, ordinary people would still be better off holding some assets, which will eventually rise in value, than none. “This is what I would call ‘no-regrets policy,’” David Autor, an MIT...