A tiny Pacific country rolls out universal basic income
economist.com
economist.com
We need to keep in mind the scope and scale of the environments in which this UBI experiment is being tried in.
The temporary success or failure of the UBI experiment seems entirely dependent on whether the country is a major currency, a manufacturing base, a service oriented economy, etc, etc, etc. and it doesn't seem likely to work for everyone, or for any individual small nation for an indefinite period of time.
> there is realistically no way to retrain this cohort. [truck drivers]
I disagree. They had to attend class and pass a test to get a CDL. They were trained to drive a truck, they can be trained to perform another task. Truck drivers are not lobotomized.
Will we say the same thing about the 4 million software jobs? When we're doing landscaping work in our 40s for 1/10 our past salary is that improved economic efficiency at its finest?
In other words, if I can do more for myself, I require less interaction with commercial and governmental institutions.
Since money is a form of communication, if I am conducting fewer financial transactions because I am solving problems on my own, my standard of living doesn't necessarily decline with reduced income.
30 years ago, if you needed a one off plastic part by tomorrow, you were most likely simply screwed.
20 years ago, if you needed a one off plastic part by tomorrow, you could probably get it at a fairly high cost.
10 years ago, if you needed a one off plastic part by tomorrow, $10 worth of gas across town and back and you had your part for an affordable price.
The world never ended, people just adapted to the new environment.
Today, if you need a one off plastic part by tomorrow, you ask AI to crank out a 3D file, its in your hand in a few hours, and you crank out 4 more parts in the remaining time.
If the individual is more productive on his/her own, he/she will naturally conduct fewer commercial transactions with his/her neighbor or neighboring tribe, and the forces of supply and demand do exactly what we know they do.
Some numbers get smaller, some numbers get larger, and we all wake up tomorrow and eat breakfast.
Having food you can eat is wealth.
Having 100% of your time at your own command is wealth.
AI is doing what every politician promised, and none could deliver.
It just made everyone (potentially) wealthy.
And it will only get more interesting in the Confucious sense as more people realize this.
Dare I say it .... world peace ? ( dependency on others as a source of fear and insecurity -> AI reducing dependency to minimal amounts -> every individual confident and secure -> ego death -> world peace ... the presumed potential path )
I don't think the difficulty is with the drivers, more with the logistics of retraining them all at once. As a cohort they came up through their class and training nicely spread out over, what, a 40 year period? Making sure there are that many training spaces for other trades over a much more condensed period is non-trivial.
The only events that happen "all at once" are in our heads as hypotheticals.
In the real world, every change takes time to propagate.
It stands to reason, all of the "experts" of the world are going to be in less demand than they were before, because some percentage of people, will replace them with AI, for some percentage of tasks.
Stated another way, each of us will be consulting with AI more, and assigning some number of tasks to a non-expert, with the help of expertise from AI, and talking to human experts less frequently.
Interactions will decrease in frequency. In the commercial space, this means transactions will decrease in number and amount. This is "bad" for everyone, in the financial sense. Corporations lose revenues, governments lose revenues, employees get pay cuts, etc.
But downward trajectories on financial charts have been a problem for every fiat based economy we know of, long before AI came into the picture. The only thing people universally agree upon when sales, taxes, salaries, etc start going down, is that "confusion" is the first response, followed shortly by "panic", followed by "doing something to fix it" followed by "pretending it worked, even if it didn't."
Maybe AI will teach the world what to do when the charts turn down instead of up.
Infinite growth doesn't exist in a closed ecosystem, and we arent expanding into space yet.
For decades magazines and other media have promoted the idea that some day, technology will relieve us of the base burden of existence, and free us to do all those wonderful leisure activities we enjoy.
Now that AI seems to be able to deliver on the promise, the thing we seem to fear the most is the deflation of our own egos.
A conversation with an AI agent carries as little as $0.00 transactional cost, with a few cents in electricity expense, after the small fixed capital outlay for the computer.
A conversation with a consultant costs $200 an hour, and benefits taxing authorities, gas stations, phone companies, etc etc etc.
Again, it stands to reason, if we replace an expensive form of communication, with one that is almost free, that people are going to use it, and all those "expenses" they save on, were someone elses income.
The end game ... most of us will adapt, and some of us will self destruct during that process, and in 1 or 2 generations, everything will be "normal" again, and AI will be taken for granted, and we'll all be worrying about the new crisis.
Lets all remember, "the economy" as studied by economists, is the study of human behavior at its core, and its generally agreed that the human animals greatest natural defense is its intelligence and ability to adapt to its environment.
Keep calm. Carry on. This isn't a scarcity problem. It's an abundance problem.
The U in UBI stands for universal. That means that former truck drivers (aka the unemployed) get it but also everyone else to include CEOs making millions. The expectation is that those with other income will give back their UBI and then some via taxes.
This is better than policies that create stupid incentives like in your example.
I wasn't aware that I promoted a policy. Can you point it out for me ?
I think these small scale experiments have value, and that its part of the process of adapting to our environment.
What I can say with absolute confidence is, the post Bretton-Woods financial system promoted by my government, the only one I know, has increased wealth inequality spectacularly, and I expect any changes to the system to continue this trend.
And thats why I want to grow onions. I can eat them. They keep vampires away.
1) it creates dumb incentives
2) it gives the govt more levers they can pull, which leads to more corruption and worse outcomes
Related point - if the truck drivers aren't where the new jobs are located, that doesn't work. We should subsidize their move (via increased taxes on AI or corporations or whatever) but like WV, we probably won't. Assuming they even want to move.
You let them retrain themselves.
People in "coal country" who can't get a job in a mine, do something other than mining. Hunger is a powerful motivator.
A $10 a month cell phone plan is all it takes to get 24/7 access to all the worlds information, and AI's intelligent queries into it.
And yes, you will have millions who never learn how to use said information to their own benefit, but we've known for awhile that poverty is a behaviorial problem as much as it is a resource problem.
Did you mean the part where I said millions will never use AI to benefit themselves ?
We've had libraries for centuries. Millions chose not to use those as well, because they wanted a beer instead.
Its normal human behavior.
The proverb "You can lead a horse to water, but you can't make him drink" exists for this reason.
No they don't, they vote for someone to open up the mines again and keep the immigrants out.
No, at least not in the US.
A corporation has a primary fiduciary responsibility to its shareholders.
Every promise ever made by a corporation to an employee or customer was just "so much bullshit, subject to change" in order to fulfill their legal obligation to the shareholders.
It's always been this way, no matter how many employees or workers actually believed said promises.
People still think the grocery store sells food as well, when the reality is that the nutrients are removed and sold elsewhere, reducing satiety, increasing sales due to intentional malnutrition.
And your doctor isn't sending you down the road to wellness when he prescribes you GLP1 antagonists instead of a proper diet and exercise.
The cold hard truths of reality.
"Everybody Needs a Thneed"
Only because Friedman told us so and we believed him. It's not some immutable natural law.
The CEOs and boards who operated this way survived.
The ones who didn't, didn't.
I don't know how you are going to change the dynamic.
Any change will have to be approved by the powerful survivors, who know exactly how their behaviors have benefited them.
You're asking the king(s) to step down as king(s).
Accomplishing it historically has required force and rarely ended as planned.
But overall I agree with you, that if we are going to make a systemic change, the change should benefit those with the least, at the expense of those with the most, because that is a path towards equilibrium, not away from it as we have been progressing since the mid 70's.
And, AI may actually reduce the status of the wealthy the most, given, the more the individual can do for his/her self, the less we need a "corporate brain trust" to make a widget for us.
Economically, AI could play out to be the force that reduced the oligarchs to the same status as the common man.
We all shall see.
Yep: meth. Source: extended family in coal country where everyone has massive substance abuse problems.
Deer hunting and leather working is a better synergy than ammonia and used batteries.
If kids had more video game exposure they would know this. :|
Also, 6 million people forced to spend their waking lives driving trucks is not a good thing. The thing that's good about that is the income they get from it. If we create enough wealth to give them the income without the truck driving... We won? That's the goal here. That's what the economy is _for_. Employment is the way the economy has always achieved that, but it doesn't meant employment is the goal, it's a means to an end.
But you should know that it's a fairly narrow, political, and controversial thing to say that the purpose of the economy is to support people during unemployment crises. In fact it's so axiomatic that I really think it's worth calling out as part of the assumed solution not an obvious and foundational truth.
What makes us different than most types of animals is that we’re capable of supporting the less fortunate members of our species even through life-threatening situations.
Now we are going to see if there is a limit or not. Or if AI changes the game (the dystopian end game is a small amount of people controlling all the production and getting rid of the rest by one way or another)
(if you live in places with healthy worker protections, a company can't just fire someone, they need reasonable grounds; bar that, they need to first try and place them somewhere else in the company, and if that doesn't work, firing involves paying a severance fee. In an ideal and morally correct situation anyway, in practice they'll use dodgy corporate structures to bankrupt companies before paying or retraining anyone)
Another optimistic look is that there might just be more work, that otherwise would not be done.
For example we always complain about AAA games coming out riddled with bugs, now we have an opportunity to cut a significant portion of that if we also keep the workforce. Same with administrative tasks that take forever because it’s one person filing it for the whole country etc.
But don't assume it's without its own controversy. Maybe the point of civilization is to allow people to help eachother by providing safeguards against treachery.
Maybe they should be forced to help eachother under threat of violence. There's a massive spectrum of "solutions" between those two, and UBI could be considered pretty close to forcing, depending on how it's implemented.
It's not pedantry or technicalities, a lasting system needs to benefit people and support / build shared principles. Ideally it'd support the principles that enabled it in the first place.
I accept a significant amount of conditionality here - it's cool that people can get rich and live materially better lives by doing stuff that creates more wealth overall. But this is completely subordinate to the goal of making everyone's life better, i.e. I accept it exactly to the extent that "a rising tide lifts all boats". It seems the rising tide of AI may not automatically lift all boats though.
Anyway yeah your point stands, I realise this is not something everyone automatically believes. I'm phrasing it like a statement of fact just because I believe it so strongly.
That or something like the Public Works Administration (https://en.wikipedia.org/wiki/Public_Works_Administration).
(And you get infrastructure out of it.)
also science, research. as much as LLMs are able to do here, they can't do everything. and even with LLMs the more people we have doing research the faster we can progress technologically and also socially.
the real question is, who is going to make these investments?
What everyone knows is that American gun owners voted in the system that's eating them alive and that they don't care as long as that system doesn't touch their guns.
So they can just keep shooting watermelons in their backyards and being keyboard warriors on the internet, for as much as their "leverage" matters.
Unfortunately we aren't in that world. AI+robots will deprive humans of both economic and military leverage. Most likely, powerful "blobs" of a few owner humans + a lot of automation will inherit the Earth and kick most humans to the curb.
Assuming such wealth is created by the autonomous trucks replacing said drivers, for the same number of trucks, that would mean we now have to pay for 1 autonomous truck + 1 idle driver. This is more expensive than a regular truck driven by someone.
So either the number of truck increase dramatically or the replaced truckers find another value-creating occupation (or both).
How does that make "living and consuming goods" value-creating, exactly ?
No it's not, but look at other countries with high unemployment and no UBI to see what the result is. Ranging from protests to migration.
Isn't it to extract every penny from as many people as possible to make few people billionaires?
Certainly, they're after all just stupid truckers and not supremely intelligent hackers. I mean, do they even know how to sudo their Kubernetes!?
I’m sure they’ll love starting from scratch as basically an apprentice making beans compared to their previous wage
Just like a programmer can switch between programming languages without having to re-learn all basic concepts of computing, so people with other occupations can transfer a large part of their knowledge to other sectors.
But that can be hard to grasp in a world where every person is either a supremely intelligent hacker or a trucker or "welder and pipe fitter and whatnot".
Great plan, glad someone with your wisdom is thinking so hard about these kinds of problems.
We’ll take millions of displaced truckers and put them “somewhere” and they’ll do “something”.
Luckily picking up a new trade will be as easy as switching from JavaScript to Python for them.
They’re already overqualified for DoorDash and uber after all.
> Using taxes on AI revenue to facilitate
This why Altman et al talk about taxing ai agents. Then they aren’t paying for it, but their customers are. We should all keep in mind that the oligarchs have never willing shared the benefit of decades of productivity gains. Why would they now?
That’s not always the case, I know that small trucks like plumbing supply houses, hardware stores, and sod companies will pull the pallet from the truck for you, but I would guess that isn’t typically for your average 18-wheeler.
So far mostly human work is taxed, then value-adding, a bit property, and a less bit capital.
If we want a system where there is some universal income, then we need to tax property and capital more and also tax some non-human work.
The US has a Compact of Free Assocation (COFA) with the Marshall Islands, which provides a lot of the funds for this. Versus Alaska where it is paid for by natural resource extraction. All that said, it is the government of the Marshall Islands making the decision to pay it out this way.
From the US point of view, this is a good program because it incentivizes people from the Marshall Islands to stay put rather than emigrate to the US mainland (which they have a right to do under the COFA).
Why is this a good thing? Naively, as an American citizen, I would rather have someone emigrate and work in America where they can provide additional labor to the mainland economy
My point had nothing to do with what the native population does on the island or what they may do for work, only that we didn't claim the island chain for the labor resources of the population (as insinuated by the comment I replied to).
This is what I responded to. Whether the initial intent or not, it makes the case that we would be better off with the native population emigrating to the mainland and providing the economy with economic value.
And at more or less no greater cost than the welfare system at time of writing. I wonder how the numbers would shake out now?
https://martin-farley.medium.com/how-a-negative-income-tax-c...
If you have negative income tax and you create 0 taxable value, how much do you receive?
Headlines latch on to the term UBI, and people largely are parrots so they argue about UBI specifically as well, but at the end of the day the question is whether its a good and sustainable idea for the government to decide what our basic necessities are then pay us so we can buy them.
> then pay us so we can buy them.
If a government pays out money then people can buy whatever they chose, not just food, clothing, and shelter.
Some governments have implemented schemes that issue variations on constrained cards (not generic money) that can only be used to obtain "necessities"
I often see people in my area chest that program. I know when food stamps were sent out or refilled because multiple people are at Walmart with a cart full of sodas. They buy as many as they can and sell it to friends or family to have the cash instead.
A variation of.
> We already have that in the US.
Dandy. It's different to cash.
> because multiple people are at Walmart with a cart full of sodas. They buy as many as they can and sell it to friends or family to have the cash instead.
Some do that, yes - not everybody can (eg: small communities, limited travel, few people with cash that want to buy basics)
I believe that governments have an obligation to their citizens beyond simply taxation and violence, and that the social contract goes both ways. I understand that I'm in the minority of Americans in this belief.
I can't justify more debt spending because we already waste money on stuff I disagree with.
In practice every time someone goes to Washington to "clean house" the first things to get gutted are welfare and funding for science and research, because unfortunately a lot of Americans consider all of that to be waste. Never the military, never the police, never the pork.
But for everything else - anything with the stink of "empathy" on it - every penny has to be justified. We cut USAID and destroyed a useful source of soft power and intelligence and killed hundreds of thousands of people because the program helped gay and transgender people in some way. We cut funding to HHS, welfare, science, education, infrastructure and the environment. And then we approved the biggest military budget in history. Netanyahu makes a phone call and we burn $3 billion dollars a month on a war with Iran without a second thought or an end in sight.
So I respectfully disagree. Under a fair and impartial system you would be correct, but American politics is neither. Every program isn't on the table. Every attempt to balance the books is nakedly partisan and punitive.
The US also has by far the lowest taxes (fed + state + local) among them too; in fact, the US could have raised taxes by more than 15% and still been lowest. [2]
Regardless, if someone does believe spending should be cut:
A) What specifically should be cut, and
B) What % of the 11.5T/y [3] gov spending does it add up to?
[1] https://www.imf.org/en/Publications/WEO/weo-database/2025/Ap...
[2] https://www.imf.org/en/Publications/WEO/weo-database/2025/ap...
[3] https://www.bea.gov/data/government/receipts-and-expenditure...
I also don't really care how much other countries choose to spend, that's their choice and I shouldn't have a say in that.
I wouldn't begin to say I have the answers or prescriptions to what should be cut, there's plenty of data I don't even have access to. From my experience with both local and federal governments, though, there is plenty of waste in the US that could be handled without even impacting the end result our programs are intended to deliver.
2. Regardless, is there any national politician who has named and quantified the items that they would cut that you support? As this seems to be a large, long-running problem within the right ('news', politicians, etc.) where they will make significant claims about wanting to cut gov spending without ever actually naming the programs they want to end and what % of the ~11T/y spending it adds up to.
3. You pointed to how when the US was set up in the 1700s that the government had different goals, and that there were wildly different expectations of what government provided for its citizens. Do you think the expectations of what the government provided in the 1700s are still relevant for what US citizens expect (or demand) of government services in the 21st century?
4. Every program will have some waste and abuse, and organizations typically then spend money to combat the waste and abuse. Sometimes the cost of fighting the waste and abuse, and/or the increased bureaucracy and overhead to prevent the issues in the first place, even exceed the costs of the waste and abuse that is being combatted. But my point is that even if waste exists, the 'cure' might be worse than the 'disease' in terms of increased costs, increased bureaucracy/oversight, etc. I'm not even necessarily opposed to those increased costs, bureaucracy, etc. in order to combat the possibly-smaller-costing waste and abuse, but it's certainly not as simple as "___ exists, so we can spend less by just not doing that."
We almost have that with the earned income tax credit. The catch is you have to work: https://www.irs.gov/credits-deductions/individuals/earned-in...
Can’t wait to retire and do all the things I enjoy doing.
A friend of mine who works in shipping was once stuck there for a couple of weeks waiting for engine parts or something, and he was bored out of his skull.
https://scottsantens.substack.com/p/marshall-islands-just-im...
FYI, so far it has barely impacted inflation there or to quote, "zero or very minimal."
https://www.abc.net.au/listen/programs/sundayextra/universal...
It's just turning this entire system into something managed by law and government.
Whether the whole system can actually work probably still needs observation and social experiments.
The freeloader problem will devour this when some fanatic tries with a substantial population.
Sorry.