Each week, In Theory takes on a big idea in the news and explores it from a range of perspectives. This week we’re talking about universal basic income. Need a primer? Catch up here.
Roy Bahat is the head of Bloomberg Beta, the early-stage venture fund backed by Bloomberg L.P.
Some people believe a universal basic income would threaten innovation — why work hard to bring new things to life, if my rewards will be taxed away to pay for an income for others?
A basic income program, if we can afford to offer it at a livable level, might have the opposite effect. Universal basic income might be the most meaningful way we could subsidize the earliest stages of innovation. It could multiply, by many factors, the amount of time people can spend creating.
Creators — of art, of technology, of the new companies that will change the way we live — often struggle to solve a basic problem: How do you make a living and still have time to work on the Next Great Thing? The side job that a screenwriter holds while working on his or her first screenplay is such a common trope we barely think about it. Startup founders receive endless advice, some absurd, on how to make money while starting a company — from freelance web development to selling bodily fluids.
We imagine the way creation works as a straight line — a novelist imagines what he or she wants to write about, sits down and starts typing. After plenty of time passes: a novel. But invention isn’t actually like that. It goes in fits and starts, it frustrates and reconciles. Part of the work is discovery, poking around, and experimenting. For many, it’s much easier to do without the pressure of needing to produce on a schedule. For most, it is impossible to do without some other income — which might be one reason so many startup founders already happen to be wealthy before they start their companies.
[Other perspectives: The terrible cost of universal basic income]
A universal basic income could free up all that hand-wringing, freelancing-to-pay-the-bills, agonizing-over-whether-the-sacrifices-are-worth-it time. Many who struggle to work while inventing new things might see an income floor as an open door to a world they might otherwise never have considered at all.
But would the increased tax load needed to fund a universal basic income kill the very incentive to innovate? Don’t startup founders start their companies in order to make more money for themselves?
Who knows. In the kinds of innovation I see, the desire for money seems to play a more limited role than you might expect. I have yet to meet the founder who starts a company instead of working at one because the capital gains tax treatment is preferable to an ordinary income. And for other kinds of creation — musical, literary, or visual, among others — money has long played (almost) no role, other than as a constraint to be solved so the maker has time to make.
This is the constraint a universal basic income might solve: It might put an end to the waitering, the security guarding, the hotel clerking that keeps innovators from reaching their full potential. Others will opine on what incentives we need to get these jobs done in society, and whether universal basic income is a good solution to income inequality, or even feasible at all. In my corner of the world, startups and the people who build them, a universal basic income could unlock innovation.
Explore these other perspectives: