Sympathy for the Luddites
Basic income for everyone does indeed seem reasonable to me. If new technology drastically reduces the amount of labour, it seems obviously fair that everyone should be eligible to profit from its benefits. If 2% of the population can provide food for the whole society, maybe another 30% (a number to be drastically reduced by new technology) needed to maintain the social and economical infrastructure, then we will have a majority of people whose economic output is not required. Those people, e.g. children, retirees, handicapped, people with illness, etc. need means to live a decent life. To excessively burden the relatives of those people seems to be an arbitrary and cruel neglect of the society to care for its members.
The argument against basic income is the same as for IP laws. Without money or legal constructs to monetize their products, people have no incentives to work. Maybe we need better incentives for working and creating things.
Please read about Basic Income Guarantees(BIG)[1-2], if you are unfamiliar. Essentially, it is a set amount of money for EVERY citizen with NO means testing. It has been promulgated by conservative and liberal Nobel laureates alike. It turns out that the limited, preliminary data shows it to be INCREDIBLY effective. Basic Income offers surprising, non-intuitive effects which -- sometimes -- strongly contradict derogatory stereotypes of the poor. For example, BIG has resulted in increased hours worked per week and wage. These increases were attributed to people finding jobs they liked more and were better at (in lieu of jobs-based means testing programs which incentivize getting crappiest job possible as soon as possible).
In many ways I think the industrial revolution has made us forget a very important historical fact. Prior to industrialization, "labor" was often little more than serfdom. "Labor" in the purest sense didn't own anything, but was simply a necessary component for the wealth-producing activities of those who did. Laborers only had one economic move: to offer their time and hands in the service of those who owned things (land, a shop, a ship, etc) in return for a wage. That wage, effectively their value as laborers, was determined by the law of supply and demand. All the industrial revolution did was to vastly increase the demand for labor.
However, the ancient fact that one's existence as more than a serf required ownership of something did not change. The living standards of serfs simply improved dramatically. Those living standards still depended on the demand for labor being high and/or the supply low.
When technology reduces the demand for labor, while the supply increases due to population growth, it's easy to think that the economic sky is falling. But since none of us have lived in a pre-industrial revolution era, we are accustomed to thinking of wage-earning labor as an economic strategy that is more common than ownership of property, and just as valid. But historically it has been a specialized and risky economic strategy, and as the demand for labor-intensive physical products decreases it should not be surprising if those who are dependent on this economic strategy suffer. It may be tragic, but it's certainly not a new tragedy.
If you want long term economic security, own something.
We should stop using the term "highly skilled" when it really means "highly specialized". The trouble is we are still using school, from kindergarten to university (and beyond), as a system to turn people into highly specialized automatons. And the trouble with automatons is they get automated. A few have been lucky during the course of the industrial revolution to pick the right skill to specialize in, and at the right time, but examples abound when you pick the "wrong" specialization, just to see it subsequently automated.
I never really understood what Buckminster Fuller was trying to get across in his Operating Manual for Spaceship Earth, until recently. The amazing thing is he addressed these concerns quite presciently in the 1960s--he saw this coming.
The only advice I can give is always be learning and adapting and apply it in creative and entrepreneurial ways.
This problem is inherently transient. The worst case is that it takes a full generation for skills and customs to adapt.
Skills like "reading" and "writing" were once the province of highly-educated specialists. They became mainstream when the economic incentives made them critical to have. People learn what they need to learn -- especially if they start as children.
It's entirely appropriate to worry about how we can help people during this painful transition. But we need to be careful not to turn this temporary problem into a permanent one by creating cultures of dependence.
Krugman's trying to juggle two contradictory viewpoints: one (the Luddite view) holds that the purpose of work is to have something to do. The Luddite petition is arguing that allowing these people to fall into idleness simply because there is a more effective machine to do their job will be toxic to society. This is somewhat confused by the Luddites also throwing out a lot of half-baked economic arguments, but those can be safely ignored in hindsight.
Krugman then proposes a solution from an entirely opposite viewpoint: that the purpose of work is to produce useful things, and if the constant disruption of jobs is the cost of efficiency, we should just give the affected a handout to provide for their needs.
But because the guaranteed income doesn't solve the Luddite's complaint, it misses the point entirely.
On the other hand, perhaps it's entirely possible that creators of technology will notice this large swath of available labor and create technology to make use of it.
An important point about the Luddites is that while expensive weavers were put out of work by machines, those machines functioned by employing greater numbers of (vastly lower paid) unskilled immigrants.
If you put a 150k salary expert out of work by creating a piece of technology that requires two 70k workers, you still profit.
I think we need to start distinguishing between the part of the 1% that builds new technologies, products, etc. and the part of the 1% that speculates on African food futures, high-frequency trading, etc.. The former is useful. The latter is entirely destructive and should be legislated into poverty for the greater good.
In the short term taxing the rich seems like the only viable solution. But just give it some time. Skill acquisition via free online courses will replace high cost universities. This alone will solve most of Krugman's problem. Entrepreneurs have a funny way of figuring out how to solve our problems - without redistributing wealth (save for the overly hyped Tesla)
Yeah he definitely identifies a problem but does not address any of the knock-on effects of a guaranteed minimum income, namely the incentive to not work rather than to work.
What he's arguing is that we should pay people not to work the same way we pay farmers not to grow corn, to ensure that the price is kept high enough for those who do engage in working/farming to earn the "right" amount of money.
It's a noble goal to be sure, to ensure that everyone can feed their families and live a comfortable-enough life and such. I don't argue with his intentions one iota.
The problem for Krugman is that taxing is his hammer and every problem in the world looks like a nail. It's far easier to exhort "we must do something!" and to use the force of law to do SOMETHING than to figure out a better solution to a very real problem.
I am of course in some ways a hypocrite since I can't think of any solutions myself off the top of my head.
The solution is obviously to watch the average standard of living get significantly worse, then elect the one promising a chicken in every pot, and a chicken-cooking robot in every kitchen (pot and kitchen sold separately).
Get rid of corporate entitlements like patents, obscenely long copyrights, the FDA (yes, it's an entitlement -- see how hard it is for a little guy to compete when the hurdles are so high), etc. etc. and then see how it shakes out.
Again? What has it been? two months since we last had a round of these "unlike all the other times where we said that things were really different, this time it really is different" opionions bullshit (no it isn't any different this time).
Can we please just let it be just this one article, this time?