When robots began stealing jobs from humans, it was easy to panic and call for some sort of tax by which to restore the humans’ competitiveness. In “A Tax on Robots?,” written in 2017, I argued that any such tax is both unwieldy and undesirable. Instead, I suggested we take a look at how the technology and data used to build and train the machines is largely provided by us and by our governments – not just by their manufacturers or owners. Taxpayers and users thus help build up the capital stock of the robots’ owners but receive no dividends for our unpaid, capital-enhancing contributions. So, instead of a robot tax, I proposed a universal basic dividend that would work as follows: Big Tech must be made to issue new equity which is deposited into a public trust from which a dividend is paid to all citizens equally. Society then receives a share of the dividends from the technology it has enabled Big Tech to produce, train, and implement.
Today, developments in machine learning, reinforcement algorithms, and especially artificial intelligence have added to the pertinence of my proposal. A new form of capital has emerged – cloud capital – which we are training constantly to turn us into its cloud serfs (whose free labor replenishes this capital), its cloud proles (shopfloor workers, drivers, and others with wrist-held devices monitoring and dictating their work), or vassal third-party producers (e.g., manufacturers forced to pay the owner of some digital platform up to 40% of the price for access to customers). Never before has this proposal of a universal basic dividend been more apt than right now. – Yanis Varoufakis, February 2024
Ken makes a decent living operating a large harvester on behalf of farmer Luke. Ken’s salary generates income tax and social security payments that help finance government programs for less fortunate members of his community. Alas, Luke is about to replace Ken with Nexus, a robot that can operate the harvester longer, more safely, in any weather, and without lunch breaks, holidays, or sick pay.
Bill Gates thinks that, to ease the inequality and offset the social costs implied by automation’s displacement effects, either Nexus should pay income tax, or Luke should pay a hefty tax for replacing Ken with a robot. And this “robot tax” should be used to finance something like a universal basic income (UBI). Gates’s proposal, one of many variants on the UBI theme, allows us to glimpse fascinating aspects of capitalism and human nature that rich societies have neglected for too long.
The whole point of automation is that, unlike Ken, Nexus will never negotiate a labor contract with Luke. Indeed, it will receive no income. The only way to simulate an income tax on behalf of Nexus is to use Ken’s last annual income as a reference salary and extract from Luke’s revenues income tax and social security charges equivalent to what Ken paid.
Today, developments in machine learning, reinforcement algorithms, and especially artificial intelligence have added to the pertinence of my proposal. A new form of capital has emerged – cloud capital – which we are training constantly to turn us into its cloud serfs (whose free labor replenishes this capital), its cloud proles (shopfloor workers, drivers, and others with wrist-held devices monitoring and dictating their work), or vassal third-party producers (e.g., manufacturers forced to pay the owner of some digital platform up to 40% of the price for access to customers). Never before has this proposal of a universal basic dividend been more apt than right now. – Yanis Varoufakis, February 2024
Ken makes a decent living operating a large harvester on behalf of farmer Luke. Ken’s salary generates income tax and social security payments that help finance government programs for less fortunate members of his community. Alas, Luke is about to replace Ken with Nexus, a robot that can operate the harvester longer, more safely, in any weather, and without lunch breaks, holidays, or sick pay.
Bill Gates thinks that, to ease the inequality and offset the social costs implied by automation’s displacement effects, either Nexus should pay income tax, or Luke should pay a hefty tax for replacing Ken with a robot. And this “robot tax” should be used to finance something like a universal basic income (UBI). Gates’s proposal, one of many variants on the UBI theme, allows us to glimpse fascinating aspects of capitalism and human nature that rich societies have neglected for too long.
The whole point of automation is that, unlike Ken, Nexus will never negotiate a labor contract with Luke. Indeed, it will receive no income. The only way to simulate an income tax on behalf of Nexus is to use Ken’s last annual income as a reference salary and extract from Luke’s revenues income tax and social security charges equivalent to what Ken paid.