Is the World Ready for a Guaranteed Basic Income? (Update)

Summary

Freakonomics Radio: "Is the World Ready for a Guaranteed Basic Income? (Update)"

Release Date: September 17, 2025
Host: Stephen J. Dubner
Description: This updated episode revisits the concept of Universal Basic Income (UBI), exploring its history, the arguments for and against it, results from global experiments, and how the idea has returned to prominence in the era of AI-driven job disruption. Featuring key voices from economics, technology, and policy, this conversation uncovers whether UBI could be a solution to growing inequality and automation.

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Overview: The Main Theme

With artificial intelligence and automation threatening to replace significant swathes of human labor, the idea of a Guaranteed Basic Income—or UBI—has never been more relevant. Freakonomics Radio explores the origins, experiments, pitfalls, and renewed interest in UBI, asking: Could it work? What does the evidence suggest? And are we, as a society, ready to try it?

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Key Discussion Points & Insights

1. The Rise of AI and Labor Market Disruption

• AI’s Increasing Role: Stephen Dubner introduces fears around AI, rapidly moving from a distant concept to daily reality ([00:32]–[02:41]).
• Erik Brynjolfsson (Stanford, ex-MIT):
  • “We're now beginning to have machines be able to augment and automate our brains and replace mental tasks... the implications will be at least as profound as what the Industrial Revolution did for our muscles.” ([02:41])
  • Predicts both winners and losers, with certain skills losing value and wages falling ([04:07]).

2. The Basic Income Proposal

• Definitions:
  • UBI is distinct from means-tested welfare; it’s unconditional and universal ([05:38]).
  • Alaska’s oil dividend cited as a rare real-world example ([05:38]).
• UBI's Cross-Ideological Appeal:
  • Left: Permanent financial safety net.
  • Right: Potential to simplify and shrink the welfare state ([06:47]).
• Historical Precedents:
  • Thomas Paine’s proposal, Friedman & Stigler’s “negative income tax,” and the Alaska Permanent Fund ([07:50]).
  • Evelyn Forget (economist, University of Manitoba): Explains the negative income tax’s structure and intent ([07:50]–[08:09]).
  • Milton Friedman: “The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need...” ([08:16]).

3. Major Experiments and Lessons Learned

• Late 20th Century Testing:
  • US Experiments: Four negative income tax trials starting in 1968; used randomized control groups to measure labor market outcomes ([11:51]).
  • Canada’s "Mincome" (Dauphin, Manitoba):
    • “Dauphin was a small town... that's what made it such an interesting saturation site.” – Evelyn Forget ([13:20])
    • About 30% eligible in Dauphin; families received a supplementary income. It “wasn't enough to give people a comfortable life... but enough to add some cream to the coffee.” ([14:22])
• Lost Data and Rediscovery:
  • Canadian project’s evaluation was shelved amid economic downturn, but Evelyn Forget later found the data and pursued health/outcome analysis ([14:51]–[19:32]).
• Key Results:
  • Hospitalization rates in Dauphin fell 8.5% ([20:55]).
  • High school completion rates increased, especially among boys, as families could forgo child labor in favor of education ([21:16]).
  • Adult workforce participation saw minimal decline; main reductions were among adolescents and new mothers taking longer leave ([22:13]).

4. Obstacles to Implementation

• Political Will Lacking:
  • Nixon’s Family Assistance Plan failed: “The right thought it was too expensive. The left thought it wasn’t generous enough.” ([17:23])
  • Experiments’ data interpreted politically; e.g., US divorce rate controversy, which later analysis suggested was overblown ([23:32]–[24:08]).
• Cost and Funding Questions:
  • Skeptics worry about tax hikes, inflation, and unintended incentives to stop working ([29:16]).
  • Robert Gordon (economist): “[A] guaranteed minimum income would put a very high implicit marginal tax rate on going to work for those with relatively low skills.” ([29:16])

5. Modern Arguments and New Experiments

• Technological Change as a Renewed Driver:
  • Sam Altman (OpenAI, previously Y Combinator): “Technological job destruction is accelerating more than people outside of Silicon Valley realize.” ([32:30])
• Y Combinator's Basic Income Study:
  • 3,000 participants in Illinois & Texas received $1,000/month for three years ([35:32]).
  • Results: Recipients worked ~1hr 20min less per week; mostly used money on necessities ([35:32]).
  • Altman: “If 10% of the people go create incredible new products and services and new wealth, that's still a huge net win.” ([05:00] and [35:14])
• Meaning of Work:
  • Erik Brynjolfsson: “People get a lot of meaning from participating and contributing to society... if we just got rid of the jobs and replaced it with a check, I think a lot of people would be unhappy.” ([35:00])
  • Evelyn Forget: “I'm not sure they necessarily need eight hours of work a day and 40 hours of work a week to find that meaning.” ([36:06])
  • She points to “gentlemen of leisure” in history who made immense scientific and cultural contributions ([36:24]).

6. Cultural and Evolutionary Reflections

• Parable of the Domesticated Dog:
  • Gregor Larson (archaeologist): Dogs followed humans for survival, later took on roles as workers—then, as technology improved, became our pets ([37:47]).
  • Dubner: “Dogs went from being on the production side of the human equation to the consumption side—big time.” ([40:44])
• Implication for a Jobless Future:
  • Host playfully wonders: Can humans reinvent their role in a world where work isn't necessary? Will we—like dogs—find new ways to be valued? ([40:47])

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Notable Quotes & Memorable Moments

• Erik Brynjolfsson:
  “The implications [of AI] will be at least as profound as what the Industrial Revolution did for our muscles.” ([02:41])
• Milton Friedman:
  “[N]egative income tax is a proposal to help poor people by giving them money, which is what they need...” ([08:16])
• Evelyn Forget:
  “It was enough to add some cream to the coffee.” ([14:22]) “I found 1800 [boxes of data] in a warehouse in Winnipeg...” ([19:46]) “Grown up people with full time jobs don't actually reduce the number of hours they work by very much.” ([22:13]) “If you look at the 18th and 19th century, some of the great scientific breakthroughs and some of the great cultural breakthroughs were made by people who did not work.” ([25:29] & [36:24])
• Sam Altman:
  “Maybe 90% of people will go smoke pot and play video games. But if 10% of the people go create incredible new products and services and new wealth, that's still a huge net win.” ([05:00] & [35:14]) “The default belief of a child is that everyone should get food to eat and a place to sleep... It's encoded into our genes, this idea of fairness and equality.” ([34:14])
• Robert Gordon:
  “A guaranteed minimum income would put a very high implicit marginal tax rate on going to work for those with relatively low skills.” ([29:16])
• Stephen Dubner:
  “Dogs went from being on the production side... to the consumption side—big time.” ([40:44]) “Personally, I think I would make a great pet for anyone willing to adopt me...” ([40:47])

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Timestamps for Major Segments

• AI and Job Displacement | 00:32 – 04:21
• What is UBI? | 05:38 – 06:47
• Historical Origins | 07:50 – 08:47
• Negative Income Tax & Early US/Canada Experiments | 09:15 – 14:51
• Canada’s Mincome Experiment Findings | 19:28 – 22:19
• Divorce Rate Controversy & Policy Fallout | 23:08 – 24:15
• Arguments Against UBI & Alternatives (Gordon) | 28:58 – 29:44
• Modern UBI Pilots (Y Combinator) | 30:23 – 35:32
• The Meaning of Work | 36:06 – 36:53
• Dog Parable | 37:47 – 40:44

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Conclusion

The episode surfaces tough questions: Does UBI risk eroding incentives to work—or simply provide society breathing room for reinvention? Experiments suggest catastrophic withdrawal from work is unlikely, with potential benefits in health and education. But political, economic, and cultural roadblocks remain. As AI accelerates change, the debate over UBI will only intensify—are we ready to take the leap, or will we continue to circle the same arguments?

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For Further Listening / Reading

• Explore historical episodes on technology, welfare, and economics at Freakonomics.com
• Full transcript and show notes available at the same site

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Summary by Freakonomics Radio Podcast Summarizer. All quotes and attributions reflect the episode’s actual participants.

Transcript

[Evelyn Forget]

A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn, with detours, new possibilities, and even another passenger. Or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together Edward Jones Member SIPC.

[Stephen Dubner]

Freakonomics Radio is sponsored by Mint Mobile offering 3 months of unlimited premium wireless service for 15 bucks a month. Get this new customer offer and your 3 month unlimited wireless plan for just 15 bucks a month at mintmobile.com freak that's mintmobile.com freak Upfront payment of $45 required, equivalent to $15 per month Limited time new customer offer for first 3 months only. Speeds may slow above 35 gigabytes on Unlim, taxes and fees extra. See Mint Mobile for details. Hey there, it's Stephen Dubner. Over the past several years, artificial intelligence has gone from something you read about to something you encounter once in a while, to something that many of us use every day. But a lot of people find it off putting, even frightening. One fear is that the more useful AI gets, the more it will displace human workers. Companies like Amazon and Ford and JP Morgan are talking about reducing their workforce, since the AIs can do some of the work at a fraction of the cost of human employees. We have made several episodes that touch on this, including a 2023 series called how to Think About AI, guest hosted by Adam Davidson, and an episode from last October called what Do People Do All Day? The fear that technology will replace human labor is nothing new. In fact, it comes up in just about every generation. There is also a proposed solution to this problem that comes up again and again. A guaranteed basic income is what some people call it, and we made an episode about that way back in 2016, years before anyone had heard of ChatGPT. The idea was having a moment then and now, thanks to the AI boom, it's having another moment. So I wanted to replay that episode for you today. We have gone through and updated facts and figures as necessary. We'll begin with the economist Erik Brynjnjolfsson, who was at MIT when we spoke back then but has since moved to Stanford. Here's how Brynjolfsson describes the central problem.

[Erik Brynjolfsson]

We're now beginning to have machines be able to augment and automate our brains and replace mental tasks. Machines can do computations and make decisions, and we're still in the early stages of this, but we believe that the implications will be at least as profound as what the Industrial Revolution did for our muscles.

[Narrator/Host (likely Stephen Dubner)]

In a book he co authored with Andrew McAfee, Brynjolfsson calls this technological disruption the second machine age. Yes, it will likely produce gains in living standards, but it also might lead to a massive evaporation of jobs. Emphasis on the might. This can be aggressively argued in either direction.

[Erik Brynjolfsson]

There are folks who are confident that the technology is going to lead to a bounty for all and make everyone better off. And there are other people who are very concerned that we'll have a jobless future. A lot of people will be left in poverty.

[Stephen Dubner]

Take just one example. Driverless cars. A technology I'm sure you've heard about. The driverless car company Waymo now operates in five cities, and Uber hopes to roll out its driverless fleet next year.

[Narrator/Host (likely Stephen Dubner)]

So what happens to all the people.

[Stephen Dubner]

Who drive for a living? Not just taxis and rideshare vehicles, but buses and trucks. In the US alone, that is roughly 12 million people. Sure, some new jobs will be created by driverless technology, but what are all those drivers supposed to if their livelihood.

[Erik Brynjolfsson]

Is obliterated, there'll be winners and losers. Already we're seeing that some kinds of tasks and skills are much less valuable, and people with those tasks and skills have seen their wages fall. And so it hasn't been a rising tide that lifted all boats.

[Narrator/Host (likely Stephen Dubner)]

So if there's a massive evaporation of jobs, and if too many hardworking people continue to earn too little to live on, what happens next? Could one solution to both problems be an idea that's been floating around in economic circles for decades? Here's the idea. What if everyone automatically received from the government a guaranteed basic income? That's our question of the day on Freakonomics Radio. Would it work? Can governments afford it? And what would happen if the financial incentive to work goes away?

[Sam Altman]

Sure, maybe 90% of people will go smoke pot and play video games. But if 10% of the people go create incredible new products and services and new wealth, that's still a huge net win.

[Producer/Announcer]

This is Freakonomics Radio, the podcast that explains explores the hidden side of everything with your host Stephen Dubner.

[Stephen Dubner]

A guaranteed or unconditional or universal basic income. A UBI is an idea that economists have toyed with for years. There are, of course, many forms of government welfare around the world, which are usually means tested. But universal payouts are rarer. Since 1982, the Alaskan government has paid a dividend on oil revenues to all residents about $1,700 a year on average. After voters in Switzerland rejected a national guaranteed income plan in 2016, the city of Bern announced its own UBI experiment in 2024. Similar trials have popped up in Spain, Finland, the Netherlands. And how about in the us? The idea hasn't had much traction lately in Washington, although Bernie Sanders and Alexandria Ocasio Cortez have both expressed support. Maybe that's not too surprising, since they are both on the socialist side of the political spectrum. But here's the thing about a universal basic income. You can see why a socialist, or just about anyone on the left, might like the idea. Theoretically, at least, it is a permanent financial safety net.

[Narrator/Host (likely Stephen Dubner)]

But you'd think that conservatives would also.

[Stephen Dubner]

Like it again, theoretically at least, because it is a way to shrink the welfare state by folding up a bunch of Byzantine entitlement programs into one tidy check. Now, what would a guaranteed income program actually look like? Where would the money come from? And if you give everyone in America a check for maybe $20,000 every year, wouldn't inflation render the poor people just as poor as before? These questions are all really, really hard to answer, but we can probably learn at least a little bit by going back in time. In the late 18th century, founding father Thomas Paine argued for a substantial universal payout based on our collective share of the earth's natural resources. That didn't happen in the 1940s. The economists George Stigler and Milton Friedman helped put another version into play. It was called a negative income tax. It was meant to support people in grave need. Here is the economist Evelyn Forget.

[Evelyn Forget]

So the idea was that if you had no income from any other source, you'd receive a certain level of income, a sort of socially agreed upon level.

[Narrator/Host (likely Stephen Dubner)]

Forget is an economist at the University of Manitoba.

[Evelyn Forget]

And as your income from other sources, and in particular from the labor market, increased, your benefit would decline, but it would decline less than proportionately.

[Narrator/Host (likely Stephen Dubner)]

And here is Milton Friedman in his usual direct style, explaining what he saw as the benefits of the idea.

[Milton Friedman]

The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need, rather than, as now, by requiring them to come before a governmental official, detail all their assets and their liabilities, and be told that you may spend X dollars on rent, why dollars on food, et cetera, and then be given a handout.

[Narrator/Host (likely Stephen Dubner)]

The hope was that a negative income tax would streamline the burgeoning welfare system without diluting the incentive to work as much as the existing system did.

[Milton Friedman]

Our present welfare programs Our present direct relief and Aid to Dependent Children programs in effect have 100% tax rate. Because if a family on relief, if, let's say, a woman, as currently is mostly the case, under Aid to Dependent Children, if a woman who is on relief takes a job and earns $100 and she's honest, she is required to have her relief payment reduced by $100. That's one of the ways in which we've been producing poor people.

[Narrator/Host (likely Stephen Dubner)]

More than 1,000 economists from 125American universities signed a statement supporting a national system of income guarantees and supplements. The idea had support from many quarters like the staunch libertarian Friedrich Hayek.

[Erik Brynjolfsson]

I have no objection against a flat.

[Stephen Dubner]

Minimum security everybody who cannot earn enough in the market.

[Narrator/Host (likely Stephen Dubner)]

To civil rights leader Martin Luther King.

[Daniel Patrick Moynihan]

That is a great deal that the society can and must do if the Negro is to gain the economic security that he needs. Now, one of the answers, it seems to me, is a guaranteed annual income, a guaranteed minimum income for all people and for all families of our country.

[Narrator/Host (likely Stephen Dubner)]

In 1968, the Republican president elect Richard Nixon appointed as his urban affairs counselor Daniel Patrick Moynihan, the liberal sociologist and future Democratic senator who was intensely focused on race and poverty. They created what came to be called the Family Assistance Plan.

[Daniel Patrick Moynihan]

What I am proposing is that the federal government build a foundation under the income of every American family with dependent children that cannot care for its own and wherever in America that family may live.

[Narrator/Host (likely Stephen Dubner)]

The Family Assistance Plan was sent to Congress. If it got through, it wouldn't be a guaranteed universal income, but rather a floor under incomes for poor families. Nixon was very, very careful to draw this distinction.

[Daniel Patrick Moynihan]

This national floor under incomes for working or dependent families is not a guaranteed income. Under the guaranteed income proposal, everyone would be assured a minimum income, regardless of how much he was capable of earning, regardless of what his need was, regardless of whether or not he was willing to work. A guaranteed income would undermine the incentive to work. The Family Assistance Plan that I propose increases the incentive to work.

[Narrator/Host (likely Stephen Dubner)]

But was this balance possible? To find out, the federal government had begun a series of experiments.

[Evelyn Forget]

The purpose of all of these experiments was to look at the labor market outcomes.

[Narrator/Host (likely Stephen Dubner)]

Evelyn forget again, the big concern everybody.

[Evelyn Forget]

Had at the time was, you know, if you give people money for nothing, why won't they just quit their jobs?

[Narrator/Host (likely Stephen Dubner)]

Starting in 1968, the federal government ran a series of four negative tax experiments in different parts of the country with different demographics. Low income urban couples, rural families, black households, especially those headed by single women. Selection was randomized, which meant there was always a control group. This is thought to be the first time the US government used this kind of experimentation to measure the effects of a policy idea. Granted, it would be many years before they'd have the data. And Nixon's family assistance plan was still making its way through the political channels. Soon a similar experiment was happening in Canada.

[Evelyn Forget]

I was sitting in a first year economics class at Glendon College in Toronto and my professor came in and started to talk about this wonderful experiment that he said was being conducted way out west somewhere and it was going to revolutionize the way we delivered social programs.

[Narrator/Host (likely Stephen Dubner)]

Evelyn Forget points out that the US movement had a conservative thrust, with Milton Friedman advocating for smaller government. But Canada was different.

[Evelyn Forget]

In Canada, the support tended to come from the left. It was a sort of social democratic impulse. And most of the rhetoric was in terms of social justice.

[Narrator/Host (likely Stephen Dubner)]

It was called a Mincome experiment, as in minimum income. It was conducted in just a couple places, including a town of about 12,000 called Dauphin. It's in Manitoba, a few hours northwest of Winnipeg.

[Evelyn Forget]

Dauphin was a small town. Like a lot of other small towns in Canada. It was very dependent on agriculture. There was nothing unique about it. And that's what made it such an interesting saturation site.

[Narrator/Host (likely Stephen Dubner)]

A saturation site meaning that every person who met the income eligibility was offered the deal. In Dauphin, that meant about 30% of the town.

[Evelyn Forget]

If your income falls below a certain level, you'll receive so much, and as your income increases, your benefit will be reduced. The nice thing about the guaranteed annual income because people get to keep a portion of their benefits as they go out to work, is that this becomes a supplement for the working poor as well. And there's an encouragement to work.

[Stephen Dubner]

So in the mid to late 1970s, if you were unlucky enough to be poor, but lucky enough to live in Dauphin, Manitoba, you would be eligible for a check from the government. Forge says that a family of four would get the equivalent of roughly 18,000 current US dollars a year. This was in lieu of any existing welfare benefits.

[Evelyn Forget]

And it wasn't enough to give people a comfortable life. When we interviewed a number of the participants, one of the participants said this lovely line that it was enough to add some cream to the coffee.

[Narrator/Host (likely Stephen Dubner)]

That said the Canadian government spent millions of dollars on the project, but for a good cause, right? To find out if it could support its low income citizens without killing the incentive to work. So did the Mincom experiment work well enough to be turned into policy? What did the data show?

[Evelyn Forget]

No one ever wrote a final report. There was no more money forthcoming to do an evaluation of the project, and it just disappeared.

[Narrator/Host (likely Stephen Dubner)]

Uh oh. Between an economic downturn and political upheaval, the Canadian Mincomb project lost its mojo.

[Evelyn Forget]

The researchers were told to archive the data for future research, and effectively what they did was to empty the file cabinets and put all the paper into cardboard boxes.

[Stephen Dubner]

And how about back in the us? Did Nixon and Moynihan's plan do any better? We'll find out after the break. Freakonomics Radio is sponsored by Mint Mobile. From new shoes to new supplies, the back to school season comes with a lot of expenses. Your wireless bill shouldn't be one of them. Ditch overpriced wireless and switch to Mint Mobile where you can get the coverage and speed you're used to, but for way less money. For a limited time, Mint mobile is offering three months of unlimited premium wireless service for 15 bucks a month. Because this school year, your budget deserves a break, get this new customer offer and your 3 month unlimited wireless plan for just 15 bucks a [e-mail] freak that's mintmobile.com freak upfront payment of $45 required, equivalent to $15 per month limited time new customer offer for first 3 months only. Speeds may slow above 35gb on unlimited plan. Taxes and fees extra. See Mint Mobile for details. Freakonomics Radio is sponsored by Framer. Still using a copy paste website Break the template trap with Framer. Whether you're overwhelmed by traditional site builders or frustrated with cookie cutter designs, Framer gives you the freedom to create a site that's professional, polished and uniquely yours. Framer is the design first name, no code website builder that lets anyone ship a production ready site in minutes. Free to start. Browse hundreds of pixel perfect templates or design from a totally blank canvas. Multiplayer collaboration means your writer, designer and marketer can all tweak the same page at once. No version control nightmares. Add bold animations like appear effects, text effects, parallax, scrolling scroll animations, looping animations, and much more in seconds. Built in AI handles the heavy lifting. Generate starter layouts and translate your entire site to any language. Ready to build a site that looks hand coded without hiring a developer? Launch your site for [e-mail] and use code FREAKONOMICS to get your first month of pro on the house. That's framer.com, promo code FREAKONOMICS framer.com promo code FREAKONOMICS rules and restrictions may apply. Freakonomics Radio is sponsored by Progressive where drivers who save by switching save nearly $750 on average plus auto customers qualify for an average of 7 discounts. Get a quote [e-mail] to see if you could save Progressive Casualty Insurance Company and affiliates national average 12 month savings of $744 by new customers surveyed who saved with Progressive between June 2022 and May 2023. Potential savings will vary. Discounts not available in all states and situations before the break, we heard that Canada's guaranteed income experiment failed to materialize after years of planning and millions in spending. Back in the States, things were not going much better. The Nixon Moynihan Fell Family Assistance Plan had died in Congress. The right thought it was too expensive. The left thought it wasn't generous enough. Ultimately, however, there were at least two direct legacies of the plan which are still around. Supplemental Security Income, which increased federal support for the elderly, blind and disabled, and the Earned Income Tax Credit, which is a small negative income tax, although not a guaranteed income. By now, the political momentum for some kind of universal guaranteed income had greatly diminished, no matter what the data might have to say about whether such a thing could actually work. But what did the data say? The American experiments were still ongoing and the final analysis was still way down the road in Canada. Remember, the data had been packed up in cardboard boxes.

[Evelyn Forget]

I finally did track it down.

[Narrator/Host (likely Stephen Dubner)]

That's Evelyn Forget again.

[Evelyn Forget]

I was doing a lot of work on the relationship between poverty and health outcomes and I remembered this old experiment and I wondered if I could find any link to health outcomes and to quality of life for the participants.

[Narrator/Host (likely Stephen Dubner)]

It took a while, but she found the boxes of data.

[Evelyn Forget]

I found 1800 of them in a warehouse in Winnipeg under the authority of the National Archives. But I mean, I was literally looking at 1800 boxes full of really badly organized data. No one had ever constructed a database and no analysis had been done.

[Narrator/Host (likely Stephen Dubner)]

She thought about going through the boxes and building a database.

[Evelyn Forget]

And I sort of realized that my life was finite and I wasn't going to be able to do anything with that particular data.

[Narrator/Host (likely Stephen Dubner)]

But thinking about the Mincome experiment in Dauphin did give Forget an idea.

[Evelyn Forget]

One of the defining features of this period in Canada was that this was the period when universal health insurance was introduced. And one of the unanticipated consequences of universal health insurance is that you collect quite a lot of data on individuals.

[Narrator/Host (likely Stephen Dubner)]

And those data had been sorted and digitized data on education, employment, and of course, health. So what if Forge could look in these data for people who lived in Dauphin and who presumably got that extra government money and then compared them to Other low income people in other towns who didn't get that Mincome boost.

[Evelyn Forget]

And I was able to find everybody who was living in Dauphin during that particular period. So the first thing I did was to look at hospitalization rates. And I found that hospitalization rates had fallen by about 8.5% for the test group in Dauphin relative to the match control group.

[Narrator/Host (likely Stephen Dubner)]

Okay, so it looked like the Mincom recipients were healthier. What else did Forge find in the data?

[Evelyn Forget]

One of the findings was that high school completion rates had increased. And we discovered fairly quickly that boys in particular in low income families had been under a fair amount of pressure to become self supporting as quickly as they could. When Mincom came along, some of the families decided that they could allow their sons to stay in high school just a little bit longer. So instead of quitting school at age 16 and getting their first full time job, these boys stayed in school until they were 18, until they graduated from high school and took their first full time job a little bit later.

[Narrator/Host (likely Stephen Dubner)]

So in the raw data it might look like employment fell since a bunch of 16 and 17 year old boys were not joining the workforce. But in fact this was good news since they were staying in school, presumably setting themselves up for a better work life. But what about employment among grownups? That's the big concern of any guaranteed income plan. Did they stop working once they started getting a government check?

[Evelyn Forget]

Grown up people with full time jobs don't actually reduce the number of hours they work by very much.

[Narrator/Host (likely Stephen Dubner)]

One exception, women especially those who wanted more time off after having a baby.

[Evelyn Forget]

At the time I think the legal entitlement was four weeks. And it's sort of interesting because as a society we've already decided that longer parental leaves are something that we want to support. So they effectively anticipated that policy change.

[Narrator/Host (likely Stephen Dubner)]

So the effects of the Canadian Mincome experiment seem to be pretty positive. Now keep in mind, the dollars to do this have to come from somewhere new taxes or cuts in entitlements or other services. That of course is going to be a major part of any discussion about any guaranteed income plan. But the data seemed to show that the biggest concern, that everyone would just quit their jobs, did not happen, at least in the Canadian experiment. Now what about the US experiments in general?

[Evelyn Forget]

The finding was that primary earners really don't reduce the number of hours they work very much. When you offer guaranteed annual income, it's secondary earners and tertiary earners, that is second adult incomes and the incomes of adolescents that fall a little bit very.

[Narrator/Host (likely Stephen Dubner)]

Similar to the Canadian results. So there too, the news was pretty good. Although there was something troubling in the.

[Evelyn Forget]

US data when the findings started to come in, it looked like the families that were receiving a guaranteed annual income might in fact have a higher divorce rate. And this became very political very quickly. In the US There were all kinds of concerns that this was an attack on the American family.

[Narrator/Host (likely Stephen Dubner)]

Daniel Patrick Moynihan, a champion of the guaranteed income idea, was also a champion of the nuclear family. The divorce findings led him to withdraw his support. But Evelyn forget that when the data were examined more carefully over time, the divorce controversy seems to have been overblown.

[Evelyn Forget]

There was a subsequent work about a decade later which suggested that it might have been a statistical anomaly.

[Narrator/Host (likely Stephen Dubner)]

So the evidence from these experiments, as narrow as it may be, seems to suggest that a guaranteed income can produce positive results. The funding and the politics are of course, separate large questions. But one reason the idea has gained momentum lately is that the world has changed a lot since those experiments. Our economies have changed a lot. There's already been wage stagnation. Technological disruption keeps on coming. All of which makes at least one economist, Evelyn Forget, think that the timing is right.

[Evelyn Forget]

I do see a fundamental and ongoing change in the way the labor market operates. And I do think that we need to make some fundamental changes in the way we deliver social programs. I think a guaranteed annual income could do a very nice job of addressing some of these issues.

[Narrator/Host (likely Stephen Dubner)]

But coming up on Freakonomics Radio, politics being what they are, who is best positioned to figure out how to actually create a successful and affordable guaranteed income program? And if you are worried that a.

[Stephen Dubner]

World full of people not hard at.

[Narrator/Host (likely Stephen Dubner)]

Work, at traditional work at least, would lead to chaos, Just remember that some people not hard at work have been pretty useful to society.

[Evelyn Forget]

I think if you look at the 18th and at the 19th century, some of the great scientific breakthroughs and some of the great cultural breakthroughs were made by people who did not work.

[Stephen Dubner]

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[Narrator/Host (likely Stephen Dubner)]

I'm Stephen Dubner.

[Stephen Dubner]

This is Freakonomics Radio.

[Narrator/Host (likely Stephen Dubner)]

For many people, wages have stagnated. For many others, their jobs may be disappearing entirely. What's to be done so that financially vulnerable people aren't just crushed? One of the most radical proposals is for a guaranteed basic income. While several governments are starting to experiment with this idea, economists are not universal in their support. Here's Robert Gordon, author of the Rise and Fall of American Growth.

[Robert Gordon]

As far as the guaranteed minimum income, I'm not in favor of that. I'm in favor of a modest increase in the minimum wage and a substantial increase in the Earned Income Income Tax credit, which encourages low income people to work.

[Narrator/Host (likely Stephen Dubner)]

Why would you not be in favor of the minimum guaranteed income?

[Robert Gordon]

There's too much of an incentive. If you guarantee income to replace work and if you provide a guaranteed minimum income to everybody, then those with low skills will drop out of the labor force and will no longer work. So I think it's a matter of incentives. A guaranteed minimum income would put a very high implicit marginal tax rate on going to work for those with relatively low skills.

[Narrator/Host (likely Stephen Dubner)]

Is Robert Gordon right? Are boosting the minimum wage and the earned income tax credit better solutions than a universal basic income? Or what about wage insurance, where the government supplements the income of people whose jobs just don't pay enough to live on? Again, these questions are nearly impossible to answer right now, but let's assume the guaranteed basic income idea is worth pursuing. How would it work? Would it require a huge tax hike? Or would the money come from efficiency or productivity gains, or from eliminating other government benefits? There are the metaphysical questions as well.

[Sam Altman]

Does basic income make people happy and fulfilled? Does it make them less stressed? Does it make them do better long term planning?

[Stephen Dubner]

That is Sam Altman, the co founder and CEO of OpenAI, the startup that kicked off the current AI revolution with ChatGPT. When we spoke with him for this episode, though, back in 2016, he was the president of Y Combinator. And what is Y Combinator?

[Sam Altman]

Y Combinator is a company that funds.

[Narrator/Host (likely Stephen Dubner)]

Startups, meaning a venture capital firm.

[Sam Altman]

For instance, we've invested in Airbnb, Dropbox, Stripe, Zenefits, Instacart, Reddit. We've invested in about 1100 companies in total. But also more recently we also have started funding basic research, which is not.

[Narrator/Host (likely Stephen Dubner)]

What VC firms typically do.

[Sam Altman]

No, but I think we're a fairly unusual venture capital firm.

[Stephen Dubner]

For instance, when we spoke with him, Altman was launching an in house research project on a guaranteed basic income.

[Sam Altman]

The tentative plan is to hire a social science researcher and to have him or her pick a group of people and give some of them some amount of money, maybe different amounts of money, for five years and observe what happens relative to a control group.

[Narrator/Host (likely Stephen Dubner)]

What happens would include all kinds of metrics.

[Sam Altman]

Do their personal balance sheets go up? Do they learn new skills? Do they create new wealth for society? All of those sorts of things.

[Stephen Dubner]

The research would also try to figure.

[Narrator/Host (likely Stephen Dubner)]

Ways to drive down the baseline cost of living. The biggest problem, Altman says, is housing.

[Sam Altman]

And that is the hardest thing to fix with technology. It's the most dependent on policy other than housing. I think we can make great progress just with technology. If you think about a world where we get nuclear fusion to work, we make continued progress on agricultural technology and water technology and transportation, or we use technology to really make education a lot more Efficient. You can easily see the costs of the baseline come down a huge amount. And I think if you're not a kind of a crazy techno optimist, which I'd say I am, you underweight.

[Narrator/Host (likely Stephen Dubner)]

That being a techno optimist in Silicon Valley is why Altman started thinking about a basic income.

[Sam Altman]

I think there is a sense that technological job destruction is accelerating more than people outside of Silicon Valley realize. And I think this is mostly narrow applications of AI, but it's going to happen for lots of other reasons. So every time we've had a major societal revolution of some sort, we had the agricultural revolution, we had the industrial revolution, where anytime you have a significant fraction of human jobs get eliminated in a relatively short period of time, eventually humans do figure out new things to do, but there's quite a lot of disruption while they're happening. And so I think people in Silicon Valley saying, man, there are going to be incredible changes in the next few decades. What can we do to make that as smooth as possible? I do think that as we as a society get richer and richer, there should be some sort of floor for everybody. And in a way, basic income is sort of the libertarian approach to doing this right? It's actually healthy for a society if some people get incredibly rich. But there should be a floor below which we as a society don't allow people to fall.

[Narrator/Host (likely Stephen Dubner)]

You could argue that why Combinator's funding of basic income research is a guilt play, since it is the kind of company that helps create so much of the technological disruption that may destroy jobs. Altman would disagree with that argument.

[Sam Altman]

So we view our job as to increase the amount of innovation in the world. And mostly that means funding startups. But that is the mission, not funding startups in itself.

[Narrator/Host (likely Stephen Dubner)]

In Altman's view, the idea of a basic income isn't counterintuitive at all. Even in a capitalist framework. He sees it as perfectly intuitive.

[Sam Altman]

I think the default belief of a child is that everyone should get food to eat and a place to sleep. And it strikes most children as incredibly unfair that that's not the case. In fact, I think that's so universal that is somehow probably encoded into our genes, this idea of fairness and equality. And I think people then get older and move away from it.

[Stephen Dubner]

Every conversation you have with anyone about the idea of a basic income inevitably comes around to one point. The value of work. Not just the financial payoff, but what you might call the moral payoff, that if anyone who wanted to could get a basic income without working, that it might destroy Our moral fiber, our social fiber. Here again is the Stanford economist Erik Brynjolfsson.

[Erik Brynjolfsson]

People get a lot of meaning from participating and contributing to society. And the way we're set up right now, if we just got rid of the jobs and replaced it with a check, I think a lot of people would be unhappy.

[Narrator/Host (likely Stephen Dubner)]

Sam Altman isn't So sure.

[Sam Altman]

Maybe 90% of people will go smoke pot and play video games. But if 10% of the people go create incredible new products and services and new wealth, that's still a huge net win. And the kind of American puritanical ideal that hard work for its own sake is valuable, period. And you can't question that. I think that's just wrong.

[Stephen Dubner]

Y Combinator's guaranteed income experiment finally got off the ground in 2020, with 3,000 people in Illinois and Texas getting $1,000 a month for three years. Their average income was less than $29,000 a year. So this was a big boost for them. They typically used the extra money to pay for essentials like rent, food, and transportation. And they worked a bit less, about an hour and 20 minutes less each week on average. How should we interpret that? Here again is the economist Evelyn Forget.

[Evelyn Forget]

I think people do need to create meaning in their lives. And for a lot of people that does come through work. I'm not sure that they necessarily need eight hours of work a day and 40 hours of work a week to find that meaning.

[Narrator/Host (likely Stephen Dubner)]

Forget, like Sam Altman, sees a potentially huge upside in freeing people of the need to work.

[Evelyn Forget]

If you look at the 18th and at the 19th century, some of the great scientific breakthroughs and some of the great cultural breakthroughs were made by people who did not work. These were gentlemen of leisure, right? These were people who had enough family money to support themselves. They certainly didn't have to dirty their hands doing the kinds of work we take for granted. I don't think these individuals felt useless. I don't think their contribution was negligible. I think it was very important to the development of the world.

[Narrator/Host (likely Stephen Dubner)]

That may all be true. But if, for whatever reasons, we all start working a lot less, whether or not there's a guaranteed income involved, humankind is in for a big change. For most of civilization, work has been a huge part of what it means to be human. So what happens if the techno optimist dream comes true? What happens if computers and robots can take care of most or all of our work? Will our robot overlords even want us around anymore? Or will we just be in their way? Sure, it's A troubling thought. But consider one example which may seem way off base at first, but consider another population that used to have to work for a living. The relationship between dogs and humans goes way back.

[Gregor Larson]

We know that dogs were not just the first domesticated animal, the first domesticated anything.

[Narrator/Host (likely Stephen Dubner)]

That's Gregor Larson.

[Gregor Larson]

I'm at the University of Oxford in the Department of Archaeology, and for the purposes of this, I'm studying the origins and evolution of dogs.

[Narrator/Host (likely Stephen Dubner)]

The domestication process was long and complicated.

[Gregor Larson]

So what we think may have happened is that a pack of wolves, rather than following, say, caribou or going after megafauna or something else, started following us instead. Because the wolves could make a living simply by living off of the back end of us. And in doing so, they would put a selection pressure on themselves to become.

[Narrator/Host (likely Stephen Dubner)]

More acclimated to us, more acclimated, and over time, more useful. Let's say you are hunting and you just nick your prey.

[Gregor Larson]

If you have a dog with you and whatever you've just nicked is leaving a blood trail, that dog will be able to sniff out that injured animal and then locate it. And so all you have to do is follow it.

[Narrator/Host (likely Stephen Dubner)]

Over time, dogs did all kinds of work for us. They herded cattle, they guarded our property. They even helped cook our food. Seriously. A breed called the Turnspit dog had a long body, short legs, and it would run in a wheel that turned a spit over a fire to make sure the meat cooked evenly.

[Gregor Larson]

These dogs were bred, or at least the best ones, were just able to sit in these wheels. And that's all they did all day, is just run and run and run and run.

[Narrator/Host (likely Stephen Dubner)]

Eventually, technology put the Turnspit Dog out of a job.

[Stephen Dubner]

Just as technology may eventually put a.

[Narrator/Host (likely Stephen Dubner)]

Lot of people out of jobs, a lot of dog work was replaced with machinery or other technology. Like people, some of them found new and different work as guide dogs, as therapy dogs. Dogs were trained to sniff out drugs or explosives, even illness in a human. Here at Freakonomics Radio, we've given one particularly clever pack of dogs some very specific training.

[Stephen Dubner]

But let's face it, most dogs aren't that clever. So when their jobs began to disappear, they did not find new work. So did dogs just vanish? No, they did not. In fact, they flourished. When we no longer needed them as workmates, we turned them into pets. In the US alone, about 65 million.

[Narrator/Host (likely Stephen Dubner)]

Households own a dog.

[Stephen Dubner]

They are far and away the most common pet. Cats are second in about 46 million households. Freshwater fish are a distant third in 11 million households. Between 2018 and 2022, our spending on pets went up by 51% to $136 billion. So if you look at the long term, dogs went from being on the production side of the human equation to.

[Narrator/Host (likely Stephen Dubner)]

The consumption side big time.

[Stephen Dubner]

So who's to say that we, their masters, won't find a way to make peace with our robotic masters even when we no longer have any work to do? Personally, I think I would make a great bet for anyone willing to adopt me. Anyone interested? Serious inquiries only please to radioreconomics.com that's it for this updated episode. We will be back very soon with a new one. Until then, take care of yourself and if you can, someone else too.

[Producer/Announcer]

Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Greg Rosalski and updated by Dalvin Abawagi. It was mixed by Eleanor Osborne. The Freakonomics Radio Network Network staff also includes Alina Coleman, Augusta Chapman, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippon, Jasmine Klinger, Jeremy Johnston, Morgan Levy, Sarah Lilly, Teo Jacobs, and Zach Lipinski. You can find our entire archive on any podcast app [e-mail] where we publish transcripts and show notes. Our theme song is Mr. Fortune by the Hitchhikers. Our composer is Louise Guerra. As always, thank you for listening.

[Narrator/Host (likely Stephen Dubner)]

Can you describe an invention or maybe series of inventions that you could foresee radically changing the future? Can you imagine what those do you have a wish list?

[Robert Gordon]

How can I imagine something that you just said? I can't imagine.

[Producer/Announcer]

The Freakonomics Radio Network the Hidden side of Everything thing.

[Evelyn Forget]

Stitcher.

[Stephen Dubner]

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[Evelyn Forget]

Today.

[Stephen Dubner]

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