Here is the transcript of my talk about a Basic Income Guarantee and the Right to be Represented by a BOT from TEDxNewYork.

All of our economic theory, all of our business practice, all of our public policy, they were all developed during an era of scarcity. Scarcity means that when you want more of something, there’s an additional cost to be paid. And that was always true for physical products but it’s no longer true for digital information. That extra view of the funny cat video on YouTube, it basically cost Google nothing. And it is that zero marginal cost of digital information that is turning everything upside down. It used to be, for instance, that we would select first then edit and then publish. Now we can publish many, many things, select a few and edit those. It used to be that people had to go to investors, raise money, then make a product and hope people would buy it. Now you can present your vision for your product to thousands of people, have them contribute, use that money to make a product that you know people want. It used to be that people were very guarded about how something worked. Now we have open source software, hardware, and even biotech. These are all inversions. They’re things that are being turned upside down. They’re being turned upside down because of the zero [ph] marginal cost of digital information and we’re just at the beginning of these. Traditional big publishers still dominate music, movies, crowd funding is tiny, open first biotech is in its infancy. But if you take these trends and you kind of extrapolate them out a little bit, what you get is a kind of digital abundance, a world in which we can learn anything we want to online for free. A world in which all the world’s medical knowhow is available to anybody anywhere in the world for free. Where you can listen to music, enjoy art, read books online for free. And we can even see how eventually that digital abundance could help us reduce the amount of physical scarcity. How? For instance by 3-D printing only products that people actually want. Also by taking existing things like cars, buildings, lab equipment and sharing it much more efficiently than we’ve ever been able to do.

So this is the world that I am very, very excited about but we’re not going to get to this world simply through more technology. We’re not going to get to this world simply through some businesses doing innovative things online. We’re also going to need to invert our public policies. And I’m going to want to speak about two examples of such public policy inversions today.

The first is a basic income guarantee or B.I.G. and the second is the right to be represented by a bot. I’ll explain what those two are and as I talk about them you may think, wow, these are crazy far out ideas. And the goal here isn’t to say, “Hey Congress, we need these as national laws in the U.S. tomorrow.” The goal is simply to say these are interesting ideas that we should be discussing. And more importantly, we should be experimenting with them to see whether they have merit. Let me start with the basic income guarantee. It’s quite a simple idea, it’s the idea that the government should pay everybody above a certain age, say sixteen, some amount of money every month or week. It’s called basic because it’s supposed your cover your basic needs: food, clothing, shelter. And it’s called guaranteed because it’s supposed to be paid to you no matter what; no matter your gender, no matter your marital status, no matter your wealth. And most importantly no matter what you do. So, whether or not you work. And that’s the inversion in this idea. The inversion is that it used to be that you had to work first in order to get paid. Under basic income guarantee, you get paid first and then you choose what to work on. It doesn’t do away with the labor market at all. You can still work in a job where you get paid more. It simply puts a floor under everybody’s income. Now you might say, why would we want that? Well because it would let us embrace automation instead of be afraid of it. I’ve been around computers for thirty plus years. And for many decades, we’ve had these promises of artificial intelligence and they have been false promises. But we now actually have major breakthroughs and we have machines that can do many of the things that humans currently do for work and as a source of income. Let me give you two examples. There are about four million people in the U.S. who make a living driving a truck, a taxi, or a bus. But we also know we have self-driving cars now. So it’s not a question of if anymore, it’s just a question of when, some of these jobs will be replaced by machines. On the other hand, we have about a million people working in the legal professions. But we now have machines that can very efficiently read through reams and reams of legal documents and even write some of them. Again it’s not a question of if anymore, it’s just a question of when. Now you might say, why do we want to embrace automation? And the answer is because it gives us time and time is great in the world of digital abundance. It’s the time you have to watch TED videos. It’s the time you have to make TED videos. So in a world of digital abundance, we want people to have time. We want people to feel they have the time and the resources to learn new things. We want people to have the time and resources to contribute to those things. And make them free. And basic income guarantee, B.I.G., helps with that in a second way. It helps with that because it creates a much broader base of people who can participate in crowd funding. So instead of saying we need these paywalls around content that keep people out, we can say no, let’s put out free content and then let’s fund it on Kickstarter, Indigogo, Patrion, or experiment.com for science or Beaconreader for journalists. There are many other benefits about basic income that I won’t have a chance to really go into detail. For instance, they deal much better with situations of abuse; whether you have an abusive employer or an abusive partner. Basic income gives you a walk away option from many different situations.

There are lots of objections too and before I talk about some of the objections, let me point out one more thing, which is this is not a traditionally left or right political idea. It’s not a traditionally left idea because it says, in order to finance this you have to do away with programs like food stamps, means tested programs, and you have to believe in individual agency. It’s also not a traditionally right idea because it whole heartedly embraces free distribution. It says, let’s tax people who make a lot of money. Let’s tax corporations and then let’s give this basic income to everyone. And as a V.C., I kind of like the fact that a lot of the political establishment is sort of ignoring or dismissing this idea. Because what we see in start-ups is that the most powerful innovative ideas are the ones that are truly dismissed by the incumbents.

So what are some of the objections? The first objection that people have is they say we simply can’t afford this. And some of the proposals that people have floated, like paying people several thousand dollars every month, in fact, do add up to more than the federal and state households [ph] combined. And we do still want some things from the state, right? We want federal defense, we want roads, we want water, we want broadband. So there are some things that we want the government to do. So the interesting thing though, is that I believe it will take much less money. And it will take much less money because we need to take a dynamic view. We don’t need to ask how much money do you need today? We need to ask, how much money will you need in this world of advanced technology and of basic income guarantee? When we ask that question, what we see, is that we already live in a world of technological deflation. And that basic income guarantee will accelerate that. So, roughly since the mid-1990s, in the U.S., the cost of consumer durables has already been declining. The things that have been getting more expensive are primarily services and within that, primarily education and healthcare. Now basic income guarantee will actually help reduce both of those. How? First, because it lets more people contribute to online free education materials, to online free healthcare resources. And it also frees people up to teach and to take care of people. The second objection that has been raised, is that people would simply take this money and spend it on drugs and alcohol. Now there’s no country in the world that has this so we can’t simply point at another country. But people have done studies, as far back as the seventies and there are on-going studies today about cash transfers. About cash transfers that are not means tested. And the World Bank has just published a review of these studies and what they found in looking at nineteen of them, is that there’s simply no evidence that people wind up spending this money on drugs and alcohol, any more than they would use drugs and alcohol already. The third objection that’s often raised is people are lazy, people are going to stop working. Again, the good news is, these studies show that this so-called income effect is quite small. People like to do things. People like to do interesting things. And when people were working less in traditional jobs, in these studies, what they were largely doing was spending more time with family and friends, more time teaching their children, more time taking care of their parents. So the very two things I said we want more of in order to reduce the cost of medication and the cost of healthcare. It also turns out that people working less is not a bad thing overall. If you reduce the supply of labor, you lift wages for everyone, which is also interesting, you might say, well why not just raise wages? Why not just have a higher minimum wage? And I’m very sympathetic to that idea, it’ll definitely help people who currently have a job. But it doesn’t help at all with this concept of digital abundance. It doesn’t help people create free online resources. It doesn’t give you the time to learn something from these free online resources because you have to have this job to just cover your basic needs. Same goes for just trying to reduce the work hours. So it’s only the basic income guarantee that addresses this digital abundance and basically frees us to participate in it.

The second inverted idea I want to talk about, is the idea of the right to be represented by a bot. A bot is a piece of software that acts on your behalf. Let me make this more concrete, I went on Facebook the other day because I remembered that a couple of years ago I had written something witty on somebody else’s wall. I was trying to remember who it was. Turns out that Facebook makes this quite difficult. You can’t actually search your own wall posts. Now Facebook has all this data but for whatever reason, they’ve decided not to make it easily searchable. I’m not suggesting anything nefarious, it’s just how it is. So now imagine for a moment if in my relationship to Facebook I was able to use a piece of software. I could now instruct this piece of software to go through the very cumbersome steps that Facebook lays out for finding past wall posts and do it on my behalf. That will be one thing. The other thing I could have done is if I’d been using this bot all along, the bot could have kept my own archive of wall posts in my own data store and I could simply instruct it to search my own archive. Now you may say, well that’s a trivial example. But actually, it’s very foundational. It completely inverts the power relationship between networks and their participants. It also inverts the present legal situation. There are lots of laws at the moment that allow networks to restrict to what degree you can use a bot to interact with them. They basically can restrict you to only use the existing application programming interfaces or the APIs and say only these are legitimate and on top of that, we can limit how much you can do.

Now to see that this is a very powerful inversion, I want to talk for a moment about on-demand car services. Companies like Uber, Lift, and Sidecar. If you’re a driver today, they each have a separate app. Makes it very hard for you as a driver to participate in more than one network at a time. If you had the right to be represented by a bot, somebody could write a piece of software that drivers could run, that would allow them to simultaneously participate in all of these marketplaces. And the drivers could then set their own criteria for which rights they want to accept. Now clearly those criteria would include for instance what the commission rate is that the marketplace is charging. And drivers would go for marketplaces that charge less of a commission. So you can see in this example, how the right to be represented by a bot is quite powerful. It would make it very hard for an Uber or a Lift or any one of these companies to charge too high a commission because new networks could come up. A cooperatively owned network, cooperatively owned by the drivers, for instance, and the drivers could participate simultaneously in the new network and the old network. And it’s the very threat of the creation of these new networks that would substantially reduce the power of the existing networks. This is important, not just for drivers. We are all freelance workers on Facebook and on Twitter and on all these big social networks. Yes we in part we get paid through free services, free image storage, free communication tools. But we’re also creating value. And it’s not just the distribution of value that we’re worried about, we’re also worried about what do these companies do? We’re worried about questions such as censorship. We’re worried about questions such as, are we being manipulated by what’s being shown to us in the feed? And at the moment, what regulators are doing is they’re trying to come up with ad-hoc regulations to regulate each and every one of these aspects. And many of these ad-hoc regulations, are going to have completely unintended consequences. And often these consequences will be bad. Let me just give you one example. The European Union has said, if you want to have information on people who live in the European Union, you have to keep it on European Union servers. That actually makes it harder for new networks to get started, not easier. It actually cements the role of the existing networks instead of saying we need to create opportunities for competition with existing networks.

So I’ve presented two ideas for fundamental inversions in public policy. And you might have a couple of objections to those. The first one could be let’s just not have any new policy at all, let’s just have more technology. We don’t need any policy. And that objection is often motivated by the idea that whatever policy that will come will actually make innovation harder, not better. It will make it harder to get to that state of digital abundance that I was talking about. And if you look at history of innovation, if you take the car for example, that’s always true initially, right? So, the early cars were actually steam engines that people were running on the street. And the regulators said, “Woah, that’s dangerous, you have to have somebody with a red flag walking in front of it.” And then the cars get a little better. They said, “Oh yep, still dangerous, can’t go faster than a horse drawn carriage.” So the early regulation was aimed at slowing down innovation. But ultimately, we only got the benefit of individual mobility because we embraced public policy, because public policy said, here are rules of the road. And public policy said, here are roads. We’re actually going to invest in making roads. So we do need public policy, it’s just we need the right kind of policy.

The second overall objection you might have is, these ideas are just crazy. How will we know they can work? We can’t just do this. And the good news here is, that we can run small local experiments. We could in fact right now run an experiment with a thousand people with basic income guarantee in a city like Detroit. Detroit has very cheap housing stock at the moment. There are entire buildings in downtown Detroit that are empty. So we could run that experiment and I think we should. We could run an experiment with the right to be represented by a bot in a city like New York. New York controls how Lift, Uber, Sidecar, all of these services operate. So, New York City could say, “If you want to operate here, you have to let drivers interact with their service programmatically.” And I’m pretty sure, given how big a market New York City is, these services would agree.

So, zero marginal cost of digital information gives us promise. It gives us a promise of digital abundance and ultimately, physical abundance. And whether or not we can realize that promise depends on whether we’re willing to invert our own thinking away from scarcity thinking towards abundance thinking.

Thank you.