Benoît Hamon: correct on basic income, wrong on taxing robots

On Sunday, Benoît Hamon won the French Socialist Party’s nomination for president. Hamon is a self-styled radical: a former education minister who resigned from François Hollande’s government after President Hollande’s imposition of austerity measures, Hamon counts the legalisation of cannabis among his policies. Though Hollande’s miserable tenure mean the Socialist Party is unlikely to fare well in the upcoming presidential election, Hamon’s policies have brought a breath of fresh air to a relatively stale Socialist Party nomination process. In particular, Hamon has clearly thought about the need to transition towards an automated economy, in which robots will do the vast majority of the work rather than people.

That’s right — in the next ten years, many of today’s most common jobs (from lorry drivers to lawyers to health professionals) may be done by machines, and Hamon is one of the few politicians who is taking this seriously. He has put forward two proposals: a universal basic income for all French citizens; and a tax on the wealth created by robots.

Hamon’s idea for a basic income for all French citizens is a good one. A universal basic income (UBI) is a monthly sum of money paid to every citizen of a country purely for being a citizen of that country.  The UBI should be enough money for someone to live on, covering necessities like food and water. Everyone would receive a basic income: there would be no strings attached, no hoops to jump through to receive it.  UBI ultimately removes the need for people to work to sustain a living, allowing them to care for family members, start a business, or put in the time to gain a job they really want to do. With a new age of automation just around the corner, the need for a UBI is becoming urgent: if people don’t have a regular income outside of their jobs, they won’t have an income at all when their jobs are gone.

Hamon’s particular plan would happen in three stages.  First, the minimum welfare payment for the poorest would be increased by 10% to €600 per month. Second, all 18-25 year olds would be given this €600 monthly payment. Finally, in 2022 every French citizen would receive an unconditional €750 monthly payment — a universal basic income.

The plan doesn’t have overwhelming support: Hamon’s critics state that the cost of his basic income plan would be in the region of €300-€400 billion.  Meanwhile, Leonid Bershidsky at Bloomberg suggests that Hamon’s proposed sum of €750 a month would not be enough for someone to live on.

While they are certainly things to be wary of, these criticisms slightly miss the point. Hamon’s proposal indicates that his UBI scheme would replace existing unemployment benefits. In addition, the fact every French citizen would receive it mean a UBI would simplify the benefits system, allowing for drastic cuts in bureaucracy. These are just some of the ways a UBI could save money in the short term. On Bershidsky’s criticism, it’s firstly depressing to think that the unemployed in France currently make do with far less than the sum Hamon is proposing. Second, a €750 monthly payment is not a small sum of money by any means, and would act as a base from which the UBI could grow to the extent that it adequately supports everyone’s basic needs.

In short, Hamon’s proposal for a basic income are imperfect but a great start: a simple, well-thought out transition process with a final programme which doesn’t quite do the job but comes very close. What’s baffling is his proposed way of paying for a UBI: a tax on robots.  Or, more specifically, a tax on the wealth created by robots.

It’s at this point we should remember why UBI is becoming such a necessity: automation. Over the next ten years, we could see many of today’s most common jobs disappear as companies find that it is cheaper to get a robot or computer to do the work instead of a person.

There are two possible reactions to this future: resist it or embrace it. The policies of resistance are relatively straightforward. First, ensure that people are cheaper to hire than robots. This can be achieved either by cutting funding for artificial intelligence research, paying meagre wages to employees and taxing companies that use robots at the expense of hiring workers. This is essentially a populist policy platform — a bit like Donald Trump’s recent pledges to American workers and threats to international corporations, but with robots as the targets rather than foreigners.

On the other hand, we can embrace a future of automation — not just acknowledge that robots will take our jobs but welcome it. With a universal basic income to ensure we don’t starve, automation would allow us to use our time in ways that we want to rather than have to. Rather than slugging through the nine-til-five in a job we might hate just so we can make ends meet, we might instead do a little part time work, spend more time with family and friends or start a business in something that we really love. With robots taking care of much of the economy, we will have time to pursue our dreams and only do work that is genuinely fulfilling.

A world of automation — a world without compulsory work — is thus something to look forward to. Hamon seems to look forward to it too: in recent interviews and in his UBI policy, he seems to realise that automation would be liberating, not limiting.

Which is why Hamon’s policy to tax robots makes no sense. As well as a tool to raise funds, taxes act as powerful incentives or disincentives. For example, the introduction of tax breaks for companies in a certain sector will encourage more companies to enter that sector. Conversely, taxing certain practices will discourage companies from doing those things because it will cost them money. So, taxing the wealth created by robots will just discourage companies from using robots, meaning they’ll employ people instead, undermining the move to full automation that UBI facilitates and Hamon apparently believes in. Taxing robots means less robots, which means more people are employed in thankless jobs, which means people still gain money from these thankless jobs, which undermines the implementation of a basic income. If you believe in a world of automation, basic income and an end to working to survive, then taxing robots isn’t the way to achieve it.

Why then would forward-thinking Hamon have such a contradictory policy platform? Perhaps he purely believes that taxing the wealth made from robots would bring in a lot of revenue. But there are many alternatives that would bring in equally large sums of money while also discouraging practices that are compatible with basic income. For example, many basic income campaigners have advocated a carbon tax to limit companies’ contribution to climate change. Alternatively, a more comprehensive system of income tax would reflect the community spirit of basic income: everyone pays in, and everyone takes out. Or Hamon could just tax wealth more generally, rather than punishing those that dare take the leap into automation.

But maybe Hamon’s contradictions stem not from economic rationality, but from the heart. Many people who believe in social justice and fighting inequality still long for the days when full employment was a realisable aim, and are willing to stop anything that takes jobs away from workers, because jobs have traditionally been workers’ only source of income. But by decoupling income from jobs, a basic income would not only allow a new source of income, but also a greater capacity for human flourishing. No routine job is worth more than that.

A basic income will take us into the future; taxing robots will take us back to the past. Hamon must decide which path he wants to take, but he can’t take both. Personally, I would like to hear more about his basic income plan and a vocal abandonment of his robot tax. In short, Mr Hamon, leave those robots alone: a world of full automation offers far more than a tax on robots.

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One thought on “Benoît Hamon: correct on basic income, wrong on taxing robots

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