Will Universal Basic Income Destroy Innovation in the US?

National Geographic Explorer in Residence and world renown population geneticist Spencer Wells joined Vance Crowe from his hideout in Indonesia where he has decided to wait out Coronavirus. We discuss if blood types matter, how past civilizations faced pandemics, when to lift the quarantine and what will happen if hunger spreads as a result of the disease (or the cure). View the full interview here.

SW: In real life travel, I feel like a lot of the middle is going to be carved out. I feel like cruises, Disney cruises and whatever else it might be, those are those are going to go away. Do you know anybody who’s booking a cruise right now?
VC: No I’ve always been surprised about that, even after norovirus I used to be surprised about this. Last time we spoke you had a very insightful indicator for how corporate America thinks about coronavirus and you framed it as the Disney index. Basically saying these are the people that are in business to have entertainment, to bring people together where it is joyous and that if you watch what their behavior is, you can tell how corporate America thinks of this disease. Do you still agree with that index?

SW: Absolutely. Watch what is going to happen with Disney. We’re now about two weeks out from their quarterly earnings call, it’s going to be a bloodbath. The thing about large corporations is they don’t release information that openly until they have to but everything that’s coming out — 75,000 people laid off at the theme parks and senior executives taking pay cuts and complaining about it — it’s going to be really scary, and this is just the beginning of it.

They are not going to be reopening theme parks on June 1st. If you believe that you are delusional.

They know that, they’re trying to project confidence, that’s what corporate leaders and government leaders have to do but you know, inside the Machine they know how long this is going to last. It’s scary.

VC: Naval Ravikant who is a VC investor, had a tweet yesterday that went quite viral and he basically said that the economy will reopen when white-collar people start losing their jobs. What do you think about that?

SW: White collar people are already losing their jobs; white collar people were losing their jobs before this ever happened. Do you know that the value of a law degree has gone down enormously in the last 10 years. You probably read about this, but you know associates at major law firms are being replaced by AI. This is this is a major issue in America. Doctors — arguably AI can do a better job of reading radiographs than physicians can. I think this what the virus is doing, is its serving as an accelerant to things that were happening in society more broadly anyway and one of the things that I think the government is going to have to step up and take on is, is universal basic income really the solution in the future? It might be, honestly if people are starving to death and rioting in the streets, maybe it’s better to pay everybody $2000 a month just so they can buy food and not freak out, which is what’s going to happen if we don’t do something like that.

VC: That is literally the scariest thing that you could say to me, because I see that as the obvious step towards communism.

SW: I lived in the former Soviet Union, it is a ****hole, I don’t want to go there but society wise, we are heading back toward 1917 right now. Not 1918 with the flu pandemic, 1917 with the Communist revolution, that is where things are headed right now.

VC: I interviewed a guy last night who runs a business and he was talking about how much pressure there was on his employees from his employees to lay them off because they could make more money on unemployment than they have ever made before and they were talking about how they now have thousands of dollars in their bank account, they’ve never had this much money before and he’s saying look, if my guys get laid off, the economy still kind of goes but if other companies like sewage treatment just shut down, disease will spread on a scale that we’ve never seen before. I fear this idea of incentivizing people not to work although I say that while not having to go into the economy.

SW: Societies go through stages in their life cycles. Europe is in its old age so something like UBI makes a lot of sense in a place like Europe or Japan which is also in its old age.

The United States has always been a young striving country where entrepreneurship, youth and new ideas have been valued and UBI will destroy that. It will, it just will.

You can’t take the same concept and apply it equally to all societies. The US is inherently a different Society. Will it get to the point where we need UBI? Possibly, but this is beyond my ability as an amateur economist and sociologists, but I know history and I know that UBI is not right for the US. Not right now, it might be in the future but it’s not right for the US at the moment.

Let’s keep the conversation going,

Vance

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