Universal Basic Income (UBI) is Survival Insurance for the AI Age

By Aamir Butt

Blog 3 of 10 in The Great Threshold series.

Let's kill the welfare stigma immediately. Universal Basic Income is not charity. Universal Basic Income is a dividend payment from the most profitable technology in history.

When AI automates 40-60% of jobs by 2035, someone profits enormously from that productivity explosion. Right now, those profits flow exclusively to capital owners and tech companies.

UBI ensures that everyone shares the benefits from technology built on publicly funded research, trained on public data, and deployed on public infrastructure.

This is a fair distribution of collectively created wealth, and you've added your part to it

The AI Productivity Explosion

We know that AI will replace workers, but it will also generate massive value. One AI system does the work of thousands of humans, 24/7, with no salary, benefits, or vacation. When companies deploy AI, profits soar while payroll vanishes.

• Current system: Profits concentrate among shareholders and executives. Workers get unemployment and despair.

• UBI system: Profits are taxed, distributed as an automation dividend. Workers get economic security and time to adapt.

Funding Mechanisms That Actually Work

There are frameworks already, if we so choose to use them:

• Automation Tax: Tax on AI/robot deployment or productivity gains from automation. Companies profiting from AI contribute proportionally.

• Sovereign Wealth Fund: Government equity stakes in AI companies (Alaska Permanent Fund model). Dividends fund UBI. Citizens become literal shareholders in AI economy.

• Land Value Tax: Tax on unimproved land value. It can't be automated away or moved offshore. Captures value created by society, not individual landowners.

• Carbon Tax: Environmental benefit plus revenue generation. AI uses massive energy. Tax it!

• Financial Transaction Tax: Small tax on stock trades and currency exchanges. Barely noticeable to investors, significant revenue at scale.

Combined, these generate 15-30% of GDP in developed nations. That is more than sufficient for generous UBI.

Optimal Level: $2,000-3,000 Monthly

Not poverty-line survival ($1,000), and not luxury ($5,000). The sweet spot: $2,000-3,000 monthly per adult in developed nations, adjusted for local cost of living globally.

• This covers:

  • Rent in affordable housing

  • Food with dignity

  • Healthcare copays

  • Transportation

  • Internet

  • Clothing

  • Small savings buffer

• This doesn't cover:

  • Luxury vacations

  • New cars

  • Restaurant meals nightly

  • Designer brands

This optimal level maintains work incentive while providing security. Every dollar earned from work supplements UBI, rather than replaces it (with gradual taper).

Working remains advantageous but optional.

Destroying the "Makes People Lazy" Myth

Kenya pilot: Recipients started businesses, invested in education, improved health outcomes. Work hours actually increased.

Finland pilot: No reduction in employment. Improved mental health and life satisfaction. Reduced bureaucracy costs.

Stockton, California: Recipients more likely to find full-time employment. Reduced income volatility. Better family stability.

Pattern: UBI doesn't reduce work. It enables better work. People leave exploitative jobs for better opportunities. Start businesses. Pursue education. Care for family. Do meaningful volunteer work.

Work becomes choice rather than desperation. This improves job quality and worker bargaining power—benefiting everyone.

The Inflation Question

"Won't UBI cause massive inflation?"

Only if supply-constrained. But AI massively increases productivity—more goods and services produced with less labor. Supply expands to meet demand.

The concern: housing inflation. Solution: pair UBI with zoning reform, housing construction, and possibly rent stabilization in expensive markets. Problem isn't UBI—it's artificial housing scarcity from restrictive zoning.

Food, clothing, electronics, services—these get cheaper as AI reduces production costs. UBI primarily redistributes existing value, not creates new money chasing same goods.

The Affordability Question

"We can't afford it!"

Actually, we can't afford NOT to implement it. Social collapse from mass unemployment costs far more:

• Civil conflicts: Estimated 10-50 million deaths without UBI, trillions in economic damage

• Healthcare costs: Stress, mental health crises, substance abuse from unemployment

• Crime: Desperate people commit crimes of survival

• Lost productivity: Millions of capable people unable to contribute

• Political instability: Extremism, authoritarianism, democratic backsliding

UBI is cheaper than managing consequences of not having it.

Moreover, AI productivity gains make this affordable for the first time. Pre-AI, UBI seemed expensive. Post-AI, productivity explosion generates revenue.

The Conservative Case for UBI

This is a progressive policy, no doubt about it, but conservatives have strong reasons to support it too.

Consider this:

• Freedom and dignity: UBI reduces government bureaucracy. No means testing, no caseworkers, no invasive monitoring. Simple, universal, respects individual choice.

• Market efficiency: Cash transfers are more efficient than in-kind benefits. Recipients can decide their needs better than bureaucrats.

• Family values: Parents can choose to stay home with children rather than being forced into the workforce. Strengthens family bonds.

• Entrepreneurship: Provides startup capital and security to take risks. More small business creation.

• Reduced crime: Economic security reduces survival-driven crime. Lower incarceration costs.

The Timeline Is Urgent

We need UBI implementation before mass unemployment, not after. Post-crisis implementation means millions suffer preventable hardship. Pre-crisis implementation creates a smooth transition.

Here's how it should look:

• 2025-2027: City and state pilots, proof of concept, gather data

• 2028-2030: National programs in progressive nations, scale gradually

• 2031-2035: Expand as unemployment rises, adjust levels based on data

• 2036+: Global coordination for developing nations

Delay would mean catastrophe. Early implementation is the way to be resilient.

What You Can Do

• Voters: Make UBI a litmus test issue. Support candidates advocating automation dividends regardless of party.

• Policy makers: Start pilots now. Build bipartisan coalitions. Frame as economic security and freedom, not welfare.

• Business leaders: Support automation taxes and sovereign wealth funds. Enlightened self-interest. Markets need consumers with money.

• Citizens: Organize, advocate, demand. Political will comes from bottom-up pressure.

We are only told that UBI is radical, but that doesn't mean it actually is. UBI is a rational response to technological transformation; an insurance policy against social collapse. It's a dividend payment from collective wealth creation.

UBI is the difference between 'AI benefits everyone' and 'AI benefits capital owners while everyone else fights for scraps.'

Choose wisely.