'Fund it, not run it': big tech's universal basic income project has its skeptics

The Black Panther party began experimenting with “survival programs” in its hometown of Oakland, California, nearly 50 years ago. Programs like Free Breakfast for Children side-stepped government bureaucracy and directly provided people with food, clothing, healthcare and schooling.

Fast forward to 2016, and the wealthy capitalists behind Y Combinator could not be more different than the Marxist-Leninist black revolutionaries. But on 31 May, Silicon Valley’s premier startup incubator announced a project that in some ways recalls the radical experiments of the 1960s and 70s.

Y Combinator plans to pilot a universal basic income (UBI) study in Oakland, giving up to 100 individuals “an amount [of money] that is sufficient to meet basic needs” for six months to a year. In theory, a universal basic income is a system whereby the government provides every individual – no matter how rich or poor – with enough income to survive, no strings attached.

“We want to be able to see what people will do when they have a baseline of safety,” said Elizabeth Rhodes, the newly hired research director for Y Combinator’s Basic Income Project. “When you have a little more freedom and you have more security, what opportunities does that create?”

Interest in the universal basic income – an idea that has been kicking around left- and right-wing academic circles for decades – has surged in recent years. Silicon Valley’s tech industry elite – with their libertarian leanings and eyes on a fully automated, jobless future – have been particularly enamored with the idea, and plans for government-run trials are in the works in several European countries and Ontario, Canada.

But not everyone is enthralled with the idea of big tech leveraging its wealth to experiment on people in Oakland. While the city’s mayor, Libby Schaaf, tweeted her enthusiasm for the pilot project, Dawn Phillips of Causa Justa Just Cause, a housing and workers’ rights organization in Oakland, expressed concerns about Y Combinator’s leadership.

“We agree strongly with the idea of a universal basic wage,” said Phillips, citing the many types of work – such as childcare and domestic work – that are traditionally unpaid. But, he added: “The way in which we achieve social and economic change matters. If any entity is interested in doing something like this, it has to be done with the leadership of low-wage workers and low-wage worker organizations – people who are most in touch with the needs [of the community].”

“They should fund it,” he said of Y Combinator. “They should not run it.”

The disconnect between a community organization with deep roots in Oakland and a tech incubator with deep pockets – both of whom support the UBI – is not particularly surprising for a concept that has long united strange bedfellows. Libertarians and right-wingers often look to the UBI as a means to spur entrepreneurship and reduce social welfare programs, while leftists see the UBI as a way to achieve social justice and release people from their dependence on waged labor.

In a democracy, one might expect those competing visions to be debated in the open, but in the US, where expanding the social safety net is a political non-starter (22 states turned down federal funding to provide healthcare to poor people, but there are plans for government-run trials Europe and Ontario, Canada), believers in the UBI are looking to privately funded experiments to advance their cause.

“We are just taking money from the YC organization and putting it into the YC nonprofit,” Matt Krisiloff, a Y Combinator staffer working on the basic income project, explained, adding that it may raise funds from outside sources later on.

Y Combinator seems aware of the fact that some Oaklanders will treat with suspicion techies bearing gifts. The influx of tech money into Oakland may have benefited some, but many longtime residents are facing displacement as the cost of living soars. Phillips called Oakland the “epicenter of a national gentrification epidemic”.

“We are not just going to go in and do this,” said Krisiloff. “We are partnering with community groups. I think it’s going to be very much a collaborative effort to protect individuals and communities.” (Krisiloff would not disclose the names of any community groups YC is working with.)

The Oakland experiment will not actually produce any usable data, Rhodes said. Instead, the pilot will be used as a trial run to figure out the logistics of the experiment, from sampling to data collection. Ultimately, Y Combinator wants to collect “holistic” data on its subjects’ “subjective well being,” including happiness and satisfaction, as well as their financial health, over the course of five years.

Y Combinator has not yet announced whether the five-year study will also take place in Oakland, but the incubator has touted the city’s “great social and economic diversity” and “concentrated wealth and considerable inequality” as reasons why it makes a perfect petri dish for social experimentation.

Rob Reich, a Stanford professor who specializes on the ethics of philanthropy, said that he did not see “any deep ethical problems” with Y Combinator’s plans for Oakland, especially because the income is unconditioned: Y Combinator will not be telling participants how to spend their money.

“Oakland is a city that lots of people have experimented on with their latest and greatest ideas,” Reich said. “I could understand if the city is tired of being a laboratory for the ideas of wealthy people, but I think that UBI – in part because it’s so non-paternalistic – deserves a more sympathetic reception than” – for example – “a school reform program.”

For Y Combinator, the project is a way to make a difference.

“None of us are really interested in just making a bunch of money and riding into the sunset. We’re very interested in things that can make an impact,” said Krisiloff. “It’s pretty pure in intent.”

Reich, who is critical of tech philanthropy that claims to want to “improve the world,” is not buying it, suggesting that the tech industry’s interest in UBI is a play to “get out in front of the political blowback that may come when technological innovation wipes away so many jobs that people are left without a way to earn a living wage.”

“That’s not to say it’s a bad idea,” he said. “That’s just to say that it’s not uninterested.”

In Oakland, in 2016, there’s no such thing as a free lunch.