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Free stimulus checks every month? Tech execs think so, but there might be a catch

The idea has percolated inside Silicon Valley for years, but it hadn’t gained much traction, particularly in the halls of power. Then, the coronavirus pandemic hit.
Sam Altman, Andrew Yang and Chris Hughes.
Sam Altman, Andrew Yang and Chris Hughes.Getty Images

Few ideas bring together the tech industry’s titans like a universal basic income.

Facebook co-founder Mark Zuckerberg says it would give people the “freedom to fail.” Tesla CEO Elon Musk says workers would have more time for leisure and learning. Twitter CEO Jack Dorsey says it would relieve pain in the world.

Chris Hughes, a co-founder of Facebook, who was Zuckerberg’s college roommate, and Social Capital CEO Chamath Palihapitiya are vocal advocates on television and in newspaper op-eds. Slack CEO Stewart Butterfield is a fan, and so is the world’s richest person, Amazon CEO Jeff Bezos, though his support has been limited to remarks at a conference. Open AI CEO Sam Altman, the former president of the venture capital firm and startup incubator Y Combinator, has been an active supporter.

The idea has percolated inside Silicon Valley for years, but it hadn’t gained much traction, particularly in the halls of power. Then, the coronavirus pandemic hit.

Now, the virus has brought new supporters to what was previously a fringe idea. Last month, the Department of the Treasury began to send $1,200 checks to about 80 million people. Another round of checks may be on the way. Lawmakers including Sen. Kamala Harris, D-Calif., have called for checks to continue until the economic crisis abates. House Speaker Nancy Pelosi, D-Calif., said a permanent guaranteed income may be worthy of attention.

The fact that some politicians are warming to it is in part a testament to how the elite of Silicon Valley have been able to change the conversation and prepare for a moment, like a pandemic, when others would be willing to listen.

“Our current environment opens up the policy horizon for a whole set of ideas that might have been niche,” said Margaret O’Mara, a historian at the University of Washington and author of the book “The Code: Silicon Valley and the Remaking of America.”

But it’s also something that comes while scrutiny of Silicon Valley and its ideas remains heightened. And while universal basic income has its supporters, there are plenty of people who worry it falls into some of the same pitfalls as other one-size-fits-all solutions.

“It is a nice tidy solution to very thorny problems,” O’Mara said. “It’s also this solution that avoids having to grapple with bigger problems.”

The idea is far older than the modern tech industry. Earlier advocates included Martin Luther King Jr. and President Richard Nixon, though they came to it for very different reasons. Essayist Thomas Paine pushed a version of it in the 18th century.

What has motivated tech figures to get behind the idea and nurture it for years isn’t so straightforward as responding to a crisis, and supporters sometimes disagree on their reasons.

Andrew Yang, an entrepreneur and former tech executive, who built his Democratic presidential campaign around $1,000 monthly checks, has talked up the consequences of artificial intelligence and robotic automation that he said will eliminate many jobs in the coming years. Like Dorsey and Musk, he has said monthly checks would help with the transition.

Dorsey, an avid meditator who’s publicly documenting his philanthropy via a Google spreadsheet, adds a spiritual component.

“I live by the principle of: everything is connected, so if someone is in pain, I’m in pain ultimately over time, and I want to make sure that I’m doing whatever I can in my lifetime to help that,” Dorsey said on a recent episode of Yang’s podcast.

Hughes, the Facebook co-founder, said he doesn’t fear the robots quite as others do. “I have never been on the end-of-work train,” he said, though he added that he and Yang are working on the same idea and keep in touch. (Hughes’ connection to tech is somewhat tenuous. Though he helped Zuckerberg start Facebook, he’s not an engineer, and he left the company in 2007.)

Hughes said he supports guaranteed income because inequality has shaken his faith in the existing economic order. And he said his own wealth reflects that.

“I am very proud of the work that I did at Facebook and I’m also the first to say that the economic reward that I got from the experience was incommensurate with the work that I put in, to put it lightly,” he said.

He was at Facebook for only a few years, including during college, and at one point was worth $700 million, according to Forbes.

“People kept calling it lucky, and that’s one way of looking at it, I guess, but it felt like to me that the system is designed that way,” he said. “It calls into question the whole idea that hard work leads to security and success.”

Some critics wonder if universal basic income could add to those same critiques. Steve Smith, a spokesman for the California Labor Federation, an umbrella group for labor unions, said the idea of giving everyone the same support could open the door to gutting services that lower-income people rely on.

“UBI has become the go-to for these tech billionaires who say, ‘Oh, don’t worry about automation, because everyone’s going to get a check in the mail,’” Smith said.

The labor movement is deeply skeptical of guaranteed income proposals, he said, because politicians might use them as an excuse to cut other safety net programs, impose regressive taxes or avoid dealing with other issues.

In other words, are tech executives, who are the objects of so much recent mistrust, the right people to be trusted to solve income inequality?

Dorsey, a billionaire CEO of two companies, Twitter and Square, isn’t all that different from Smith in how he describes his support for the idea: that it would give people peace of mind and enough money to eat while they’re between jobs.

Square sells software and electronic checkout registers that somewhat directly aim to replace human cashiers. “We serve sellers, and their employees are cashiers, and we can see the writing on the wall,” he said on Yang’s podcast this month.

“It doesn’t mean that they don’t work. It means that they have a floor with which to build,” Dorsey said, addressing a complaint common among conservatives that people getting a check might not bother getting a job.

One way Silicon Valley is trying to make a guaranteed income a reality is by doing what an engineer might: testing it, and showing it can work. But that hasn’t always gone according to plan, and starting a social welfare system can be harder than it looks.

Startup incubator Y Combinator has for years tried to launch a large-scale demonstration through its nonprofit research arm. After initial delays with a small pilot program in Oakland, California — caused when participants faced the possible loss of existing benefits — the demonstration was supposed to kick off in 2019.

A year later, researchers are still in the enrollment phase and looking for participants, Elizabeth Rhodes, the project’s research director, said in an email. It’s not clear where they are recruiting, and no one was available for an interview, she said.

A different experiment in Stockton, California, is further along and especially timely during the pandemic as a source of food money. Hughes, through an advocacy group he co-chairs, the Economic Security Project, provided $1 million to launch it. Others who chipped in included the Future Justice Fund, a charity run by Instagram co-founder Mike Krieger and his wife, the philanthropist Kaitlyn Krieger, and Andrew McCollum, another Facebook co-founder.

And Dorsey has upped his giving, sending $5 million to Yang’s organization that will be turned into $250 grants and $10 million to another large-scale demonstration, Project 100, tied directly to the coronavirus pandemic. The latter effort has also received support from Google’s philanthropic arm and from Good Ventures, started by Facebook co-founder Dustin Moskovitz and his wife, Cari Tuna.

It’s not clear if such projects will move the political needle in Washington, where at least this year any proposal for more monthly checks faces a big hurdle among Senate Republicans. The probable Democratic presidential nominee Joe Biden hasn’t embraced the idea, either.

But while the idea’s appeal was once maybe tied to the Silicon Valley ethos, the public’s view of regular checks may be changing.

“There are tens of millions of Americans who just need to make rent and pay grocery bills,” Hughes said. “The idea that a single check from the previous stimulus is going to be able to cover a crisis that’s now entering its third month, it’s just not reasonable. There’s a much more basic cry for financial support.”