The Great American Share
Sam Altman wants to shift the U.S. economy to universal basic income. There’s one problem. Giving away free money is more complicated than anyone thought.
“We all have quite limited time on this earth,” Sam Altman says, “I hate seeing it wasted.” We’re sitting with Altman in Spectacle HQ where he’s perched on a chair and briefing us on his latest side project: a semi-secret experiment with universal basic income. Altman believes the key to unlocking human potential—and keeping America competitive in the world—lies in giving every citizen a regular allotment of money to cover basics like housing, food, and shelter.
Unlocking human potential has more or less been Altman’s day job since 2014 when he assumed the presidency of Y Combinator, the Silicon Valley start-up accelerator famous for churning out companies like Reddit, Dropbox, and Airbnb. During his stewardship YC has ventured into less surefire investments including artificial intelligence, nuclear power, and supersonic air travel. One bet already paid off—a self-driving car company called Cruise Automation was acquired by GM for $1 billion.
But in countless ways it’s much harder to convince lawmakers and politicians to give every person in the country cash gratis than it is to guide a start-up to a nine-figure valuation. For his part, Altman doesn’t seem very worried. Exuding an almost infectious energy for solving difficult problems, he admits that while basic income “might help people figure out whatever they want to do in life” it also has the potential to “be very dystopic and maybe it won’t work like we think.”
Spectacle: So the idea is that basic income is an answer. But what’s the question that it’s trying to answer?
Sam Altman: The question I’m interested in: How do we unlock maximum human potential? I think resources are distributed incredibly unequally around world. Obviously, there are a lot of people who could do great things that would benefit all of us. Create art, start companies and yet they can’t. I think 50 years from now it will look pretty ridiculous that we motivated people by fear of not being able to eat, not having a place to sleep, to work in jobs they hate for bosses they hate, or not do what they really wanted.
I think YC was an example that I saw firsthand of something like a basic income that allowed people to pursue what they wanted to pursue. Airbnb and Reddit would not exist had they not gotten basic income from YC.
“What I would propose is a model like a company where you get a share in U.S. Inc. And then, instead of getting a fixed fee, you get a percentage of the GDP every year.”
One thing I didn’t realize at the time, but now I do looking back, is that Y Combinator itself is very much like a basic income. When I went through YC, $12,000 got invested in my company. We used that to live on. Buy some servers, do some projects, but mostly to live on. And everybody else got that as well. Some people totally fail. But some people create companies that they never otherwise would’ve been able to start.
Spectacle: That’s such a good viewpoint of Y Combinator. It’s basic income but provided for three to six months. I think a lot of people get worried that when we give it to everybody, the money goes to waste.
Sam: If a million people waste the money and one person goes on to create the next Apple, that’s okay.
One of the things that people forget is that if the robots really do come, yes, they will eliminate or change a lot of jobs, but the cost of goods and services will just go down and down and down. As much as people complain about work, we seem wired to get value out of it, or at least some of us do.
Spectacle: That’s a huge part of being human. You have to have a sense of purpose.
Sam: A lot of people are unhappy and feel like they don’t have a purpose, and unemployment is four percent. So I don’t think jobs in the way we traditionally think of it are the answer—otherwise people would be a lot happier than they are. The definition of work always changes. You know, for the last 100 years the rate of job elimination by technology has been remarkably consistent—around 50 percent of jobs every 75 years change. And the things that we do now that we call work? A subsistence farmer from a few thousand years ago would laugh at us.
Spectacle: There’s a huge branding problem—especially in the U.S.—of people who will basically say, “These are handouts.”
Sam: “This is socialism…”
Spectacle: Yeah, how do you change their minds?
Sam: What I would propose is a model like a company where you get a share in U.S. Inc. And then, instead of getting a fixed fee, you get a percentage of the GDP every year. As the whole country does better, you do better. I think that is how you align everybody. That message you can get a lot of people behind, even people who traditionally hate welfare, hate socialism.
Spectacle: Profit sharing in the United States?
Sam: Some version of that.
“And I think fights for rights always look obvious in retrospect and very difficult when you’re looking forward to them.”
Spectacle: You guys are running a basic income experiment in Oakland now, right?
Sam: We’re still in our pilot. It turns out that giving money to people is much harder than you might imagine. We’ve had to work with state, local, federal governments so that people in our study don’t lose their housing eligibility, lose their food assistance just because we’re giving them money and raising their income level. And what we don’t want is to make anyone worse off.
Spectacle: What is the size of the pilot? What do the people get?
Sam: It’s just a few dozen [households] and they get different amounts ranging between $1,000 and $2,000 per month.
Spectacle: How did you guys select the people?
Sam: Random. Clinical, random controlled trial. Some computer program picked them in certain neighborhoods.
Spectacle: Are there some people that didn’t accept?
Sam: No one didn’t accept, as far as I know.
Spectacle: Have you met any of the people?
Sam: I haven’t. I am trying to stay—
Spectacle: Far away?
Sam: Yeah, because I clearly have a bias toward thinking this is a good idea and I don’t want to bias our results because I will accept the data if it’s not.
Spectacle: What do you guys use as a control?
Sam: So for the pilot, we don’t have a control group. For the main study, we’ll have a control group of, I think, 2,000 people.
Spectacle: So there would have to be people who basically volunteer to give information but would never receive any money. That’s tricky.
Sam: You know, it is tricky, although not as tricky as I thought. One of the things that surprised me is a bunch of people have guessed my email address and emailed me saying, “I heard that you’re doing this. I’ll be in the control group just because I think this is important. I don’t need any compensation, I just believe in this idea, and I want to be part of the study.”
Spectacle: In America, there’s a level of ambition that you’re not going to be able to squelch. “This is where I started but I always want more. I imagine myself as the kind of person that could do better or could be something much greater.”
Sam: You know, one question policy makers ask me a lot is, there’s four times as many people in China as the U.S. What hope does the U.S. possibly have to stay as the dominant force in the world economy? And there is a belief, maybe it’s right, maybe it’s wrong—I kind of think it’s right—that something about Americanism is special. I think that there is something about American culture where people will keep wanting more.
And sure, a lot of people will do nothing with this, but enough people will use it to create more innovation and economic value. That actually is the answer to how we stay ahead of China—or whoever comes after China—is radically more economically inclusive to generate more U.S. GDP.
Spectacle: There’s a generation—our parents and older—where a lot of their self-worth is tied to [their careers]. “I did a job. I did it well. I provided for my family.” Millennials and younger have a very different value.
“We’re going to have very powerful neuro AI that does a lot of tasks better. And I think where all of the alternatives to basic income fall down is dealing with what happens if the robots really do come.”
Sam: Well, it worked for our grandparents and it doesn’t look like it’s going to work for most millennials, and I think it may just be that simple.
Spectacle: They’re realizing, “I don’t need another car. I don’t need to own a house. There’s a certain experiential value I want get out of my life and a sort of different level of fulfillment.”
Sam: The millennials looked around and said, “Damn, I’ve got $200,000 of student debt. I have no job prospects that are gonna let me afford a house, or a car, or three trips a year to Europe. I better decide to shoot for something else.”
Spectacle: I think the definition of what it takes to be happy is changing.
Sam: Yeah, look, the McMansion in the suburbs turned out not to make people happy, for the most part. I’m sure some people love it.
Spectacle: Marriages change in terms of how people think of it, the way people think about relationships. And so could the relationship to work completely change this over time?
Sam: Humans have what seems to be deep-seated desire to relatively outperform other people, it’s good that people can win the game in different ways. We think it’s ridiculous that our parents, or friends of our parents, want McMansions. They think it’s ridiculous that we care about how many likes our Facebook photos get. Academics think it’s ridiculous that Wall Street traders get the amount of money they make, Wall Street traders think it’s ridiculous that academics care about how often their papers are cited. But people find their own things to compete and differentiate on. And it doesn’t all have to be the same game.
Spectacle: Is there anything else that competes with basic income?
Sam: There are a lot of other ideas. They all interfere and distort more. I don’t think the earned income tax credit is a bad idea, but I do object to the idea of incentivizing work for its own sake. I think that is value of two generations ago. There’s a bunch of ideas where you give people economic incentive to go to school, or to teach, or to caretake. But I expect that we are going to get true AI built in the next couple of decades, three at the outside. And sooner than that, we’re going to have very powerful neuro AI that does a lot of tasks better. And I think where all of the alternatives to basic income fall down is dealing with what happens if the robots really do come.
Spectacle: Some people even argue there’s a version of basic income that already exists—it just happens in other countries. Germany might be a good example. You can go without work and go on unemployment. It’s set up for you so that if you fall down, you don’t end up becoming homeless, you don’t end up going hungry until you get a job.
Sam: Yeah, a lot of Europe has that.
Spectacle: There’s a word in Swedish, it’s called “lagom,” and it means, “Not having too much, not having too little. Having just the right amount.”
Sam: You know, interesting thing is there are words or there are phrases in most other cultures and languages for this concept, and it does not exist, as far as I can tell, in –
Spectacle: I think the closest term we have to it is, “being content.”
Sam: I was actually going to say that in Australia, for example, it’s called tall poppy syndrome. You know, if you’re too tall of a poppy, you get chopped down. But this idea that it’s bad to outperform. The closest American equivalent I know of, although only like grandparents say it, is “too big for your britches.” But even that’s fallen into disuse. And there isn’t really like a slur for being too ambitious in America. And in most other languages, or even other English-speaking countries, there is something for that. You know, sometimes it’s positive like, “Being content with what you have, not wanting too much.” Some cases it’s negative. But that’s just not part of Americanism.
Spectacle: There are several other basic income experiments being done. Finland is one that we sort of talked about. What have you guys learned, or what have you been watching in those other experiments that caused you to change or alter things?
Sam: Context really matters so I expect basic income in Finland to be really different from basic income in the U.S. You probably know this word, I don’t even want to try to pronounce it, but it’s spelled like H-Y-G-G-E. You know that word?
Spectacle: No, not familiar.
Sam: It’s pronounced roughly like “hue-gah” I think. But it’s this idea of comfortable, content moments in everyday life. And so even if the sun is not coming up for weeks on end, you know, you light a candle and have some tea with close family around this table with nice wood, and that’s the super important thing to have. I was talking to a Fin recently about the basic income. And there’s some country where it was, like, referendum. It got totally crushed a year, two years ago, maybe it was Sweden. I don’t remember. But there is some country from that part of the world that was also trying to pass basic income. And there, the answer was like, “Well, everyone will just do more hygge.” And that’d be great. And maybe that is what would happen. In the U.S. no one says that. People are like, “Well, people will either do drugs and play video games. Or they will try to create new value, art, companies.”
Spectacle: But I don’t think the answer is ever one or the other.
Sam: I totally agree. People think about it so differently in different contexts. I think there really is a generation shift happening there.
“And sure, a lot of people will do nothing with this, but enough people will use it to create more innovation and economic value. That actually is the answer to how we stay ahead of China—or whoever comes after China.”
Spectacle: Basic income could be just a form of rights that people need to understand is a necessity for a much better society.
Sam: I think every big change to the social contract throughout history is always really hard because people are conservative and they like what they’ve known, and they’re static, and big change is scary. And I think fights for rights always look obvious in retrospect and very difficult when you’re looking forward to them.
Spectacle: Ultimately maybe it’s not going be such a hard sell. You’re trying to sell free money. Once people have it, they’re going to say, “how did I ever live without this?”
Sam: “You’re never taking that away from me.”
Spectacle: Could we have smaller transitions. It doesn’t have to be a city; we could do it in rural areas.
Sam: Totally. I think starting it gradually, that’s kind of what we’re doing. You know, kids all believe in basic income. When kids ask their parents like, “Why does that homeless person not have a place to sleep, or not have food?” It seems fundamentally wrong. We kind of unlearn it at some point. But I do think there’s just somewhat of a generational shift that’s going to happen here, and it’s going be a big fight, and people are going to get really mad and talk about, you know, the end of America.
Spectacle: People have been talking about the end of America since America’s start.
Sam: I think there is a sense of something lost. We’re kind of the last children of the American Century. We grew up in this cultural context of believing that America was going to dominate the world for ever and ever, and that was so obvious it wasn’t even worth discussing. That breeds American exceptionalism and optimism for the future. If you are growing up today, that doesn’t seem obviously true. And that is a huge mindset shift. The fact that most people in their 20s don’t think their lives are going to be better than their parents’, that’s a huge shift. That’s a really different, new thing and I think quite bad.
Spectacle: But it also depends on how we define “better.”
Sam: Totally. I mean, one way to solve the problem is always to reframe it.
Spectacle: Yeah, I think that’s the version of hygge where everyone’s like, “You get to be content.”
Sam: And live your life how you want.
Spectacle: Right. It doesn’t take away your ambition.
Sam: You get, you know, 90 years…100 years. You should live them in the best way you can. And if that to you is to sit around, make tea, and light candles, great. If that is to go and try to create the next Apple, that’s great too.