Presidential Candidate Andrew Yang: AI Needs Universal Basic Income

0:00Andrew Yang:If you were to ask an investor to make an investment based on something that happened 100 years ago, they'd laugh you out of the room. But then if you say, hey, what's going to happen to jobs, they'd be like, oh, 100 years ago, this happened. You'd be like, what? Like 100 years ago, you know, we didn't have smartphones, we didn't have anything. Hello, and welcome to Giant Ideas with me, Cameron McLean, and me, Tommy Stadlin. We're co-founders of Giant Ventures, which builds and backs purpose-driven companies. At Giant, we're lucky to meet extraordinary people with Giant Ideas that are changing the world.

0:28This podcast brings you behind-the-scenes access to those ideas and the inspiring stories of the people behind them. We explore how one giant idea can kickstart a billion-dollar company, shape culture, and transform life as we know it. Today on the Giant Ideas podcast, we are joined by Andrew Yang. Andrew first gained global attention running for US President in 2020, running as a political outsider with the signature policy of universal basic income, also known as UBI, where he proposed$1 ,000 per month for every adult American to offset job displacement by automation. This was years before AI was a mainstream conversation and a time when fewer people were talking about AI's impact on society and jobs.

1:11Andrew later withdrew from the race but continued to turn his ideas into action. He ran for mayor of New York City and co-founded the Forward Party, a new political party in America aiming to bridge partisan divides. Today's focus is on his new company, Noble Mobile, which wants to radically reduce the cost of mobile data for Americans and get them using their phones much less. It's an extension of the work he's done for years, looking to help Americans become more financially secure. Andrew, welcome to Giant Ideas.

1:40Andrew Yang:Thanks for having me, guys. It's a pleasure. So you're one of the strongest proponents of universal basic income. You put it front and center of your presidential campaign, and you're one of the few people who's actually run a UBI Pilot. Tell us what UBI is and what do you think of it today? The shorthand I use that people will get is it's capitalism where income doesn't start at zero. I'm 100 % certain that AI is going to replace millions of workers here in America and around the world and that the adjustment is going to be wrenching and painful and too much for many people, maybe many societies.

2:19Andrew Yang:So putting money into people's hands is going to be vital. And universal basic income is an idea that I did not come up with. It's been with us since the founding days of this country. Thomas Paine was for it. Martin Luther King Jr. was for it and was championing it when he was assassinated in the 1960s. So it's an old idea made new again, I suppose, by the fact that AI is here and getting twice as strong and smart and fast every six months or so. Well, we'd love to come back to your strong conviction that AI is going to replace that many jobs. You say that with a lot of certainty. But what did you learn from the pilot on UBI that you ran?

3:07Andrew Yang:That cash works, that people become mentally healthier, less stressed out. Domestic violence goes down. Optimism goes up for kids. Qualities like conscientiousness and agreeableness go up, which are two massive indicators of professional success and educational attainment. you had folks spending money on very positive, wholesome things. There was not a lot of, let's call it like illicit substances or some of the things that people are afraid of. And these findings have been replicated in many, many different environments around the world. I'm friendly with an organization called Give Directly that some of your listeners might be familiar with, but it's putting money in the hands of folks in the developing world and the outcomes there have been awesome and tremendous.

4:07Andrew Yang:It works here in the US. And if people look at the data, I think they'll be very impressed. And Andrew, when we talk about universal basic income, is the clue in the name? Is it truly universal? Do you think it should be something that is just a blanket, for example,$1 ,000 a month payment to everyone, or should it be means tested? I think it should be universal myself. I mean, there are different ways to fund it. That said, I like it in all of its forms. And so if you look at the population, new moms is an example. Folks who are homeless is an example. People coming out of foster care. I've seen income programs directed in all sorts of ways.

4:55Andrew Yang:But I think if you were to go society-wide, universalism is a big positive because you take out the reporting incentives where people are like, oh, I don't make that much, like, you know, because you want to get the money. you get rid of any stigma you can fund it in ways that people who don't need the money are sending money in the other direction for example through an ai tax or luxury consumption tax like yachts fine jewelry stuff like that so i'm a fan of the you and ubi one parallel idea that has gained a lot of traction in the last year or so is something Brad Gerstner, the investor at Altimeter, has been very involved in, which is the idea of giving every child in the US upside in equity, in US equities.

5:54And his view, I believe, is that people have just got way out of whack with inequality, right? And so the rich are getting richer and you've got to have everyday Americans much more bought into the US economy. And therefore you want to give them$1 ,000 invested in the US stock market over time because otherwise people feel disconnected from, I guess, democracy and the US journey. Is that version of it something you support? If not, why? Is it an alternative to UBI? How does that fit in with your idea?

6:23Andrew Yang:I love it. You know, putting money into people's hands at birth, it's great. It's going to compound for 18 years until they get a hold of it. It does make you feel like you're a stakeholder in the economy and the country. So I'm a huge fan. I think that the principles actually are quite similar. In parallel, you can see them where putting money into people's hands helps empower them, make them a participant. And if it starts at age zero, great. Yeah, and how do you think these services like UBI or what Brad's doing relate to public goods and public services? Do they replace them? Do they sit underneath them?

7:07Andrew Yang:I see them as both and. It's not like if I give you this$1 ,000 when you're born, you don't need roads. There are, at this point, layers to what people are going to benefit from. And we should be trying all sorts of innovations and seeing what works. So why isn't it happening? Well, in the U.S., it's not happening because our political system actually insulates most of our leaders from real need to solve problems. And you're seeing it show up in polarization and animus and hostility. And that stuff makes me deeply sad. I gave a TED Talk last year that tries to break this down in numbers, but the simplest way to understand what's happening in America is that the approval rate for Congress is around 17 percent, and the re-election rate for individual members of Congress is 94 percent.

8:14Andrew Yang:And the reason for that is that 90 percent of the districts are drawn to be either quite blue or quite red and are not competitive in the general election. So the way to stay in office is just to not piss off your own party, particularly the 11 percent of the more ideological that vote in that party's primary. So you have an incentive structure that ends up pulling folks to the side. and it's more about keeping your own team well-fed ideologically than solving the core problems. And I mean, obviously, the US is running a huge, huge budget deficit at the moment. How would you suggest financing UBI?

8:54Where would you pull from?

8:56Andrew Yang:Well, you probably saw recently Dario Amadei, the CEO of Anthropic, raised his hand and said, A, we're going to get rid of a lot of the entry-level white-collar jobs via AI through Anthropic and other companies. And B, you should tax us. I mean, imagine the CEO of a major AI firm just coming clean and being like, guys, you should just freaking put an AI tax because the jobs are going the way the dodo bird. And, you know, I think that our legislators should take him up on it. I mean, it's pretty obvious. Like, you know, he's not saying something that's necessarily great for him and his shareholders, but it does happen to be the truth.

9:36Andrew Yang:So I appreciated that out of Dario. And I think if you're going to produce trillions of dollars in new value, there are ways for that value to flow through people's hands. It's interesting you bring up the Dario example. one of the other leaders of one of the other even larger USAI companies who we had on the show off the record said to us, look, the wealth creation that AI is going to create is going to make, you know, the social media guys look like pygmies and you're going to have to tax us AI giants 80, 90 % to try and capture some of those dollars because it is also going to have huge impacts on employment.

10:16So let's talk about that, which, you know, is clearly one of the big drivers why you would need something like the UBI. So I guess, are you convinced that we're going to see very, very large scale unemployment in the US and Europe? And if so, like how big is large scale and what kind of timeframe do you think we're working on for that to happen?

10:34Andrew Yang:I'll just use Dario's numbers. Like Dario thinks half of entry-level white collar jobs are going to go away in the next three to five years. And that would spike US unemployment to 10 % plus. So let's just take that as a baseline. I think he's right. And how do people take that set of affairs? Very, very poorly. You know, like if you spend four years getting a college degree and you have tons of debt, and then you're doing a job at your local cafe or dog walking or whatever the non-college degree requiring job you're occupying, you're probably pretty frustrated and angry. And then you apply that at scale.

11:26Andrew Yang:I mean, to get a little bit political with you all, one of the preconditions for revolution in a country is something called elite oversupply, which is that there are too many folks who kind of have elevated expectations relative to the opportunities. and I think that's a state of affairs that will be very much real in the US and other western countries. So I think it's really interesting you know most a lot of people will respond to the idea that this new wave of technology is going to destroy jobs and say well we've been here before every time there's a transformative technology industrial revolution printing press you know you name it cars people always say that it's going to take away jobs and then actually the new technology enables humans to do bigger and better things and jobs don't go away.

12:17But I think actually, if you really drill into it, what tends to happen in those big sort of industrial revolutions and changes is that the transition period gets very, very messy. You have things like revolutions, political revolutions. You have really, really bad periods for working people. And those were with technologies which weren't as transformative as AI is, right? And AI is, if it works to the extent people think it's going to work, is going to be much more disruptive than those technologies. Do you feel that people are badly underestimating what is about to happen to employment?

12:47Andrew Yang:Yeah, for sure. You know, we've never had AI come online before. We've never had it affect so many industries at the same time. And to the illustration you drew, things got very, very messy and hairy and unruly and even violent during the Industrial Revolution, where in the U.S. we have a holiday called Labor Day. And Labor Day was inaugurated because of riots where people were killed in a set of railway strikes. And so a holiday for labor was born. And so people are like, oh, it's going to be like that. It's like, well, last time included violent riots. So you're saying violent riots? You know, it's, I mean, people, I find this line of argumentation to be eminently ridiculous, honestly, because if you were to ask an investor to make an investment based on something that happened 100 years ago, they'd laugh you out of the room.

13:56Andrew Yang:But then if you say, hey, what's going to happen to jobs? They'd be like, oh, 100 years ago, this happened. You'd be like, what? Like 100 years ago, you know, we didn't have smartphones, didn't have anything. Like, like, what are you talking about? It's just so intellectually lazy that in one area, they would completely dismiss reference point as woefully out of date and stupid. And then in another context, they'd be like, oh, yeah, let's draw upon that experience because they're not even digging into what happened 100 years ago. As you can tell, it frustrates me to no end. It's just really it's just really self-serving and lazy.

14:33yeah i think that's a fair point because the companies of today the ai companies look nothing like the companies of those days either so yeah it's a false analogy what are all these people going to be doing then so that's the other big question is you get let's say ubi happens and what are all the people who are no longer employed because of ai who are given ubi how do they spend their time are they doing things like wikipedia where you know is a great experiment in people voluntarily working on a public good in a creative way is it exciting kind of intellectual pursuits like that? Are they just chilling?

15:06What's your experience on the experiments that you ran, A, and then B, if you sort of look forward to rolling this out across the US, what will it allow people to do with their time? What do you hope it will expect it will allow people to do with their time?

15:20Andrew Yang:Well, I want to be realistic. So first, let me say, like, here's what you hope. What you hope is that people start businesses, people establish creative endeavors, people get together and build what their community needs, that there's all sorts of generative, wholesome dynamism that occurs. And some of that will definitely happen. On the flip side, you know, like starting a business might not be in the cards for a majority of people. A lot of people want to show up and have a job or a job like position for themselves. And I'm someone, one of the biggest misconceptions about me and universal basic income is that I think that people benefit from having structure, community, purpose, training, like all these things that jobs provide.

16:16And the ideal situation is that we create a vibrant environment where people are kicking

16:27Andrew Yang:off new projects and other people are showing up and then taking jobs because there's so much new business formation or charitable organization growth in a given community. But I don't think that money magically gets you there. I think that you want to have other mechanisms in place to bolster health and wellness, caring and nurturing, arts and creativity, growth, innovation, all of the above. I think that the challenge is enormous. It's something that I call the human-centered economy. And if you have an economy focused on capital efficiency in an age of AI, this is not a whole lot for a lot of people to do, just being very, very honest.

17:19Andrew Yang:And so what you need to do then is say, okay, like, well, what do people want to do? What do we need more of in these communities? And then energize that, whether it's by traditional means, or having like these new measurements actually show up in your output. And so that to me was like the major opportunity is imagine if you had in the U.S. as an example, you say, look, we're going to reward organizations that make our kids smarter or healthier. Right now that doesn't exist in the U.S. Like if I make kids smarter and healthier, maybe I can find a way for certain families to pay me. but generally speaking, and this, by the way, it goes back to our earlier question about like, why isn't this happening in the US?

18:15Andrew Yang:It's like the US is spending a lot of money on things that are not necessarily delivering. And so if you can actually make it so that entrepreneurs get rewarded for delivering, then you have a real chance. I love that, but that sounds like almost, yeah, a total refounding of how we ascribe value in the capitalist system, definitely in America. That is exactly right. To the extent that I've got a massive idea, you can tell I'm pumped about it. This is our only way out of this mess. If you insist on saying, look, we're just going to make it GDP as the measurement, it's like we lose. Because AI is just going to be much, much better at producing gross economic output.

18:59But then if you change the measurement to something around like human flourishing, then like, hey, like, how do you measure that?

19:06Andrew Yang:And then you have to start thinking. It gets much more modern. Do you think America will lead the way on that? Or maybe it's more likely a European country might lead the way? Well, shoot. I mean, you know, like I was trying to speed us up in the most dramatic way I could think of, which was to run for president. But right now, if you ask me which country is going to be at the forefront, I mean, I certainly hope it's the US because I'm here. But I would very much take it if you were to point to like some European country that would get its act together faster. I guess that, I mean, I'm, I'm, I'm with you.

19:48I'm, I, I think this is where the world needs to head, but I guess the counter argument would be when we've tried to ascribe value that sits outside the dollar and kind of financial value creation, whether it's been ESG or other, other metrics, it's, it's quickly become, you know, subjective and therefore run into challenges. So I guess we'd really have to think how we would measure value, right? Because I mean, part of it has to come down to, or we just take the view, hey, we all kind of know what value looks like as humans. If it's directionally correct and people don't need to make money, people are going to feel good about it.

20:20Other people will see them and they'll feel good about how the people have seen them. That's all fine. Or I could take the other view and say, no, we need to figure out how to measure value in a way that's not financial, but that can lead us down tricky paths, I guess.

20:33Andrew Yang:Yeah, yeah. I love this line of questioning. And to me, we should do the best we can at these measurements so that you can point to them and be like, sure. I mean, one thing that's obvious, it's just lifespan or like quality adjusted life years. You know, like if I can make, for example, like, you know, millions of Americans, uh, healthier in a particular decade of life, I should be a billionaire.

21:09Andrew Yang:Like, and those are measurements that I think a lot of people would accept. Um, so you, you want to, you want to do the best you can, um, because it, it is subject to, um, perverse incentives, just like anything else. But you can't not try based upon it being tricky because if you don't try, we're fucked, just being very honest about it. You're a very credible person to push this line of argument because you are a formal entrepreneur. You are an entrepreneur, right? So you understand the profit motive. You understand value creation. You understand how powerful a force that can be and has been for America and for the world and for capitalism.

21:49but you know maybe we're on the we're on the precipice of a new dawn and uh it's worth it's worth pushing that line of thinking and and seeing where it leads us yeah thank you uh you guys are

22:03Andrew Yang:savvy and get it i mean um i actually as i'll tell you this you know insider baseball type thing but i was on a national news broadcast and uh the anchor and i were having a conversation about this topic. Everyone knows AI is going to come and disrupt the work opportunities. And then he said, how are we going to build this new economy? And I described where we have to go. And then he said, I'm not smart enough to even attempt that sort of endeavor. Like, I don't have the ego either. And then I said to him, it's like, well, that's just the difference between you and me. i love that that's fantastic i won't name it but we had an entrepreneur one of our events um and he said uh something similar which was uh some people people will tell you it's impossible and you should think it might be for you and i thought well i will say this anchor did get a good laugh he's like okay yeah i could see that i could see why you know and he you know he appreciated it andrew um let's go back a little bit to u.s politics.

23:10You talked about that TED talk you gave, which I think is one of the most popular of all time, why US politics is dead and how to fix it. Very briefly, why is US politics dead and how are we going to fix it?

23:23Andrew Yang:US politics is broken because the incentives are askew and the way to fix it is just to fix the incentives, which is not easy, but can be done. The way to fix the incentives is to move to non-partisan open primaries coupled with instant runoff or ranked choice voting. And then you would have proper incentives where if you could get the sane majority on board, then you win, as opposed to right now, you get the extreme ideological minority. And in the U.S., all of these mechanisms are run at the state level. so you would have to change the way the primaries work in let's call it six to eight u.s states which is feasible if you spent a couple hundred million dollars um so that that was the case i made and i'm happy to say people are yet working on it interesting it's sort of like uh the equivalent of regulatory capture in politics political capture in a way they sort of cornered the system yeah and this also does aggravate me where everyone can see in the u.s it's not working and people are frustrated about it.

24:36Andrew Yang:But if you point out, it's like, you know why it's not working? It's like that state's set up over there and we should do something about that. It's like, yeah, yeah, yeah, but shouldn't we just be mad at the other side? It's like, didn't you just tell me that this stuff's not working? Like Americans, for the most part, let's just say they enjoy sports and politics has become this blood sport and they're more eager to participate in the blood sport than they are to go to the refs and be like, yo, this game is rigged. This game is not rigged in terms of your winning or losing, though it is that too.

25:17Andrew Yang:But it's like the purpose of this game is theoretically for us to get good policy and elect leaders we're excited about and it's not doing those things. So it's kind of interesting, guys, because I'm the child of immigrants here in the U.S. My parents immigrated here from Taiwan. My dad's a physicist. My mom is a statistician. And so that's like the lens I have to American politics. Like, oh, you guys, this system is really badly designed and the setup's stupid. And it's going to give us stupider and stupider results. And I'm happy to say there are more and more people wising up, being like, oh, yeah, that is right.