In a recent note looking at why economic measures of productivity seem to be slowing down, Citi’s chief economist Willem Buiter wrote in support of a universal basic income. One possibility is that in a world when many products have a low marginal cost but huge consumer surplus — it’s very cheap to add another photo to Instagram, for instance — only the price of the good is counted in GDP.
Buiter is worried that a growing number of workers lack the skills needed to take advantage of technological changes and that the nature of recent innovation is “more disruptive” because new innovations are less complementary to widely available skills, i.e., robotic automation is a substitute for labor, not something that helps them be more productive.
Buiter even goes so far as to recommend a universal basic income as a desirable policy measure. From the report: “Use the tax-transfer mechanism (e.g. through a guaranteed minimum income for all, or an ambitious negative income tax, public funding of health care and long-term care etc.) to support those left behind by technological advances.”