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One of the biggest VCs in Silicon Valley explains how basic income could fail in America


Sam Altman Y Combinator

Sam Altman is putting a lot of faith in the idea that giving people free money will make them happier and healthier, but that doesn't mean he's betting it all.

Altman is the president of Y Combinator, Silicon Valley's largest startup accelerator. He and a group of YC researchers plan to launch an experiment in Oakland, California, next year in which roughly 100 families will get $2,000 a month.

The goal is to capture data that reveals whether free money on a regular basis (known as a basic income) really does help people escape poverty and live healthier lives.

Data from underdeveloped countries, such as Kenya and Honduras, already suggests people do see those benefits.

But the US is uncharted territory for basic income. Altman, one of Silicon Valley's largest champions for basic income, acknowledges that even he has some doubts.

"I believe that when automation comes, we will have enough extra money that the math will work," he told Business Insider. In other words, when robots and artificial intelligence replace huge swaths of the American labor force, basic income could sustain the displaced workers.

"What's unclear to me," Altman continued, "is will people be net-happier or are we just so dependent on our jobs for meaning and fulfillment?"

Altman envisions a scenario in which the majority of Americans, fresh off their initial basic-income payments, become perfectly content to sit at home in their virtual-reality headsets. He questions whether that future is necessarily better than the stimulation and (modest) physical activity found in commuting to work and chatting with coworkers.

"People do form bonds with their community and their society through work," he says. "And I think it does contribute to our national cohesion."

Staunch basic-income advocates don't necessarily disagree with Altman, but they also don't share his pessimism that basic income will produce a society of couch potatoes. Many say the system would merely free people up to do different kinds of work — work they find more satisfying than the kind that pays the bills.

In other words, accountants could paint more. Lawyers could practice the drums more. Everyone with a hobby could make that their sole focus. And yes, people who like VR could use VR to their heart's desire.

How the future shakes out could come down to how Americans learn about such a system: As psychologist Daniel Kahneman once noted, "People don't choose between things, they choose between descriptions of things."

If basic income is presented as a radical style of welfare, it's likely to upset people who oppose welfare in its existing form. People who see value in work for its own sake could bristle at the idea of severing income from a work requirement.

On the other hand, if it's presented as a means to freedom from work you hate, people might see basic income as inherently more American than the existing labor structure. Citizens could finally do the work that matters most to them rather than the work that pays the best.

The future hasn't arrived yet, so it's impossible to know what kind of effects an overhaul of that scale — free money for all, no strings attached — would end up having. Until the data offers that clarity, Altman says, he'll continue experimenting with tiny versions of the future to see which look the most appealing.

SEE ALSO: Facebook's cofounder just launched a $10 million initiative with other big names to figure out whether basic income works

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