Elon Musk Wants a 'Universal High Income' for All

In Star Trek, there is a matter-energy conversion machine called a replicator that produces anything you want – food, water, and inanimate objects – and effectively eradicates scarcity. During our artificial intelligence-fueled euphoria, entrepreneurs and thought leaders like Elon Musk are optimistic that society will eventually copy the replicator and usher in a new world of abundance.

Elon Musk and the New Wealth

Today, everyone is frightened that artificial intelligence (AI) will eventually go on a job-killing spree. Businesses laying off workers keep citing new technology as the key reason, a claim some skeptics say is an excuse. Whatever the case, if our worst fears are realized and Skynet fuels mass layoffs, unemployment will be widespread. To combat this, Elon Musk wants checks for all Americans.

"Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI," Musk wrote in an April 17 post on X, adding in a follow-up message that it would not be inflationary. "AI/robotics will produce goods & services far in excess of the increase in the money supply, so there will not be inflation."

Appearing on a recent episode of The Iced Coffee Hour podcast, famous real estate broker Jason Oppenheim predicted that everyone will have the wealth to hire private chefs. "Everyone within ten to 15 years will have a Michelin star chef, a maid, babysitter, a dentist, and the best physician in the world," he said.

Is there a reason to be ebullient over AI and robotics? Absolutely. More likely than not, the new technology will emulate the dot-com boom of the late 1990s and early 2000s, which eventually manufactured a massive productivity explosion. Even Kevin Warsh, President Donald Trump’s pick to replace Jerome Powell as head of the Federal Reserve, expects a deflationary bang from AI.

At the same time, we have to consider one of the first rules of economics: scarcity.

World of Scarcity

Legendary economist Thomas Sowell famously said: “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.” However, based on what the futurists have been espousing as of late, this will soon become an antiquated principle.

While everyone jumped headfirst into AI, data centers, semiconductors, and robots, we forgot to ask a key question: Where are the parts coming from? The current administration is employing various measures to secure rare earths, metals, and other raw materials to ensure the United States remains at the forefront of the AI and robotics revolution. However, based on the prices of commodities like silver, palladium, and platinum, demand is strong, but supply is limited.

Perhaps the industry will adapt and find new, cheaper materials to manufacture robots, similar to what electric vehicles did by substituting palladium and platinum a few years ago. Until then, it will be challenging for the sector to keep up with the widely anticipated rocketing demand, making these products expensive. Still, never count out the ingenuity of the free enterprise system.

Let’s assume that Elon Musk is correct that a universal basic income will be needed, that T-1000s will manufacture goods and services beyond the money supply, and that no inflation will arise. Everyone would be extremely wealthy, as Oppenheim alluded, and the entire population could hire a maid. In this hypothetical economic climate, why would a person want to be a maid, given that she is drowning in affluence? Or would the maids not have maids of their own?

As the song goes, "We'll have a maid, who has a maid, who has a maid to serve the two maids lemonade."

Marginal utility teaches us that as the supply of goods increases, the marginal value of each additional unit diminishes. When there is an abundance, the marketplace shifts its attention to something else. Food was mankind's primary focus. When food became ubiquitous, we concentrated on medicine. And so on. Every era is a game of whack-a-mole: One problem is hammered, but another challenge pops up. Who knows what will happen in the future?

Eternal Pleasure

The population’s living standards have improved dramatically, even over the past decade. Entrepreneurship, the division of labor, and science and technology have made it possible. But if Elon Musk and his colleagues can make the entire world rich, then what is next for our species? The idea that we are going to spend our free time writing the next great American novel, producing art like Gian Lorenzo Bernini, or learning Latin is a pipedream.

Research shows that, for the most part, recipients of a universal basic income use the funds to purchase alcohol and lottery tickets, spend less time working, and report no improvement in their quality of life.

Man’s purpose is not endless decadence and hedonism; it is the chase toward an objective that brings satisfaction. A replicator will make life easier and pleasurable, but it will not generate meaning.