Following the annual theme "What the World Needs Now," Burda's innovation conference is launching a new online format in February with prominent speakers.
Dominik Wichmann, DLD managing director and Xing Insider for Digital Future Topics, speaks to Albert Wenger, one of the world’s most successful venture capitalists, about the future of work and the need for an unconditional basic income.
A slightly amended version of their interview at the DLD conference in Munich.
Mr Wenger, why does the future of work interest you as a venture capitalist?
Albert Wenger: A few hours ago, I heard about some contract review software. The software identifies anything in a contract that is incorrect and automatically provides a revised version. And all without a lawyer. Any profit generated by this company goes to the owner. For someone like me, this is naturally very interesting. On the other hand, we need to be clear that this company will have very few employees, or maybe none at all. Sounds a bit scary, doesn’t it?
It definitely doesn’t sound great for lawyers. This deep sense of unease, of dehumanisation, is affecting our working world as a whole.
That’s how it goes! This particular example is about lawyers, but in principle it affects us all. We know that, today, work is how most people finance their lifestyles and how many define themselves. But we also know that to provide us all with food, only 4% of the world’s population needs to work in agriculture. Why? Because, in the past, we used innovations. Because at some point someone decided to invest in new devices and tractor companies to produce more food in a shorter time with fewer workers. So automation is not a new phenomenon. And it’s good for us! But now we need to establish how our society can benefit more greatly from current innovations such as artificial intelligence in robots.
A young Italian entrepreneur called Federico Pistono has published an interesting book called “Robots will steal your job, but that’s OK: how to survive the economic collapse and be happy”. He writes: “Tell me something that you think robots cannot do, and I will tell you a time frame in which they can actually do it.” Is automation really that predictable?
No, we can’t predict the future. Niels Bohr says: “Prediction is very difficult, especially about the future.” It’s important to understand that people started thinking a long time ago about how to involve machines and computers in the working world. When I began playing with computers 35 years ago and became fascinated with the idea of artificial intelligence, there were many theories of what would be possible in the distant future. But it wasn’t possible at that time. The world has fundamentally changed in the meantime, particularly in the last ten years. Today we are living in yesterday’s future. Today many past theories have become a reality. Today we are delegating our work to robots. Just think about the automotive industry: How many people work on conveyor belts now compared to the past?
So digital transformation won’t just change our working world, it will shatter it?
Yes, I assume so. Most people underestimate the impact of current and upcoming innovations on the jobs market. They think these changes won’t affect them directly. I can tell them that this is not realistic, because the jobs market is already feeling the effects. To reiterate the point, it has already happened, it’s happening now and it will happen even more quickly in future.
So people will definitely become superfluous?
No, they won’t be superfluous. They’ll be unemployed.
You support the idea of a guaranteed basic income as one potential solution for the future of the jobs market. How would you approach it? And how much money are we actually talking?
Essentially, this is a guaranteed income for every citizen. Different experts have suggested different amounts. Personally, I calculated an amount of around 1000 dollars in the USA. A basic income should allow a person to feed and clothe themselves, have a car and somewhere to live and – very importantly – to access computer facilities and the internet.
All that for 1000 dollars?
Not in Munich. And certainly not in New York City either. You live in Manhattan. Are you really trying to tell me that a person could live there on 1000 dollars and pay for everything you just mentioned?
No. But I think we need a good foundation for a new way of thinking. A recent study showed that five billion people will be living in cities by 2030. Isn’t that crazy? The internet has been connecting people for more than 20 years now, and it seems that more and more people are being drawn to cities. We are still under the delusion that the only way to earn money is to have a permanent job. And many believe – wrongly – that these permanent jobs can be found in big cities. But if you had a basic income of 1000 dollars in the USA, you could move to Detroit, for example. Cheap houses are a dime a dozen there.
Detroit? Doesn’t sound all that appealing.
If everyone had a basic income, local economies could start from scratch – even ailing economies like Detroit.
Mr Wenger, you were born and raised in Germany. As you are no doubt aware, we have a left-wing political party called “DIE LINKE”. For many years, their key premise has been a universal basic income. The aim is to comprehensively expand the social system to cover common salaries. How does your theory about the future of work and a general basic income fit with the motives of the German left-wing party? You’re not left-wing yourself, are you?
No. I believe in the free market. I believe that competition will sort things out. But I’m afraid I don’t know enough about the motives of the “LINKE” party to go into more detail.
Okay, let’s get serious and assume that a basic income is introduced in the USA or Germany. Each country wants to regulate this income differently, so some will get a basic income and others won’t. How can you ensure that immigration and migration won’t sink the new system?
Immigration is, of course, a major topic in Europe at the moment and I would argue that the immigrants currently coming to Europe are fleeing violence, war and dictatorships in their homelands. So the problem is already separate from the issue of a basic income system. We should fight to extend democracy and the rule of law so that people can live where they want and where they come from. I think it’s wrong to reject an idea through fear, assuming that it might exacerbate something that’s already a huge problem. It’s the wrong way to approach such a complex issue.
We don’t just work to earn money. For many of us, our work has a deeper meaning or is the source of our self-esteem. How will we stop people from simply becoming lazy or depressed because they’re not working?
Over several generations, we have constructed a society in which everything is defined by work. In the USA, a family’s first concern is choosing the right school for their children. They struggle to get their children into the right kindergarten so that later they can get into the right high school, the right college and, finally, the right job.
Our job shapes our life. What’s wrong with that?
There’s nothing wrong with that. But the unemployed will feel inferior as a result. Everyone works, so if you don’t, you automatically become an outsider, a loser. And if society sees you as an outsider, that can naturally lead to depression. But it has nothing to do with being “lazy”. In fact, I don’t think there’s anything wrong with being lazy.
People are not lazy by nature. Experiments show that people with a basic income suddenly have time for things they would previously never have done. And that expands their horizons. For example pensioners who suddenly have the chance to visit places they’ve never seen and experience things they’d never heard of before. They don’t all spend their days sitting in front of the TV.
But doing sweet nothing seems a bit more enticing than moving to Detroit, doesn’t it?
Maybe I’m too positive – as a venture capitalist, I’m an optimist. But there are other things that we can do as a society.
Naturally, giving people a basic income isn’t enough by itself. We also need to modify our education system over time. Higher education is very expensive in the USA and many students simply have no opportunity to experience new things outside their studies. But the great thing about the internet is that people can educate themselves free of charge. You can learn practically anything online. So I would suggest a combination of basic income as a means of subsistence and, at the same time, the freedom to do what you want. Instead of concentrating so much on work, we should tell people: “Here’s some money, find out what makes your life worth living!”
A lovely thought, but let’s do the maths. You’re talking about 1000 dollars a month, so a little over 895 euros. There are around 82 million people in Germany. Where would the money come from?
I didn’t calculate it for Germany, just for the USA, where a basic income at this level would cost about 3 billion dollars. That’s a lot of money. On the other hand, based on gross domestic product, the US economy has over 18 billion dollars. And its economic activities actually amount to 39 trillion dollars. So there’s no question of whether we can afford it. We can. The question is whether we want to.
So can we expect the USA to introduce a regulated basic income in the foreseeable future?
I would welcome it, but I think a lot more clarification is required before the next steps can be taken. People will protest at first...
...and say that the existing system can’t be overhauled.
I think so, yes. But one significant change has already taken place: A look at Google Trends shows that interest in a basic income has soared in the last few months. Finland, for example, is planning a big experiment and Switzerland recently held its first referendum on whether to add a basic income to its constitution.
The Swiss referendum failed miserably.
Yes, it will take a while until people stop being fixated on their work. But we are incredibly lucky to have been born in this era! We need to realise that we have access to a huge, collective digital legacy. We didn’t earn this legacy. We didn’t invent the internet and yet it enriches our lives and provides tremendous benefits. All we need to do is change the way we think.