Universal Capital, Not Income

THEODORE Skylakakis is a Greek politician, Member of Parliament, and former Minister for Environment, Energy, and Finance. He is the author of The Displacement of Labour, which examines how AI, automation, robotics, and drones are set to reshape the economy and labor market over the next ten to twenty-five years.

The Confluence: What’s the main thesis of your book?

Skylakakis: The central argument is that a big part of existing labor is going to be displaced by these technologies. At the same time, we’re going to have extreme abundance and extreme inequality, unless we manage this transition in a more energetic way, with governments acting rather than remaining passive, as they are now.

The Confluence: What’s specifically different about AI that makes it such a unique threat to labor, compared with past waves of automation?

Skylakakis: It’s not that it displaces both physical and intellectual work, that’s happened before. It’s that it creates a brain and a body that’s more competitive than humans, in the next generation of jobs, not just the old ones being replaced. Every technological revolution creates new jobs too, but AI will be very competitive in those new jobs as well. A young person needs five to seven years of experience to be good at a job. AI will need half a year. There will be little room for young people to compete unless they’re genuinely excellent at what they do, or run their own business.

The Confluence: A lot of policymakers respond to this with universal basic income. You propose something different, Universal Basic Capital. What is that, and why does it matter more?

Skylakakis: With universal basic income, your position depends entirely on politicians, since they’re the ones who give it to you. If a political elite gets captured by an economic elite, that income can be reduced. And if you don’t have a democracy at all, where the political and economic elite are the same oligarchs, things go even worse.

What I propose instead is a society where ownership is distributed widely, through three kinds of ownership. First, housing as a basic human right in a society of abundance, so everyone has a home they can’t lose and isn’t dependent on anyone for. Second, basic capital that pays a growing dividend, enough to live on but also enough, above the minimum needed, to actually participate in the market as an economic player, which you can’t do with basic income alone. Third, a personal AI agent of your own, to protect you from what will matter most in the future economy: the higher intelligence of others.

The Confluence: How would you actually implement that, politically?

Skylakakis: I’m a practical politician, this isn’t theory. The key is that we need to make the societal deal now, before this wealth is created and captured by a few, because once it is, moving toward this kind of society becomes much harder. So the hyperscalers need to know upfront that a large part of their income will go toward this purpose, which lets us move through the transition in a coordinated way rather than a confrontational one.

In parallel, we need to build the legislative software before we need it. For example, we could take a small share, five or seven percent, of handouts governments already give, like unemployment benefits, and convert that portion into capital you invest and can’t touch for five to seven years. As those benefits grow, or more people receive them, that minimum capital grows too, and people gradually become economic players.

At the same time, we start building the idea of a house you cannot lose, not to any government decision, yours for as long as you live. Parts of this already exist, the Homestead Act in America is a partial comparison, but most countries don’t have this kind of legislative institution yet, and we need to build it.

The Confluence: What do you see as the main obstacles to this? Resistance from big tech lobbyists, for instance?

Skylakakis: No, the biggest obstacle is people who don’t believe the revolution will actually happen, mainly economists, academics, and politicians who don’t accept the scale of disruption I think is coming, so they don’t prepare for it. And politically, people don’t want to discuss it, because telling young men and women they won’t have a job costs votes. It’s easier to pretend it isn’t happening. By the time it does happen, there won’t be time left to introduce these policies.

The Confluence: It’s actually the hyperscalers themselves who are starting to float ideas like universal basic income or basic wealth. Doesn’t that make the inequality you’re describing even more likely?

Skylakakis: Yes. Look at what the hyperscalers are actually doing: gathering immense amounts of money for business plans built around displacing labor, because that’s what their business plans are. They started proposing universal basic income, and are moving toward the biggest IPOs in history and put trillions of dollars behind it. That capital needs to be redirected now, through the kind of deal I’ve described, or it will simply be captured.