Ray Dalio: Automation and Universal Basic Income | AI Podcast Clips
00:00:00.000 | - So let me ask you about automation.
00:00:04.160 | That's been a part of public discourse recently.
00:00:07.600 | What's your view on the impact of automation?
00:00:12.200 | Of whether we're talking about AI
00:00:14.640 | or more basic forms of automation on the economy
00:00:17.320 | in the short term and the long term?
00:00:19.520 | Do you have concerns about it as some do?
00:00:23.120 | Or do you think it's overblown?
00:00:25.760 | - It's not overblown, I mean, it's a giant thing.
00:00:27.880 | It'll come at us in a very big way in the future.
00:00:31.680 | We're right at the edge of even really accelerating it.
00:00:34.840 | It's had a big impact and it will have a big impact.
00:00:38.120 | And it's a two-edged sword
00:00:39.800 | because it'll have tremendous benefits.
00:00:44.800 | And at the same time, it has profound benefits
00:00:48.980 | in employment and distributions of wealth.
00:00:51.820 | Because the way I think about it is,
00:00:55.560 | there are certain things human beings can do.
00:00:57.920 | And over time, we've evolved to go
00:01:02.240 | to almost higher and higher levels.
00:01:04.740 | And now we're almost like we're at this level.
00:01:07.680 | It used to be your labor and you would then do your labor
00:01:11.760 | and okay, we can get past the labor.
00:01:13.320 | We got tractors and things and you go up, up, up, up, up.
00:01:16.560 | And we're up over here.
00:01:17.680 | And up to the point in our minds where, okay,
00:01:22.160 | anything related to mental processing,
00:01:25.440 | the computer can probably do better and we can find that.
00:01:28.920 | And so other than almost inventing,
00:01:32.280 | you're at a point where the machines
00:01:35.820 | and the automation will probably do it better.
00:01:40.040 | And that's accelerating and that's a force.
00:01:43.200 | And that's a force for the good.
00:01:45.860 | And at the same time, what it does is it displaces people
00:01:50.860 | in terms of employment and changes
00:01:53.160 | and it produces wealth gaps and all of that.
00:01:55.600 | So I think the real issue is that that has to be viewed
00:01:59.640 | as a national emergency.
00:02:02.520 | In other words, I think the wealth gap, the income gap,
00:02:07.000 | the opportunity gap, all of those things,
00:02:09.620 | that force is creating the problems
00:02:13.360 | that we're having today.
00:02:14.320 | A lot of the problems, the great polarity,
00:02:17.480 | the disenfranchised, not equal,
00:02:21.440 | not anything approaching equality of education,
00:02:25.160 | all of these problems, a lot of problems
00:02:28.000 | are coming as a result of that.
00:02:29.760 | And so it needs to be viewed really
00:02:32.880 | as an emergency situation in which there's a good work,
00:02:37.880 | good plan worked out for how to deal with that effectively
00:02:43.760 | so that it's dealt with effectively.
00:02:47.520 | So because it's good for the average,
00:02:52.000 | it's good for the impact, but it's not good for everyone
00:02:54.800 | and it creates that polarity.
00:02:56.320 | So it's gotta be dealt with.
00:02:58.160 | - Yeah, and you've talked about the American dream
00:03:00.400 | and that that's something that all people
00:03:03.080 | should have an opportunity for
00:03:04.440 | and that we need to reform capitalism
00:03:07.040 | to give that opportunity for everyone.
00:03:09.720 | Let me ask on one of the ideas in terms of safety nets
00:03:15.320 | that support that kind of opportunity,
00:03:18.240 | there's been a lot of discussion
00:03:19.400 | of universal basic income amongst people.
00:03:22.120 | So there's Andrew Yang, who's running on that,
00:03:25.520 | he's a political candidate running for president
00:03:28.240 | on the idea of universal basic income.
00:03:30.840 | What do you think about that?
00:03:32.240 | Giving $1,000 or some amount of money to everybody
00:03:36.000 | as a way to give them the padding,
00:03:39.680 | the freedom to sort of take leaps,
00:03:42.720 | to take the call for adventure,
00:03:44.560 | to take the crazy pursuits?
00:03:47.120 | - Before I get right into my thoughts
00:03:49.520 | on universal basic income,
00:03:50.840 | I wanna start with the notion that opportunity,
00:03:55.840 | education, development, creating equality
00:04:02.120 | so that people say there's equal opportunity
00:04:06.560 | and is the most important thing.
00:04:10.080 | And then to find out what is the amount,
00:04:13.440 | how are you going to provide that?
00:04:15.320 | How do you get the money into a public school system?
00:04:20.320 | How do you get the teaching?
00:04:21.960 | The fleshing out that plan to create equal opportunity
00:04:26.960 | in all of its various forms is the most pressing thing to do.
00:04:33.000 | And so that is that.
00:04:36.560 | - The opportunity, the most important one
00:04:38.680 | you're kind of implying is the earlier the better.
00:04:41.760 | Sort of like opportunity, so education.
00:04:44.800 | So in the early development of a human being
00:04:48.160 | is when you should have the equal opportunities.
00:04:50.440 | That's the most important.
00:04:51.440 | - Right.
00:04:52.260 | In the first phase of your life,
00:04:54.600 | which goes from birth until you're on your own
00:04:58.200 | and you're an adult and you're now out there
00:05:00.800 | and you deal with early childhood development, okay,
00:05:05.040 | and you take the brain and you say what's important?
00:05:08.360 | The child care, okay,
00:05:10.720 | like it makes a world of difference, for example,
00:05:13.800 | if you have good parents who are trying to think about
00:05:16.840 | instilling the stability in a non-traumatic environment
00:05:21.440 | to provide them, so I would say the good guidance
00:05:24.120 | that normally comes from parents
00:05:26.160 | and the good education that they're receiving
00:05:29.840 | are the most important things in that person's development.
00:05:36.560 | The ability to be able to be prepared to go out there
00:05:40.720 | and then to go into a market
00:05:43.120 | that's an equal opportunity job market,
00:05:46.220 | to be able to then go into that kind of market
00:05:49.360 | is a system that creates not only fairness,
00:05:53.160 | anything else is not fair,
00:05:55.340 | and then in addition to that,
00:05:57.520 | it also is a more effective economic system
00:06:00.760 | because the consequences of not doing that
00:06:04.080 | to a society are devastating.
00:06:06.100 | If you look at what the difference in outcomes
00:06:08.960 | for somebody who completes high school
00:06:11.320 | or doesn't complete high school
00:06:12.920 | or does each one of those state changes
00:06:16.240 | and you look at what that means in terms of
00:06:18.920 | their costs to society, not only themselves,
00:06:22.480 | but their cost and incarceration costs
00:06:25.080 | and crimes and all of those things,
00:06:27.880 | it's economically better for the society
00:06:31.120 | and it's fairer if they can get those particular things.
00:06:36.120 | Once they have those things,
00:06:38.140 | then you move on to other things,
00:06:39.640 | but yes, from birth all the way through that process,
00:06:43.540 | anything less than that is bad,
00:06:47.180 | is a tragedy and so on.
00:06:49.300 | So that's what I, yeah,
00:06:50.780 | those are the things that I'm estimating.
00:06:53.020 | So what I would want above all else is to provide that.
00:06:57.780 | So with that in mind,
00:06:59.160 | now we'll talk about universal basic income.
00:07:01.280 | - Start with that, now we can talk about UBI.
00:07:03.720 | - Right, because you have to have that.
00:07:05.360 | Now the question is what's the best way to provide that?
00:07:09.500 | So when I look at UBI,
00:07:11.800 | I really think is what is going to happen
00:07:14.320 | with that $1,000?
00:07:15.800 | And will that $1,000 come from another program?
00:07:20.800 | Does that come from an early childhood
00:07:22.840 | developmental program?
00:07:24.640 | Who are you giving the $1,000 to
00:07:27.640 | and what will they do for that?
00:07:29.120 | - $1,000.
00:07:30.140 | I mean, like my reaction would be,
00:07:32.340 | I think it's a great thing that everybody
00:07:34.500 | should have almost $1,000 in their bank and so on.
00:07:38.220 | But when do they get to make decisions or who's the parent?
00:07:41.120 | A lot of times you can give $1,000 to somebody
00:07:44.460 | and it could have a negative result.
00:07:46.220 | It can have, you know,
00:07:47.260 | they can use that money detrimentally,
00:07:49.780 | not just productively.
00:07:51.540 | And if that money's coming away
00:07:53.360 | from some of those other things
00:07:54.900 | that are gonna produce the things I want,
00:07:56.900 | and you're shifted to, let's say,
00:07:59.260 | to come in and give a check,
00:08:00.820 | doesn't mean its outcomes are going to be good
00:08:02.980 | in providing those things that I think
00:08:04.540 | are so fundamental important.
00:08:06.940 | If it was just everybody can have $1,000 and use it,
00:08:09.980 | so when the time comes-- - Use it well.
00:08:11.380 | - And use it well, that would be really, really good
00:08:14.660 | because it's almost like everybody,
00:08:17.020 | you'd wish everybody could have $1,000 worth of wiggle room
00:08:20.100 | in their lives, okay?
00:08:22.060 | And I think that would be great.
00:08:24.380 | I love that.
00:08:25.440 | But I wanna make sure that these other things
00:08:28.780 | that are taken care of,
00:08:29.820 | so if it comes out of that budget,
00:08:31.780 | and I don't want it to come out of that budget
00:08:34.540 | that's gonna be doing those things,
00:08:36.420 | and so you have to figure it out.
00:08:39.260 | - And you have a certain skepticism
00:08:40.900 | that human nature will use,
00:08:44.380 | may not always, in fact, frequently may not use
00:08:47.860 | that $1,000 for the optimal,
00:08:50.060 | to support the optimal trajectory.
00:08:52.380 | - Some will and some won't.
00:08:54.180 | One of the big advantages of universal basic income
00:08:57.760 | is that if you put it in the hands,
00:09:00.040 | let's say, of parents who know how to do the right things
00:09:02.780 | and make the right choices for their children
00:09:05.320 | 'cause they're responsible,
00:09:06.440 | and you say, "I'm gonna give them $1,000 wiggle room
00:09:09.240 | "to use for the benefit of their children."
00:09:11.820 | Wow, that sounds great.
00:09:13.680 | If you put it in the hands of, let's say,
00:09:16.720 | an alcoholic or drug-addicted parent
00:09:20.080 | who is not making those choices well for their children,
00:09:24.200 | and what they do is they take that $1,000
00:09:26.720 | and they don't use it well,
00:09:28.460 | then that's gonna produce more harm than good.
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