Roderick Benns recently interviewed Floyd Marinescu about basic income, a Toronto-based CEO and co-founder of C4Media which produces InfoQ.com and the QCon conferences. Marinescu is also an angel investor, author, and humanitarian.
Benns: Tell me a little about your early life. Where did you grow up?
Marinescu: I was born and raised in Toronto and still live here. My parents were immigrants who fled from communist Romania in the 1970s. I grew up in a fairly poor, working class family, with an atmosphere that was somewhat typical of right-wing, eastern European immigrants’ views of the ills of government control, taxes, and the police state. What I came to realize in my exploration of basic income is that it will prevent the conditions that led to communism and other revolutions like it. I think basic income reduces socialism, too, as it promotes real republican freedom as economist Guy Standing points out. You reduce the size of government programs with efficient cash transfers, and you replace government behavioral interference in the lives of the poor and instead give people the resources for greater choice, freedom, and safety.
Benns: What was the turning point for you in your acceptance of basic income as a valuable policy tool?
Marinescu: I can’t find a clear turning point, but the main factors that led me to be more aware and serious about learning more about basic income was that I have a lot of experience at the front lines of globalization. While most people think of globalization in the context of foreign factories, textiles, manufacturing, and outsourced programmers, my own business is structured in a way where I was able to leverage the global possibilities of recruiting for knowledge work and service jobs. When I started my business, I immediately started hiring mid-level and entry-level operations roles in eastern Europe and other countries outside of the typical first world economies. Now I have almost 50 people of which only one quarter work from the United Kingdom, Canada, and the U.S. If it were not for globalization, my business might not exist as I could not have afforded so much staff in the early years.
On the other hand, if most other companies in Canada and the U.S. leveraged the same opportunities there would be even fewer and fewer jobs and increasing downward pressure on wages for existing jobs here. So you see it’s not just automation we should be concerned about that will take out jobs. Modern knowledge worker jobs can be hired anywhere. This insight is why I became so interested in basic income. Most of today’s companies are keeping costs low by building things in emerging economies but their main profits are coming from consumers in mature economies who have been experiencing slow and steady wage stagnation for the last 30 years. That is a leaky boat in my opinion and we on a dangerous downward spiral in terms of the health of the economy that will eventually hurt all levels of society.
Benns: How can this policy be of help to entrepreneurs or those who wish to be?
There are two aspects to that question — future entrepreneurs, and today’s business owners and the impact on how they can employ people.
I believe that basic income will unleash future entrepreneurship in ways we can’t begin to appreciate. There are so many people with good ideas but they can’t afford the time or break out of existential financial fears to pursue them. There are still even more people who have serious talents who may never get to develop them because their financial insecurity ties them to safe jobs that are misaligned with their strengths. Imagine if everyone had the sense of security to really explore what they are truly good at – imagine how much more efficient and faster our economy would be moving!
When I was 25 I took my all my savings at the time and bought a rental property, and the income from it drastically reduced any fears I had of one day starving or not affording shelter. It provided economic security that was the basis of my ability to feel safe to later quit my job and start my business. If it were not for that basic income that I provided for myself, I probably wouldn’t have felt safe to quit a very high paying job and start my business. Mark Zuckerberg mentioned in his Harvard keynote address that if he had to worry about providing for his family he wouldn’t have learned to code and wouldn’t be where he is today.
Looking at it from an employer’s point of view, I believe basic income definitely empowers staff, and that’s a good thing. There has been criticism that basic income might subsidize employers’ pay by making it easier for people to accept low paying jobs. That argument has many facets. People who have basic security wouldn’t need to take jobs they wouldn’t enjoy, or stay in jobs with toxic bosses or a bad culture. It can also empower people to demand wage increases they deserve, which is why I believe that basic income is more effective than minimum wage increases. On the reverse, people who might love a job that happens to pay a low wage can feel free to take it if they want to and if it aligns with them. One thing for sure is that a basic income will provide more choice, and and as an employer I can feel better that the staff who are here really want to be here.
There is also a category of entrepreneurship no one ever talks about – the unpaid, and non-revenue generating activities like community work or caring for elders and children. That may not be an economic activity but I think we’ll see more ‘entrepreneurship’ in those areas after a basic income, which will provide added value to society.
Benns: How do we counter the fears that people will stop working if they’re given a basic income in times of need?
The data and experiments to date show that people work more, not less. Simple as that. People can educate themselves, and if it isn’t already clear it will be very clear a few years from now, once the results from the basic income pilots in Ontario, Oakland, Kenya, Finland, and Scotland come out, all of which are starting this year. There may be other pilots that run between now and then, too.
The only examples of reduced work in some of the experiments done to date were of teens who stayed longer in school, or went back to school, and mothers who stayed home longer with their children. On the other hand, the emancipatory effects of a basic income have shown that people work more as they seek out work that is really meaningful to them. I think the basic human requirement is to feel useful, and staying at home doing nothing is not useful. Everyone from the CEO to the janitor wants to feel useful, and a basic income allows people the space to find the work in which they can be their best.
Surveys have been done in which people were asked if they would keep working if they had a basic income, and 98 percent said yes. But only 30 percent thought that ‘others’ would keep working if they had a basic income. Such is the bias inherent in our fears. And even if a very small segment chooses to work a lot less, think about the bell curve. In any distribution of humans you’ll have one to two percent on either end that are outliers to the behaviour you’d expect, so if one to two percent of society chooses not to work, should we stop talking about a policy that will have a massive impact on the 95 percent who need the money the most? That’s reductionist thinking. And furthermore, the money being spent right now to police and incentivize people to work who don’t want to is probably more than we’d be spending with a basic income, in addition to it being wasteful and paternalistic.