We're already too late
In a Nutshell
Wage labor is collapsing due to automation, triggering a deflationary death spiral as consumer spending (70% of GDP) and payroll taxes (80-85% of federal revenue) vanish, necessitating replacement by **capital** (sovereign wealth funds, ESOPs, EOTs, DAOs, baby bonds) and **transfers** (UBI, dividends, carbon rebates) to achieve **universal high income** (UHI) of $300k+ median household income by 2060 in today's dollars. UHI simulator projects wages shrinking from 82% to residual, with capital expanding to 60-90% of income via stacking 140+ global interventions like Alaska Permanent Fund ($13k/family) and Norway's oil fund model—replicable without oil via VAT, carbon taxes, and endowments. We're already too late: decades of delay created a chasm requiring immediate stop-gap UBI/guaranteed income pilots (e.g., 100+ US cities) while capital ramps up, aligning household interests with economic growth for half-million-dollar median incomes long-term amid demonetization/deflation.
These notes were generated by AI and may contain inaccuracies.
Elon Musk talks about universal high income, but when asked how to fund it, suggests a VAT tax. Built a UHI simulator based on post-labor economics research. Stacking a portfolio of income sources like sovereign wealth funds, UBI, baby bonds can lead to much higher household income than today. Universal high income is non-wage, non-labor-based income creating higher income than today. Median household income baseline is $83,000/year.
Simulator shows wages (big blue wedge) declining, replaced by universal basic income, sovereign dividends, etc. By 2060, more than double median household income in today's dollars. Goal arbitrarily set at $300,000 per year per household as median income.
Over long run, invalidating wage labor. Three primary economic sectors:
- Primary/extraction sector: from 80+% to <2% today.
- Secondary/manufacturing: peaked at 35% mid-20th century, now 12%.
- Tertiary/services: 65-70% today (measurements vary, but vast majority).
No quaternary sector to migrate to; terminus of human wage labor. Mantra: better, faster, cheaper, safer—machines replace humans, no further migration possible.
Business revenue pays wages, workers spend on products/services, loop continues. If businesses stop paying wages (use machines), deflationary death spiral. Consumer spending drives 70% of GDP; income/payroll taxes 80-85% of federal revenue. Entire system predicated on wage labor and wage taxes. Capital owners need customers; automating away consumers commits fiscal suicide.
Three buckets: wages, capital, transfers. Every dollar from one of these.
- Wages: salary/hourly, self-employment, freelance—exchanging time/energy for money.
- Capital: dividends, interest, rent, royalties, capital gains (YouTube ad revenue is royalty).
- Transfers: government checks (social security, tax credits, UBI, food assistance, housing subsidies, public health); in-kind services (public school, roads, transit) count as effective income.
As wages decline, capital and transfers must replace them—that's post-labor economics and UHI.
Post-labor economics began in 1970s. Labor share of national income: 65% then, now 56-58%; declining in 13/16 major economies since 1980s (capital eating labor). Productivity vs. wage gap: 1948-1973 grew in lockstep; then productivity doubled, median compensation fraction of that—expected in automated economy (automation began with industrialization, robots, databases, RPA).
Transfer dependence rising: government transfers as share of personal income from 8% (1970) to 18% (2022); higher in Norway, Germany. Fiscal system compensating for labor market failure.
Current US median household income $83,730: 82% wages, 13% transfers, 5% capital. Grow capital band (transfers will grow too per simulations). UHI is multiple income streams across buckets; residual wages remain (human touch demand, but not centerpiece tomorrow).
12 buckets (not exhaustive):
Capital
- Public: national sovereign wealth fund; state (e.g., Alaska Permanent Fund); city (urban/municipal wealth fund).
- Private: ESOPs, EOTs (employee ownership trusts, popular in England), cooperatives; new like DAOs; stocks, bonds, dividends, rentals.
Transfers
- UBI: national, state, municipal (stackable like dividends).
- Conventional: social security, Medicare.
- Baby bonds (being implemented).
- Carbon rebates, common dividends (e.g., spectrum auctions to citizens or endowments).
VAT/wealth/robot taxes fund individual programs, but focus on reservoirs.
Guaranteed income: 100+ US cities since 2020 ($500-1,000/month); Stockton recipients more likely full-time employment. Can start small/local.
State supplements: 31 states + DC/PR have earned income tax credits atop federal EITC.
Auto-enrollment retirement/asset building: 19 states (e.g., CalSavers, OregonSaves); participation 5-15% to 70-90%.
Public in-kind services: K-12, transit.
US transfers $4T/year (entitlement spending): social security, Medicare, education, Medicaid, EITC, SNAP. COVID stimulus: 3 rounds, 160M households, $867B—direct UBI at scale, but unsustainable without capital boost.
VAT (popular Europe), corporate profit taxes, automation/capital/service taxes, carbon taxes/dividends, wealth taxes, data/AI royalties, financial transaction tax, land value tax. Replace wage-dependent payroll taxes (80-85% federal revenue).
Cities own: Bank of North Dakota, Copenhagen, Chattanooga, Singapore, Vienna. Capitalize via state-owned banks, fiber (monetize infrastructure), etc. (endowments like university endowments).
US examples:
- Alaska Permanent Fund: $80-89B (2022), $13,000/family, reduces poverty 20-40%, no employment effects (created 1960s/70s).
- New Mexico State Investment Council: distributions surpass oil/gas by 2039, funds universal childcare (land/oil).
- Texas Permanent School Fund: $48B oil, 1854 (oldest globally).
- North Dakota Legacy Fund: oil.
Only 4/50 states have them. Capture oil, minerals, solar, spectrum, carbon.
Norway (largest, global pension fund, oil); Abu Dhabi (oil); GIC (Singapore); Saudi Arabia; Kuwait (oldest, 1953/1963). Model reproducible sans oil.
US only major advanced economy without one. Trump Feb 2025 ordered creation: 3-5% GDP/year at 7% returns → $58T in 25-30 years, $14,000/household at 3% rule—but too slow (need by 2030-2035). Simulation/white paper (GitHub) shows need thicker cushion.
Make capital ownership default/automatic.
ESOPs: 6,600 in US, 15M participants, $2T assets; 2x retirement savings, 2.3x net worth.
EOTs (UK): 1640% growth decade, tax-free bonuses to $3,600/year. Owner retires, transfers to employees (tax incentives, golden parachute).
Baby bonds (federal Trump accounts, 2026): ~$17,000 by adulthood for house/car/education/wealth.
Auto-enrolled accounts; conventional capital (stocks, bonds, real estate); worker co-ops; DAOs (digital ownership). All create on-ramps.
Capital accumulation is not only easy, it is automatic and the default option. This is what we're going for in the long run. Not only do you have guaranteed income and universal basic income and dividends from sovereign wealth funds and state wealth funds, you have something that you have control over, you have economic agency directly. This cannot be emphasized enough.
When we talk about the long term, this is what the transition is going to look like. As of the latest data from 2024, capital makes up 5% of household income, transfers are 13%, and wages are 82%. As wages go away, something will need to expand to take that place: more capital, more transfers, and wages shrink.
In the long run, the goal should be that wages and capital flip-flop. Ideally, see capital-based income in the 2050s greater than 80%, honestly greater than 90% of household income, with a little bit of transfers and a little bit of wages as residual. That's what I would prefer to see. That's why this is set to greater than 60%. I don't know if we can actually get there, but if most households are getting most of their money from capital, from all the different kinds of capital that we've talked about, whether it's public capital or private capital, that is going to be much more stable in the long run.
That also means that household income grows with the economy. Meaning that your interests are then intrinsically aligned with the interests of the government and the billionaires because everyone wants the economy to grow. As of right now with labor share of income declining, you're getting left behind. With GDP decoupling from wages, you're getting left behind. But if everyone has a massive stake in the economy, then that is truly not like trickle down economics. That is truly a paradigm where the rising tide lifts all boats or in this house all households.
Every year we wait costs exponentially more than the year before. This is the big chasm that we need to cross. Capital will take many years to ramp up whether it is household capital or sovereign capital. Wages however are going to fall off a cliff before then meaning we have this entire gap that we need to fill and backfilling that can only be done with transfers because remember there's three sources of household income: wages, capital, and transfers.
Wages are going away. Yes, we could pass laws to ban AI usage and just keep people doing jobs for the sake of doing jobs, but that's not economically efficient, and it's also really dehumanizing, and a lot of people don't want those jobs anyways. Capital we can build. The numbers check out when if we were to stack all of these interventions together from public capital and private capital at the household level, at the city level, at the state level, and at the federal level, we can absolutely end up in a situation where capital returns fund every household.
The problem is time. The problem is that we are late to the game. America and really every other nation should have been building public wealth and private wealth for decades. We should have started in the '60s or '70s, then instead of having to wait until the 2050s and 2060s for it to fully mature, we're going to have to use universal basic income, guaranteed income, and those sorts of things as a stop gap measure in order to keep the economy chugging along. Otherwise, it's just not going to happen.
That is it for this presentation. Now, let me show you the actual GitHub repo where you can look at all of this in greater detail. Here's our white paper. The white paper is nice and structured and it includes everything that we've gone over in much greater detail, including the outcomes of the simulations.
One thing that I want to draw your attention to is the survey that I did of every single intervention that's out there. This isn't even all of them. This is just the top of them. Global inventory of post labor income interventions:
- Transfer programs: dividends, social security
- Public capital: government pension funds, China Investment Corporation
- Private capital programs: ESOPs and more
This is more than 140 interventions from around the world that can all contribute to creating a universal high income for literally everyone.
One of the things that I found in these simulations and I've got it all covered in this white paper is the fact that we do not have enough time to capitalize all of this.
However, in the long run, the median household income in America could go as high as half a million dollars in today's dollars.
One thing that I did not explain in greater detail is that there's a couple other reasons driving this. One is demonetization and another is deflation.
Demonetization is a transaction that just goes away. A lot of people have started realizing that GDP is not really the best measurement in the future because when you have one tool that obsoletes a lot of other spending like say for instance your AI chatbot just today it can already do artwork for you it can do law for you it can do medicine for you so a lot of that is transactions that just never happen.
Deflation is the cost of stuff that you need that becomes much cheaper. The cost of pretty much all digital goods and services can go down by a factor of 100 to 100,000. That is actually baked into the simulator if you want to go play with it.
With all that being said, please take a look at this and spread the word. My book is coming out soon.
Labor Zero, a post labor economics treatise. This is my book, 180,000 words that covers all of this in much, much greater detail. We have 19 days to go at time of recording. We have almost a thousand backers. If you want to get in on this and help make this happen, please do so. There are plenty of tiers left to join. We got the projects we love on Kickstarter. We made it to the front page, the trending section of Kickstarter.
There you have it. That is how I would build universal high income. There is nothing in this that is magic. We don't need to overhaul the entire system. It's just going to take a matter of time and political effort.
If you've been following me on Substack or Twitter, I've been posting a series of articles making the argument for post labor economics from different perspectives like the progressive view, the conservative view, and even the capitalist view. And then I'm going to be releasing this video alongside a here's how we actually build universal high income.
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