The universal basic income of creators: How can inclusive creative income revive art democracy?

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Encryption technology and inclusive creative income have the potential to reshape the democratic spirit of the Federal Art Project during Roosevelt’s New Deal.

Written by: Li Jin and Lila Shroff
Li Jin is a founding partner and former a16z partner of Atelier Ventures, a venture capital firm; Lila Shroff is an analyst at Atelier Ventures. Compilation: Li Ke

In the 1930s, Roosevelt’s New Deal launched a series of plans and projects aimed at helping the unemployed during the Great Depression, promoting economic recovery, and reforming the financial system. These include the Federal One Project, which invested US$27 million (approximately US$522 million today) to provide employment opportunities for tens of thousands of artists in the fields of music, design, visual arts, drama, and writing. As the largest example of government art sponsorship, the plan also seeks to make art available to the wider community and create a new American art style.

Illustration provided by Annie Zhao

These programs hired the most famous artists of the 20th century, including Jackson Pollock, Willem de Kooning, Lee Krasner and Mark Rothko ) And created more than 100,000 works, including murals, sculptures and paintings. The goal of the U.S. Federal Art Program is to tolerate artists of different levels of experience and allow them to have a wide range of freedom in subject matter and style. The project director Holger Cahill declared: “The paintings of American artists It’s American art.”

In addition to providing relief to unemployed artists, these programs also aim to “relieve the growing dissatisfaction and stimulate a sense of citizenship.” The important thing is that they transformed art from privately sponsored luxury goods to an important part of democracy. Art becomes open to everyone and enters the public field of vision, rather than confined to small circles.

Contrary to frivolous amateurs, the role of the artist has been recognized as an important part of the economy and community.

The universal basic income of creators: How can inclusive creative income revive art democracy? “Bauxite” by Julius Woeltz at the AR Post Office in Benton County.

Almost a century later, this spirit has been reformed.

The world today resembles in many respects the Roosevelt New Deal period of the 1930s: massive unemployment, widespread burnout, and the need to bridge differences between groups. Importantly, COVID-19 has increased income inequality, reaching its highest level since the Gilded Age (currently, 1% of high-income households in the United States account for 30.4% of social wealth), accompanied by low-income workers, women, and minorities. The group suffers from unemployment and health threats. After the recession, as after the Great Depression, we should explore ways to revive the economy, especially for those vulnerable groups.

Inclusive Creative Income (UCI)

Nowadays, the income of the creative industry is unstable, which means that those who work in the arts are usually wealthy people: the possibility of a person with an annual household income of $100,000 to become an artist, actor, musician or writer is an annual household income of $50,000 double. A person with an annual household income of US$1 million is ten times more likely to become an artist than an annual household income of US$100,000.

Kristen Bahler of “Money” magazine wrote: “If your family has enough money to make sure you don’t go hungry, then it’s a low risk to dedicate yourself to the art that makes people hungry. thing.”

In the world of online content creation, this inequality of opportunity still exists: a 2013 paper in the Journal of Computer Media Communication found that “online content creators often come from relatively superior groups, and the online content they create may Preference for things they are interested in or related to.”

Although creative tools and platforms have become civilians, and the threshold for becoming a creator on the Internet is lower, economic success is only concentrated in a small number of top creators, and middle-level creators still have difficulty obtaining economic benefits. success.

UCI providing platform

In some ways, creative works on the Internet are similar to public goods: they are non-exclusive (users cannot exclude others from consuming the product) and non-competitive goods (one person’s use of the product does not prevent others from consuming the product). When creators post videos or write tweets on TikTok, the whole world can benefit from it. Content can provide entertainment, social networking, education, stimulate new insights, and have positive externalities. Consumers get value from it, but it is not feasible to charge for it, unless the creator sets up a pay zone to convert public goods into member products.

The universal basic income of creators: How can inclusive creative income revive art democracy? Source: https://boycewire.com/public-goods-definition-and-examples/

Government payment is a way to provide public goods, but it is not the only way. The technology platform of the “Internet country” (in the online world, our economic and cultural life is increasingly being influenced by technology companies, which are rich and powerful) is another potential source of funding for these creative workers.

Technology companies often compare themselves with digital public places: Mark Zuckerberg (Mark Zuckerberg) compared Facebook and Instagram to “digital city squares” in 2019, and Jack Dorsey compared Twitter It is called “Digital Public Plaza”. In reality, public spaces are usually co-funded by local, state, and federal governments; for technology platforms, funding for emerging creators can be investment and support for those who contribute to the vitality of digital city squares A form.

In the digital world, user rights are citizens’ rights, and creators’ rights are workers’ rights. Nowadays, creative workers have little say in their rewards and protection of workers’ rights. The platform to provide creators with basic income will take the first step towards creating a creator-friendly environment. In turn, richer and diversified platform content will enhance the consumer experience.

In my December article, I introduced the idea of ​​Universal Creative Income (UCI) initiated by the platform, which involves supporting the middle class of creators, and outlined the UCI platform as a possible solution to support emerging creators.

Providing creators with basic income may be a wise strategy to motivate more creators to devote more time to content creation. TikTok’s Creators Fund announced: “The U.S. Fund will provide at least $200 million to help ambitious creators who are interested in making a living through innovative content.”

Guaranteed income will enable individuals to spend more time on creative pursuits without worrying about meeting basic survival needs. The successful implementation of UCI will improve the stress and mental health of creators, and create a fairer path for more diverse creators, enabling them to engage in content creation with peace of mind.

For the platform, the idea is simple: use company revenue to provide funding for the “Universal Creative Income” program for emerging creators on the platform. For example, companies like Facebook or YouTube can shell out a sum of money to support creators on the platform and send them monthly checks to cover basic living expenses, regardless of their skills, training, or background. Unlike most mainstream creator platform funds, UCI focuses on the continuity of payments, the transparency of eligibility standards, and its focus on smaller emerging creators.

One final point: We believe that focusing on creators who need funding the most will have the greatest impact on the economy of participating creators.

UCI’s platform advantages

Although UCI seems to be based on the company’s altruism, there are still practical business models that can make the program a valuable investment.

UCI can better adjust creators and platform incentives, and promote the participation of downstream users and retain them.

1. Be competitive in attracting creators. The implementation of the UCI plan allows the platform to attract creators in an era when every social platform is fiercely competing for the attention of creators. The new creator funding program has been steadily advancing, which is a sign of winning the creator’s battle. The TikTok Creators Fund was established in the summer of 2020, promising to award US$1 billion to creators in the United States over the next 3 years, and Snap Spotlight (paying US$1 million per day) followed in a few months. Although these programs are the right step in providing compensation to creators, their allocation of funds is related to success, which makes them meaningful only for superstars. UCI projects are more effective in attracting and retaining more creators.

2. Encourage more creators to participate in the creator economy. Just as unpaid internships exclude low-income background students, the current creator economic model is to accumulate audiences through free content and then commercialize them, which excludes creators who are less able to bear financial risks.

Our hope is to provide funding for long-term creators who can provide long-term value, not for top creators who can already profit in multiple ways and are sought after by many platforms. The UCI program for emerging creators can increase the loyalty of creators and establish exclusive access channels for the next generation of talents. The latest example of a platform plan for emerging creators is Pinterest’s newly announced Creator Fund, which clearly focuses on the few representative communities that desperately need funding and creative resources: “We see the need to improve those that are underrepresented in the platform Creators and communities”.

Alexis Wichowski, author of the book “Transactions of Information,” wrote: “The digital world needs to stay healthy to keep users here. Investing in the health of the ecosystem is in the best interest of the online world.” UCI helps emerging creators financially. Build a healthier ecosystem, which ultimately increases user engagement and provides a richer content ecosystem on the platform.

3. Retain creators throughout the creative life cycle. For creators, the early decision they make is to choose a platform to start creating. The UCI program can be expanded to support the platform and encourage creators to create content on the ecosystem. Based on the above, as creators grow and progress, it becomes easier to retain them. For creators who are familiar with product features and attract followers on the platform, constant content and user binding increase the possibility of retaining creators.

The universal basic income of creators: How can inclusive creative income revive art democracy?

4. Reduce the dissatisfaction of smaller creators. From our conversations with emerging creators, we usually feel that other platforms give priority to top creators, give them priority treatment, low commission rate, and greater exposure and promotion. The platform-sponsored UCI will counteract this perception and show emerging creators that they are an important part of the ecosystem.

In short, UCI functions like any business investment: the benefits of the UCI program (to attract more creators and build a more active content ecosystem) should exceed the cost of implementing the program.

UCI benefits for creators

  1. Encourage experimentation and innovation. Research on the interaction between creativity and social and economic returns found that social recognition (which largely drives the online creator economy) induces herd mentality, while economic rewards promote originality. UCI can encourage creators to experiment more with content and take greater risks to deal with new and diverse topics without worrying about alienating audiences or performing poorly.
  2. Improve the health of creators. Hunter Walk recently wrote: “For many people, being a modern creator is exhausting” because social media platforms reward the speed of content. UCI can encourage more balance and counteract creator burnout. The Universal Basic Income (UBI) experiment in the 1970s provided a group of Manitoba residents with guaranteed income for five years. As a result, women took more maternity leave and more students completed high school graduation. By eliminating concerns about meeting basic survival needs, UCI can also enable creators to make optimized decisions for long-term benefits.
  3. Assist the transition between sideline and main business. For anyone who has turned from an employee to a creator, a familiar milestone is the anxiety surrounding the initial commitment of full-time employees and the subsequent initial salary cuts. UCI can help more creators transition from focus to main work by smoothing income, because creators will work hard to find a market that suits them.

The impact of UCI will be to produce more content creators (including those who would not risk becoming creators) and a higher quality and more diverse content ecosystem. Substack also recognized the above benefits when describing the Substack Pro program in its blog, and explained their advance payment program for writers:

We like this model, because even though some people who get the opportunity to collaborate are already wealthy, it enables some financially struggling writers to start a sustainable career. We take most of the risks for them. In return, their work helped to improve the content quality of the Substack ecosystem and become a long-term customer.

What are the risks of the UCI platform?

Letting technology platforms sponsor UCI plans is not without risk. It takes us from the true paradigm where governments and central banks have absolute power over currencies to an online world where platforms have greater control over the livelihoods of emerging artists.

For the creator of the UCI plan, being a beneficiary will increase dependence on a single company, which has the power to make unilateral decisions on the payment amount, project eligibility, etc. Unlike government-sponsored UBI, in the design of the UCI platform, there is no democratic process for obtaining the consent of stakeholders.

Another major potential drawback is to stifle innovation. Once established, profitable companies can fund UCI, but early-stage startups cannot do this. The financial attractiveness of startups to emerging creators will decrease, and they may increasingly choose to create on platforms that provide UCI. Just as Roosevelt’s New Deal was part of the cultural agenda to Americanize art and create a common sense of national identity, platform-sponsored UCI can also “platform” art, thereby making certain formats more widely accepted and Pay attention and form a platform to solidify.

The UCI program funded by the platform may also cause controversy among top creators, because it is actually a redistribution in the platform economy: a portion of the platform’s revenue (drawn disproportionately from top creators) will be allocated to emerging creators.

In the real world, political resistance to UBI stems in part from the increase in taxes required to fund it. Residents have considered taxes when deciding where to live. The similarity of the creator economy is that top creators can move elsewhere (with their audience) to avoid platforms taking interest rates to subsidize UCI.

However, it is worth noting that UCI sponsored by the platform can promote a net increase in professional accessibility as an online creator. So far, the lack of monetization has not stopped new startups (such as Clubhouse in the first year) from attracting creators.

How to implement UCI platform

  1. The platform will calculate the share of income that can be allocated to the UCI program, and determine the creators to be targeted and the criteria for determining eligibility. The criteria will be determined based on business objectives, for example, for creators who will have the greatest marginal utility and generate the most incremental new creative activities for regular cash payments. The eligibility criteria will also help distinguish aspiring emerging creators from ordinary consumer users.
  2. After creators meet the eligibility criteria, they can choose to start receiving UCI payments. The company sends a check of UCI standard amount to creators every month.
  3. At the end of the 12 months (or a predetermined length of time), creators will gradually withdraw from UCI. The time limit of the reform plan is deliberately designed, so every emerging creator has an opportunity, but the scope of the plan is limited, so the platform does not have to subsidize every long-tail creator forever.
  4. The platform evaluates the results of the UCI plan based on business goals (such as original content creation, participation, retention), and iterates from it.

Crypto UCI

As an alternative to platform-funded UCI, encryption technology can also be used to implement more transparent and democratic forms of artist funding. In a podcast conversation, James Young, the founder of Collab.Land, described a decentralized autonomous organization (DAO) that can sell a portion of NFT tokens and use the proceeds to fund emerging artists, who in turn give A certain percentage of the organization’s tokens are used as collateral.

Another way to achieve this may be that the community treasury can use part of the funds it holds to fund the UCI project. Its function is similar to the aforementioned UCI platform, but users and creators of DAO will participate in governance decisions, including the mechanism of creators’ basic income plan, rather than unilaterally made decisions about UCI by a centralized company.

The disadvantages of using cryptocurrency to fund artists are greater complexity and new behavior changes: creators need to have cryptocurrency wallets and learn how to convert cryptocurrencies into legal tender (buying materials, paying food, rent, etc.). If UCI targets the lowest-income creators, this group of people may not understand the mechanism behind the encrypted UCI program and need more introductory education.

Back to Roosevelt’s New Deal, crypto UCI has the potential to reshape the democratic spirit of the Federal Art Project. Just as the Federal Art Project hires artists and installs their works in public places such as schools, hospitals, and libraries, new encrypted business models (such as NFT and crowdfunding) can make creators profit while maintaining public access to their works.

ARTnews’ column compares, “If the commercialization of art is accompanied by its dislocation in galleries, museums, and private residences […] Then, FAP seeks to combine art with daily experience and seek a better culture. Inclusive understanding and appreciation.” Crypto UCI can solve the problem of dislocation of content and move it from a walled garden to a more open ecosystem, where creators have more control over their business and consumers can have more Access information.

Although platform-funded UCI and crypto UCI seem to be ideologically opposed, they are not mutually exclusive. Web2 and Web3 solutions can and will run at the same time: crypto UCI can be an excellent funding mechanism for creators recognized by the community, but for a brand new creator, the distribution potential of the Web2 aggregator is currently unparalleled.

From UCI to UBI

In addition to funding creators, it may be beneficial to extend basic income to a wider group of people. Universal Basic Income (UBI) can be a hidden form of creator funding, allowing more people to be more creative and innovative.

Studies have shown that children from high-income families (1% of the highest income) are ten times more likely to become inventors than children from lower-middle-income families: In addition, downstream product innovation has also benefited high-income families a lot.

In the 2020 election, presidential candidate Andrew Yang called on every American adult to have a basic income of $1,000 per month. One of the benefits is to make people “more creative.” Today, support for UBI is especially popular among young people: adults under 30 are in favor of the government providing UBI at approximately 2 to 1.

Despite the recent popularity of UBI, the idea of ​​guaranteed income has a long history: Napoleon, Thomas Paine, and Martin Luther King have all expressed support for some form of cash distribution or basic subsidies.

Despite UBI’s benefits, the United States may not have the political will to implement this plan as soon as possible. UBI Research is a think tank that explores the possibility of independent and government UBI implementation; many of its compilation projects are based on encryption. For example, UBI is an encryption project that continuously sends $UBI tokens to successfully verified members who have been registered as specific human individuals. This is a social identification system for humans on the Ethereum blockchain.

The future of digital creative life

In addition to providing employment opportunities for artists, Roosevelt’s New Deal had a bigger mission: to promote what Franklin Roosevelt called a “richer life.” The Roosevelt New Deal cultural program allowed countless Americans to see original artworks for the first time, participate in their first live theater performances, and participate in educational programs at community centers across the country.

Nowadays, social media platforms also enable consumers to obtain a large number of creative works for free, but the advertising model and digital nature of the content have destroyed the economic viability of online content creation. The end result is that the creator economy is similar to the economy of superstars. The vast majority of creators are struggling to maintain a balance of payments. All creators are built on a shaky foundation because of their ability to reach audiences and earn income. Determined by a few companies.

Although crypto companies promise that the platform will be more open and transparent, and users can directly own and participate in the development of the basic platform, for creators, a law of power distribution has emerged. In the NFT market, the top 1% of artists account for 48% of sales. This reflects the operating state of the traditional art world, where the top 1% artists account for 64% of auction sales.

With the increase in job insecurity and income inequality caused by the pandemic, it is more urgent than ever to formulate plans for creating wider opportunities for creators to succeed. As we spend more time on digital city squares, it is important to build a healthier ecosystem in these online cities, because civic activities are more active, decision-making is more democratic, funding for public works, and powerful creation A powerful middle-class economy. Inclusive Creative Income (UCI) can take a step in this direction.

We hope that the ideas and solutions discussed in this article serve as the starting point for a long-term conversation. We are eager to hear ideas from the wider community and hope to see more 🧪 trials in this field.

Thanks to Scott Moore for the enlightening conversation. Thanks to Patrick Rivera, Jesse Walden, Cooper Turley, and Gabby Dizon for reading and improving this article. Thanks to the many people who inspired this article, including Matthew Henick, James Young, Jon Ippolito, Xavier Jaravel, Scott Kominers and many others.

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