“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation," he told CNBC.
"Yeah, I am not sure what else one would do. I think that is what would happen."
The concept of a universal basic income has actually been floating around for years within the tech community, with the idea that citizens would receive a regular stipend from the government to cover basic needs such as food and housing.
Switzerland was the first country to try to introduce a universal basic income program when it sought to create legislation this past summer of giving 2,500 Swiss francs (US$2573) per adult, no matter how much they work, and 625 Swiss francs (US$640) per child under 18.
Voters rejected the plan but supporters of the bill continue to fight for it, saying it “would promote human dignity and public service”.
Despite this setback, Musk said that at some point in the future, governments might no longer have an option but to enforce a universal basic income “as more and more jobs are replaced by technology [and] people have less work to do”.
He also sees people having more leisure time as an added benefit of automation.
"People will have time to do other things, more complex things, more interesting things," he said.
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As the use of technology becomes more prevalent in places of work around the world, Tesla CEO and “iconic Silicon Valley futurist” Elon Musk thinks governments won’t have a choice but to start subsidising people’s basic needs.