Why we need a universal basic income

Photo: Generation Grundeinkommen / Flickr

Faced with a future of automation and growing inequality, governments are paying considerable attention to the universal basic income, emboldened by trials in Finland, the Netherlands and Africa.

 

The origins of the basic income

The idea of a universal basic income (UBI), i.e. an unconditional weekly or monthly grant for every human being, has been debated for centuries. In his Utopia, first published exactly 500 years ago, Thomas More presented his idea of a perfect society, rejecting the feudal system in favour of a social collective organisation. More reports a conversation between the English Archbishop of Canterbury and the Portuguese Raphael Nonsenso.

Debating the fashion in which England was treating its growing number of thieves, Raphael said, “Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming first a thief and then a corpse.”

After Thomas Moore’s Utopia, the idea of the UBI was built upon the assumption of a reinvention of the social security system. In the XVIII century, Antoine Caritat, Marquis de Condorcet (1743-1794), wrote the Sketch for a Historical Picture of the Progress of the Human Mind. It contained a brief draft of what social insurance might look like and how it could reduce inequality, insecurity and poverty.

Later in the XIX and XX centuries, British Labour Party member Dennis Milner (1892-1956) published a short pamphlet entitled Scheme for a State Bonus (1918). The essay, based on an eclectic series of arguments, defended the introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom.

Contemporary advocates of UBI are building up an understanding of this theory. The British journalist and author of Post-Capitalism: A Guide to Our Future, Paul Mason, delivered a lecture in Amsterdam, claiming that neoliberalism has failed and a new economic model must be put in its place.

In his book, the author explains why replacing capitalism is no longer a utopian dream, how the basic forms of a post-capitalist economy can be found within the current system and how it could swiftly expand.

Our long-term aim should be to push more and more economic activity to be done outside the market and the state.

“Our long-term aim should be to push more and more economic activity to be done outside the market and the state. This requires, in part, that we end the reliance on wages for work […] We need to quickly pursue the experiments with the universal basic income […] ?and aim within ten years for states to be in a position to roll out the policy itself,” said Manson.

“The basic income is not left or right. It’s forward,” said Scott Santens, an American activist for the UBI. Political will is the determining factor for a constructive discussion on the basic income, which could represent a major political reform in political and economic systems around the world.

Yet, such advances would require a whole new level of policy-making and countries that are better off will keep resisting. The current social and political instability threatening Europe may weigh substantially in a country’s decision to adopt the basic income. Nevertheless, it is up to every country to find the most appropriate way to implement the policy according to their own administrative and financial capacities.

Basic Income debated by European governments

Switzerland

Proposals for this concept were presented in Switzerland last June, in an unprecedented referendum that ended with the UBI being overwhelmingly rejected by the Swiss people. Why would the Swiss people waste the power they hold by rejecting the opportunity to set the example? Most likely, the high welfare enjoyed by the Swiss and fears of a sudden influx of undesired migrants were the reasons behind the failure of the plebiscite that could have set a milestone in history.

The Swiss right wing rejoiced. “Theoretically, if Switzerland were an island, the answer is yes. But with open borders, it’s a total impossibility, especially for Switzerland, with a high living standard. If you would offer every individual a Swiss amount of money, you would have billions of people who would try to live here”, said Luzi Stamm of the Swiss People’s Party. Besides, critics of the concept argue that a society where a basic income is granted would encourage slackers. “If you pay people to do nothing, they will do nothing,” said Charles Wyplosz, professor of economics at the Geneva Graduate Institute.

Yet this argument is debatable given that, due to rising inequality, most of the people who would be entitled to this grant would still need to work to be able to enjoy a dignified life, particularly in countries displaying high levels of poverty and wide gaps between rich and poor.

Finland

Contrary to the Swiss, the Finns have seen better days. The Finnish Minister for Finance, Petteri Orpo, received a letter from the European Commission recommending a reduction of Finland’s deficit by 0.6% of GDP, as the country’s large deficit threatens it with significant hardships. Indeed, the IMF states that Finland was showing “tepid” signs of economic growth.

Nevertheless, last August the government passed a bill for an experiment in which a number of unemployed citizens were randomly selected to receive a monthly basic income. Not surprisingly, a survey found that, with hard times knocking at the door, the Finnish people happily welcomed the idea of a basic income.

The Netherlands

In August 2015, the Dutch city Utrecht announced it would run an experiment to assess the impact of UBI. The try-out emboldened the supporters of the basic income and in January this year, the member of the Dutch Parliament Norbert Klein of the Cultural Liberal Party wrote a “note of initiative” to the Parliament asking for a serious and open debate about the idea of a basic income for all over the age of 18 (who have lived in the Netherlands for more than ten years).

Today’s growing social disparities are a ticking time bomb.

Poverty is crushing us

For Nobel Peace laureate Muhammad Yunus, today’s growing social disparities are a “ticking time bomb“, both socially and economically speaking. As for Georges Dassis, president of the European Economic and Social Committee, poverty in Europe is not seeing any progress, “nearly one in four EU citizens (about 120 million people) faces the risk of poverty”.

A study from Oxfam reported that 62 people in the world are now in control of more than half of global wealth. A graphic illustration from the Spanish daily El País has depicted how global inequality is growing, with nearly half of the world’s wealth in the pockets of roughly 1% of the world population.

Furthermore, a report released by the World Bank stated that, even though poverty has declined in Africa, evidence shows that more people worldwide live in poverty today than in 1990.

The study is underpinned by surveys of ten African countries, exploring the levels of inequality of economic opportunity by looking at such factors as ethnicity, parental education and occupation and region of birth. Another approach was to examine persistence in intergenerational education and occupation. “Is a farmer’s son less likely to be a farmer than he was a generation ago?” However, the authors claim that measuring poverty in Africa remains a challenge.

The study also claims it is possible that the poverty level would have declined even more if the conditions under which the study was conducted – data quality and comparability – had been taken into account. Yet because of population growth, many more people are poor, the according to the report.

Writing in the Guardian, Jason Hickel did not hold back in his criticism of the World Bank’s alteration of the international poverty line from $1.25 to $1.90 per day. “It’s a PR coup for the World Bank: the poverty line appears to have been raised to a more humane level and the number of poor people is lower than before,” denounced Hickel.

As of 2015, the African population is estimated to be around 1.166 billion, a number that is set to expand greatly in the next decade. In Kenya, an experiment conducted by the charity GiveDirectly is granting 6,000 Kenyans a basic income for a decade. Neighbouring Uganda will also take part in the experiment from 2017 for a period of two years. And China, the second world’s largest economy, is conducting research on the benefits of the basic income.

The dawn of the robotic future

Advisory firm Forrester released a report in June 2016, revealing that robots will soon replace 7% of US jobs. “By 2021 a disruptive tidal wave will begin. Solutions powered by artificial intelligence/cognitive technology will displace jobs, with the biggest impact felt in transportation, logistics, customer service and consumer services,” said Forrester’s Brian Hopkins in the report.

Uber recently announced that it expects to have a fleet of driverless cars operating in Pittsburgh soon. Last May, Adidas revealed its new prototype robot-driven Speedfactory in Ansbach, Germany. Adidas will start retailing its first sports shoes manufactured by robots in this factory in 2017.

While machines are taking the jobs of humans, the level of corruption and misconduct in the world is mounting.

While machines are taking the jobs of humans, the level of corruption and misconduct in the world is mounting, putting an ever-bigger strain on wealth imbalances. A recent report from Oxfam has reinforced the belief that fraud and corruption are a cancer long embedded in the financial system. The document stated that 90% of the world’s biggest companies operate in at least one tax haven.

Momentum

Faced with the immense difficulty of tackling such deeply-rooted societal curses, advocates of the UBI believe that granting a basic income to fulfil the basic and natural needs of each human being is the progressive way to empower people and confront the scourge of poverty.

The movement is gaining political momentum and the opportunity to enforce a continued demand for such a universal right is there. The debate over an unconditional grant for every human being must be exhaustive, taking into consideration all the dimensions at stake.

How much would each individual earn? Would all individuals earn the same? Would the money come from national budgets? If so, would social services such as health and education be compromised? Should there be some sort of penalty in the form of community service for those who eventually refused to work?

We are yet to discover the full social and economic impacts of such a humanitarian experiment but the road towards an inclusive society is already laid out in front of us.

Marta Pacheco
About the author

Marta Pacheco studied Political Science and Media & Journalism at the Catholic University of Portugal (UCP). An independent researcher based in Brussels, she has been active in reporting EU and international affairs as a journalist contributor for media outlets in Brussels. Former Blue Book trainee in the European Commission and with a keen interest on politics and global affairs, Marta has been developing her skills and knowledge in the healthcare field, energy & environment and in the financial crisis.


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