The coronavirus pandemic brought upon us so many things. For me and many others, it became a time for reflection, strategic thinking, and deep study on things of personal and professional importance; one that saw me explore, in theory, the economic and political systems of the world.
What did I make of that study? A lot, hence this:
Understanding Universal Basic Income:
I am still not quite sure where I first heard about UBI. Maybe from my dad, but on a second thought, my better judgment points to a random conversation in University. Either ways, I never had a concrete knowledge on this subject until now.
Universal or unconditional basic income, or UBI is like social security for all. This income is independent of every other source of income and guarantees you a monthly starting salary above the poverty line for the rest of your life. UBI does not aim for a world of equal outcomes rather equal opportunity, more unless, a total shift towards an entirely new system, where anyone can actually choose to work for free.
Imagine that from this day forward, on the first day of every month, an amount of money is deposited into your bank account because you are a human being. What would you do? or, on a deeper note, what won’t you do? How does this firm foundation of economic security and freedom affect your present and future decisions, from the work you choose, to the relationships you maintain, to the risks you take? A good example of this type of system exists in the Creative Commons and the Public Domain where money is no longer needed in order to live and work. Just imagine how much passion-fueled work gets done, and how much science would be better enabled.
It may surprise you to learn that a partial UBI has already existed in Alaska since 1982, and that a version of basic income was experimentally tested in the United States in the 1970s. The same is true in Canada, where the town of Dauphin managed to eliminate poverty for five years. Full UBI experiments have been done more recently in places such as Namibia, India and Brazil. Organizations and Think tanks like GiveDirectly and Y Combinator have also launched privately funded experiments in the US and East Africa respectively.
How does it get funded?
The idea of the government paying everyone a basic income does not imply printing trillions and dropping at doorsteps every month. It is more about redistribution of wealth; from the upper echelon to the most vulnerable, in that, everyone is at a ground zero where the problem of food and shelter has been overcome. OECD reports that the impact of inequality on growth stems from the gap between the bottom 40 percent with the rest of society, not just the poorest 10 percent, stressing that: Anti-poverty programs will not be enough.
This will need a lot of policy changes in taxation, financial models, annual budgetary allocation, and luxury items/services.
Won’t it make people lazy and unproductive?
Choice is a powerful motivator.
There is a popular conception that unearned income is perceived differently than earned income, and therefore spent more spuriously. Why? Simply put, people are considered more likely to spend money they did not earn. The fear is that people will pay more for goods and services with basic income, and therefore increase prices. This is a misconception not backed by evidence, with the opposite observed in simulations that have been conducted around the world. Conversely, basic income eliminates the existing disincentive to work that lack of options create.
With basic income, all income from paid work is earned as additional income so that everyone is always better off in terms of total income through any amount of employment – whether full time or otherwise. In this dispensation of Artificial intelligence and automaton of jobs, the fear of being replaced only gets more intense, and this needs to be dealt with before it blows out of proportion. Create an income floor with a universal basic income, and suddenly people look at losing their jobs entirely differently. In fact, they may even be happy about it. If the loss of a job results in someone being free to retire early, take a vacation, or even start up their own enterprise, then the insecurity and fear of job loss is gone.
Interestingly, studies of motivation reveal that rewarding activities with money is a good motivator for mechanistic work but a poor motivator for creative work, which is what will be left when automation and AI takes over. We are thus looking at a future where work will not be motivated by money, rather out of the pursuit of personal and intrinsic goals. This also highlights the difference between using money to do meaningful work and doing meaningless work for money. When you hate what you do as a job, you are definitely getting paid in return for doing it, But when you love what you do, you are only able to do it because of somehow earning sufficient income to enable you do it.
Would this not give too much power to the govt.?
The fear that basic income could increase citizen subservience to government is real, and that is only because of what ‘government’ is perceived as today. I identify with the school of thought that traces the foundation of political authority to the social contract, which also stands as the basis of government. Though there has been a huge shift from its original purpose, it still does not change the fact that: We are the government and the government is us. History has never recorded a leader without followers.
The thinking that if government is giving money to everyone, then they could use it to serve their own interests or weaponize it against the people only points to the legitimacy of the social contract and/or the true intent of govt. in place. Regardless, governance is a two-way thing and it will always require our involvement; from holding these leaders accountable, calling for independence of the legislature and judiciary, election reforms, and letting out our greviance through civil ways – demonstration, petitions, media campaigns, boycotting activities, and dialogue.
The assumption that the government can decide to stop this initiative, and/or use it as a tool of control… has, is, and will forever be unethical, inhuman and a middle finger to the founding fathers of politics who designated govt. for the people, of the people, and by the people. Such actions could be considered political suicide.
On drug overuse, mental health and addiction:
There is an inequality in the way we look at addictions, where the addictions of the poor carry a stigma, and that of the elite, do not. What about the addictions of power and greed we see in the rich? Or shopping? Or even money itself? There are many forms of addiction that consume our lives, and yet we mostly just look down at those in poverty.
In defense, We turn to evidence from actual basic income experiments where increases in usage of drugs like alcohol aren’t observed. In Namibia where people were given basic incomes, aside from the first payout, alcohol use did not increase. The same observation was made in India with the basic income research there.
Again, according to research, all forms of addictions are mostly born in childhood at the hands of both impoverishment and abuse. As economies worsen for families, child abuse rates increase, and vice-versa. Basic income therefore not only stands to reduce drug use among adults, but also stands to reduce child abuse rates, as kids also get a basic income from birth. These reductions in child abuse and enriching of childhood environments stand to then bear further fruit years down the road in the form of decreased addiction rates.
A basic income could indeed allow people the freedom to use drugs, but evidence shows that that’s not the decision people actually tend to make when they have increased access to resources.
On markets and economy
Where demand already exists and supply is already paid for, demand is unlikely to change as basic income simply replaces one method of payment with another. Where demand is actually increased, depending on the good or service, supply can also easily be increased, be increased with some investment in capacity, or not be increased. It is this third case where prices can rise, and points more to increases in prices for luxuries, and not basic goods and services.
By ensuring everyone has at the very least, the minimum amount of voice with which to speak in the marketplace for basic goods and services, we can make sure that the basics needs of life — those specific and universally important to all goods and services like food and shelter — are being created and distributed more efficiently. It makes no sense to make sure 100% of the population gets exactly the same amount of milk. Some may want more than others, and some may want less. It also doesn’t make sense to only produce milk for 60% of the population, thinking that is the true demand for milk, when actually 85% of the population wants it, but 15% do not have the means to voice their demand in the market. Milk producers would happily sell more milk and milk lovers would happily buy more milk. It is a win-win to more accurately determine just the right amount. And that is basic income. It is also a win-win for the market and those who comprise the market.
Now, what if we no longer withheld access to basic resources? What if work in the labour market became fully voluntary?
What if we could no longer force people to work for little or nothing? Maybe income would go up? Maybe the automation of human labor with technology would be accelerated? Maybe productivity would go up?
We can actually find the answers to these questions. From research, we know what they are likely to be, but until universal basic income takes root, we won’t know for sure, and we will continue forcing each other to work for each other by withholding food, shelter and other basic needs from each other – sounds nice yea?.
I must not fail to acknowledge Scott Santens, Andrew Yang, Archbishop Desmond Tutu, and Thomas Spence, whose work played a huge role in shaping my view on this subject, and in many parts, influenced this writing. Their insatiable curiosity and will for a better society has brought us this far.