This is a topic I will be writing more about into the future (follow my UBI Facebook page for more info).
What is a universal basic income, and why do we need it?
A universal basic income (UBI) is a guaranteed income that would be paid to all adult citizens regardless of other income or wealth, and is proposed as a way to address a number of social problems that are appearing on the horizon. Most notably – problems associated with ever increasing automation of work, and the subsequent ever increasing un(der)employment for human workers. Aside from the obvious detrimental effects on poverty and wellbeing, ever increasing un(der)employment is a terminal problem for a capitalist system due to decimation of the consumer base. Without people to buy your stuff, capitalism must fall over.
The other important feature of a UBI is that it will provide a minimal level of security and dignity to every person in society. And if a society can’t do that, what then is the point of society? There are also tangible benefits to this like reduced crime and healthcare costs, in addition to the moral argument.
Are machines really going to replace that much human employment?
The short answer is – Yes. Those who hark back to the industrial revolution — where inventions like the steam engine and printing press, while replacing many human jobs lead to greater innovation and therefore expanded human employment — show a decided lack of understanding of what exactly miniaturisation combined with artificial intelligence (AI) means. Essentially – “robotic humans” for manual tasks and computers for cognitive tasks, to an ever increasing degree. Put simply, necessary human employment will be decimated. An Oxford University analysis suggest that about half of all jobs now will be replaced by machines in the (near enough) future.
Isn’t it a good thing that we will have to work less?
Yes it is. Imagine having more time to spend with your family and friends, and on projects and endeavours that inspire you as opposed to depress you like so much of our current work arrangements? Sounds perfect. And it is, from a social perspective. The problem that arises, though, with less and less hours worked by employees, is that disposable income falls, and as a consequence, so too does consumer spending. Capitalism requires spending to function. With no spending there is no demand, leading to no profits (and no tax revenue), leading to no spending leading to no demand leading to…. you get the picture. I.e. economic calamity. So while it is, for most, very desirable that we won’t have to work as much as we do now, there has to be a system in place to account for the loss in spending generated as total hours worked in society are radically reduced.
Why should it be ‘universal’? Is that fair?
Any flat-rate income/taxation measures are inherently regressive compared to an analogous measure that wasn’t flat-rate/universal. However, if we literally mean ‘fair’ – as in equally distributed – then yes, it is. What can be more fair than paying everyone the same amount of extra money?
However, fairness isn’t really the primary argument for the universality of a basic income. The primary argument is one of cost and efficiency. Without the need to determine and enforce entitlement to welfare benefits, you end up with a much simpler and more efficient system and one that does away with the vast majority of the welfare bureaucracy. That is, significant savings can be realised by doing away with the welfare bureaucracy. Savings which can go towards offsetting the cost of a UBI.
Free money? This sounds too good to be true.
This is where the discussion on a UBI, and how to pay for it, gets more complicated (and contentious). There are a number of broad approaches that can be taken to pay for it, and these include – savings, higher taxation on capital and/or robotic production (see what a certain Bill Gates has to say about this), and, non-intuitively, free money! That latter one is a little harder to explain and will form part of a more comprehensive article on UBI in the future. But very briefly, when you realise that virtually all money (and by consequence economic growth) is ultimately debt, you soon realise that popular notions of what money is and how it comes about are not reflected by reality. And, as such, a concept such as “free money” isn’t as ludicrous an idea as you probably once thought it was. To put it in its absolute simplest terms – money is conceptually nothing more than a placeholder for value. And a UBI arguably adds significant value to society.
Inflation is the only potential stick in the mud here. But the root causes of inflation are contentious, and it’s far from obvious that the government adding money into an economy necessarily leads to inflation. The real test will be results from real-world examples where UBI has been implemented. There have been a number of previous UBI experiments, and there are a number of ongoing and planned ones. I’ll look into these in a future article.
You want capitalism, you need a UBI.
This is the reality of what is facing us. Capitalism will fail if no one is able to purchase its products and services. If you want to keep capitalism then you have to find a way to get money into the hands of consumers. Forget about nonsense moralistic arguments concerning whether it’s “right” to pay someone to do “nothing”. It’s wrong to knowingly run society into the ground. Resist the temptation to be swayed by arguments that assert that people will just lounge about and do nothing if they are in receipt of free money. Even if they did (which past experiments show they won’t), it doesn’t matter, as unemployment will be forced on huge numbers of people whether they want it or not. And in any case, what’s more important? Someone’s right to get outraged at what other people freely choose to do, or the potential collapse of the whole system on which our society is run? If it’s not the latter, then it really should be.
Ultimately a UBI offers to free the vast majority of society from unsatisfying and unnecessary toil, and promises to eradicate poverty and allow human potential to soar to new levels. Or, simply, to just stop stressing so much and learn to love life again.