Universal Basic Income: An idea whose time has come?

Universal Basic Income – commonly known as simply UBI – is an idea that has become increasingly popular as of late. A guaranteed, unconditional cash payment delivered to all on an individual basis without a means test or other conditions, UBI has inspired an entire U.S. presidential campaign and won the support of many in the tech community, such as Tesla CEO Elon Musk.  But as an idea, it has much earlier origins, with Thomas More hinting at it in his 1516 book Utopia. Since then, basic income has caught the attention of thinkers from almost every political persuasion – from free-market liberals to social democrats to anti-capitalists.

American civil rights leader Martin Luther King broadened the focus of his campaign in the 1960s to include economic as well as racial injustice. He criticised U.S. involvement in the Vietnam War as a drain on resources that could be put to use in the fight against poverty. Of utmost importance to King was to change attitudes towards poverty – in particular, the stereotype of the poor as idle. A minimum income guarantee was a key proposal of his. Here’s what he had to say:

“It seems to me that the Civil Rights movement must now begin to organize for the guaranteed annual income. Begin to organize people all over our country, and mobilize forces so that we can bring to the attention of our nation this need.”

“I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Martin Luther King

But, no doubt about it, basic income is a controversial idea – and one that seems to many of us as inescapably utopian.  Free money for everyone – how could you possibly sell such an idea? Wouldn’t it cause havoc in our economic model? If citizens are given cash with no strings attached, how can the state be sure that they will not fritter it away and remain (or become) unproductive members of society? Doesn’t there need to be supervision to ensure that public funds are put to good use, conditions to push people in the right direction? Is there an advantage to blanket-coverage universal programmes or do they just drain resources? These can be compelling claims, but the evidence from basic income studies overwhelmingly contradicts them.

Martin Luther King was an early proponent of universal basic income. Lyndon B. Johnson’s Great Society programme paved the way for a debate on welfare reform in the late 1960s.

Trials across the globe over several decades indicate that UBI can be a successful tool in reducing poverty – if poverty is understood as a lack of cash. A 1970s Canadian study, Mincome, reported changes such as declines in domestic violence and mental health complaints, higher education continuation rates and a greater percentage of mothers taking time off for maternity leave. Declines in work hours also appeared marginal. Some participants chose to start new businesses, with basic income providing leeway to take risks. Others became active in their communities through NGOs and other entities that traditional economic indicators like GDP tend to overlook.

Just this year, a two-year Finnish study concluded that basic income did improve citizens’ mental well-being, confidence and life satisfaction. “The basic income recipients were more satisfied with their lives and experienced less mental strain than the control group.” UBI seems to empower those in precarious employment or unemployment in a way that traditional, means-tested benefits do not. In a crisis that has produced in just a few months an unprecedented economic recession across the globe – 38 million unemployed in the United States as of this week – some governments have turned to income supplement schemes and similar measures. World leaders from the Spanish prime minister to the Scottish first minister to Pope Francis have now started to talk about UBI as a viable long-term measure. Even if bold ideas weren’t previously front and centre of political agendas, to many, it now seems that we have little choice. We’ve got to do more than paper over the cracks in the system.

In an age of automation and increasing work precarity, is this the moment for universal basic income?

Read more:

  1. https://www.theguardian.com/society/2020/may/07/finnish-basic-income-pilot-improved-wellbeing-study-finds-coronavirus
  2. https://www.youtube.com/watch?v=HwUTLJDnZFw
  3. https://blogs.lse.ac.uk/lsereviewofbooks/2017/07/24/book-review-utopia-for-realists-and-how-we-can-get-there-by-rutger-bregman/

Written by: Jacob Grech

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