Imagine living in a society where each and every citizen receives a monthly payment from the government which meets their “basic necessities” regardless of their circumstances.
The idea of a Universal Basic Income (UBI) has gained considerable popularity of late – not just among leftists but also with right-wing pro-capital proponents. What if it were possible to adopt an ideology which utilised both socialism to get people what they need and capitalism to give people what they want?
What is Universal Basic Income?
In his recent book Basic Income: The Material Conditions of Freedom, Daniel Raventós defines basic income as, “an income paid by the state to each full member or accredited resident of a society, regardless of whether or not he or she wishes to engage in paid employment, or is rich or poor or, in other words, independently of any other sources of income that person might have, and irrespective of cohabitation arrangements in the domestic sphere.”
Raventós lists numerous points in its favour: that it would eradicate poverty, facilitate a better balance in our lives between paid, voluntary and domestic work, empower women, and “offer workers a resistance fund to maintain strikes that are presently difficult to sustain because of the salary cuts they involve.”
UBI – At What Cost?
While the clear societal benefits add considerable weight to the case for UBI, one key reservation is whether we can actually afford it – is it possible to pay everyone enough to cover the basics of life without hiking up taxation to unsupportable levels?
In his article for Forbes Magazine, Tim Worstall writes that we can indeed afford a UBI at an entirely reasonable level within the confines of the amount that we already tax. The more pertinent question, he believes, is whether we actually want one? While polls on the topic appear to divide us, Worstall argues that the positives outweigh the pitfalls, primarily on the basis that it would be better than the cruel, almost wicked welfare states that we currently have.
The Green Party of England and Wales supports the idea of a citizen’s wage, partly owing to rapidly increasing job insecurity and the rise of the gig economy, and partly owing to the massive costs associated with administering increasingly complex and unwieldy welfare systems.
Ten Reasons to Support Basic Income
Here’s ten reasons to support UBI, according to Basic Income UK:
1) Basic Income will help us rethink how & why we work
A basic income can help you do other work and reconsider old choices: It will enable you to retrain, safe in the knowledge that you’ll have enough money to maintain a decent standard of living while you do. It will therefore help each of us to decide what it is we truly want to do.
2) Basic Income will contribute to better working conditions
With the insurance of having unconditional basic income as a safety net, workers can challenge their employers if they find their conditions of work unfair or degrading.
3) Basic Income will downsize bureaucracy
Because a basic income scheme is one of the most simple tax / benefits models, it will reduce all the bureaucracy surrounding the welfare state thus making it less complex and costly, while being fairer and more emancipatory.
4) Basic Income will make benefit fraud obsolete
As an extension of (3), benefit fraud will vanish as a possibility because no one needs to commit fraud to get a basic income: it is granted automatically. Moreover, an unconditional basic income will fix the threshold and poverty trap effects induced by the current means-tested schemes.
5) Basic Income will help reduce inequalities
A basic income is also a means for sharing out the wealth produced by a society to all people thereby reducing the growing inequalities across the world.
6) It will provide a more secure and substantial safety net for all people
Most existing means-tested anti-poverty schemes exclude people because of their complexity, or because people don’t even know how to apply or whether they qualify. With a basic income, people currently excluded from benefit allowances will automatically have their rights guaranteed.
7) Basic Income will contribute to less working hours and better distribution of jobs
With a basic income, people will have the option to reduce their working hours without sacrificing their income. They will therefore be able to spend more time doing other things they find meaningful. At the macroeconomic level, this will induce a better distribution of jobs because people reducing their hours will increase the jobs opportunities for those currently excluded from the labor market.
8) Basic Income will reward unpaid contributions
A huge number of unpaid activities are currently not recognised as economic contributions. Yet, our economy increasingly relies on these free contributions (think about Wikipedia as well as the work parents do). A Basic Income would recognise and reward theses activities.
9) Basic Income will strengthen our democracy
With a minimum level of security guaranteed to all citizens and less time in work or worrying about work, innovation in political, social, economic and technological terms would be a made more lively part of everyday life and its concerns.
10) Basic Income is a fair redistribution of technological advancement
Thanks to massive advancements in our technological and productive capacities the world of work is changing. Yet most of our wealth and technology is as a consequence of our “standing on the shoulders of giants”: We are wealthier not as a result of our own efforts and merits but those of our ancestors. Basic income is a way to civilise and redistribute the advantages of that on-going advancement.
Putting UBI into Practice
Finland has become the first country in Europe to pay its unemployed citizens an unconditional monthly sum, in a social experiment that will be watched around the world. Finland’s government hopes that the nationwide pilot will cut red tape, reduce poverty and boost employment. Under the two-year scheme, 2,000 unemployed Finns between the ages of 25 and 58 are currently each receiving a guaranteed sum of €560 (£474 / $615) pcm. This income is replacing their existing social benefits and will be paid even if they find work.
Speaking on behalf of the Kela, the Finnish Social Insurance Institution, Marjukka Turunen says, “For someone receiving a basic income, there are no repercussions if they work a few days or a couple of weeks. Working and self-employment are worthwhile no matter what.” According to The Guardian, the initiative, which Kela hopes to expand in 2018, is the first national trial of an idea that has been circulating among economists and politicians ever since Thomas Paine proposed a basic capital grant for individuals in 1797.
It’s not just Finland who are embracing UBI – in 2017, basic income experiments are scheduled to take place in numerous cities across the Netherlands, where several test groups will get a basic income of €970 (£822 / $1067) each month.
In Ontario, Canada, a C$25m (£14m / $18,3m /€16.6m) a basic income pilot project is set to launch this summer, initially covering the areas of Hamilton, Thunder Bay and Lindsay.
In Scotland, local councils in Fife and Glasgow are looking into trial schemes in 2017, which would make them the first parts of the UK to experiment with universal basic income. Councillor Matt Kerr of the Scottish Labour Party, says, “Like a lot of people, I was interested in the idea but was never completely convinced.” But working as Labour’s anti-poverty lead on the council, Kerr says that he “kept coming back to the basic income”. Kerr views UBI as a means of simplifying the UK’s byzantine welfare system. “But it is also about solidarity: it says that everyone is valued and the government will support you. It changes the relationship between the individual and the state.”
In the Wall Street Journal, political scientist Charles Murray outlines his vision for UBI: “In my version, every American citizen age 21 and older would get a $13,000 annual grant deposited electronically into a bank account in monthly installments. Three thousand dollars must be used for health insurance … leaving every adult with $10,000 in disposable annual income for the rest of their lives. People can make up to $30,000 in earned income without losing a penny of the grant. After $30,000, a graduated surtax reimburses part of the grant, which would drop to $6,500 (but no lower) when an individual reaches $60,000 of earned income. Why should people making good incomes retain any part of the UBI? Because they will be losing Social Security and Medicare, and they need to be compensated.”
The Counter Argument
Critics of UBI such as American Economist Thomas Sowell and the Manhattan Institute’s Oren Cass argue that it is unworkable. Cass points out at National Review that it would be impossible to replace Medicare and Social Security with the UBI across the US, noting that “Medicare already spends more than $11,000 per recipient; Social Security spends $16,000.”
“Murray’s UBI covers only half of what the elderly’s ‘earned’ entitlements paid,” writes Cass. “Anyone left to rely on the UBI would be unable to afford both Medicare-quality insurance and other essentials.”
Therefore, any sort of UBI would likely be added on to the welfare state rather than replacing the welfare state, which would only worsen the problem.
Cass also argues that it’s unrealistic to think that they will lose jobs to automation, given that the economy has added, “80 million net jobs since computers started coming on the scene in the 1960s and more than 25 million since the Internet became mainstream in the 1990s,” meaning that even as new technology has developed and replaced old jobs, new jobs still find a way to spring up in its place.
Also, the notion that UBI would end poverty is highly misleading, because what constitutes as poverty is arbitrarily defined by the government.
Emlyn Mousley, founder of Save the Earth Co-operative, is an advocate of UBI – here is his personal opinion on the subject:
Save the Earth’s co-founders and myself established our co-operative not only to help the Earth, its people and its wildlife, but also in the knowledge that we currently live within a capitalist system. In my mind, as well as the minds of millions of others, we need massive change for the planet.
Save the Earth Co-operative is legally incorporated within a capitalist system. Like it or not, this is the system within which our society exists. But we are mindful and structured to have one foot in current capitalist society and another in the future. Just because something is so, this does not mean that you cannot be dissatisfied with the corporate chains and strive for change.
One possible future would be a resource-based society. Take Star Trek, for example, where money and poverty are notably absent – granted, this exists within the realms of fiction, but what if such societies could flourish in real life? Many humans have dared to dream of this, including Jacque Fresco, who established The Venus Project. Check out YouTube for some inspiring videos about the organisation and its plan of action for social change.
The year is 2017, not 1717, yet so many of us still find ourselves working 40 to 60 hours weeks to keep on top of our bills, mortgages and debts – one minute our wages are deposited in our accounts, the next they vanish again.
While the Office for National Statistics paints a rosy economical picture for 2017, there are more workers on zero hour contracts than ever and the need for food banks has never been greater. What kind of society do we live in where indispensible public servants such as NHS nurses are hit with pay cuts that edge them over poverty line? Many have resorted to using food banks and claiming emergency grants simply to keep afloat. It is a well know fact that the majority of western populations are three pay cheques away from being homeless due to extortionate rents or mortgages, but it doesn’t have to be this way.
If we have to continue living in the capitalist system, I firmly believe that UBI is the way forward. I say have to, because the capitalist system benefits the establishment, corporations, the wealthy, job creators and government. Watch The Great Money Trick to see why these groups of alphas are so keen for capitalism to stay.
UBI will never be successful if the general public are not fully informed. Take Switzerland, for example, where 77% of its citizens rejected a proposal for UBI. Why was this, when the government outlined a substantial basic income of 2,500 SFr. (£1,755, €2071, $2,555) per adult per month for life? Quite simply, because of one unfathomable clause – if you chose to work, your earnings would be deducted from your basic income. Who on earth would back this, you might ask? Well, 23% of the Swiss population did, but what do you suppose would happen if the clause were omitted, so that every adult received 2,500 SFr. in addition to their salary, with no deductions? A cynic might suggest that the Swiss government intentionally made an untenable proposal to keep the issue of UBI off the table for the next four years or more.
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford.
Let’s talk money – the most highly prized asset in the world. Some would go as far to say that it is the most populist religion. The capitalist system has been injected with steroids – you only have to look at the people who flash their cash across social media today, while half the world is starving, or in abject poverty. Western countries abolished slavery in the 1800s, yet we have now replaced this with debt slavery. Why are we the only species who have ever paid to sustain our lives on planet earth? Money is a man made social system and in theory we can change this at any time, but in order to affect change, individuals need to be educated – in essence, we must wake up to the fact we are being conned.
Money and other barter chips such as bitcoin are generated out of thin air – banks create money on computer screens under licence from its relevant government. Upon creation of this money, banks charge interest, creating debt. It’s well worth taking a look at Who Controls the Money, Who Controls the World – an insightful documentary that explores fractional banking.
Consider the UK and USA national debt, currently standing in the multiple trillions. To whom do citizens owe that money? Ask yourself who owns the Federal Reserve Bank in the USA, or the Bank of England? Why don’t they publish the names of their directors or shareholders? Why, when it comes to wars, or when the banks need a bailout, is there suddenly plenty of money? Every year, the banks are given trillions of dollars in stimulus moneys which are supposed to trickle down to the average Joes like you and me – but do we see it? Do we truly benefit from this?
I will leave you with this UK parliamentary debate held in the House of Commons on 20th November 2014. For the first time since the Bank Charter Act of 1844, the subject of money creation and society was raised. Steve Baker MP opened the debate with this imploration: “Mr Speaker, I beg to move that this House has considered the subject of money creation and society – the methods of money production in society today are profoundly corrupting in ways which would matter to everyone if they were clearly understood.”
All humans on this planet are born the same, but some are lucky enough to be born into wealth, a western country or a prosperous area. Should fortunes be predestined? Surely each and every one of us should be entitled to our basic human rights – access to shelter, clean food, water and energy? If you aspire to more than this then by all means you can work and contribute to society by creating worth and receiving additional income in exchange for your valuable labour contribution.
Remember to question those who claim that society would collapse if UBI became the norm. Individuals who currently take liberties might well do the same with UBI, but many others, who would lack a sense of purpose sat at home doing nothing, would be creators and have the freedom to give back to society as they saw fit.