No penalty on earth will stop people from stealing, if it is their only way of getting food. It would be far more to the point to provide everyone with some means of livelihood’
These words, penned half a millennium ago by Thomas More in Utopia is the first recorded advocation of the concept of Universal Basic Income (UBI) More may have been the first, but was certainly not the last to put words to this idea, supported across centuries and across the political spectrum. The list of adherents is eclectic: Nicolas de Condorcet, Thomas Paine, Thomas Jefferson, Karl Marx, Abraham Lincoln, Bertrand Russel, Franklin Roosevelt, Martin Luther King, Milton Friedman, Richard Nixon, Desmond Tutu and Bernie Sanders.
More’s Utopia seems an apt place for the birth of this idea, sounding as it does like something from a science fiction novel. The idea, in essence, is that each citizen receives a flat sum of money from the state, providing every person with financial security, which can then be complimented with paid employment. It is a radical idea, but then again we seem to be living in radical times.
A 2013 study by researchers at the University of Oxford predicted that more than 45% of jobs in the United States would have been replaced by machines by 2033. This staggering transformation of the job market, not just in the US but worldwide, is one of the driving arguments for extensive experimentation with UBI.
India’s government has been one of the frontrunners in developing UBI in practice, but have stopped short of implementing it in the 2017 budget. The support in India is the product of a five year trial of UBI in eight villages in the state of Madhya Pradesh. Each adult was paid 200 rupees, with 100 rupees extra granted to the guardian of each child. This was later raised to 300 and 150 rupees respectively. The results of the trial were overwhelmingly positive. Contrary to the fears of many critics that ‘free money’ would de-incentivise work, those who received the money increased their productivity, and the only group in which employment fell was children, who tended instead to stay longer in education. Another pilot in Uganda saw similar results: hours worked by the individuals receiving the benefits actually increased by 17 percent. Nutrition, healthcare and sanitation were all also boosted in the regions in which the trial was carried out.
UBI certainly seems to address some of the problems that the Indian government has been seeking to solve for a long time. India’s economy has seen huge growth over the course of the past two decades, while 30% of the nation’s population remain in devastating poverty. There is no doubt that this plan will be expensive, but advocates see UBI as a way of removing the bureaucracy and corruption that currently plagues the Indian welfare system, and of providing genuine economic benefits to both the state and it’s citizens.
In more developed nations, too, UBI is attracting interest. In Finland, a trial scheme is taking place to replace the unemployment benefits with UBI in the hope of boosting employment. The city of Oulu will be the location of this experiment. Many of the jobs in Oulu have disappeared with the decline of Finnish firm Nokia, leaving thousands of skilled workers jobless.
One of the primary obstacles to these people getting back on the job ladder is the manifold restraints and conditions imposed by the Finish welfare system. The regulations forbid wage earning, even part time, for those on unemployment benefits in Finland, which can make employment a less profitable option than work. With the introduction of UBI, those struggling to find jobs in Oulu will be freer to take up part-time work, and to spend their time applying for jobs rather than wading through the constant bureaucracy required to ensure benefits continue to be paid.
There are downsides to UBI, or in the very least dangers. One of the primary fears on the left is that UBI will be used to remove many of the safety nets currently in place to support the poor while the wealthy receive cash benefits that they do not need. In the United States it is feared that those libertarian supporters of UBI would expect the removal of welfare systems supported by the current tax code, undermining essential support infrastructure such as medicaid and medicare.
On the right is the fear that people would avoid work if they did not have to go, but this has also been cited as one of the positives, allowing citizens to pursue unpaid but necessary careers such as caring. It is also argued that the idea is too idealistic, and that even if people did want to work, being able to hold out for a job they would not feasibly get while other necessary jobs are harder to staff would be a bad thing.
The jury is currently out on whether UBI really could be the way forward. There certainly have been impressive benefits observed in trials to date, but the universality of these trials is still in question. What is clear however, is that the economic paradigm in which 100% full-time employment is an achievable goal will inevitably be shifted by the march of technology. This could either lead to More’s Utopia or some other, somewhat darker future. Our world is fast becoming one with more workers than work, and with the fever of political radicalism rising it is imperative that this problem is addressed. UBI may or may not be the solution, but whatever the way forward is we need to find it, and soon.
By Amy Williams