Universal Basic Income: a panacea for society's ills?

As a policy, support for Universal Basic Income (UBI) flouts traditional political and social lines, making unlikely bedfellows of those on both the right and left wing. Facebook’s Mark Zuckerberg, free-market evangelist Milton Friedman, and firebrand economist Yanis Varoufakis all count among its high profile, and rather disparate, champions. Their advocacy has helped bring the policy into mainstream consciousness, and widespread political discussion of its implementation, in contrast to a few years ago, is now readily had - no longer is UBI simply dismissed as an unattainable utopian ideal.

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Universal Basic Income

Its popularity has risen in correlation with the increasing economic inequality that is now endemic across Europe, and whose spread, political tinkering has done little to inhibit. For their failure to address this widening gulf, centrist parties of the left and right have been punished at the polls, and politics has polarised. Electorates and experts, alike, have begun casting their eyes further afield for something more radical, something more transformative to address the crises in which societies are mired. Many have alighted on UBI as one such solution.

But what exactly is Universal Basic Income? And what do its proponents say about it?

UBI is cash payment delivered, periodically, to all individuals, without means testing, and regardless of employment status. The income is considered a right, and there are no restrictions placed on what it can be used for. There are also variants on UBI, differentiated by those who are entitled to receive payment, called, simply, a Basic Income (BI) - context, generally, dictating the restriction. The following is a contemplation on the potential of such policies.

Offsets technology-induced and stressful state of unemployment  

As technology advances with ever-growing rapidity more and more jobs are being lost to robots and algorithms. People entering the workforce now, unlike previous generations, are told to expect multiple career changes in their lives, and to brace themselves for periods of unemployment or low income whilst in between professions. For some, this reality is already being felt, and it's not a pleasant one.

There is much research that shows enforced profession change, as will soon be completely mundane, can be psychologically very damaging. An issue compounded by the financial scarcity that is often its by-product. UBI would ease this stressful transition, allowing the jobless to get back to their feet while retaining their dignity, find suitable new work or training, and eventually restart contributing to the economy. The removal of absolute scarcity during this interim period has been shown to facilitate better decision-making by the individual - reducing rashness and encouraging a closer consideration of the longer term.

The power to rejuvenate

Sceptics of the proposition often question how society could justify giving free money to drug addicts, alcoholics, and ex-criminals, as they would be guaranteed under UBI. On this count, the evidence actually points to UBI having largely positive effects. A trial in Liberia revealed that many addicts and criminals who received UBI, rather than squandering their money as many presumed they would, spent their monthly endowments on subsistence and what the study described as ‘legitimate enterprise’.

Similarly, in Give People Money, Journalist Annie Lowrey, identifies a UBI pilot in a small village in Kenya as producing the same results. Before the pilot, the village was made up of dirt roads, had little access to electricity and ran a largely open sewage system. Midway through – the program is ongoing – and the village has been transformed, almost unrecognisable, and is now a prime example of what Lowrey calls innovative entrepreneurship.

Both of the above examples speak to an interesting psychological quirk that is often revealed in the discussion of UBI. Namely, when asked about its viability individuals tend to think that although they themselves would put their grant to good use, the initiative would fall down because of the profligacy of others, who are likely to make ill-advised, wasteful choices. In actual fact, when put into practice, UBI has consistently shown that people, irrespective of background, tend to be impressively shrewd when putting their money to use.

Reduction in ever-growing bureaucracy

In most states, there exist countless governmental organisations responsible for helping those in poverty, handing out unemployment benefits, food stamps, etc. The running of such sprawling, intertwining welfare programs is expensive, time-consuming, and often complicated for both administrators and recipients. A simple cash payment directly to the individual would cut down on this bureaucracy. To give some sense of scale, in the US there are 79 different means-tested programs. To the pleasure of all those concerned with reducing government and red tape, all these could all be scrapped with the introduction of a UBI.

Tackling domestic abuse

Less publically discussed, but of equally vital importance is its power to tackle abuse. To society’s embarrassment, domestic violence remains prevalent wherever you go. Those who suffer abuse - the majority of which are women - often remain trapped in violent situations, lacking the financial means needed to escape. By ensuring a certain level of financial independence, as UBI would provide, the process of leaving an abusive partner would be simplified. It is unclear how many people currently suffering in silence this could help.

Empowering workers

Those on the left see UBI as an opportunity to empower the working class, providing them with what historian Rutger Bergman has called ‘real freedom’. For him, this freedom is predicated on the ability to say no, a privilege currently enjoyed exclusively by the rich. UBI, he believes, would give individuals the ability to say no to jobs they didn’t want, to cities they no longer wanted to live in, and to employers who treated them unfairly – that ‘is what real freedom looks like’. Additionally, the redistribution of wealth would provide workers with greater bargaining power. As Annie Lowrey has questioned, ‘why take a crummy job for 7.25 an hour when you have a guaranteed 1,000 dollars a month to fall back on?’ In such a situation, employers would be inclined to take seriously the demands of their workforce, and improving working conditions would likely follow.

The future of UBI

In many people’s minds what is still lacking is a satisfactorily long, randomised trial of UBI, run with a sufficiently large pool of people. Currently, empirical proof of its long-term success or lack thereof simply does not exist. Even the much-hyped trial recently concluded in Finland, lasted just two years, focused only on the unemployed, and has already been criticised for lacking the scale or ambition to really put UBI, or Basic Income, to the test.

Nonetheless, with its promises of transferring not just money, but dignify, responsibility and power back to the people UBI remains a seductive prospect, and one certainly worthy of continued experimentation. Trials are being planned for places as far-flung as India, Iran, and Scotland, and it’s with great anticipation we wait to see how they fare. UBI may yet have its time in the sun.

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