Why is everyone talking about Universal Basic Income?

The appetite for UBI is growing around the world – initial trials are underway ©depositphotos

What is universal basic income?

In its fundamental form, UBI hasn’t changed much from More’s original proposition. The idea is to give every citizen, regardless of means, a sum of money, regularly and for life – usually enough that they don’t need to work. Luke Martinelli, a research associate at the University of Bath, explains UBI as follows: “The aim is to ensure that everyone receives uniform and lump-sum payments and can make themselves independent of other benefits provided by the state, such as social security benefits. A uniform lower income limit is therefore defined for everyone.”
Jamie Cooke, head of RSA Scotland, offers a more specific definition: “Basic income has to have certain core elements to it – it is universal, it is unconditional, and it is regular, secure and direct.”
UBI’s proponents are international and politically diverse. They range from radical leftists of the post-capitalist variety like Paul Mason or Aaron Bastani, to Silicon Valley gurus like Elon Musk and Mark Zuckerberg. “It’s really fascinating how international a conversation this is,” says Cooke.

Why is everyone interested in UBI now?

A veritable smorgasbord of reasons. The generally dire and unfair state of high-income economies is one. As the economist Branko Milanovic points out, the income of the middle and lower middle classes is stagnating, while the upper class is experiencing a steady increase in wealth. This means that the richest 1 percent of the population earns twice as much as the lower 50 percent.
“In Scotland, it’s very much been driven from a social justice perspective,” says Cooke. The UBI should compensate or supplement social injustices: unequally distributed benefits should not discourage people to take up regular work and earn their own money. The recognition of unpaid work by women in the care of the elderly and domestic work is also an important factor.
There are proposed public health benefits, too. Martinelli points to a study in Canada where hospitalisations and mental health problems were alleviated by increased income security. People might work for enjoyment, rather than survival: “It would theoretically allow people to take risks,” says Martinelli. “To go back to retrain or re-educate, to have a career break – these are positive productivity-enhancing changes.”

Will the Universal Basic Income save us from robots, Al & Co?

Other arguments fall in the “robots are coming for our jobs” category. “In the US, there’s been a push from the perspective of artificial intelligence, automation, the impact that this is going to have on jobs”, says Cooke. “That's partly why you're seeing so much interesting support from some of the entrepreneurs. To be brutally honest, there’s an element of self-preservation: they’re concerned that they’re going to have an impact on jobs, and people with pitchforks might turn up at their front door. Even the environment might benefit,” says Mark Maslin, professor of Earth System Science at UCL, because when we work less we consume less. “We are convinced UBI will cut down on consumption and poor environmental practices.”

Needless to say, this view provokes some rancor among progressives. “There are variations of basic income, even with all the work I do on it, which I would fight against tooth and nail,” says Cooke.
“This argument is preferred by the Silicon Valley gurus,” Coote says. “They want people to have just enough money so they can go shopping and buy their goods and not riot in the streets, but they don’t want social progress – UBI is attractive to them.”

What’s the left suggesting?

The progressive version of UBI usually involves its being paid on top of existing benefits provided to citizens. The most talked-about of these experiments took place in Finland, by the Social Insurance Institution Kela. From January 2017 until December 2018, two thousand unemployed, randomly-selected citizens were given a monthly flat payment of €560.
This was a very low sum, explains Miska Simanainen, a researcher at Kela. “This is equal to the minimum unemployment benefit in Finland – if you were getting earning-related benefits, then your income was much, much higher.” One of the key aims of the study was to find out whether UBI affects a person's motivation to work.

So how did the Finnish experiment go? “The main results related to employment and income was that nothing really happened during the first year of the experiment,” Simanainen says. Basically, people with UBI didn’t go and find jobs. Well-being may well have risen – the treatment group was happier and less stressed – though Simanainen emphasizes that evaluation is ongoing.

What are the criticisms?

There are quite a few – too many at present. “The idea that people will quit the labor markets is one; the idea that we’d be better to target the poor is another,” says Martinelli. “Then there’s the moral argument that it’s not fair to let people ‘scrounge’, and I guess the flip side of that is that if you give people income which is unconditional, you're not actively helping them to integrate in society – you’re basically encouraging them to drop out.” Related to this concern is a worry about how people will actually spend the money – does the state not have a responsibility to curb substance abuse, for instance?

Anna Coote also has serious qualms with the idea that any of these studies have worked in any financially viable sense. “Please don’t say there is evidence that it works – it doesn’t,” she says. “This is one of the most dishonest claims of some of its advocates: they say ‘it’s been trialed; it’s been shown to work’. I have done a thorough review of all the trials that there is literature on, and there is no evidence to show you that UBI could work in its fully developed form.”

Coote explains that the real issue here is funding. There is no evidence, in her view, that you can have a generous welfare state and solid social infrastructure alongside “full fat” UBI – i.e. giving out enough money to live on. Pushing for UBI, in this sense, is doing the right’s job for them – it’s only viable if we decimate the public sector.

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