Could Universal Basic Income boost business?
Free money for all
September 29th 2017
When it comes to new ideas, handing out free money certainly ranks as big – but is it clever?
The jury is still out on whether Universal Basic Income (UBI) could finally end poverty, as proponents claim, or simply add to the financial woes of workers who will ultimately foot the bill. Regardless of what the true impact might be, the idea of a supportive handout, given to all without means testing or work requirement, is gaining traction.
Free cash society?
Scotland is the most recent country to begin research into how a UBI scheme might work, with First Minister Nicola Sturgeon stating, “It is an idea that merits deeper consideration.”
In Scotland Will Begin Funding Universal Basic Income Experiments, Futurism.com writer Patrick Caughill notes that new ways of providing income will become necessary as workers are replaced by machines: “…we are on a track toward greater automation. So, policymakers must take time to consider how to deal with a society where the majority of previously human-held jobs will be accomplished by machines. UBI may also be a long way from perfection, but it is the willingness of governments and other entities to conduct these experiments that will allow such policies to grow and take root.”
“I think we'll end up doing universal basic income. It's going to be necessary...There will be fewer and fewer jobs that a robot cannot do better.”
Hidden cost of robots' rise
Various charities and lobby groups are championing the UBI cause. New York-based GiveDirectly operates in African countries, providing basic incomes to ‘the extreme poor’ through donations; Australia’s Green Institute recently published a whitepaper (PDF) on the subject.
Over in Belgium, the Basic Income Earth Network was founded in 1986 to coordinate the activities of supporters around the globe. And closer to home, Basic Income UK is a ‘collective of independent people promoting unconditional basic income as a progressive social policy for the United Kingdom, and beyond.’
Some of the world’s most successful entrepreneurs have expressed interest in UBI. Besides Mark Zuckerberg and Richard Branson, Tesla chief Elon Musk, is a fan. In Elon Musk doubles down on universal basic income: “It’s going to be necessary”, Business Insider reports Musk’s comments to the World Government Summit in Dubai earlier this year: “I think we'll end up doing universal basic income. It's going to be necessary...There will be fewer and fewer jobs that a robot cannot do better. I want to be clear. These are not things I wish will happen; these are things I think probably will happen.”
Does more mullah mean more tax?
Last year Switzerland became the first country to hold a referendum on whether to adopt UBI, as reported in the Quartz article Switzerland has rejected the idea of universal basic income. Supporters suggested a ‘no questions asked’ monthly payment of £1755 for each adult, but the proposal was overwhelmingly rejected by 77% of voters. This demonstrates the resistance many feel towards giving people something for nothing. Indeed, none of Switzerland’s political parties backed the plan.
Many experts and commentators aren’t sold on the idea of UBI either. CapX editor Robert Colvile pulls no punches in Why universal basic income is a particularly bad idea. He argues that reducing welfare provides a huge incentive for the unemployed to find work. Colvile believes UBI would compound the unemployment problem rather than, as supporters claim, giving the poor and disenfranchised a financial hand up, leading to higher employment and buoyant economies. But Colvile’s biggest gripe is with the cost.
“This thing costs money,” he writes. “Enormous amounts of it… to get that £3,692 from the Government, you’d pay thousands of pounds more. This would mean (and stop me if you don’t follow the logic) that large numbers of people would be paying a much larger amount of tax. In fact, it would represent a transfer of £120 billion of extra taxation into the welfare state – the equivalent of the entire budget of the NHS in England.”
Citizens dependent on big brother
Huffington Post contributor George Zarkadakis also takes aim at UBI in The case against Universal Basic Income, citing philosophical concerns over its impact on society.
“Democracy is based on the assumption that citizens are the producers of wealth and the owners of property,” writes Zarkadakis. “UBI is undermining the foundations of democracy because it transforms citizen freedom to citizen dependency...In short, we need to reinvent democracy in a post-work future. The alternative would be to enter an era of corporatist totalitarianism dressed up as representative democracy.”
Whatever side of the fence you’re on, UBI is having a moment, and whether it’s clever or not, the idea isn’t going away any time soon.