What is the Universal Basic Income (UBI)?

The Universal Basic Income (or, in short, UBI), as the name suggests, is a social welfare proposal which provides all citizens—rich, poor, and elderly alike—with a regular basic minimum income paid by the government, without the need to work.

It is a guaranteed minimum income of sorts, which societies have come to think of as a revolutionary step in the backdrop of incessant automation of jobs (or, as I put it earlier when the robots take all our jobs!).

Even though no country has fully adopted this basic income structure, how the concept has spread in the last decade is phenomenal. It is also unique to our present societal condition when most of our jobs are easily replaceable by machines.

While some sceptics have dissed the idea of UBI as utopian, several have taken up the idea as the future mechanism of sustaining society. Despite that, there are challenges that persist when discussing the notions of UBI (which I will briefly touch upon in this essay).

Historically, Universal Basic Income!

Although the concept of Universal Basic Income may seem nascent, it has been discussed, and debated, and even several pilots implemented and failed in societies. Somehow the sceptics may be right to call it Utopian, given how Thomas More, in his Utopia, discusses a society where each person is guaranteed a certain income. For More, it was the only way to deal with stealing and theft, if everyone already got as much as they needed. He adds:

Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming first a thief, and then a corpse.

(More, 1516)

Come late 18^th century Britain. In 1795, a group of local magistrates met in Speenhamland, Berkshire, and devised a system to alleviate distress among locals due to poor harvests in those days. Family incomes were topped to cover the increased costs. A man could now buy three-gallon loaves a week (plus a loaf and a half for every other household member). There was sufficient bread to feed any household without having to work or with extraordinarily little work.

However, there was something amiss with the Speenhamland plan.

Within a decade or two, the population had already doubled—enough to make it not feasible for the plan to sustain any longer. By the 1830s, the model was highly unpopular. Several complained that the Speenhamland system caused a “universal system of pauperism”. Others, like David Ricardo, thought of the system as a “poverty trap”, where free money incentivised people to reproduce more—make more kids—and increase government costs.

Come 2020. The COVID-19 pandemic has brought the world to a halt. And during this challenging period, ideas of Universal Basic Income again came to the fore. Several politicians and industry leaders (like Jeremy Corbyn, Tulsi Gabbard, Andrew Yang, Mark Zuckerberg and Elon Musk) have pushed forward ideas around UBI as the future of our society.

What does a Universal Basic Income mean?

UBI, as an income distribution model, entails three components.

• First, there is a cash transfer, as opposed to other kinds of benefits (like food redistribution or housing schemes).
• Second, it is universal—in the sense that everyone tends to benefit from the scheme, as it does not target specific groups/communities.
• Third, it is unconditional. Anyone receiving such benefits must not comply with any work/legal requirements. It is not conditioned on means or demographic requirements (like age, gender, marital status, etc.).

Need for the Universal Basic Income

Several have argued that UBI must be a minimum basic income support system which allows people to sustain themselves without having to depend on work/employment. This is becoming more immanent in the face of technological growth and the rise of automation in society.  

The argument goes that with increased automation and robotisation of employment, there would be fewer and fewer jobs for humans. In a society where machines hold most jobs, what should humans do? How do they survive? As a natural corollary to a world without human jobs, thought leaders are now turning to ideas like Universal Basic Income as the future.

While this idea that jobs will die down is not new, every innovation has led to anxieties about job loss. When the calculator was first invented, people thought there would be no accountants in society. But, as it turns out, technology reproduces newer jobs—but only up to a point.

My hunch is we have already reached a point where technology can no longer produce newer jobs for people. Reason: automation works on algorithms that seek to perfect the art of doing anything better than a human. So much so that machines have now taken up tasks that humans thought they had a monopoly over—like writing, painting, practising law, and recreating themselves. These changes are so rapid to our times that there is no going back.

Suppose there are barely any jobs for humans to work on. In that case, humans could respond best by creating a system where machines work to produce all the resources necessary for society while doubling their reproductions. All humans have a certain sum of money to spend on and buy these goods.

This way, machines would have now replaced humans in laborious tasks, but at the same time, allow humans to do things they like—like going out more often, partying, painting, dealing with their heartbreaks without having to worry about waking up to bosses’ calls at 9 am every morning. And there would still be sufficient money in the economy.

What is with the Universal Basic Income, then?

Several pilots have been running around UBI in various locations.

The US state of Alaska has given an annual check of about $2000 (when oil prices are high) to $1000 (when they are lower) since 1982. Other US states, like New Jersey, North Carolina, Pennsylvania, and Iowa, have tried and failed in basic income schemes. Similarly, Brazil has been experimenting with such transfers since the 1990s.

In Europe, Finland tried out a basic income model, providing about $635 monthly for 2000 unemployed individuals for two years. As it turned out, the participants felt happier and less stressed during the period. There are several pilots underway in Germany and Spain as well.

In Kenya, several universal primary income incentives are underway. The charity GiveDirectly has been paying over 20,000 people across 245 villages in Kenya. Some programs are running in India and China as well.

However, the problem at large persists.

How do we accommodate the growing population and inequality in the world with a model of UBI? If a country is rich, it can accommodate for models that provide for monetary transfers efficiently. But, in countries like India, Bangladesh, and Uganda, there is unprecedented poverty, unequal distribution of income, and lack of resources. In such countries, how do we practically implement UBI?

Cover Photo by Christine Roy on Unsplash