Demistifying Basic Income: Voices from Supporters, Converts, and Detractors around the Globe
Until recently, the idea of universal basic income (UBI) was widely dismissed as eccentric and utopian. Today, it is enjoying a remarkable upsurge in interest and is now being taken increasingly seriously in a great diversity of nations as a way to revolutionise income support in society.
The principles of UBI have been discussed in articles of INSEAD Knowledge: it would pay every individual, as of citizen right, an unconditional income irrespective of how much they earn in salaries or other sources of income and of their work status or circumstances.
With a long ideological history dating back to ancient Athenia, then discussed by Thomas More and later by British and American economists and political philosophers in the 19th and 20th centuries, the idea is witnessing a revival. This can be attributed to a number of factors: from the rise in inequality and work-related poverty to the growing fragility of labour markets, the impact of accelerated new technology on jobs and to the increasing inadequacy of modern social security systems to deal with these growing risks.
There is no single model of UBI on offer. Advocates come from very different perspectives and levels of ambition. Most supporters accept that a UBI is not a silver bullet that would solve all today’s problems, but see it as a source of empowerment that could lead to better work for many, while taking the sting out of a much more precarious and insecure future.
It’s Basic Income: a new book with unprecedented reach
Released on March 8th 2018, It’s Basic Income explores the growing global debate by bringing together 38 contributions from a great range of perspectives - from supporters and recent converts to dissenters – across five continents and fifteen countries (including the editorial and content contributions from the authors of this summary article). The greatest value of the book is its diversity: it addresses many of the still hotly debated issues around UBI, but from a range of different angles and cultures:
How would individuals choose to exercise the greater choice offered by UBI?
Is it too cumbersome and expensive?
How would society change in general?
The book presents arguments both for and against UBI coming from across the political and economic spectrum, including from business leaders, innovators, entrepreneurs and also people with diverse professional backgrounds, from academics to musicians.
Trials are currently being implemented in a range of diverse contexts. Those discussed in the book range from Y-Combinator-funded pilot in California to small-scale projects in Uganda (crowd-funded), Kenya (run by the charity GiveDirectly) and Brazil (launched in 2008 by the ReCivitas Institute as a citizen-to-citizen project). It is too early to know if such trials will help lay some of the current debates to rest; comprehensive evaluations of the effects of these pilots will only be available in some years. For now, what kind of perceived benefits are driving these initiatives in such distant places?
The Boons of UBI – and voices from critics
The foremost objective of UBI is to tackle precariousness and poverty, particularly prevalent in developing countries. Lessons are drawn from the experience of past trials by, among others, Sarath Davala and Soumya Kapoor Mehta who examine the way the India trial lifted many people out of poverty and enabled them to make better decisions about their futures. Davala explains that the sense of income security created by the basic income payment gave people the freedom and stability to make strategic choices about their employment and to better plan the cultivation of their land without borrowing, which lowered the risk of the perennial debt traps they had previously experienced. In addition, malnutrition in children decreased while levels of school enrolment increased, especially among girls.
Another effect observed is one of empowerment. Bruna Augusto and Marcus Brancaglione discuss how the recent small-scale trial in Brazil they helped to set up boosted levels of basic security. This sense of safety enabled villagers to move from a state of passivity towards their own life to considering and designing their own futures. Participants used their income on basic purchases. Once these basic needs satisfied, they started financial planning and even small businesses, or were able to seek out jobs in other localities. Mehta explains that for the case of India the effects go beyond material benefits, including an ‘emancipatory’ effect on women and children who otherwise have limited voice in decision-making both within the household and in the community.
One of the greatest criticisms of UBI is that people will not bother to work or make an effort if they are receiving ‘free’ cash. The same concern is found in both emerging and developed nations. Yet, there are arguments to the contrary. The ‘empowerment’ argument in the context of technological change and automation is laid out by co-author of this article, INSEAD’s Eduardo Rodriguez-Montemayor, who argues that ‘UBI can help achieve the adaptability and flexibility required by the 21st century economy. People will take on the opportunities brought by technology as long as they can afford to leave jobs, take risks and get the relevant training.’ Unlike the welfare traps observed in means-tested support systems, by being unconditional UBI could lead people to work more, and potentially also more productively – if it makes it easier for people to search jobs more aligned to their competences and motivations. Brenton Caffin from UK innovation think-tank Nesta, argues that UBI could encourage Californian start-up models, significantly empowering ‘massive labour market liquidity and unlocking of latent potential and innovation’.
The greater choice allowed by this empowerment would also help develop activities with social value that go beyond commercial or remunerated activities. The impact of UBI on the arts and culture are addressed by musicians Brian Eno and Toby Deller. One premise is that culture and the arts not only bring intrinsic value by nurturing the individual spirit; they can bring about wider social impacts (such as changes in social norms) and may even become a source of national competitiveness (via soft power; national/city branding; etc.). Social value is also created by activities that are currently not remunerated but are essential in the context of changing demographics, such as caring for children or relatives. Vanessa Olorenshaw, a founding member of the UK’s Women’s Equality Party, looks at the impact on unwaged work, undertaken mostly by women, in the home and the community via voluntary work. In addition to supporting such valuable work, UBI could also foster inclusion, as addressed by Ursula Barry from Dublin in analysing how to close gender inequality.
Empowerment also means a more active role of people in society. Arguments that a basic income would boost active social participation are presented by Roope Mokka and Katariina Rantanen from the think-tank, Demos Helsinki. They argue that a basic income would enable people ‘to be able to produce, contribute and create value – not just to survive and have enough money for basic necessities…’ Writers from Canada’s The Leap Manifesto argue that, by giving workers greater bargaining power, it offers the prospect of greater ‘democratic control of resources and productive assets’. Additionally, by ‘decommodifying’ labour, it would pave the way for a dignified life with less dependency on employers, giving individuals more freedom to direct their lives.
Despite the favourable points, the idea of a UBI remains highly controversial. It divides opinion even amongst those with common political values. Citizen participation advocate, Peter Beresford OBE, raises questions about the top-down nature of UBI – isn’t basic income just another policy that is created and prescribed by the few at the top? Ed Whitfield, co-founder of the American Fund for Democratic Communities, argues that a basic income is not transformative enough. Public policy academic from Germany, Anke Hassel, claims that because of its costs, and because it would benefit the poor only slightly but at the expense of the middle classes, a UBI is a ‘dead end’. Implementation also depends on winning public support. As Anthony Painter of the UK’s Royal Society of Arts puts it, UBI supporters need a ‘pluralistic movement that reaches across political, ideological and interest divides. The best thing that those who consider basic income to be essential can do is ‘widen the tent’.
Verdict: it’s empowering but it’s not a panacea
Supporters and detractors, both sets of viewpoints are represented in the book. Supporters claim that UBI will cut poverty while transforming the nature of individuals’ choices with more empowerment. Central to a UBI is that it is non-prescriptive: it would offer people greater flexibility between work, leisure (and let’s not confuse leisure with idleness), education and caring; greater autonomy can then bring greater financial freedom for women and recognition for unpaid but essential work. Detractors argue that it is a utopian ideal that distracts from more practical and cost-effective solutions (further analyses show that UBI does present challenges for public coffers and its implementation would imply ambitious reforms in tax and welfare systems so that it adds up financially).
There is growing acceptance – even among the most committed of advocates – that a big-bang approach that sweeps away large parts of existing systems of social security cannot work. As some contributors argue, successful implementation would require an incremental approach to reform: a UBI would need to sit initially alongside the existing income-support systems, rather than replacing them entirely; a phase-in period might be needed, perhaps starting with modest levels of payment or introducing it initially for certain demographic groups such as children. Actual implementation would need to be tailored to different tax systems, social cultures and stages of development. What works for one country might not work for another.
Moreover, UBI would need to be accompanied by other policies targeting training and re-skilling, employment and (falling) wages, and the growing inequalities and concentration of wealth ownership. Even with a UBI that helps ensure a basic standard of living, underprivileged people may not be able to close much the gap with respect to those with access to more opportunities who now accumulate relatively more resources.
Despite the challenges, there remains a powerful impetus, national and global, behind the idea of a UBI. A measure of the new interest is to be seen in the number of trials now in place, from the Netherlands and Canada to Uganda. Several other countries are considering joining the ‘trial club’, such as Scotland.
National pilots will provide new evidence of effects on employment, poverty and well-being –results from Finland, perhaps the most ambitious trial, will be followed with interest. The net effect, supported in part by evidence from earlier pilots, is more likely to promote than weaken the incentive to work, as well as acting as an inducement to earn more. Indeed, incentives would be stimulated by lowering dependency on means-tested programmes.
The debate has in many ways moved on from questions of desirability to those of feasibility. The trials will help answer some of the important questions around its practicality. Future work will draw on the evidence from the national experiments, but need to concentrate now on questions of implementation: Is it affordable? Can it work in practice? Perhaps most important of all, will the public buy-in to the idea?
About the Authors of the Article
Amy Downes is the Co-founder of Work till Late design studio and communications consultancy. Her interest in the topic of Basic Income stems from her time studying philosophy and social justice and welfare.
Stewart Lansley is a visiting fellow at the School of Policy Studies, University of Bristol and at London's City University and the author of A Sharing Economy, Policy Press, 2016 and Breadline Britain, Oneworld (with Jo Mack), 2015.
Eduardo Rodriguez Montemayor is a Senior Research Fellow at INSEAD’s Economics Department.
About the Book
Amy Downes and Stewart Lansley (Editors), It’s Basic Income, The Global Debate, is published in the UK by Policy Press and in the USA by the University of Chicago Press.