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Should You Support Universal Basic Income? Who else is in favour?

Manak Suri

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In the previous article “Universal Basic Income: In Action” we explored that Universal Basic Income under different variants is already being put to trial in different provinces of a number of countries around the world. Before that, in “Universal Basic Income: The Idea” we weighed the potential of UBI in creating a monumental change in the way humanity as a society functions as of today. While there’s still quite some time required to ascertain how easily and efficiently the system can be put into effect and whether it should be put into place at all, some of the more apparent advantages, as well as flaws of the system, are repeatedly considered by experts in determining the answers to the aforementioned questions. In addition, many influential figures have also come out both in support of UBI as well as against it. Let’s take a look at the support UBI has garnered as well as the supposed benefits and criticisms of UBI.

Pros of Universal Basic Income

The first argument often cited in favour of UBI is for its potential to alleviate poverty, improve the standard of living and vastly reduce income inequality no matter which country it is implemented in. the Alaska Permanent Fund (AFP), which we’ve already discussed, was instrumental in improving the state’s income equality rank from 30 to 2. UBI trials in Namibia, Kenya, and parts of India have also yielded positive results in this regard. UBI has also resulted in the improvement of health, especially mental health, as reported by people who have been part of UBI trials in Ontario, Canada. UBI also encourages entrepreneurial behaviour since it guarantees basic subsistence thereby providing an incentive for people to take up a line of work of their liking. UBI trials in India and Namibia have also shown that it has helped promote financial decision making by women resulting in their empowerment. A guarantee of a fixed income every month also brings more power to people when it comes to deciding where they should spend money. The Roosevelt Institute research we discussed previously also suggests an overall growth in the US economy with a countrywide implementation of UBI. UBI is also expected to lead to a positive job growth and lower the dropout rates in schools since it provides more security to families.

Cons of Universal Basic Income

The critics of UBI argue that money that is essential for the poor is being redirected towards the wealthy and those citizens who have no need for it. Robert Greenstein, founder and President of Center on Budget and Policy Priorities in Washington D.C.  “if you take the dollars targeted on people in the bottom fifth or two-fifths of the population and convert them to universal payments to people all the way up the income scale, you’re redistributing income upward. That would increase poverty and inequality rather than reduce them.” In addition to that, it is often argued that UBI programs are highly ineffective when compared to welfare programs that are implemented on targeted populations. Therefore, unless UBI is implemented without the scrapping off of such welfare schemes, it is likely to find opposition from a huge number of people who currently benefit from these programs. Another argument against UBI one may repeatedly encounter is that UBI reduces the incentive to work, which leads to huge costs for the economy. This may also lead to a dearth of skilled and unskilled labour in the economy. The Swiss government have opposed the implementation of UBI for the very same reason, fearing that the current labour shortages may be exacerbated. Finally, an argument that also holds the door open for many debates is that UBI is too expensive to implement and will cost a lot to the government. As opposed to studies which show a growth in the economies through the implementation of UBI, many economists have also opposed it, claiming that UBI in the more developed nations will be very expensive to guarantee an acceptable standard of living to all the citizens.

Who Supports Universal Basic Income?

Since the idea was first proposed by Sir Thomas More in 1516, UBI has found suitors throughout recent history. Founding father of the United States Thomas Paine was in favour of it, philosopher and Nobel Laureate Bertrand Russell argued in its favour, and even Martin Luther King said: “the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” American economist Milton Friedman, Bishop Desmond Tutu, and even former US President Richard Nixon came close to bringing UBI to the United States. As of today, a number of high profile names in the Silicon Valley have expressed their support for UBI. An advocate of entrepreneurship and creativity, Mark Zuckerberg sighted UBI as an worth a look in his statement at his Harvard commencement address: “We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas.” Tesla co-founder and CEO Elon Musk believes implementation of UBI is inevitable. “There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk said in an interview in 2016. Pierre Omidyar, founder of eBay also donated towards a UBI experiment in Kenya. Coursera founder Andrew Ng expressed on Twitter: “More than ever, we need a basic income to limit everyone’s downside, and better education to give everyone an upside.” The list does not stop here.

UBI has at least gained enough attention to get people, investors, world leaders, and governments to talk about it and more importantly experiment with it. The results are not yet out and will take a considerable amount of time still to be able to present a final verdict on UBI and its effectiveness. However, as robots make humans redundant in recurring waves, is there still enough time to just be experimenting?

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A student of economics with a keen eye for developments in the geopolitical sphere, Manak is a curious individual with a penchant for writing about anything that makes him ponder long enough.

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Yes, You Should Start Caring About Politics!

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One of the most common things that you hear from people a lot of the time is something along the lines of “I just don’t really care about politics.” In fact, you might have even said something along those lines yourself. And it can be tempting to fall into this line of thinking. After all, politics are hardly the most exciting or exotic things in the world. However, the truth is that they impact your life in different ways every single day and if you choose to ignore politics, then that just meant that you’re going to end up falling victim to policies that harm you and the people around you. With that in mind, here are some ways that you can start being more politically minded right now.

Know the issues

Do you know where you stand on many of the most important issues of the modern day? Do you know what most of those issues are? The truth is that many people would rather ignore a lot of the problems that society and the world at large face simply because it can feel as though they’re too big to deal with. Things like the economy, climate change, and social justice aren’t just abstract concepts; they’re things that impact the lives of real people every single day. Being more informed about the issues will allow you to have a much better understanding of your own political views.

Know who to speak to

Do you know who your senator is? Your representative? Most people tend to only know major politicians who have held office at one point or another. Sure, you probably know the president or a senator like John Mccain. But what about all of the other senators like Doug Jones or Mike Crapo? These are the people you can actually contact if you want to start making some changes in the world. Getting to know who you can contact can help you feel much more involved in the modern political process.

Forget about personalities and focus on policies

Modern politics has become as much of a game of personalities as anything else. But the truth is that the personalities of individual politicians are far less important than the policies that they and their party want to enact. After all, the policies are the things that will actually make a difference in people’s lives. You should never vote just because you like or dislike the way that a particular politician talks or what their personality seems to be like. Always vote on policies, not personalities.

Now, this doesn’t mean that you should suddenly let politics take over every conversation that you have or that you need to be constantly thinking about it. But trying to bury your head in the sand and ignore the things that are going on around you isn’t going to do you any good. The only way that you can start to make some genuine changes in the world is if you face up to the realities of the modern world and try to do something about it.

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How Mafia-States Get Away with Criminality

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In theory, all 195 states adhere to the Charter of the United Nations and therefore pledge “to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained”. In other words, to play the game and adhere to basic governmental principles. That’s in theory: in practice, a handful of states in the world behave like mafias, and get away with it.

President George W. Bush first used the terms “failed states” or “rogue states”, during his office. Rogue states seem more adapted because, if they are failed states in the sense that they do not carry out their mission, they are not failed for everyone. Afghanistan is, still today, one of the most prominent examples of how to get personally rich by pretending to represent people. In the wake of the NATO intervention in Afghanistan, billions of dollars were poured into the country in reconstruction efforts, based on the belief that if the population was schooled and busy at work, they would be less likely to join rebel ranks. The idea was good, but most of the massive funds were sidetracked to line officials’ pockets and Afghanistan is pretty much in the same shape as it was before the program, if not worse. Business Insider covered the subject (1): “All districts receive central government budget to cover salaries of front-line forces,” reporter Jessica Purkiss wrote for the Bureau. “In many areas in Afghanistan, some of this budget disappears and the actual number of officers tasked with holding back the Taliban is much lower than the number actually allotted.”

And such rogue states also exist close to the Western sphere of Europe and the US. Almost every single State in Central and South America is at the warning level on the Fragile State Index (2) (the term was brushed up to sound less definitively damning than President Bush’s wording). Hungary was bashed this year, along with the rest of EU low-performers, for dropping sharply in the EU’s good governance ranking, as reported by Nicolaj Nielsen, for the EU observer (3): “Bulgaria scored the worst among EU states with 41, followed by Greece (44), Italy (47), Romania (48), Hungary (48), and Croatia (49). Dolan faulted the crackdown on civil society and other independent institutions in Croatia and Hungary for their worsening performance. Both governments were also embroiled in scandals last year. In one case, Hungary’s government allegedly funneled money from the Central Bank to friends and family.” Prime Minister Viktor Orbán learned from the report (4) that “Hungary loses 200 billion forints every year due to the corruption that exists in public procurement cases.”

Not to forget that States are not all mutually recognized and accepted, some of them are self-proclaimed. While some do indeed strive to carry out their stated mission and serve the people they claim to represent, some other are merely mafia groups with a political cover, which deal in various traffics and racketeering. Bordering Morocco, Algeria and Mauritania, lies Western Sahara, where a group named the Polisario Front announced to the world that it was the shield of the Sahrawi people, who originate from the arid strip of land, with the stated intent of creating a sovereign state. But that must be put into perspective with the endless list of allegations and accusations carried against it, regarding the Polisario’s management of refugee camps in Algeria for example. The self-proclaimed government of the Sahrawi – namely the SADR (Sahrawi Arab Democratic Republic) – is known for keeping the refugees captive in the camps, or keeping family members as hostage to guarantee men’s returns, maintaining a general state of violence and lawlessness within the compound. In addition, the European Anti-Fraud Office (OLAF) has serious doubts (5) as to what becomes of the humanitarian aid it sends. It suspects not only the food to be sidetracked and sold on the black market, but also to be requested in excessive numbers – the Polisario front claims it holds up to 200 000 refugees but has systematically refused census, leading humanitarian donors to believe the figures are doubtful.

Can this be avoided? Hardly, at the general level. Pablo Escobar coined the phrase which underlies the entire system : Plata o plomo (silver or lead). Officials could be paid off to keep silent and play along, or be shot. Therefore, it is in the nature of corruption systems to maintain themselves because, should a “pure” official arise, he will be removed and replaced by a more complacent one.

Mafia states use the cover of darkness or, better still, a politically activist stance. The Colombian FARCs – Polisario’s allies, incidentally… – and the Medellin Cartel, run by Pablo Escobar, had an intense PR activity with many “social and humanitarian” poses, to help improve their public image and stymie political push-backs. The Polisario Front has moved much of its assaults to the judicial level, in a new form of “civilized” piracy, including with the surprise attempt to seize a Moroccan shipload earlier this year in South Africa. “The conclusion of this case will actually tell us whether it is now conceivable, on the judiciary level, that international shipping industry – which carries 90% of global trade – become hostage to some form of unprecedented and increasingly vicious political piracy,” wrote Philippe Delebecque (6), a French judge specializing in maritime affairs.

Mafia states are here to stay, because the mafia creates the state, and not the other way around. Once the mafia has developed its tentacles and political power enough, it will make kings and topple uncooperative administrators. Other states in the world are fully aware of this fact, and that if they bust a mafia-state, another will replace it within weeks. So, in the best cases, neighboring countries let it be; in the worst cases, they get involved in the graft.

1) http://uk.businessinsider.com/afghan-national-security-forces-us-assistance-70-billion-2017-9
2) http://fundforpeace.org/fsi/
3) https://euobserver.com/political/136664
4) http://hungarianspectrum.org/2017/01/26/hungary-has-been-steadily-becoming-more-corrupt/
5) http://www.eubulletin.com/4018-exclusive-olaf-report-reveals-diversions-of-eu-aids-to-western-sahara.html
6)https://seapiracy.einnews.com/article/406654813/_j2VsuC3itgcmo3C?lcf=YCp5Ip9ztVBQmLVnDO55vXzEICMe6RFJuBE3DVQzur8%3D

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Universal Basic Income: In Action

Manak Suri

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Universal Basic Income presents a case to be considered, now stronger than ever, as automation hits us in recurring waves and machines are slowly beginning to take over much of the work that was done by human beings. If you aren’t caught up with the idea behind UBI and what its implementation could mean for us, you might want to read our previous article on the subject. Now, let’s focus our attention on the practicality of the scheme and let’s have a look at some of the existing cases of UBI in different parts of the world along with their results so far, and have a look at who all are backing the program to become the political norm in the coming decades.

Basic Income Around the World

Pilot programs of UBI have been held in different parts of the world. Besides Finland and Ontario, Canada, which began experimenting with UBI this year itself, countries such as Brazil, the city of Utrecht in The Netherlands and even Oakland in California, the United States have implemented varying UBI schemes on parts of their population. Hawaii passed a legislation this year which aims at forming working groups in order to study the effects of UBI. Elsewhere in the United States, the state of Alaska boasts of a genuine UBI program which has existed since 1976. The Alaskan Permanent Fund or the AFP, which is funded by oil reserves gives dividends to its permanent citizens every year. However, also in 2017, 77% of Swiss voters rejected a UBI proposal from being introduced in the country. Now lets take a look at the cases in Finland and Ontario individually.

In Ontario, Canada trials of UBI have recently begun involving 4,000 citizens between the ages of 18 and 64 who expect to receive a total of a little over 12,000 dollars a year. Couples are entitled to nearly twice of the amount. The plan is to study the effect of such a scheme on the health and well being of the subjects, their earnings and also their productivity. While the experiment is still in its initial stages and it’s too early to make any decisions, a few of the participants have already shown signs of a positive change. In addition to boosting the income of some who fall in the lower end of the earning bracket, the scheme has greatly improved their mental well-being, enabled them to afford healthier food and pay more attention to their health and visit their families more often. Other participants have also expressed that the safety net provided to them by the scheme has enabled them to focus on work they want to do and also on helping others.

Unsurprisingly, automation was a major factor in the decision to introduce the scheme in the province. Ontario’s Premier Kathleen Wynne said of the same,” I see it on a daily basis. I go into a factory and the floor plant manager can tell me where there were 20 people and there is one machine. We need to understand what it might look like if there is, in fact, the labour disruption that some economists are predicting.” Ontario has a population of nearly 14 million people. Positive results overall from the scheme may further result in its adoption throughout the province including all 14 million of its populace.

In January this year, 2,000 people were randomly selected across Finland to be part of a trial of one of the most advanced UBI schemes in the world, undertaken by the Finnish Social Insurance Institute. Under the scheme, the selected citizens receive  €560 (£495) from the Finnish government regardless of their employment status and how much they earn. Some of the cases in the country show that UBI provides the participants with more flexibility in their working pattern, encourages entrepreneurial spirit to take up what one would like to do, and also create more time and focus on volunteering and charity work.

Ms. Sini Martinnen, one of the beneficiaries of the program who noted the above changes in her lifestyle spoke of the same. “So there’s value in other things you do – if there’s just not enough work for everyone you have to figure out how to inspire people to be creative and do other kinds of stuff”, she said. Her statement falls in line with the kind of environment being created due to automation. Otherwise, you will have a lot of different social problems that will be very expensive – more expensive than the basic income system”, she added.

What Studies Say

The success of UBI among small populations in Ontario or in a Scandinavian country such as Finland does not necessarily mean they will work in larger countries. UBI may be introduced in a limited form in parts of UK, where we may be able to better assess the case of basic income and its viability over a population that is more diverse and layered with complexity at every step of implementation.

Nevertheless, studies on the matter precede trials in many countries. Considering the point, a recent study by the Roosevelt Institute on universal basic income and its effects suggests that the introduction of UBI in the United States would boost the US Economy by $2.5 trillion. The study, titled “Modeling the Macroeconomic Effects of a Universal Basic Income” suggests that a UBI of $1,000 a month to every American adult will lead to a growth of the economy by 12.56 percent over a period of 12 years, resulting in an increase in the GDP of the country by nearly $2.5 trillion. It reaches the statement after considering three different versions of unconditional cash payments. Another assumption taken up in the study to arrive at the given conclusion was that room for UBI in the budget would be made by increasing the deficit and not by increasing taxes. “When paying for the policy by increasing taxes on households rather than paying for the policy with debt, the policy is not expansionary,” the study says. “In effect, it is giving to households with one hand what it is taking away with the other. There is no net effect.”

In the midst of these studies, theories and trials UBI has attracted support and critics from all corners. In the final article of this series, we’ll take a look at who all are backing the program to become the political norm in the coming decades and what are the pros and cons tossed around in the debate around universal basic income.

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