This could be an important year for the universal basic income model

This could be an important year for the universal basic income model

Posted by John P. Bradford // January 7, 2017

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What if people were paid just for being alive?

It may sound like some radical utopian ideal, but that’s the essential proposal at the heart of a growing movement now drawing mainstream support from a diverse array of economists, policy wonks and Silicon Valley thinkers: Universal basic income.

The idea is appealingly simple: In such a system, a government would guarantee each of its citizens a yearly stipend of enough money to cover a basic standard of living, no strings attached.

The concept, in its most elemental form, has been bouncing around circles of academics, activists and policy theorists for decades with little to show for it in the way of real-world practice.

But in recent years, a growing chorus of influential voices from across the political spectrum has taken to advocating a basic income model as a salve for modern economic and technological forces shaking up job markets and reshaping the very nature of work.

Just this week, Finland became the first European country to roll out a universal basic income program on a trial basis, and Business Insider reported that the Indian government would be releasing a report in favor of a similar system later this month following several experiments in the country. Several Dutch cities have also kicked off trials this year, as has the Canadian province of Ontario.

With a number of big and small governments finally taking the proposal from paper to practice and an American political climate galvanized by economic security worries, 2017 could be a groundbreaking year for the debate over universal basic income.

Strange bedfellows

Perhaps part of the draw of universal basic income is its rare appeal across groups of people among whom you’d be hard-pressed to find much other political common ground.

The concept has something for everybody. Libertarians like its potential to clean up a sprawling welfare state, Silicon Valley techno-utopians tout its prospects as a means of income for workers unemployed by their robots. And socialists and progressives admire its promise of poverty and inequality reduction.

The idea has its detractors too, of course, including those who argue (not entirely without merit) that it would be too expensive, that it would render people unwilling to work or that it could uproot long-standing social institutions centered on the workplace.

Yet aside from a vaguely conservative bent, critics tend to be individual skeptics whose views don’t cohere along ideological lines.

‘Post-work society’

Of these disparate groups of supporters, the tech-centric school of thought has perhaps the most radical imagining of how the system will look.

One set of proponents on the more extreme side views it as part of an oxymoronic-sounding vision for the future called “luxury communism.” Once artificial intelligence puts everyone out of work, the thinking goes, basic income will help people support themselves as their work weeks are diminished to just 10 or 12 hours, while machines will come under collective ownership.

Meanwhile, they can then spend all that extra free time on hobbies and passion projects.

While most capital-rich tech moguls would never support such a radical reassignment of private property, they do share a common vision of a leisure-heavy “post-work society.”

Other tech theorists have described basic income as a “social vaccine of the 21st century”

Just take it from noted basic income supporter Elon Musk.

“People will have time to do other things and more complex things, more interesting things,” Musk said in a CNBC interview on the topic last fall. “[They will] certainly have more leisure time.”

Other tech theorists, in the typically lofty language of professed “thought leaders,” have described basic income as a “social vaccine of the 21st century” positioning poverty as analogous to a public health crisis.

Besides Musk, Silicon Valley big shots like venture capitalist Marc Andreessen (who’s usually a champion of aggressive privatization), Facebook co-founder Chris Hughes and Y-combinator president Sam Altman have all expressed interest in the theory.

The latter two have even put their money where their mouths are by organizing and contributing to a $10 million fund to study the viability of the concept over the next two years. Y-combinator, a renowned startup incubator, is in the midst of its own basic income experiment involving several dozen Oakland, California residents.

Techno-Marxism?

The debate over basic income also marks the rare occasion on which those on the far left might see eye-to-eye with Silicon Valley’s ultra-wealthy one-percent.

The same “post-work society” described by technorati might also jibe with, though not completely fulfill, a Marxist prescription for labor in which workers aim to free themselves from the tyranny of the job market. Marx himself wrote of leisure time as a means of personal development, self-improvement and fulfillment, a sentiment that wouldn’t necessarily sound out of place in a tech investor’s Medium post.

And because the concept has never been adopted on a large scale, economists have only scattered experiments throughout the years from which to draw data.

Left-leaning supporters are also drawn to basic income’s potential as a corrective for the rapidly growing wealth gap.

In a post in Jacobin earlier this week, prominent progressive inequality analyst Matt Bruenig made the case that the elite class already has its own version of a basic income by way of earnings from rent and interest on an inordinate share of capital. Bruenig cites statistics showing that one in ten dollars of income produced in the United States go to the richest one percent in the form of capital payments independent of actual labor.

Some economists also argue that basic income could have social benefits beyond immediate income relief in the form of lowered opportunity costs that is, the value of one course of action as weighed against the expected gain of other possible options. When a certain threshold of income is guaranteed, people are able to be more daring about chasing jobs or staying in school longer without having to worry as much about the potential wages they are forgoing by doing so.

Could it actually work?

Even the most intricate argument in favor of universal basic income could be rendered moot should the system prove untenable in the real world.

And because the concept has never been adopted on a large scale, economists have only scattered experiments throughout the years from which to draw data.

One of the most widely cited of these pilot programs took place in the Canadian province of Manitoba in the mid-1970s. For five years, select Manitobans received monthly checks from the government in amounts determined by family size.

Revisiting the data collected at the time in 2011, economists found that life in areas under the program improved notably during the period in terms of quality-of-life metrics like hospitalizations, mental health cases and school retention.

Data on the effects in the United States of earned income tax credits (meaning small negative income tax payments that are a legacy of Richard Nixon’s failed attempt to push a basic income program in the ’70s) are also often considered to be an imperfect proxy for studying the effects of basic income.

Those results were similarly positive, revealing no major drop in working hours among primary earners and a decrease in poverty, especially among children.

But even if the effects of basic income are proven to be positive, the cost of maintaining such a program is a different matter.

An effort in Switzerland, which was resoundingly voted down in a referendum last year, was deemed too costly and potentially harmful to the Swiss economy. The German parliament determined that basic income was “unrealizable” for similar reasons in 2013.

But now, thanks to a growing number of countries and municipalities opting to serve as lab rats for the idea this year, we may soon see a more conclusive answer.

Read more: http://mashable.com/2017/01/05/universal-basic-income-2017-year-ahead/