The Universal Basic Income: For the Sceptics

Why basic income is a necessary step towards building a society fit for the 21st century

Contrary to popular belief, the case for basic income does not rest on the assumption that robots and artificial intelligence will bring about mass unemployment, nor that it would be a more efficient way of relieving poverty and reducing inequality (although it would). As set out in my recent book Basic Income: And How We Can Make It Happen, the arguments for wanting everyone in society to have a basic income are ethical rather than instrumental: a basic income would serve social justice, enhance individual and social freedom, and provide the basic security that people need to be healthy and functional.

Predictably, the growing interest in basic income has been met by a host of objections, all of which can be and have been refuted. Nevertheless, they persist. The two main criticisms are that basic income is unaffordable and that it will make people lazy.

Take affordability. This tends to be the immediate response – we cannot afford to give everyone a basic income. Often, this disguises the real reason for hostility. I would pose this question: suppose it could be shown, to your satisfaction, that a basic income was affordable. Would you then support it?

The cost of a basic income depends on the amount and how it would be implemented. Most advocates believe it should start at a very modest level, paid as a regular amount to all legal residents (subject to a waiting period for migrants, for pragmatic reasons). The payment to more affluent members of society would be clawed back partially or wholly through the tax system.

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"Means-tested benefits are expensive to apply and administer, fail to reach many of those in need, and create damaging poverty traps that discourage paid work."

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There are sound reasons for giving a basic income to all and then taxing back where appropriate, rather than applying a means test to determine eligibility. Means-tested benefits are expensive to apply and administer, fail to reach many of those in need, and create damaging poverty traps that discourage paid work.

The net cost of a basic income would thus be far less than the back-of-envelope calculations often bandied about, derived from multiplying a given amount by the population. Studies in the UK have shown that even under the existing tax and benefit system a basic income is affordable. So universal basic income would not, as some critics like to maintain, take resources away from public services.

My preference, however, would be a social dividend route, creating a national wealth fund built from rolling back the vast array of regressive subsidies and tax breaks that exist today and from levies on all forms of ‘rentier’ income derived from ownership of assets – physical, financial and intellectual. The fund could be supplemented by ecological taxes such as a carbon tax, and levies on the rental income flowing to Big Tech through use of our data.

The second standard objection to a basic income is that it would induce laziness and undermine the ‘work ethic’. I would pose a similar question: If I could show you, to your satisfaction, that it would increase work, would you then support it?

There is strong evidence, including from pilots and experiments in India, Canada and the US that a basic income does increase work, especially if work beyond wage labour, such as care work, is taken into account. Besides giving people more energy, confidence and ability to take risks, for those with most to gain from a basic income it would remove the disincentive to take paid jobs embedded in the existing social assistance system.

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