Idea: From Far Right Wingers to Hard Leftists, Universal Basic Income Is An Idea With Growing Popularity

Courtesy of 'the daily blog'

   What if every month, you as an American citizen, received a check from the government for about $8,000? And what if I told you that the check had no strings attached--it's "free" money, merely for existing. Does that sound like some kind of socialist utopia? It certainly does. However, this idea is not new, nor is it socialist. It has been proposed by prominent enlightenment era thinkers such as Thomas Paine and Marquis de Condorcet. It also has support from modern figures such as libertarian Charles Murray and liberal Anthony Atkinson. Yet, the concept is experiencing a mainstream revival and is being taken very seriously by economists, sociologists, politicians and even Silicon valley visionaries from all ends of the political spectrum. That is because it's true aim is to create a new flavor of capitalism.

   On the basic income website, it states that "a basic income is an unconditional income granted to all on a individual basis, without means test or work requirement." You read that correctly--you can receive a basic income without even having to work. Essentially, UBI is a new system of welfare that seeks to replace the traditional welfare state which has failed to adequately help the very people it intends to help (in 1996 extreme poverty in the US was estimated at 636,00 while in 2011 it was estimated at 1.5 million.) But this idea has many economists intrigued for several reasons. One of the most obvious reasons is that it has never been done before, but economists are not even sure what to expect from it, which makes it all the more interesting. However, some economists believe that a UBI will eliminate the poverty trap, which is when your income rises and you lose state funding, therefore leaving you with no net gain or even a net loss.

Courtesy of this YouTube video

   The growing interest in UBI is strongly associated with growing fears that within the next 20 years, half of all US jobs may be replaced by automation. Proponents argue that UBI will help ease this transitional period in the market by helping workers explore other career paths or even be more willing to open up businesses of their own. Opponents argue that guaranteeing people income without any conditional could cause an incentive for people not to work. But an experiment with guaranteed income to residents in a Canadian province called Manitoba showed that providing a basic income to citizens did not have a significant effect on the labor market participation of the recipients. These results however, are disputable and in no way conclusive about the effectiveness of a nationwide UBI system. Finally, some opponents still argue that giving money to everyone won't necessarily solve poverty.

How would we even finance UBI?

   Funding a UBI system is certainly achievable in rich countries like the US, Canada, Germany, Switzerland etc. Some of the funding could simply be drawn from the replacement of old welfare programs. Additional revenue would have to be raised by several possible ways. One of them is through a raise in income tax, although doing this can be more harmful than good as it would potentially increase people's rationale for tax evasion or have other adverse effects. An interesting alternative would be through a system of taxation that is popular in Europe known as value-added tax or VAT. A VAT is a tax that is based on the increase in value something goes through in each stage of production or distribution. Another idea is funding through a land tax. A national land tax based on all the land in the US (whose entire value is estimated at $23 trillion) of just 5% could raise about $1 trillion in revenue.

Courtesy of 'fastcoexist'

Conclusion

   The support from people of all political ideologies proves that this is certainly not a strictly partisan proposal, but rather something that needs to be seriously studied and considered along nonpartisan lines. Could this be a solution to poverty? only in practice would we know for sure. But I would advise for us not to forget the wise words of Maimonides, "give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime." 

-----

Redirect to: 

Article in The Economist

Our state of Alaska closest to already having UBI