New World Same Humans #56
Free money for everyone: why the debate on UBI is about to explode.
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This Wednesday in New Week #25 I wrote about Stockton’s recent experiment with a Universal Basic Income.
Stockton is a small city in California, not far from Silicon Valley. Despite bordering such wealth, it’s one of the poorest in the country; 25% of its 310,000 inhabitants live below the poverty line. Boarded up homes and shops are commonplace; the city was ravaged by the 2008 housing crisis and never recovered.
For two years starting in 2018, 125 low-income families were sent $500 a month no strings attached.
The results are now in. Recipients paid down credit card debt, spent on food and essentials, and worked more than those in a control group who received no UBI. All while reporting improved physical and emotional wellbeing.
Interesting in its own right. But it’s the wider context here that makes all this so urgent. Fuelled by massive cash payments to citizens during the pandemic, a wave of job destruction, and a radical new economic theory, the conversation about UBI has moved to a new place.
UBI is set to be one of the defining issues of the coming decade. So this week: where is the argument at now? What lies ahead? And is UBI, as critics claim, nothing more than an empty dream? Or can it be a practical path to a world that is fairer and more free?
The idea of a universal basic income – a regular cash payment made by the state to every citizen, regardless of means, and with no conditions attached – has a long history. But at heart the dream has always been the same: the end of poverty, and the start of a new era of human flourishing. So where is the conversation today?
🏝️ Starting with Utopia
Human history is a story of material scarcity. No surprise, then, that people have always dreamed of a world in which everyone has enough. The first recognisable proposal for a UBI can be found in the English politician and philosopher Thomas Moore’s 1516 work Utopia, which imagines an island in the South Atlantic whose inhabitants have established the perfect society. Most trace the current conversation about UBI, though, to the decades following WWII. In the UK some members of the legendary Beveridge Committee, whose recommendations led to the creation of the modern welfare state in 1945, floated ideas that sounded much like a UBI. Meanwhile Dutch historian Rutger Bregman has written extensively on the experiments in UBI run in the US in the 1960s, and how close President Nixon was to enacting an unconditional income of $1,600 a year – around $12,000 in today’s money – for every poor family. It’s amazing, now, to think that 1960s Republicans talked openly about money as a universal human right. You know what came next. Reagan and Thatcher’s neoliberal revolution, which broke the post-war settlement and championed free markets and small government. Winter came for the UBI dream.
🔍 The Evidence Mounts
The 2009 financial crisis, rising inequality, and the spectre of automation-fuelled mass unemployment revived interest in UBI in the 2010s. Since then the debate has drawn on recent experimental evidence that counters typical criticisms: that recipients of a UBI will waste money, refuse work, and descend into a purposeless malaise. All the evidence points in the opposite direction: see the results of the recent Stockton experiment. A recent large-scale trial in Finland, which saw 2,000 people receive EUR 560 per month, came to similar conclusions. Via endorsements from tech titans including Mark Zuckerberg and Elon Musk, by 2019 the idea of a UBI was mainstream enough to form part of Andrew Yang’s unsuccessful bid for the Democratic presidential nomination; Yang proposed a ‘freedom dividend’ of $1,000 a month for every adult.
💥 The Pandemic Changes Everything
The Stockton experiment is a useful addition to the evidence base. But if UBI is to become a reality, evidence isn’t enough. Proponents will have to win the political argument. And here the record isn’t so good; in a 2016 Swiss referendum on the subject, for example, a massive 76% voted against. But the pandemic has the potential to transform all this; a point that’s not lost on Yang:
Why is the pandemic such an important moment for UBI? The 2008 financial crisis put a crack in 40 years of neoliberal market fundamentalism, but the pandemic has exploded it. Governments, conservative and progressive alike, have fire-hosed cash at citizens across the last 12 months: the US is sending cheques of up to $1,700 to most adults. Last year Hong Kong handed around $1,200 to all permanent residents. Here in the UK the government was paying the wages of nearly one quarter of all workers last year. The result is a shift in perspective. Just two years ago, a proposal to hand $1,000 a month to every US citizen seemed radical. Today, Yang is standing for mayor of NYC; his proposal for an unconditional income for the city’s poorest 500,000 seems standard, even relatively tame. What’s more, evidence suggests that time will be an ally when it comes to sentiment: several polls show young people across Europe support UBI, and a Pew Research poll in August 2020 found US citizens under 30 were two to one in favour.
In the years ahead, the conversation around UBI will intensify. That will be fuelled by structural economic and social forces changing the way we think about money, work, value, and what constitutes a meaningful life. The NWSH take? UBI is an idea whose time has come, and it can liberate us to develop a new vision of life inside industrialised nations.
💸 Rethinking Money
I’m yet to mention a huge word, perhaps the word, when it comes to this week’s topic: affordability. The idea of a monthly income for everyone naturally raises the question: where is all that money supposed to come from?UBIs aren’t cheap, but modest schemes aren’t as expensive as you might think. A 2019 British study found that a £60 a week UBI for every adult in the UK would cost £28 billion and return UK spending on benefits to 2010 levels. More generous schemes, of course, cost more; in the wake of the pandemic, UBI is a big issue in the South Korean presidential election scheduled for next year, and potential candidate Lee Jae-myung, who supports a basic income, suggests new taxes on carbon emissions and digital services to help pay the bill. But the conversation around cost goes far deeper. A controversial new theory called Modern Monetary Theory says that we’ve long misunderstood the nature of government debt, and that governments should be far more relaxed about spending more than they take in via tax revenue. In short, we’re in the middle of a far-reaching rethink when it comes to the nature of money. That could have profound consequences for the conversation on UBI.
👱 The Wealth of Humans
At the heart of the argument is, still, the profound structural changes that will be wrought on the economy by automation technologies. AI, robotics, and other tech is set to decouple two fundamental, and historically intertwined, economic building blocks: labour and productivity. In a more automated world, we’ll have super-productive economies that need less human labour. And in that world, UBI serves a practical purpose: it provides for people – perhaps many millions – who are no longer able to find a job, the people superstar futurist Yuval Harari calls ‘the new useless class’. But there’s a philosophical argument, too. The knowledge and capital that make an automated world possible developed across centuries, and are now best understood as a shared legacy that belongs to all of us. It’s right, then, that the material wealth now created by that legacy is shared among us, too. We built modernity together. We should all share in the material spoils.
🌍 Beyond Capitalism
The end of the neoliberal consensus, a fundamental rethink of money, and the structural shift that is automation: it all adds up to an inflection point for capitalism, and a major moment for UBI. So what comes next? In a world of automated material abundance, the idea that people must work in order to be paid may come to seem as strange to our descendants as the feudal bonds between peasant and landlord seem to us. Two truths to guide us in the years ahead. Industrialised societies have enough to cover everyone’s material needs; the challenge will be reaching political agreement on sharing that wealth. And there’s so much meaningful work to do that’s currently ignored or marginalised by the traditional economy. In 2021, then, we have a chance to develop a new vision of life inside industrialised nations. One that’s less about people as servants of the economy, and more about the forms of life that remain when many don’t need a ‘job’. Think care of children and elderly relatives, local community, education of ourselves and others. The UK population of over-85s, for example, is set to treble to 5.1 million by 2066; they don’t all have to be looked after by strangers, or robots. Capitalism fuelled a remarkable increase in human wellbeing, but the next evolution is now taking shape. It’s time for a great turn back to one another. And a UBI can make that turn possible.
Fully automated luxury lifestyles
Thanks for reading this week.
Utopia means nowhere in Greek. For that reason, some believe that when Thomas Moore wrote his 1516 work he intended a satire on humankind’s endless, doomed search for the perfect society.
In other words: new world, same (imperfect) humans. But that shouldn’t mean a terminal pessimism. In 2021, we have the chance to build a better world. It’s an opportunity we shouldn’t waste.
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David.