Is a Universal Basic Income Now Essential?

The idea of a basic income for everybody, has been around for a long time. The 18th-century radical Thomas Paine, more recently, Martin Luther King, even the free-market guru Milton Friedman have all advocated systems which have a lot in common with Universal Basic Income (UBI), but for some reason, this idea was forgotten about.

Up until now. At the present time, governments all over the world are looking at UBI again. There have been experiments in India and Brazil, and a pilot programme is taking place in Utrecht, in the Netherlands. On the 5th of June, the Swiss will vote in a referendum on a plan that would see all adults receive roughly £1,700 a month, with an extra £400 a month for each child. But what is UBI? In this, the first of a two part series on the subject, one of the main architects and a strong force behind the UBI movement, Dr. Guy Standing explains. Dr. Standing lectures at the School of Oriental and African Studies at the University of London, is co-President, of the Basic Income Earth Network (BIEN) organisation, and his latest book entitled: A Precariat Charter: From Denizens to Citizens (Bloomsbury Academic, 2014), covers the UBI theme.

The basic argument behind UBI is that the old financial system has broken down; the relation between capital and investment which has been stable for hundreds of years has destabilised. This is causing social unrest, the rise of far right groups. To counter this, people need a basic guaranteed income.

There is, however, an argument that UBI will create a new underclass of people who are fed a certain amount of money each month, whilst the rich, who have access to capital live on a far higher level. When they are asked about the poor people, they say: “Oh they’re alright, they are getting UBI.” To this argument, Dr. Standing answers: You have to see UBI as a certain anchor in society. We now have an increasing number of people faced with a lifetime of debt. Unless you provide people with some kind of security, problems will only get worse. I am convinced by the psychological evidence, obtained from the pilot programmes, that people who have basic security; and we are talking about a modest amount, which they are guaranteed, that they are likely to work more rather than less, are more productive, altruistic and tolerant of others and become better social citizens. The argument that somehow you are going to create an underclass is an insult to people and to our democratic institutions, because 99% of people want to improve their lives. People want to work, care for our relatives and so on. I don’t think that by providing UBI you are going to fundamentally change human nature at all. People who feel secure are more likely to join bodies like Trade Unions and other organisations who would represent them, because they will feel secure.

If people have security and time, that means that they could join political parties and become a threat to the ruling party? To this, Dr Standing answered:

Yes, there is that view, but Milton Friedman was an advocate, he understood that for a market economy to function properly, people must be able to make rational choices… Many Libertarians in the USA for example are realising that unless we do something about inequality we are not going to get a functioning, improving capitalist system. What we have now is a worldwide financial system which is being transformed as we speak. More and more people are going to be contracted online. In the next 10 years, one in three financial transactions will be made online. We have to rethink of how to restructure work, and we have to understand what work is, include all the forms of work that are not remunerated at the moment. Caring for our relatives, working on ourselves as human beings, all of these things are crowded out of you are heavily in debt, and struggling to serving.

This programme is the first of two on the subject of Universal Basic Income. The next programme will cover practicalities.