Universal basic income (UBI) has been a fringe policy proposal for decades that lately seems to be gaining political traction. In the past few years people across the political landscape from Elon Musk to Yanis Varoufakis have come out in favour of the guaranteed income. As such, it seems worthwhile to take a proper look at how the promise of free money would actually play out and if it could work.

On paper, UBI seems like a solid plan. If implemented, a specified sum of money is granted to every adult citizen of the state, every month, no strings attached. Your life goes on like normal but with an extra splash of cash you didn’t have to work for. The stated reasons for this seemingly radical idea are twofold. On the one hand, people like Elon Musk and Mark Zuckerberg warn of the oncoming automation that will drastically reduce the available jobs. UBI would make sure people survive the transition to our new automated economy and don’t get lost in the storm of progress. The other reason is UBI’s avowed power to reduce the currently massive inequalities visible in all economies. A monthly injection of money to all citizens, so the argument goes, would take the rough edges off our rugged capitalism and give those who need it that little step up from which to advance into prosperity.

Unfortunately, the powerful have shaped the world in such a way that there can be no such thing as free money. The money has to come from somewhere and in most UBI proposals it actually comes from other socialised benefits. The logic being that if we’re giving out free money, we don’t have to take care of everyone anymore. Take Andrew Yang, currently running for the Democratic nomination in the U.S. presidential race. Yang has profiled himself on his Freedom Dividend, a UBI plan that would grant an unconditional $1,000 to every American adult. On his campaign website it states:

“Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally — most would prefer cash with no restriction.”

Clearly, for those who need it most, the guaranteed income is not free money. Yang’s plan simply substitutes benefits people already had with lump-sum cash that they can spend freely. Now, like Yang’s campaign website claims, there is an undeniable appeal to simply getting cash as opposed to restricted benefits. Economic freedom allows people to plan for themselves and potentially free themselves from a cycle of dependency.

But what kind of freedom are they gaining? Proposals currently on the table for a guaranteed income simply ignore the realities of poverty. The supposedly “free cash” has, in many cases, already been spent before it ever arrives. It’s only free money for anyone without outstanding medical bills, worries of making rent or troubles putting good food on the table. This is especially so when we consider that precisely these people are going to be most damaged by a privatisation of basic goods and services, regardless of whether or not they gain some meagre guaranteed income.

As always, when the government steps back, private companies jump in. Then, all our necessities are being provided by companies who live by one rule: make as much profit as possible. We’ve seen the world over how this plays out. Companies either raise prices, lay off workers or slash wages. The UBI is not a cash injection for the poor, it’s a subsidy for private companies and an excuse for the government to drop its responsibilities. It’s no wonder the proposal is so popular under Silicon Valley techbros and millionaires like Richard Branson, they know the money is going to them eventually.

As the proposals currently stand, UBI might even make inequality worse. This might happen for two reasons, the first of which has just been mentioned. If the guaranteed income comes together with privatisation of basic goods, the money simply lands in the pockets of the rich eventually anyway.

The second reason depends on the fact that UBI would improve the lives of the more fortunate in society while keeping the unfortunate exactly where they already were. Let’s say you already make enough money to get by as it is. An extra lump of cash every month would be great. You could start working less and spending more time with family, pick up a hobby you always dreamed of having time for or just simply have more money. If you’re dependent on social programmes or in debt, the UBI doesn’t change anything for you. The quality of life or even simple incomes of those doing just fine shoots up while the poor stay poor, thus expanding the already existing gap between rich and poor.

We can’t magically balance out the playing field by throwing money at the problem. The world has been built in such a way as to prevent inequality from being solved. Only massive, structural changes that drastically empower the working class and pull the carpet out from under the unfairly powerful can solve the problems we face. Only then might UBI actually be called free cash to the needy, but by then we wouldn’t need it anymore.