In the city where Adam Smith developed the free-market theories that inspired Thatcherism nearly 300 years later, a young Labour politician is pursuing an economic vision that takes a drastically different approach to “the wealth of nations”. Councillor Matt Kerr, an anti-poverty specialist on Glasgow city council, has been exploring how people become enslaved by poverty – and how they can escape it.

A meeting in Glasgow last month with Guy Standing, the radical economist who founded the Basic Income Earth Network, inspired Kerr to seek cross-party support to pilot a “universal basic income” in parts of Fife and Glasgow. He acknowledges that these are very early days and that there are many obstacles ahead, but the move makes him the most senior incumbent politician in Britain to contemplate a radical scheme that only a few years ago was considered beyond the political pale.

So why is Kerr sticking his neck out?

“Look, it might be that at the end of this whole exercise we find that it’s just not workable, but I’d rather give it a go in good faith. At the moment, defending a system that is only slightly better than the one the government is trying to implement is simply not good enough. It’s not giving anyone any hope.”

The universal basic income concept is so simple you are tempted to ask why it has never been seriously looked at before. It offers something for everyone across the political spectrum. It works on the premise that individuals are guaranteed a minimum regular payment unconditionally. Kerr, who worked as a postman for 14 years, acknowledges that much academic research and fieldwork must be done to calibrate payments appropriate to the needs of people.

“We, as a party, need to be ambitious for people and I think this can be a part of that. Nye Bevan is a great hero of mine, but I can’t imagine if he were around today that he would have created the benefits system the way it now looks. It’s time to ask if this has worked. This has been a 70-year experiment. It worked at the time when we had high levels of employment. But we don’t have that now. And although I’ll always strive for full employment, the reality is that as technology improves and increases, that’s going to be harder to achieve.

“This is a big challenge to the left. In these circumstances you can’t just write people off and nor can you have the current system that is hugely difficult to navigate and completely enslaves people to the state.”

Already, the Finnish government, as well as provinces in Canada and some Dutch cities, are looking at pilot schemes. Glasgow, however, would seem to offer an ideal petri dish for experimentation. The infamous “Glasgow effect” sees adult males in the city’s most deprived areas die significantly younger than those from other working-class UK cities with similar patterns of deprivation and health inequalities. Here a person can lose 20 years of life expectancy in a six-mile corridor from the east end of the city to its arboreal west end.

Easterhouse is one of the most disadvantaged areas of Glasgow. Photograph: Murdo MacLeod/The Guardian

“The universal basic income is about the relationship between state and individual,” says Kerr. “I’ve always believed that socialism is about giving people freedom from fear, but the right have distorted the word to suit their agenda.

“If you’re free from worrying about having a roof over your head and feeding your children, you can be free to take some risks and manage your own life. You can have the ability to take part in your community and volunteer without the risk of sanctions. At its core is a message from the state to the individual, saying ‘we actually give a damn about you and we’ll treat you with respect’.”

Kerr is scathing about another Scot, Iain Duncan Smith, and his universal credit scheme. Almost 15 years ago, the former Tory minister for work and pensions famously toured Easterhouse, a sprawling and disadvantaged community in the north-east of Glasgow. “People who guided him round at the time genuinely thought that he got it, that he began to understand the deep-rooted patterns of inequality that underpinned the lives of many people living there.

“But his system of universal credit showed he didn’t get it. It was doomed to failure because they made one basic error: they moved people off receiving their benefits weekly or fortnightly to once every four weeks. Thus people began to fall into the clutches of loan sharks or predatory credit card firms when the cash ran out well before the end of four weeks.”

Discussions around the universal basic income also highlight competing political and moral philosophies.

On the one hand, there is the view that our benefits scheme is one that we and the generations before us all paid into. We are entitled to any benefits we may require throughout our lives because they have already been paid for. The view favoured by the right, however, is that the postwar welfare state has, in places, created a damaging dependency culture among generations of the unemployed: the state therefore has a duty to incentivise people to get off benefits.

For Kerr, though, there is also a challenge for the left. “We’re sleepwalking here,” he says. “We like to tell ourselves that we are a nice, centre-left society that values our public services, yet we consistently reject parties who seek to increase taxes to pay for them. There needs to be a conversation about that.

“The universal basic income gives people a degree of certainty and proper security. Few people now can expect to go through their entire working lives in the same job. People change jobs much more frequently and this leaves gaps and we don’t deal with the gaps properly. It takes weeks to register and to become eligible for payments and weeks for them to come through. By that time, they have become consumed in a spiral of debt from which they rarely emerge.”

Within weeks a team of academics and economists will begin to address the task of making pilot schemes for Glasgow and Fife viable. In the interim, Kerr and Jamie Cooke, head of RSA Scotland, which has led research on the subject across the UK, will seek support across a wide spectrum. “We’ve had encouragement from the SNP and also from some senior officers within the DWP.

“Tories like Professor Adam Tomkins, the MSP, can also see its possibilities. A person who has the security of a minimum basic income might dare to dream of setting up their own business and becoming an entrepreneur.”

Perhaps Adam Smith, the great champion of the free market, would have approved after all.