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Strategies & Market Trends
Universal basic income (UBI)
An SI Board Since June 2017
Posts SubjectMarks Bans
316 40 1
Emcee:  Glenn Petersen Type:  Moderated
Universal basic income (UBI), more generally referred to as basic income, is a regular unconditional sum of money paid to all citizens, or a subset of citizens, that is sufficient in amount to meet their basic needs such as food and housing. Recipients receive cash, rather than in-kind assistance, and are able to set their own priorities on how they spend their basic income. A basic income could replace most existing welfare and anti-poverty programs or extended to n entire population. In its purest form, any income earned by a recipient would not reduce their base income, thereby giving the recipient an incentive to work and earn additional income. It would eliminate the so-called “benefits cliff,” which penalizes welfare recipients when they earn additional income while receiving benefits.

We have entered an age of robotics, algorithms and artificial intelligence. Automation, artificial intelligence, and other technological developments are reducing the need for humans to perform certain functions. While past technological advances have often eliminated or reduced the employment in certain job categories, they have generally led to the creation of a corresponding number of new jobs in entirely new employment categories. Many observers believe that today’s technological advances, particularly in the field of artificial intelligence, may be a “game-changer” and whole categories of jobs will be eliminated without the creation of new jobs.

As a result, social scientists, economists, and politicians are searching for solutions on how to lessen the economic and social trauma affecting those individuals (and their families) who could experience a disruption of their employment. Basic income is one of those potential solutions. While the current discussion of basic income is mostly about providing a safety net for those individuals facing the loss of their jobs due to technological advances, perhaps the most transformative aspect of basic income is the freedom it would give individuals over their own lives without governmental interference.

While currently the most vocal proponents of a basic income are liberals and progressives (such as Robert Reich and Andy Stern), who advocate their support for the concept under the banner of “social justice”, there have been a significant number of prominent conservatives and libertarians, including Milton Friedman and Charles Murray, who have advocated for some form of a universal basic income. Milton Friedman argued that a basic income (or a negative income tax, as he called it) would reduce government bureaucracy and the costs associated with it through the elimination of a host of anti-poverty and welfare programs. He believed that it would shift power from bureaucrats to individuals, who would benefit by being able to make their own decisions on how to spend their money. They would also psychologically benefit from the greater dignity that comes with the elimination of paternalistic oversight. Friedman believed that it would give individuals currently on welfare an incentive to work. While a basic income is its purest form would not negatively penalize a recipient’s additional income, Friedman’s plan would reduce the basic income paid to a recipient as additional income is earned. A basic income would also give individuals the freedom to pursue charitable and volunteer careers that do not provide a high level of compensation. Some proponents argue that it would stimulate entrepreneurial activity, as it would incent individuals to take more risks in their careers.

In 1969, the Nixon Administration tried to get a modified basic income program for the poor (the “Family Assistance Plan”) passed by Congress. Despite significant support (it passed in the House), the plan ultimately failed.

One objection to basic income centers upon the fear that we could be creating a sub-class of citizens who are content to merely exist on their basic income and disinclined to contribute their talents to the greater good. Do we really need to create a sub-class of citizens who are pot-smoking slackers and an audience for Jerry Springer living off of the largess of the government? Well, in case you have not noticed, such a sub-class already exists.

A more significant concern is cost. While much of the cost of a universal basic income could be covered by the elimination of various anti-poverty and welfare programs, the implementation of a truly universal basic income would require additional funding, most likely from a tax increase or an increase in our deficit spending, both of which are currently politically unpalatable. The cost issue could be mitigated by adopting a modified basic income that is “means-tested” or one that includes some reduction of the base income as the recipient earns additional income. A basic income program could also have a work requirement.

A number of local pilot programs, all in their early stages, have been initiated in Oakland, Ontario, Kenya, and Finland. Silicon Valley – the source of much of the technology that is disrupting the labor markets – has taken an interest in the concept. The Kenyan pilot program being conducted by GiveDirectly is particularly interesting. If successful, it could revolutionize the way foreign and charitable aid is distributed. In 2016, Switzerland held a referendum on a proposal to provide all of its citizens with a universal basic income of approximately $2,555 per month. The proposal was defeated 77% to 23%.

The purpose of this board is to share information on the concept of a basic income and to track the progress of the various pilot programs that are being rolled out. It is possible that future technological advances will lead the creation of new industries providing plentiful employment, thereby eliminating the need for a basic income. Regardless, the topic merits monitoring. I have posted a variety articles, videos and podcasts (including an excellent one by Freakonomics’ Stephen Dubner) on the subject, both pro and con. Realistically, a basic income is not going to be implemented in my lifetime, nor the lifetime of most of the current members of the SI community. It is a utopian concept, the implementation of which would require overcoming a large number of economic and political challenges. However, I would not be surprised to see some local programs adopted to replace existing welfare programs.

While I am generally opposed to the wholesale transfer of wealth through government programs, I think that the concept of a basic income merits serious consideration, most specifically as a potential replacement for our current welfare structure. I doubt that many would disagree with the fact that our current welfare system is demeaning to the people it serves and that it strips them of dignity, and too often, the ambition and incentive to escape the system. Hopefully, our upcoming technological advances create new jobs as the old jobs are rendered obsolete, which would mitigate the needs for a universal basic income. If not, we are going to have to rethink our safety net. I believe that a basic income would have the added benefit of reducing crime. It would not deter the truly ambitious from pursuing greater wealth, and it might incent them to pursue opportunities that they would normally regard as too risky.

I am under no illusions that a certain percentage of our population would be inclined to merely cash their checks and simply exist in a semi-vegetative state. So be it. However, as Charles Murray has argued in his defense of a universal basic income, if we accept the fact that we live in a society that is going to make transfer payments, we should insist that those payments are made as efficiently as possible, with minimal government oversight, and that they provide incentives for individuals to seek employment. I agree with this view.

I expect the conversation to be civil and will not hesitate to exercise my powers as the moderator if it is not.

Selected resources


Freakonomics podcast: freakonomics.com
Basic Income News: basicincome.org
Milton Friedman interview (conducted by William F, Buckley Jr): youtube.com
GiveDirectly website: givedirectly.org
BIEN update on pilot programs (May 2017): basicincome.org
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ReplyMessage PreviewFromRecsPosted
316According to McKinsey & Co., almost half the activities people are paid rougGlenn Petersen2last Tuesday
315A decent argument for UBI An Alternative to Welfare [youtube video] youtube.comTimF-June 2
314LOL UBI She needs a joint in her left hand! poster girl: [graphic]Pogeu Mahone-May 28
313h/t Sam Amazon’s latest warehouse machine demonstrates the slow drip of automatGlenn Petersen-May 18
312Exclusive: Amazon rolls out machines that pack orders and replace jobs Jeffrey Glenn Petersen1May 13
311We are deluding ourselves if we believe that we can turn displaced factory workeGlenn Petersen-May 12
310Inevitably, more lost jobs: Robots Edge Closer to Unloading Trucks in Amazon-ErGlenn Petersen1May 3
309One successful program and others will follow. On the other hand, Japan is probGlenn Petersen-April 18
308Potential job losses / lower tax revenue through automation isn’t a US specific kidl-April 17
307Bad idea. Taxing the "robots" will inevitably make our economy less coGlenn Petersen1April 16
306I'm sure David is well aware of Milton's idea. It would be hard for himTimF-April 16
305He is assuming that the basic income is truly universal – an all or nothing propGlenn Petersen1April 16
304Yeah it was a UBI who's level was supposed to cover people at the 10% for inTimF-April 16
303Thanks. I took it that only 10% of people receive UBI from the statement >bruiser98-April 15
302Where do you get the "ten percent part". Its 330mil times $5k or $1.6TimF-April 15
301I wonder about his math. USA population is about 330 million. Ten percent of tbruiser98-April 15
300But then there is the reason I was briefly for a UBI ==== ...All taxes discourTimF-April 15
299This is one of the reasons I moved away from my brief support of a UBI -- DavidFTimF-April 15
298How to not replace humans Kaveh Waddell Axios April 13, 2019 AI and robots areGlenn Petersen-April 13
297 The political fallout from a transitional short term basic income program mighkidl-April 10
296Just playing the devil’s advocate ... Once a benefit is established, removing itGlenn Petersen-April 10
295 There is a middle ground. Providing displaced workers with a basic income - wikidl1April 10
294I am not so sure that it’s really “OUR” choice. Corporations will do what is gooGlenn Petersen1April 10
293The bottom line: "It's about choices," Acemoglu said. "So farkidl-April 10
292The problem with automation Steve LeVine Axios April 10, 2019 A drumbeat of stGlenn Petersen-April 10
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