universal basic income

Universal basic income (UBI) is a proposal to mitigate Poverty and inequality by which the government provides direct payments to all citizens. The universality of UBI is intended to prevent resentment of recipients by non-recipients, and contrasts UBI with a Guaranteed Minimum Income (GMI) which provides similar payments but only to those below a certain income. UBI has gained popularity in response to fears that technology will make increasing numbers of jobs obsolete, and those who held those jobs unable to meet their basic needs.

Studies

Small pilot studies of UBI in specific locations show it’s generally effective. So long as payments are guaranteed for a significant-enough period of time (measured in years at least), they allow recipients to invest in their future and take beneficial risks that often lead to a better life. Outcomes observed include greater financial stability, improved incomes, and better physical and mental health. This is unsurprising: we know precarity exacerbates such things.

• GiveDirectly’s UBI experiment in Kenya
• A summary of pilot studies in 6 countries
• Mincome (a 1970s study in Canada)

Concerns

Concerns about UBI are generally concerns about capitalism, that UBI is not systemic change, just an accelerant to an already broken economic system. As Audre Lorde famously put it, “the master’s tools will never dismantle the master’s house.”

Capital Capture

While UBI may succeed in isolation, I think the most realistic concern about its broader deployment is with capital capture. Adding more money to a system with the same amount of essential resources like food, housing, etc. will just incentivize the already-powerful to use their power to charge more for those resources. The law of supply and demand tells us that a $1000/mo basic income without public investment in housing will just cause rents to rise by $1000/mo, turning UBI into just another handout to already-wealthy rent-seekers. Guaranteeing a universal income is crucially not the same as guaranteeing the ability to meet basic needs. If the point of UBI us to ensure everyone access to housing, food, medical care, etc. then that access must not be mediated by predatory oligopolies as it currently is in the United States. It’s notable that many successful deployments of UBI have been in countries like Finland and Canada which already have a strong social safety net with public options for housing and healthcare.

UBI doesn’t reduce inequality, it only moves it elsewhere

In “Redesigning Utopia: Why Free Money for Everyone Would Not Solve the Polycrisis”, Alf Hornborg takes a global view, arguing that even if UBI could reduce inequality and meet more basic needs in wealthy countries, it would exacerbate global inequality because the current global economic system meets the needs of the Global North by exploiting the Global South. More purchasing power for the poorest in rich countries would increase demand for inexpensive goods that are largely produced by the poorest in poor countries, incentivizing further exploitation of the least powerful.

UBI could exacerbate climate change

A strong argument in favor of UBI is that by increasing the economic power of those with the least of it, it would increase economic activity overall, leading to a larger, more dynamic economy that benefits everyone financially. However, an argument from Degrowth would highlight the climate costs of already-rich countries getting richer when said countries are already disproportionately responsible for climate change. That said, this is not an argument against UBI generally, only potential implementations of it, and as Hornborg notes in the article above, perhaps UBI could be deployed in a carbon-reducing way such as tying payments to the regenerative economy.