The idea of a universal basic income is gaining traction in the mainstream.
It was once seen as a fantasy backed by dewy-eyed Utopians because the premise of basic income is to give people free money – a set amount of monthly cash to cover living expenses such as food, transport, clothes, and utilities, regardless of their income, social status, or anything else for that matter. No questions asked.
But it is now being talked about in serious economic and political circles.
Earlier this week, the UK’s Labour party even said that it is “closely looking” at UBI as an idea, with shadow chancellor John McDonnell saying it “might be an idea whose time has come.”
More and more cities are rolling out experiments with a basic income, with Utrecht in the Netherlands experimenting, Finland planning a study next year, and, despite the rejection of a nationwide UBI scheme, the Swiss city of Lausanne could also give the idea a go.
Despite this growing enthusiasm for UBI, the consensus view is still generally that the idea isn’t really viable, largely because of the costs associated with giving every single person a fixed amount of money. However, the cost of basic income isn’t the biggest obstacle to its introduction, according to Dutch author and basic-income advocate Rutger Bregman.
Instead, it is the “outdated definition” of work held by people across the globe that first needs to be addressed before it becomes a truly viable idea.
Speaking to Business Insider in late May, Bregman – whose book, “Utopia for Realists,”explores realistic ways of putting into place ideas like UBI and working for just 15 hours a week – said that before there’s a real chance of a basic income being accepted worldwide, there needs to be a paradigm shift in the way we think about the concept of work, what we define as work, and why we pay for some types of work but not others.
We still work with a very outdated definition of what work is
“The most important obstacle for basic income is a moral obstacle. It is in the ideas that we still have about work. We still work with a very outdated definition of what work is. We define work by getting a salary in a hierarchical relationship with an employer, and you have to get paid.
“All the other things, caring for the children, caring for the elderly, doing housework and volunteer work – we don’t consider that as work, even though obviously it is. Try and stop doing those things, go on strike as a careworker or stop doing the dishes, and you’ll see that it is going to be a problem.”
The fear that UBI will disincentivise work – that we’ll all stay home watching TV instead of working if we get free money – turns out to be empirically unfounded. Pilot studies of UBI schemes have shown that given the choice to work or not, people still go out to work, but they often change the work they choose to do. Net labour productivity goes up under UBI, proving that the economic impact of UBI is positive not negative to growth.
Take, for instance, the famous Mincome experiment in Canada in the 1970s. During the experiment – which gave everyone in a small Manitoba town a guaranteed amount of money, based on their previous income – working hours barely dropped (men worked 1% less on average), and productivity also increased. There was also a more than 8% fall in the number of people hospitalised, which given Canada has free universal healthcare, provided a substantial decrease in expenditure.
While such experiments provide a good example of the effectiveness of UBI, Bregman’s basic point is that no matter how many experiments are carried out, and how many analyses are undertaken about the cost viability of basic income – recent studies from the likes of the Royal Society of Arts, and the left-leaning think tank Compass show that introducing UBI in the UK would not be as fiscally painful as we might imagine – it is the problem of advocates getting politicians and policymakers to fundamentally change their views that stands in the way.
He also argues – citing the work of economist Branko Milanovic – that when we look at work, as we define it now, the actual value brought to jobs by workers is highly dependent on several conditional factors, like where you’re born, your gender, and your ethnicity.
Milanovic, whose work focuses on income inequality, has previously argued that “some 50 to 60% of income differences between individuals in the world is due simply to the mean income differences between the countries where people live.”
As a result, Bregman says: “It’s pretty easy to make the case that most of our wealth comes from somewhere else – it’s a gift. A gift is something that in a just society you would share.”
That, he says is where basic income comes into the equation: “It is an entirely different philosophical defence of basic income. Here is where we need to make the big change about how we look at it. It is a shift of paradigm, and that’s very hard to make. It’s not just about doing a nice experiment and showing it worked. It’s really a battle of ideas.”
Obviously, fundamentally shifting the definition of what we consider to be work is no small task, but Bregman argues that without big ideas, the world would be without all of our must fundamental beliefs: “I always like to point out that almost every milestone of civilisation that we have now, like democracy, or the end of slavery, or equal rights for men and women, or even the beginning of the welfare state. These were all regarded as utopian fantasies once. It has to start somewhere.”