Unconditional Basic Income – an Economic Model for a New Renaissance

Unconditional Basic Income - a New Economy - main

By Elizabeth Edgett

Guest Writer for Wake Up World

How can we solve poverty and boost the economy without causing massive environmental damage?

Here’s how. It’s called a Unconditional Basic Income (UBI).

The fundamental challenge today is that we need redefine the value of work. We need to stop relying on corporations to create jobs. That’s not what they do. They exist solely to create profit. They do this by lowering wages and/or decreasing the number of workers (jobs) required to get that profit. Yet both left and right leaning governments continue to try to induce corporates (through tax breaks and other programs) into creating jobs and/or raising wages.

But corporations don’t create jobs or raise wages. This is a misguided ideology. Instead, corporations take this ‘corporate welfare’ and hoard the profits in offshore tax havens, getting richer while the country (and others like it) goes deeper and deeper into debt. This ideology has never worked, and it never will.

So let’s get real…

It is a mathematical fact that this ideology does not provide enough jobs (or wages) for the population … period. Unemployment is built into our current model.

It is also a fact that consumers create jobs, not corporations, because no jobs are created if no one buys products. Consumer demand = employment.

It’s time for the “Third Way”…

The Unconditional Basic Income

The U.S. Basic Income Network defines the UBI as “… an unconditional, government-insured guarantee that all citizens will have enough income to meet their basic needs.” [1] While it may sound radical to some people, the idea of a UBI is not new. In fact, English lawyer, social philosopher, author and statesman Thomas More proposed it in his work Utopia in 1516. [2]

This one, simple economic change could solve inequality, homelessness, poverty, unemployment, welfare, pensions and the minimum wage issue all at once, reverse the effects of recession almost overnight and take huge amounts of pressure off the environment and ourselves. It’s this ‘Third Way’ that can break the Left/Right ideological impasse. (Relying on banks and corporations to create jobs is an economic ideology that has proven itself futile.) It supports innovation by allowing corporations (including small businesses) to focus on their trade and frees them from having to provide social services and jobs. It also frees people from living under the thumb of state-run social programs, such as welfare programs and oppressive work situations, reducing bureaucracy in the process.

Most importantly, it recognizes the value of the myriad unpaid work that is done every day by parents, grandparents, volunteers, artists, musicians, writers, students, friends etc.

It would immediately take stress off the environment because people would not be forced to drive en masse to meaningless jobs and make useless widgets for a living. They could afford to buy organic food, and support organic agriculture. They could make ecological lifestyle decisions because they would not be forced to buy the cheapest of the cheap. The planet and the people on it would heave a massive sigh of relief.

As an Unconditional Basic Income (UBI) system, everyone gets the same amount, roughly the equivalent of a US $10 per hour job. Everyone gets it, rich or poor, working or not, and there’s no means testing, so NO new bureaucracies.

But this is not socialism! People can choose to work and can make as much money as they want to above the UBI, so capitalism remains intact.

The simplicity of the idea is its beauty. The UBI has been supported by both left and right leaning politicians as a way to eliminate poverty and avoid violent revolution. [3] [4] [5] Both Milton Friedman and Martin Luther King supported the idea of a Basic Income.

Switzerland will soon hold a referendum on this. If it passes, it could herald a new day for humanity. [6]

Unconditional Basic Income - Improvement Enjoyment Community

The Economy of the Unconditional Basic Income

The UBI can be funded by diverting most present social service funds into this more efficient model, and then shutting down large numbers of redundant government departments (retaining education and medical etc). Theoretically, the UBI is so simple it could be run on a single computer that transfers the UBI into everyone’s bank account automatically every month.

Another source of funding could be a Financial Transaction Tax – a tiny percentage taken off every stock market transaction. This would also address the out-of-control microsecond computer trading issue on the stock markets. As of 2012, there was an estimated $21 trillion missing from the global economy because it is hoarded in off-shore tax havens for multinational corporations and the richest 10%. I think this is the place to look for missing tax dollars. If we tax these corporations properly, (i.e., tax stock market transactions and stop giving them subsidies in the mistaken hope that they will create jobs) then we will start to force them to bring that offshore tax haven money back into the general economy.

Either way, businesses would not have to pay for the UBI. A UBI is different than a minimum wage because employers do not pay for a UBI. It is funded through taxes. Employers in embattled low wage industries could therefore continue to sustain their businesses and pay low wages, because people would no longer need to be paid high wages by industry. They would be working to add to their Basic Income and improve on their basic quality of life — not just survive.

Because there is no means testing for a common UBI, no extra bureaucracy would be needed. In fact, the UBI has been shown to “promote efficiency and a shrinking of the federal bureaucracy”. [7]

There would be no effect on inflation, as long as the UBI is funded through taxes and not through ‘printing’ money. (Inflation is caused by money creation in excess of demand.) Employers also won’t need to inflate prices because they won’t have to increase wages. In fact, a UBI would be better for business as there would be more people with disposable income buying products. Business would increase overnight — instant consumer demand and instant stimulation.

Additionally, as shown in pilot projects, a UBI will cause an increase (in some cases doubling) of small businesses as people use the UBI as startup capital. This increases market supply and competition thus further reducing the possibility of inflation. The UBI encourages market supply to reflect consumer demand, thereby avoiding inflation while supporting the economy. It’s a win-win.

The Economy of the Unconditional Basic Income - Inevitable

A Renaissance of Human Creativity

Wherever a UBI has been trialled, people worked more, not less, and started small businesses. The amount provided was adequate enough that they didn’t need to go into debt to the banks to ask for a startup loan. For instance, in Dauphin, Canada’s “Mincome” experiment, and in Omitara, Namibia, crime decreased, health care costs went down, and the overall economy improved. Two basic income pilot projects have been underway in India since January 2011 resulting in better food, better healthcare, better children’s school performance, a tripling of personal savings and a doubling of new business startups, all leaving the overall economy much healthier than before the UBI.

With issues of social and economic wellbeing and inequity addressed, the potential of a UBI is a renaissance of human creativity never before seen in the history of mankind. We have many unpaid workers in our communities. Volunteers, artists, musicians, homemakers, grandmothers, etc. It’s now time that they were valued, and rewarded monetarily, by our society.

British economist Guy Standing explains…

“Globalization has brought not just greater inequalities but also chronic economic uncertainty to the world’s population. Governments have failed to effectively develop or adapt social protection systems to reduce economic insecurity.” [8]

“I believe we must see basic income as a question of emancipation, a question of building freedom, building control over life and of social justice, not just as a measure for dealing with poverty. We must understand that the debate on basic income must be seen in the context of a global transformation taking place in which inequalities are becoming unsustainable and… a tiny plutocracy is gaining income from the system while the growing precariat is facing falling wages, unstable labour and a loss of rights. They are being turned from citizens into “denizens”, losing rights. This is unique.” [9]

It’s time for real change — an Unconditional Basic Income! But politicians won’t do anything this positive without a grass-roots uprising from the people.

Demand a UBI! Tell your friends, share this article, and help make the UBI go viral!

The Unconditional Basic Income — a Video Introduction

To learn more:

  • http://www.vox.com/2014/9/8/6003359/basic-income-negative-income-tax-questions-explain
  • http://www.ted.com/conversations/14456/why_basic_income_should_become.html
  • http://www.economist.com/blogs/democracyinamerica/2013/11/government-guaranteed-basic-income
  • http://www.euractiv.com/section/social-europe-jobs/interview/van-parijs-an-unconditional-basic-income-in-europe-will-help-end-the-crisis/
  • http://www.theatlantic.com/politics/archive/2014/08/why-arent-reformicons-pushing-a-guaranteed-basic-income/375600/
  • http://web.archive.org/web/20150705112120/http://www.guystanding.com/files/documents/Basic_Income_Pilots_in_India_note_for_inaugural.pdf

About the author:

elizabeth edgettAs a child, Elizabeth Edgett “would gaze out at the sky, journeying to imaginary places”. Today, she is a fantasy fiction writer, and astrologer.

Elizabeth contributed this compelling article, a departure from her usual work, because “I just want this important idea to go viral”.

You can connect with Elizabeth and learn more about her work at twitter.com/ElizabethEdgett

 


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  • Carlos Alvarez

    If you were not paid to work, would you do your job? I think this question is something that we must all ask ourselves to find the true satisfaction in our jobs/careers.

    As far as this excellent article goes, if all resources were spread out evenly, all basic necessities would be met and the unconditional basic income would exist for all. I am not sure the benefit of public corps gaining +15% each year anyways?? (unless your whole retirement is invested in the stock market – which can decline in value thanks to inflation and an imperfect monetary system etc). I much rather see excess money be given to middle class (or actual ppl) than ate by larger corps.

    Carlos

    • Kristine

      I think this would work! Cause $10 is like a dollar now a days so you would have to work a job if want to have nice things but at least if something were to go wrong like a employer who wants to fire you for there own personal reasons you have something to fall back on. I was good at my last job an didn’t want to loose the job but there was nothing I could do about it. An my unemployment has ended I’ve been sending out numerous online 4 hour applications an assessment tests an still no job because I know I am overqualified for a $8hr job which is almost like your working for nothing. A tomato just one is almost $2 dollars think about it!!! They have mark wahlberg asking for handouts for handouts of $19 bucks a month for veterans when he just acted in a movie (keyword ACTED) why didn’t he give the money he made for the movie to the veterans .. The government is corrupt an wants a violent new world order to start an people don’t stand together cause if we did we really would win but there making everyone too fat with there chemical food an too drugged with all there pills keep dumbing us down people are too lazy.. I wish I could do something but I’m one person who actually cares about people.. People only care about money !!!!!! I don’t know what to do to survive but pray somehow it comes my way ..

    • Chiteira

      If you were not paid to work, would you do your job?

      Actually Carlos, I don’t have a job. But I think in some ways I would stand a better chance of getting a job with a system like this in place. Because, people would see me as a genuine applicant, because there is no pressure from anywhere to apply. Additionally, I would have some money coming in so I could afford to take on some projects. At the moment I am restricted by not being able to afford things like petrol, public transport, printer ink, diatomaceous earth to kill bugs in my vegie patch…etc etc. I could also get a haircut so I don’t look totally unkempt as I do now.

      The other aspect of “would you do your job?”. A lot of jobs we do are pointless and not worthy of being done. People may stop doing these jobs and that would be a good thing. For instance, what possible value is there is people knocking on your door trying to sell you electricity? Totally pointless. It would be beneficial for this sort of pointless job to cease to exist. It offers value to no-one.

      The other kind of job people stop doing is jobs that are harmful to health. Again, I think this is a good thing. If a job is harmful to your health, then you shouldn’t do it. It also would make it so much easier to negotiate terms with employers. For example, “no i am not going to sit all day – I expect to be able to get up and walk around for at least 15 minutes of every hour”.

      The other thing people might stop doing are jobs that are unethical. For example, people calling you up to get your credit card details so they can rip you off.

      I like the idea…. I think it could be a hard sell though.

  • vcragain

    .
    wow – this sounds so sensible – where do we join the movement ??? no association of website to add our support to ??

    • You could start getting connected to the movement by going to Basic Income Earth Network (BIEN) at

  • Val Stevens

    The way I look at it is that money is like water on the planet … which goes in a cycle. Accumulated water evaporates to make clouds, and make rain, that waters the earth and accumulates then evaporates and returns to the clouds again … and so on. The earth prospers and supports the life upon it. Money needs to do the same. If water is held, breaking the cycle, life on earth perishes … and so it is with money. “Wealth” is a different dynamic entirely. It is simply a state of mind … of how much is considered “enough” of anything. And greed is something else again. It is a demon of always wanting more than “enough” and is allied to lust and avarice.

  • Max Resonance

    Robert Theobald, economist, wrote about the
    guaranteed annual income in the 1960s.
    https://en.wikipedia.org/wiki/Robert_Theobald

  • Ronda Kirk

    Please contact the Coast to Coast am talk radio show with host George Norey to spread the word for this idea. This show is the #1 nighttime talk radio show with millions of progressive listeners!

  • TheOnlyOneNotHigh

    ~335,000,000 Americans
    52 weeks x 40 hours (40 hours is a work week in case you aren’t sure) = 2080 hours
    ~2000 hours (we’ll low ball this to keep the numbers easy) x $10 = $20,000
    20,000 x 335,000,000 = $6,700,000,000,000

    That’s 6.7 trillion dollars that you want for nothing.

    Where does it all come from? It comes from the me’s. The people that do all those useless jobs.. like the jobs that build and maintain those useless roads, the useless buildings, the useless networks that comprise the internet that delivers you family guy so you can laugh your valuable ass off when you are finished with the bong.

    I’ll keep my 6.7 trillion, thanks. Do something to contribute to society and then we can talk about fair compensation. Until you learn to earn your place in society you have no opinion worth listening to.

    …and do some math before you post this drivel. Not even bush/obama can rack up that kind of bill, during a war!

  • Mike Sievers

    But who pays the taxes to support this? Is my UBI tax free? Do you only tax additional income? Would wages go down? All corporate income tax goes to the military budget, and all income tax goes to the interest on the national debt, so where will this money come from?

  • ejhr

    “Nothing” pays for it. The economics of today has “nothing” that balances the books as per double entry book keeping. So the Federal [Monetary Sovereign] governments can just mark up each person’s account with the numbers required for them to access from their own individual account. This is “thin air” money and in economics it has no liability side. You definitely cannot fund it through taxation. All taxation does is cut spending power never to fund government expenses. so the “Nothing” that balances the ledger is the whole economy and its resources. Injecting this money into the economy will boost the economy with the added spending power and maybe add to employment, even in a shrinking market. The worth of the economy will allow for such spending without runaway inflation.