Potential consequences of implementing universal basic income

Universal Basic Income (UBI) is often touted as the panacea for freedom and happiness – more so in modern times since advancements in Artificial Intelligence (AI) demonstrate a credible threat to jobs.

U.K. anti-poverty charity the Joesph Rowntree Foundation stated that regular cash payment, regardless of income, existing wealth, or other conditions, could help reduce poverty, improve income security, and boost well-being.

The concept of a basic income is not new; for example, the Canadian province of Manitoba experimented with a basic guaranteed income pilot between 1974 and 1979. However, the convergence of modern cultural change, particularly from AI advancement, has made UBI seem increasingly necessary.

It’s worth pointing out that a mass basic income pilot effectively took place during the lockdowns, where eligible individuals received “covid payments.” This gave people the experience of “free money,” making UBI seem like a viable possibility.

However, significant worries remain about funding UBI and potential unintended consequences, such as undermining individual responsibility and self-reliance and, contrary to expectation, creating greater societal inequality.

Likewise, when considering the government’s response to the health crisis, another cause for concern is its possible misuse as an authoritarian tool – which, when combined with a Central Bank Digital Currency (CBDC,) may comprise a system of dependency driven by pressure to conform for fear of being cut-off.

The case for UBI

Researchers from the think tank Autonomy recently announced plans to trial a two-year program paying £1,600 ($2,040) a month to 30 participants in the North East of England and North London.

The organization said the pilot intends to “make the case for a national basic income and more comprehensive trials to fully understand the potential of a basic income in the UK.”

Autonomy’s Director of Research, Will Stronge, added that a UBI would reduce poverty and boost the well-being of millions of people, making the potential benefits “just too large to ignore.”

Anthropologist David Graeber argued that the prevalence of meaningless jobs in Western society harms mental well-being. He argued that these “bullsh*t jobs” inflict psychological harm and are morally and spiritually damaging.

Graeber estimated that around half the jobs in developed countries fall into this category. Such roles are primarily characterized by their lack of impact, meaning if the job ceased to exist, the world would continue with no discernable consequences.

Examples of bullsh*t jobs Graeber gave included admin assistants, telemarketers, and middle management positions, among others.

On that basis, UBI could free people from the necessity to work a meaningless job for money. This would likely bring about a profound positive shift in our attitudes towards ourselves and others, as the struggle for survival would no longer be a consideration.

During the lockdown, many people were free to decide how to spend their time, leading to increased hobby uptake, with walking, reading, and exercising being popular choices. Moreover, this period also saw new business formations up 13% in 2020 – suggesting UBI could encourage entrepreneurialism.

The disadvantages of UBI

In contrast to expectation, political and financial writer Stephen Bush argued that UBI would result in greater inequality, not a more egalitarian society.

He explained that because UBI is paid to everyone regardless of their circumstances, higher earners would experience a boost in their “financial firepower to entrench their advantages.” This could mean more capital to invest in property, greater access to private education, and amplification of other such advantages.

Few could argue against the humanitarian aspect of guaranteeing a regular, minimum monthly payment for all. But in reality, such a system is cost-prohibitive – presenting doubts about UBI’s feasibility.

Although the Joesph Rowntree Foundation was mainly in support of a basic income scheme, they also warned that UBI is not a “silver bullet,” as it would require a radical overhaul of society and the economy, noting that tax increases to fund it proved a sticking point, even among supporters.

“When asked directly about UBI, some studies show a sizeable minority of the public are receptive to the idea, at least of a pilot, but with no majority in favour and significant concerns about cost and use of the money, even among supporters.”

In a UK-based report by Northumbria University professor Matthew Johnson, it was noted that 70-80% supported a basic income of £995 ($1,270) per month – significantly less than the amount per Autonomy.

But crunching the numbers, even at the lower rate, the estimated cost would amount to £480 billion annually – equating to 22% of the U.K.’s GDP – which is a sizeable chunk of the country’s economic output.

Concerns on government involvement

The development of CBDCs has experienced a notable uptick recently, with most countries either launching or actively progressing with their programs.

CBDCs have drawn criticisms around the centralization of control in the hands of the establishment – with detractors warning that authorities could potentially block specific purchases and merchants, even programming expiration dates to prevent saving.

The governmental reaction to the health crisis demonstrated that, when given the opportunity, authorities overstepped their mandate, imposing strict lockdowns and suppressing dissent, even if that consisted simply of asking questions.

Data compiled by Pew Research found that public trust in government has sunk to near-historic lows – with just 20% of Americans saying they would trust their government to do what is right always/most of the time. This starkly contrasts with the mid-sixties, under President Johnson, when the same question yielded a 77% response.

It has been repeatedly shown that government initiatives often fail to meet expectations. When combined with a willingness to trample civil liberties in the name of public health, it becomes imperative to approach CBDCs and UBI with caution rather than blind acceptance.

While UBI may appear to be a promising solution to inequality, we should be mindful that nothing comes for free.

The post Potential consequences of implementing universal basic income appeared first on CryptoSlate.