UBI: balancing progress and protection

Why we need to be able to think in terms of a brave new world.

Annalisa Cappellini Francesco Grillo
25 April 2018
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Thomas More's Island of Utopia, 1518 Frontispiece. Woodcut. Wikicommons/ Folger Shakespeare Library Digital Image Collection. Some rights reserved.“From each according to his ability, to each according to his needs”

The society that Marx theorised as a fulfilment of history paradoxically resembles the one imagined by the more visionary entrepreneurs, on the edge of launching a new industrial revolution that was promising to free us all from the very idea of labour as an instrument of production and income redistribution.

Both utopias could, however, turn to nightmare, if we just imagine using the dramatic increase in productivity brought about by smart technologies, to turn citizens of such an evolved society into the lazy recipients of prosperity for the asking.

The idea of the Universal Basic Income (UBI), now the subject of a debate gone viral, is not a new one. We can trace its origin back to 1516, when Sir Thomas More in his Utopia introduced the concept of “providing everyone with some means of livelihood” and then to Thomas Paine, who in 1792 fully elaborated the idea of a guaranteed minimum income. In truth, UBI can be considered just as the umbrella term for that debate on the reform of the welfare state that Willian Beveridge devised in 1942 –  and that western European governments, in different forms, have progressively adopted since the end of WWII.

Today, like then, the core of the issue is to create a safety net able to allow the full development of scientific progress while minimising the risks of growing inequalities that new technologies inherently pose and that might drag us soon enough into new conflicts. 

The real challenge today is even more radical and dramatic: as smart technologies are going to progressively replace human labour in every area, we will have to be equipped to live in a world where policies aimed at achieving full employment are separated by, and distinguished from, the fundamental battles for universal inclusion.

As current welfare systems adapt inadequately to say the least to the challenges presented by automation and globalisation, when thinking in terms of UBI we need to envision a new and comprehensive set of measures to replace our welfare systems.

Instead of being primarily focused around employment protection ( e.g. unemployment benefits) and almost entirely linked to the income level (pensions) we need to devise mechanisms of inclusion aimed at all citizens that can also be adjusted according to the different levels of hardship encountered.

Three key perameters

However, the feasibility of such ambitious reform is based on three key parameters. It is on those criteria that new trials launched in countries like Canada, Finland, Uganda and Kenya are tested and measured, in order to understand how UBI could be effectively and successfully implemented.

First of all, it is necessary to take into consideration the impact that UBI would have on the capabilities of the beneficiaries. From a theoretical perspective, to guarantee a universal protection would mean to free people from “survival anxiety” and allow them to be free to fulfil their potential and plan their future. This approach is at the base of experiments like the one that is ongoing in Ontario, Canada, where the local government is trialling payments to 2,500 people that ensure a minimum income level of at least C$1,320 a month, regardless of employment status.

The risk of adopting this approach, however, is that a high level of indiscriminate financial protection would reduce the propensity and willingness to look for employment and keep developing skills.

Secondly, it is nevertheless critical for even an automatic mechanism to be able to measure the needs of every single citizen. As it would be both a waste of resources to support someone who does not need this and because needs vary across cities, generations and individuals. For example, in Kenya the charity GiveDirectly launched a 12-year UBI experiment consisting in giving unconditional cash transfer to poor rural households. The experiment aims to measure the effects that different UBI models (short-term, long-term and lump sum payment) might have on economic status, time use, risk-taking, gender relations and outlook on life.

The third parameter is the one of efficiency. The majority of the debates that are ongoing seem to be solely focused on the impact (or costs) that the introduction of UBI would have place on state coffers. As an example, in Italy this is the only aspect of the UBI proposal presented by the 5SM that is currently discussed. But if we were to adopt such a strategic shift in our thinking and, as mentioned above, to consider the introduction of UBI not as an addition (or duplication) to our current welfare systems, but as the replacement, or evolution, of such systems – we would immediately discover financial benefits for the state as a whole. In fact, an automatization of the benefit would even produce savings vis-à-vis policies which require the intermediation of bureaucracies. 

UBI framework(s)

The truth is that a one size fit all UBI does not exist; UBI frameworks need to be built over time, while establishing a synchrony between progress and protection. A new technological revolution that would really create that dramatic increase in productivity, could be able to support and sustain the costs of a new and robust safety net which, in turn, allows those technologies to fulfil their full potential.

A brave new world needs to create those forms of protections that would encourage people to take on more risks and innovate, knowing that their basic needs, or security, are taken care of, regardless of how disruptive the future global smart economy might be.

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