Out of the Wreckage by George Monbiot

Author:George Monbiot
Language: eng
Format: epub
Publisher: Verso Books

The Distributive Economy

Though it has been discussed for centuries, a universal basic income (UBI) was treated until recently as a marginal and outlandish idea. UBI is an income paid to every adult – and, in some proposals, every child. It is unconditional: in other words, unlike some forms of social security, it does not depend on qualifications such as poverty or attempts to find work.

The idea is now moving into the mainstream partly because both employment and unemployment benefits are widely perceived to be failing. The insecurity and poverty experienced even by those who can find work, combined with a coercive and often draconian welfare state, has driven thinkers and politicians to explore alternatives.

Parts of Finland, the Netherlands, Namibia, Spain, France, Canada and Scotland have run small-scale, experimental projects: this is always, in my view, the right way to begin. An experiment in Kenya channels foreign aid directly into the pockets – or, more precisely, the phones – of the poor.19 Already, most of the world’s people, including many of the poor, have mobile phones, which could enable them to use mobile banking services. Foreign aid is currently under attack in many rich nations, as its opponents argue that much of it disappears into the offshore bank accounts of corrupt officials, or is swallowed by administrative costs and white-elephant schemes. While these charges are often exaggerated, they tend to contain some truth. In many cases, aid might be both more effectively deployed and more politically sustainable if it went directly to the intended beneficiaries, in the form of a basic income. (The danger here, though, is that it may leave essential state services, such as health and education, underfunded.)

In a trial of UBI in the Indian state of Madhya Pradesh – whose levels of poverty ensure that even small payments can make a big difference – strong improvements were seen after six months in health, nutrition and school attendance.20 Replacing India’s perverse public subsidies and complex, corrupted welfare programmes with a universal basic income should result in a significant increase in well-being. But the effects are likely to become weaker in nations whose people are richer, and whose administrative systems are more effective.

A UBI does not cure all ills (and it could create a few). Some of the claims made for the proposal are inflated: it is unlikely to provide a full substitute for social security payments or housing benefits in the rich nations, or for employment in any nation. But it does have the potential to relieve extreme insecurity; to grant people some breathing space between jobs, or while they try to develop new careers or start their own businesses; to de-fang intrusive and punitive regimes of benefit sanctions; to reduce fraud; to raise people’s confidence as they negotiate with their employers; and to spring people out of the poverty trap (in many nations, because social security payments decline rapidly as people take on even low levels of work, returning to employment scarcely pays). The absence of means testing and other assessments could make it cheaper to administer than other forms of welfare.

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