The Case for Universal Basic Income

Universal Basic Income (UBI) is the idea that all citizens of a country should regularly receive an unconditional sum of money in order to pay for basic living necessities. In practice, UBI would replace the current welfare system and it’s numerous existing programs as a more transparent, efficient, and affordable alternative. UBI would ultimately eradicate poverty and prepare us for the future economy that is rapidly changing due to technological process and automation. Let’s take a closer look on how UBI could work in the American economy.

In America, the poverty line for a single individual is $11,880. Thus if UBI were to provide every citizen between the age of (18-64) with $12,000 a year, it would instantly bring every citizen above the poverty line. This will allow a couple things to happen. First the need for a minimum wage law would become unnecessary because it would no longer have to provide a basic living, and therefore involuntary unemployment would no longer exist. Competition would thrive and people would be more willing to take risks knowing they’ll always have $1000 in the bank every month.

Secondly, women would be reinvigorated into the economy. Women disproportionately provide the majority of care taking roles in families for children and elderly which is work that is monetarily uncompensated for. UBI would thus be a transfer of wealth to care takers (and therefore mostly women) and provide them with compensation for work that they already do for free. Indeed, UBI would be the biggest feminist revolutionary act of our time.

While the economic boom that UBI is capable of providing looks promising, some skeptics have challenged it on several fronts. One criticism of UBI is that by providing people with free money is that people will have much less incentive to work. This is a fair criticism, but it is one that can be addressed by changing the tax system to a more progressive one.

In the current welfare system, benefits are phased out as workers earnings increase. This creates poor incentive to work, and in some cases like those with disability insurance, the choice is binary: work or receive benefits. With UBI, workers will only stand to gain from working and educating themselves to fit the needs of future markets.

Another strong criticism of UBI is it’s relationship with families that have a lot of children. Should UBI provide more for these families? Is this fair? And perhaps more importantly: Is this economically sustainable? This is a problem directly related to overpopulation. You can read more about this in my blog post Overpopulation: A Road to Dystopia. As far as I can tell, UBI advocates haven’t been entirely convincing on this front. However, some argue that this will be a non-issue.

UBI will require a change of mindset in the way we view work in our everyday lives. It will require us to accept the uncharted territories of a new world that has an abundance of resources, massive automation, and a diminishing need for traditional work. Despite the challenge this presents, I’m incredibly optimistic to the implementation of UBI in the near future (25-40 years) here in America. I expect this conversation to elevate onto the national level in the coming years.

For further reading on arguments for and against UBI, some recommended articles:

A Guaranteed Income For Every American

The Case for Free Money

My Second Thoughts About Universal Basic Income

Why a Universal Basic Income Is a Terrible Idea

If Robots Steal Out Jobs, A Universal Basic Income Could Help

Ethics and Economic Justice

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” – Franklin D. Roosevelt

I have been reading David Parfit’s book Reasons and Persons the past couple of months and I must say, it’s been a wild ride. I recommend it to anyone that subscribes to utilitarian ethics and having their world views pushed to the limit. It may seem farfetched to some, but I suspect Parfit will go down as one of the greats in the history of philosophy.

The book covers a variety of loosely related topics, but I want to focus on the type of utilitarianism he concludes from his arguments: Prioritarianism. Prioritarianism holds that the goodness of an outcome is a function of overall well being (Utilitarianism) with extra weight given to worse off individuals. Let’s look at an example to sharpen the distinction between the two.

Imagine a two-person society: its only members are Jim and Pam. Jim has an extremely high level of well-being, is rich, and lives a blissful life. Pam, by contrast, has an extremely low level of well-being, is in extreme poverty, and lives a hellish life.

Now imagine that we have some free resources ($10,000 for example) that we may distribute to the members of this society as we see fit. Under normal utilitarian circumstances, the $10,000 will generate more well-being for Pam than it will for Jim. Thus giving the money to Pam would be the morally correct choice. However, let’s imagine slightly different circumstances.

Jim, for whatever reason, even though he is already filthy rich and very well-off, would gain just as much well-being by receiving the $10,000 as Pam would. Suddenly utilitarians don’t have a preference on who gets the money because both Jim and Pam’s well-being would increase the same. Prioritarianism on the other hand would give the money to Pam, because she is worse off than Jim.

Furthermore, prioritarianism doesn’t act just as a tie breaker for well-being, sometimes it favors priority over a small amount of well-being in order to emphasize compassion. So if Jim were to somehow gain more well-being from the money than Pam, Prioritarianism still wouldn’t necessarily favor him. It is important to note that the amount of well-being traded for priority is arbitrary, but in most cases we can rely on common sense. But why is that?

Well there is a good reason: There are diminishing returns on the value of goods and money. Would Jim be able to tell the difference between having 1 billion dollars and 1.00001 billion dollars? No, he wouldn’t have a clue. In fact there have even been studies, including a prominent one by Princeton University Researchers, that money doesn’t buy happiness after one earns $75000 a year.

It is estimated that it is around this point where money is no longer a primary concern in ones life. People can focus on health, relationships and leisure’s without the stress of paying the bills at the end of the month, which is a real fear for millions of Americans.

If you subscribe to prioritarianism ethics, a certain amount of wealth redistribution becomes fundamental to a healthy and moral society. In a society where Walmart’s Walton family (one of many examples) owns more wealth than the bottom 42 percent of Americans combined, millions of which are living in poverty and struggling to survive, can a rational person really argue that this disparity in wealth is ethical?

Welfare state capitalism may currently be the best economic model, but its inability to redistribute wealth fairly will continue to raise questions on how it can be improved. Economic justice isn’t about equality. It’s about removing the gross excess at the top to help prevent suffering for those at the bottom.