Here’s an update: This past week, the UK’s Jeremy Corbyn became the latest politician to propose implementing the universal basic income (UBI) for his country. He is one of many to do so recently, and their efforts are bearing fruit. Finland is actively testing it out, Switzerland voted on it (though it didn’t pass), and individual cities around the world are beginning trials. If you have read the Black Lives Matter platform, you might have noticed that it calls for a universal basic income as well.
All this UBI talk might some excite people who think that the future is finally here. It shouldn’t. That’s because any UBI implemented today would be a disaster.
A Universal Basic Income, for those unfamiliar, is simply a monthly check delivered by the government. It is not means tested, and every citizen gets it. It is often framed in the context of eliminating other government welfare programs.
It seems that many politicians don’t fully understand the premise behind the basic income, and instead have latched on to it as a popular buzzword and are naively trying to make it a reality. In the process, they will make a mockery of UBI and kill any hope of implementing it when we are actually ready for it.
To see what a successful UBI program needs, it is prudent to look at one that actually works: The Alaska Permanent Fund. The fund was created to pay dividends (about $2000 in 2015) to Alaska’s residents from the state’s oil revenues. It has been paying those dividends since 1982 to every permanent resident, regardless of employment status.
So what does a UBI need? A fund of resources, or wealth, that can be distributed without hurting those paying for it. It is NOT a redistribution program. In order for a country to give every citizen an income that could cover their basic needs, that country needs to be fantastically wealthy. Even though globally we are more prosperous than we have ever been, no country today is wealthy enough to afford a UBI. Today it would simply function as a welfare program costly enough to bring down an entire economy. While it’s unclear if UBI will forever remain nothing more than a good idea, the future could bring us the type of wealth and lowered cost of living needed to make it sustainable. A fully automated economy will improve all our lives in unfathomable ways. Imagine a cab ride across town costing the equivalent of a few dollars. Household goods could be printed in your home. Your home could be printed. An economy like that would generate such an excess of goods as to make a UBI feasible, because the only thing UBI needs to do is cover basic living expenses. But we are at least a decade away from anything that will begin to look like that.
Besides the fact that a UBI is impractical for now, the discourse surrounding it is destroying its most significant selling point: historically, ideological support support for the UBI has been bi-partisan. Even Friedrich Hayek, the father of Libertarian economic thought, gave some support to the idea of a minimum income. If a push for a UBI only comes from the left today, in the future those on the right will see as just another welfare program, to be promptly voted down while pointing to the national debt clock.
So politicians: I know UBI sounds good, but please, save it for when it will work.