Universal Basic Income: a Force For Good or Bad?

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Universal Basic Income (UBI) is an economic theory trotted out by populists from either side of the political spectrum as a solution to the increase of automation. Milton Friedman and Richard Nixon were the first proponents of UBI in America, Nixon wanted to reap the rewards of a popular policy and Friedman wanted to cover the wound of poverty in America with the smallest bandage he could justify. The 37th President proposed a minimum of $1,600 per year for a family of four – considering inflation, the republican was offering around 80 per cent of Andrew Yang’s 2019 presidential election proposal.

Andrew Yang, despite beginning his presidential campaign in 2017, wasn’t seen as a serious candidate until he appeared on the ‘Joe Rogan Experience’ in early 2019. Yang’s campaign was focused on domestic problems, he proposed a UBI that would deliver a monthly payment of $1,000 to every US citizen over 18. Although this seems like a radical policy that would dent poverty on the national scale. Furthermore, Andrew Yang justified the possibility of a UBI with the introduction of a VAT, as opposed to a tax that would solely redistribute wealth from richest to poorest.

Critics of UBI are quick to throw words like ‘idealism’ and ‘utopian’ around, however, this isn’t an uncommon rebuttal from the right – often saying there is no ‘magic money tree’ as soon as working people call for improvements to society. There was no magic money tree for Jeremy Corbyn’s broadband communism, there was no magic money tree for nurses earning stagnant wages, and there was no magic money tree for a defining increase in the minimum wage. However, the Tory party were not short of money when it came to spending £2.6m on a new media room, or handing £30m PPE contracts to their local publicans. Elitist tory hypocrisy is not difficult to find in regard to the spending of tax-payer money. During the Covid pandemic for instance, the Conservative government overspent roughly £15bn on a broken Test and Trace system.

One of the fundamental differences between right and left perspectives on a UBI comes at the stage of implementation. The left, for the most part, believes in the necessity of the welfare state and would look to introduce a non-means tested income for citizens aged 18 and above, alternatively, much of the right’s focus on a universal basic income looks to replace an already underequipped safety net for the most vulnerable in society. At the Scottish leader’s debate, Douglas Ross, was the only politician to denounce a UBI and advised the audience he is "not convinced" by the idea.

A report by economists, Lansley and Reed, estimated the total cost of the UBI would be as high as £300bn, although this would be mostly covered by the tax and benefit changes, with the final £28bn covered by returning welfare spending to 2010 levels.

A universal basic income is not a single concept and could be introduced in many different ways. In 1990, Norway introduced a sovereign wealth fund to disperse the profits from their national oil reserves. In 1974, the rural Canadian town of Dauphin, introduced a ‘Mincome’ of around £9,400 per year, offering the financial support to those below the poverty line. Eric Richardson was 10 years old when his family were accepted onto the scheme, he said:

“Normally, you didn’t get to go [to the dentist] until you were old enough to pay for it yourself, I remember it very well because I had 10 cavities and our dentist would drill your teeth without freezing.”

Automation is something many in society view as progress and something that will make life easier, however, the negative implications of robots advancing within the workforce are at the heart of the discussion for UBI. For instance, a June 2019 report from Oxford Economics shows the impact of automation, it says:

“Since 2004, each industrial robot that’s been installed in the manufacturing sector has displaced an average of 1.6 people. In the first year of a robot’s deployment, it displaces roughly 1.3 workers. This figure increases in succeeding years.” Additionally, Kai-Fu Lee, Taiwanese-American Venture Capitalist, gave an interview with 60 minutes CBS, he said:

“Basically chauffeurs, truck drivers anyone who does driving for a living - their jobs will be disrupted more in the 15-to-20-year time frame and many jobs that seem a little bit complex - chef, waiter - a lot of things will become automated, we'll have automated stores, automated restaurants, and all together in 15 years, that's going to displace about 40 percent of the jobs in the world.”

Joseph Ferry, a second year Mechanical Design Engineering student, from the University of Glasgow said:

“Automation can be very useful when it comes to manufacturing large quantities of parts. The investment cost for automated manufacture is much larger than that for handmade parts, but it leads to an increase in the rate of production. This can lead to a reduction in the cost per part if a large number of parts are being produced.”

Although a Universal basic income is beginning to look like a political inevitability, it is clear that vigilance from the public must be maintained – if a government attempts to strip benefits bare, as opposed to a direct tax on wealth - inequality and wealth disparity will only grow. It is clear therefore, as a society, the burden is on the people to ensure we are not sold a raw deal with the future of our economy and are not complicit in the attempts of the neo-liberal right to maintain an oppressive system that sees the rich get richer at the expense of the worker.