The Case for Universal Basic Income

Universal Basic Income (UBI) is a concept that was originally conceived as a solution to poverty, ensuring that markets could continue to grow during normal economic times. The growing interest in UBI in Silicon Valley reflects a future vision driven by concerns over mass unemployment caused by artificial intelligence. Key figures like Sam Altman, CEO of OpenAI, and Chris Hughes, co-founder of Facebook, have both funded research into UBI. Hughes also published a book on the subject, Fair Shot (2018). Elon Musk, in his usual bold fashion, has expressed support for UBI in the context of AI-driven economic change. In August 2021, while unveiling the new Tesla Bot, Musk remarked: ”In the future, physical labour will essentially be a choice. For that reason, I think we will need a Universal Basic Income in the long run.” (Sheffey, 2021)

However, the future of UBI largely hinges on the willingness of billionaires like Musk to fund its implementation. Left-wing groups typically oppose the idea that work should be merely a choice, advocating for guaranteed jobs and wages as a means for individuals to support themselves. While it is undeniable that, in the current world, employment is necessary to afford life’s essentials, UBI could potentially redefine work as a matter of personal choice for everyone.

The Historical Roots of Universal Basic Income

Historian Rutger Bregman traces the historical roots of the UBI concept and its potential in the modern world in his book Free Money for All (2018). According to Bregman, UBI could be humanity’s only viable future, but it wouldn’t come without cost. Billionaires like Musk and Jeff Bezos must contribute their share. If the AI industry grows as expected, it could strip individuals of the opportunity for free and meaningful lives, where their work is recognised and properly rewarded. In such a future, people would need financial encouragement to pursue a better life.

The first mentions of UBI can be found in the works of Thomas More (1478–1535), an English lawyer and Catholic saint, who proposed the idea in his book Utopia (1516). Following More, the concept gained attention particularly after World War II, but it was American economist and Nobel laureate Milton Friedman (1912–2006) who gave the idea widespread recognition. Known as one of the most influential economists of the 20th century, Friedman advocated for a ”negative income tax” as a means to implement UBI, where individuals earning below a certain threshold would receive support from the government based on the difference between their income and a national income standard.

Friedman’s ideas were embraced by several American Republican presidents, including Richard Nixon (1913–1994) and Ronald Reagan (1911–2004), as well as the UK’s prime minister Margaret Thatcher (1925–2013), who championed privatization and austerity. Friedman argued that a negative income tax could replace bureaucratic welfare systems, reducing poverty and related social costs while avoiding the need for active job creation policies.

UBI and the Politics of Welfare

Friedman’s position was influenced by his concern with bureaucratic inefficiencies in the welfare system. He argued that citizens should be paid a basic monthly income or negative income tax instead of relying on complex, often intrusive welfare programs. In his view, this approach would allow people to work towards a better future without the stigma or dependency associated with full unemployment.

In Finland, Olli Kangas, research director at the Finnish Centre for Pensions, has been a vocal advocate for negative income tax. Anyone who has been unemployed and had to report their earnings to the Finnish social insurance institution (Kela) will likely agree with Kangas: any alternative would be preferable. Kela provides additional housing and basic income support, but the process is often cumbersome and requires constant surveillance and reporting.

Rutger Bregman (2018) describes the absurdity of a local employment office in Amsterdam, where the unemployed were instructed to separate staples from old paper stacks, count pages, and check their work multiple times. This, according to the office, was a step towards ”dream jobs.” Bregman highlights how this obsession with paid work is deeply ingrained, even in capitalist societies, noting a pathological fixation on employment.

UBI experiments have been conducted worldwide with positive results. In Finland, a 2017-2018 trial involved providing participants with €560 per month with no strings attached. While this was a helpful supplement for part-time workers, it was still less than the unemployment benefits provided by Kela, which, after tax, amounts to just under €600 per month, with the possibility of receiving housing benefits as well.

In Germany, the private initiative Mein Grundeinkommen (My Basic Income) began in 2020, offering 120 participants €1,200 per month for three years. Funded by crowdfunding, this experiment aimed to explore the social and psychological effects of unconditional financial support.

The core idea of UBI is to provide a guaranteed income to all, allowing people to live independently of traditional forms of employment. This could empower individuals by reducing unnecessary bureaucracy, acknowledging the fragmented nature of modern labour markets, and securing human rights. For example, one study conducted in India (Davala et al., 2015) found that UBI led to a reduction in domestic violence, as many of the incidents had been linked to financial disputes. UBI also enabled women in disadvantaged communities to move more freely within society.

The Future of Work in an AI-Driven World

Kai-Fu Lee (2018) argues that the definition of work needs to be reevaluated because many important tasks are currently not compensated. Lee suggests that, if these forms of work were redefined, a fair wage could be paid for activities that benefit society but are not currently monetised. However, Lee notes that this would require governments to implement higher taxes on large corporations and the wealthiest individuals to redistribute the newfound wealth generated by the AI industry.

In Lee’s home city of Taipei, volunteer networks, often made up of retirees or older citizens, provide essential services to their communities, such as helping children cross the street or assisting visitors with information about Taiwan’s indigenous cultures. These individuals, whose pensions meet their basic needs, choose to spend their time giving back to society. Lee believes that UBI is a wasted opportunity and proposes the creation of a ”social investment stipend” instead. This stipend would provide a state salary for individuals who dedicate their time and energy to activities that foster a kinder, more compassionate, and creative society in the age of artificial intelligence. Such activities might include caregiving, community service, and education.

While UBI could reduce state bureaucracy, Lee’s ”social investment stipend” would require the development of a new, innovative form of bureaucracy, or at least an overhaul of existing systems.

Conclusion

Universal Basic Income remains a highly debated concept, with advocates pointing to its potential to reduce poverty, streamline bureaucratic systems, and empower individuals in a rapidly changing world. While experiments have shown promising results, the true success of UBI will depend on global political will, particularly the involvement of the wealthiest individuals and industries in its implementation. The future of work, especially in the context of AI, will likely require a paradigm shift that goes beyond traditional notions of employment, promoting societal well-being and human rights over rigid economic models.

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References

Bregman, R. (2018). Free Money for All: A Basic Income Guarantee and How We Can Make It Happen. Hachette UK.
Davala, S., et al. (2015). Basic Income and the Welfare State. A Report on the Indian Pilot Program.
Friedman, M. (1962). Capitalism and Freedom. University of Chicago Press.
Lee, K. F. (2018). AI Superpowers: China, Silicon Valley, and the New World Order. Houghton Mifflin Harcourt.
Sheffey, M. (2021). Elon Musk and the Future of Work: The Role of Automation in the Economy. CNBC.