(12 minute read) Recently there has been a sea change in western politics. Issues of all kinds have been brought to the surface. While some are simply bottled-up emotion, others are more fundamental and relate to who we are and who we want to be. Coincidentally, not long ago a favourite podcast series of ours, Freakanomics Radio, discussed the idea of restarting Earth. Well, why not? What would we change if we could build an ‘Earth 2.0’? Amongst the topics raised was the implementation of ‘universal basic income’. It’s a simple concept that has been around for some time and as I listened, it became clear why universal basic income could be part of a more sustainable future.
Today, unlike any time in history, more people can be involved in these discussions (including writing articles like this). We have an opportunity to make changes for the better, for a more sustainable world. But before we jump into saving the world, I’ll note that whilst we are interested in holistic sustainable living, Kylie and I have focused The Bees Republic on the consumer-producer relationship. In particular on food, domestic living and our impact on the environment. That said, we are aware that there must be a holistic response to making the world more sustainable (a word we’ll discuss the meaning of in a future blog).
In addition to environmental sustainability, the effort must include social and economic factors. With that in mind, I’m treating this discussion piece as a ‘relevant deviation’ from our core environmental focus. A deviation into the exciting world of socio-economics no less!
I’ll start by explaining the principle of universal basic income (UBI). Then give a splash of history before diving into some consideration of the modern-day and what it could all mean for a more sustainable way of life.
The basic principles of universal basic income
Whilst the detailed application varies to suit each nation’s tastes, the principles remain the same. They are that everyone is provided with a standard income by the government. Regardless of stature, wealth or employment. The level of income is set at just above the poverty line. There are no sanctions, means-tests or loopholes, only a simple unconditional lifetime payment. People with disabilities are likely to receive an additional amount, but by and large, that’s it, everyone is treated equally. The aim is to provide all citizens with a level of wealth that facilitates the avoidance of unnecessary personal hardship, not supporting a life of luxury.
Over the past 12-months, the concept has gained traction across the political and business spectrum. As years of austerity grind on and social budgets shrink, the search for new ideas has begun. Nicola Sturgeon, the Scottish First Minister has shown interest, whilst ‘Y Combinator’ a California investment company, and the Dutch city of Utrecht are working toward conducting experiments. Meanwhile, Finland has already begun an experiment and Switzerland has held a referendum on it.
The concept has proved controversial, opening up endless avenues of debate. Questions such as what type of taxation should be levied, and to what degree. Or more fundamentally whether people should even be ‘entitled’ to welfare, and if so how much and when?
These are certainly interesting debates to be had and these questions may well form future posts. But for now, I will focus on what UBI means within the primary socio-economic sense and its relation to sustainability. First, let’s look at where it’s come from.
A concept with a long history…
Various forms of universal basic income have existed for centuries in western history. Jason Hickel suggested in his Guardian article earlier this year that it originates 800 years ago in 1217. Two years after the signing of Magna Carta in England, the ‘Charter of the Forest’ came into being. The Charter established the rights of people to use the ‘common lands’ for grazing, water and wood. It was an attempt to share the bounty and freedom of the land with all to the benefit of social stability.
The most commonly cited origin of modern universal basic income is in 1797. Thomas Paine, one of the US founding fathers, suggested providing every man over 21 years of age with $2,000USD (£1,500, $2,500AUD) in modern value. This would be funded through a land tax. If enacted, it would have been a means of sharing the land in a similar fashion to the Charter above.
Around the same period, the ‘Poor Laws’ of England also show similarities. They were a series of laws enacted to ease severe poverty. In Europe the same social issues took place and riots begun with France falling to revolution. Importantly, these laws established the concept of ‘deserving poor’ and ‘undeserving poor’. Something which continues to this day and we will look at shortly.
As the modern world took shape, social progress was on the horizon. In the 1960’s a series of experiments across North America looked at understanding the implementation of a more recognisable form of universal basic income. The United States carried out four experiments across seven towns involving almost 9,000 families. Meanwhile north of the border in the Canadian town of Dauphin, approximately 30% of the local population (12,000 residents) were chosen as participants. The foundations for a new form of welfare were being investigated.
This heritage presents is a clear common thread. That is, recognition that the success of wider society is only possible through the stability of the whole. Leaving the poor in extreme conditions whilst relying on them for labour was not a long-term solution.
What is the modern socio-economic context?
We exist, in western societies at least, in a capitalist economic system and socialist welfare system. The combination of these varies in degree depending on your country of residence. But essentially those are the two ideologies at play.
This means the financial system is designed for private businesses, able to generate profit by various means within agreed legal limits. These businesses compete within a ‘free market’ as they make their own opportunities with as much chance of success as failure. The goal, to put it simply, is to accumulate capital.
The social system however, is a government-backed, non-competitive public service that recirculates all funds back into service provision. There are no shareholders or profits. Its goal is to offer a service equally to all citizens, again within a defined legal framework.
The role of government in both systems is to form and apply the law. But, within socialism the government is also a service provider. Within both, taxes are levied to fund the government’s activities.
Jeffery Sachs, a key contributor to the Freakanomics series that inspired this post, suggests that modern economics is fundamentalist in its approach:
“…modern economics embodies a vision of human nature and an approach to ethics that is a simplified and, in my view, a deeply flawed reflection of that.”
The focus on accumulation of wealth is deemed ‘good’ within capitalism. The means of gaining wealth can be varied, but that is the goal. In conducting business, people make clear-cut, rational and informed decisions as they engage in this system. There is no grey, only black and white.
In a similar vein, Sir Angus Deaton suggests that in such a system there will always be some form of inequality. There has been, he notes, since Neolithic farming. In order for there to be great riches, there must be extreme poverty according to this system.
Capitalism, it seems, can create the illusion of freedom. Bu, the reality is we do not all start from the same position. Where one person may receive a great inheritance, another may be born into great hardship. This is freedom by circumstance, and from this, you must flourish. The involvement of socialism (welfare) attempts to acknowledge this reality and offer a base to society. It accepts there is some grey between the black and white. It does not suggest a cap to what the individual can achieve, merely raises the base bar off of the ground for an equal bottom.
We exist in a dual system, fundamentally at philosophical odds, but clearly capable of coexistence. Wealth can be generated, and through the structure of society, we have decided that some of this wealth should be used to support those in need. We accept the principle of private wealth. But, we also accept the principle of collective care. Together, these allow a society to be successful as each aspect is reliant on the other.
What is the role of welfare in the modern world? What do we want it to be?
The existence of a welfare system suggests we do not agree that people should be left to certain forms of unnecessary hardship. It would suggest also that we want some containment on the distance between the ‘haves’ and ‘have-nots’. This distance, however, is widely reported to be increasing. We exist in a wealth vs wellbeing paradigm.
There is a long history in assistance for the poor. As alluded to above, however, there are apparently two ‘types’ of poor. The ‘deserving’ poor and ‘underserving poor’. This means that some are considered to ‘deserve’ support and others are not. Those ‘deserving’ may be disabled, old or too sick to work. The ‘undeserving’ are simply labelled idle. As such, they will receive no support. These definitions have continued for almost 200 years and stand central to modern welfare.
Given the current changing winds of politics, perhaps this is a moment to step back and consider a bigger picture. Who do we want to be? Is the current system actually sustainable?
Today, stories of the looming arrival of robots and artificial intelligence are everywhere. This is an example of change far beyond the control of the individual. Whilst the changes often quoted (47% of US jobs being at risk over a 10-20 year period) appears concerning, the key thing achieved is fear. Those at the bottom of society are in the cross-hairs of progress. They are also the least able to adapt. Fear, hunger, homelessness, these are part of the ‘incentives’ of modern economics. It is not if you will be exploited, but how.
So, we have those most vulnerable, in their most vulnerable moment being rigorously tested to be sure they are in need. The system reacts and in doing so prolongs the negative (lack of income) and stunts the positive (opportunity to retrain) while the individual seeks employment. The fact of being ‘idle’ is not by choice or desire, but lack of effective support to progress.
The question then, is to what extremes are we as a collective, prepared to accept such inequality?
I’ll make a suggestion. It’s not acceptable for there to be such wealth in the world against such poverty. Within our own national boundaries we have established systems to reduce this. But with limits. These limits no longer serve their purpose.
A system that is based on a fundamental distrust of humanity simply because of their circumstance, is flawed. A system such as this is as useful as a poor quality lube to the wheels of society. It works for a short term, but before you know it, it’s causing more friction than use.
Society is a collective of people with shared values and culture. Able to support one another without a direct personal relationship. There is care within anonymity. Welfare is a key part. It provides for social resilience, enabling the individual to adapt to new circumstances for the success of the many. This resilience is important as without it, society is unable to grow, learn or adapt.
Time does not stand still. Our curiosity, needs, and desires create a changing world. At times more turbulent than others, but ultimately we move forward. The ability of the lower ends of society to absorb this change is as important as those at the top. Where wellbeing is undermined, so is wealth.
The presence of an effective welfare system, therefore, benefits the fullness of society. It brings structure and stability, an ability to cope with change. On this basis then, we accept that for society to be successful and ongoing, it must accept its interconnectedness. Allowing fear to be a major driver, and incentive to employment is not sustainable, indeed it is detrimental to long-term success.
What difference would universal basic income make?
We are not the first to be confronted with significant social and economic change brought on by technological development. Just as the majority of those involved in the nineteenth-century riots and revolutions were not against technology, neither is universal basic income. The argument is about society’s ability to adapt efficiently and effectively to the change at hand. Where those individuals become unemployed, surely the best option is for them to re-train in a useful manner. One that works best with their abilities. They can then make their most meaningful contribution back to the greater society.
The focus of universal basic income is on dignity and consideration, not ‘deserving’ or ‘undeserving’. In providing a UBI we remove the ever-present threat of absolute poverty. That when times are hard, there is unconditional support. The individual is part of a larger body allowing them to look at their options and progress.
Michael Bohmeyer, head of the German initiative ‘Mein Grundeinkommen’ (‘My Basic Income’), is quoted in the New Statesman. He states it quite succinctly:
“Basic income is about power, about letting it go… It’s about trusting people. It gives them the freedom to say no and ask the question, ‘how do I really want to live’?”
As with the ‘Charter of the Forest’, perhaps we should consider what the modern ‘commons’ are. Are we now at a point where we should see our collective success as a social commons that all can benefit from? Currently, we all benefit from a stable society. One with laws that are rational and enforced reasonably. Both business and individual function best in such a society. Why should this not be extended to strengthen those most vulnerable by facilitating their fuller inclusion into wider society?
The examples cited in Canada and the US add further weight against any arguments of ‘idleness’ or ‘undeserving’ poor. The results are as follows:
Firstly, hospitalisation rates fell 8.5%. Believed to be partly due to reduced stress and ability to afford rest when needed, something backed up in the latest Finnish study. Secondly, the researchers noted that there was a partial drop in employment of young men. This was in fact not due idleness, but because they were able to attend school for longer. Previously they would be pressured into leaving education to bring in an income for the family. Now they were now able to improve their job prospects. A similar trait occurred with new mothers. They returned to work later as they could now afford more time off with their child, having the added benefit of saving on childcare. Finally, across both this and the US results, it is noted there were no significant reductions in working hours from adults previously in work.
How does universal basic income relate to a more sustainable future?
In simple terms, for the world to be sustainable, it simply needs to be able to continue, to be ongoing. This has become pretty complicated. Continuity is not guaranteed as we are finding out, nor is it easy. But, it is possible. In a structure where we assume distrust, facilitate fear and allow extreme poverty there is little chance of any form of sustainability. History is littered with periods of revolt as the lower ends of society push back at being undermined and downtrodden. The current system that provides some assistance, but remains balanced on an outdated notion of ‘undeserving’ has stagnated progress.
By creating a system that allows trust, builds consideration and consciousness, we allow individuals to take pride not just in themselves but in their connection to those around them. Individuals are allowed dignity and control over their future. Instead of a social system that limits the distance you can flourish, universal basic income protects you from the distance you can fall.
With a self-sustaining society, one where we are all able to progress. Where individuals are no longer left to languish because of their circumstance, we have created a proactive system. Proactive rather than reactive as it is now. We are enabling the best chance of success from the earliest point. With a society minded in this way, understanding the interconnectedness of us all, we are more likely to take note of our environment.
When we are fearful, resentful and humiliated we are unlikely to give consideration to people or the environment around us. In enabling a more just society, we enable a better chance of caring for the environment and so a more sustainable future. A stable collective is able to act with coherence and effect, something the environment is in great need of.
Some final thoughts
Does this all mean we have found the Holy Grail? A panacea for modern society’s misfortunes? Perhaps not, but we would certainly be closer.
Around 200 hundred years ago as noted by James Robinson in the Freakanomics series, the global population was poor with 80-90% in extreme poverty. Since then through the use of technology and improving social institutions we have reduced this. In the 1980’s this was down to 40% and today it stands at 10%. Change is possible, but it doesn’t occur simply because there is a pre-determined route. It occurs because we continue to make it occur. We push and grow for something better. We are active and these changes are entwined in protest, discussion, research, and innovation.
Today, we have the wealth and ability for the first time in human history to eliminate extreme poverty. To provide cures and vaccines to vast numbers of people. Educating and spreading knowledge to many more. We have the ability to create a society that is self-sustaining, able to provide for those in short-term and long-term need. Right now, we choose not to do this. But if we wanted to, we could. We simply need to act to make our world genuinely more sustainable.
Final final thoughts…
Over to you guys, it was a long read but we’d love to hear from you…