SI have been curious about the idea of universal basic income for a while. The idea, by itself, is simple. The government gives a certain amount of money, no strings attached, to all its citizens. The money should be enough to meet basic needs and there is no condition on who gets it. Everybody does. It is different from many normal public welfare government programs or laws we are familiar with.
- It is not a minimum wage law. Minimum wage is what you must get when you are working. Basic income is something you get irrespective of whether you are working or not. And if you are working, it is apart from, and independent of, anything you are making on your job.
- It is not a cash to the poor scheme. There is no condition on who gets it. Rich and poor, employed and unemployed, villagers and urban dwellers – everyone gets it.
- It is not an employment guarantee scheme. You just get the cash. You don’t have to work for it.
- It is not one among the myriad of food, education or health schemes. There are no conditions on how you spend the money you get as the basic income. Your can drink your brains out and spend the night in the drains if you wish. (You might get caught under some other law, but not because of what you did with your basic income money). You can buy an iPhone (if the basic income is sufficient for that). Or you can spend it on food, education, and health.
If you have not heard of the idea or considered it before, you are perhaps shaking your head at this point. What does that even mean? That’s worse than communism. Who will ever work if they get free money?
If you decide to trash it right away, I can hardly stop you. It so obviously doesn’t make sense, right? The idea is naively misguided at its best.
But you can consider hanging on for a moment.
Will nobody work if everybody was given a basic income?
I don’t think so. If you are an optimist you will call it human ambition, if cynical call it human greed; it is infinite. People are not satisfied with even much higher amounts of money than what a basic income scheme can provide. They want to continue earning more to keep up with, and stay ahead of, Joneses and their cousins. The world is not going to stop working just because they have enough money to feed themselves. They always want more. At least for materialistic gain they will continue working.
But working is not just about earning. Many people find an intrinsic satisfaction in the work they do. A lot of early work in philosophy and science came from the so-called “gentlemen of leisure” – people who didn’t have to work for their livelihoods. Of course, the leisure of this class of people was earned by the exploitation of a much larger part of the population. So nobody wants to go back to those days. But the point here is that good work is not necessarily motivated by livelihood needs. In fact, if you think of fields like literature and arts, where popularity (economic benefits) and greatness do not necessarily go hand in hand, leisure and basic income will help create more good work. Could it mean not enough of popular work will be produced? Unlikely. See the earlier paragraph about working for materialistic gains. Even in sciences and business, if people didn’t think that the alternative to holding onto their jobs was dying of hunger, we might see less of meaningless or even harmful work getting produced. Perhaps people won’t feel as justified in publishing papers with fudged or wrong data or going along with unethical business decisions if they didn’t fear so much for their jobs.
But poor people will become lazy and their men will only use the money to drink.
Many among the rich do not know how to manage money. Many among the poor also, perhaps, do not know. And we are misdirected in taking this paternalistic approach specifically towards the poor. For the most part, people on the brink of hunger will buy food first and that will be a good thing. Besides basic income is not a one-time dole out. It is a long-term, ideally lifelong, assurance of basic dignity. Once the direness of life stops killing you, positive ambitions are more likely to take its place in your mental space. Maslow’s hierarchy may not be as neatly hierarchical as its diagram tends to suggest, but there is an essentially correct idea in there. There will always be some lazy, useless people in the society – poor or rich. But overall I have more hope of poor people becoming upwardly mobile and living more meaningful lives than all of them becoming lazy drunkards.
What we do really fear (but won’t say out loud) when we express worries about poor people becoming lazy is that we won’t get cheap labor. In India, you don’t have to be super-rich to hire a maid or a cook or even a full-time driver. That’s because we can find them cheap. With the basic income, they won’t have an incentive to work too cheap. Already with schemes like MNREGA, in some parts of the country, people are complaining about not getting labor easily for farming or household work. I will read that “easily” as “cheaply”. But middle class losing some convenience (I will be one of the losers in this case) of the cheap labor is no reason why a whole population should not live with more dignity. And with universal basic income, the maid-hiring middle class is also eligible for it. Perhaps we can use that to pay the higher salary demanded by our domestic help!
This introduces another reason to consider universal basic income. The increasing automation and less need of human labor. We can celebrate it or we can denounce it, but we can’t deny it. A lot of basic tasks do not need as much human labor as they used to need (With washing machines many of us don’t need maids to wash our clothes!). How many kinds of jobs have disappeared in last two centuries? And how many more are on the brink of disappearing? Oh yes, yes – I hear that – reskilling, upskilling, so-many-employers-can’t-find-employees etc. But firstly, even reskilled jobs will continue to succumb to automation. A significant part of Infosys kind of “software engineering” may be automated sooner than we would ever have thought. Secondly, perhaps so much work is really not needed. In the beginning of the industrial age, hopeful people had dreamed of lesser working hours in a more industrialized society. That hasn’t come to pass. Why do so many organizations want to hire skilled sales people? To increasingly push products on the consumers who aren’t interested enough in them? Why? Why can’t we do with less production? Why do we need overproduction of clothes to be sold at 70% discounts online or in the malls to the people with already overstuffed wardrobes, when our garment workers are paid paltry sums and when there are still others who are dying of cold in want of sufficient clothes? For good or for bad, our production systems are becoming so efficient that we may not need all the human labor available to produce enough for everybody. But people need to eat, to wear clothes and to live. Hence basic income. And then let them work on things they desire whether or not it pays. Let them create poetry, art or organic gardens nobody pays for. Or perhaps enough people do and they become the next bestselling author or the next hot artist or the next unexpected business success. Let both the possibilities exist.
Back to earth. Universal basic income is by no means an idea that is ready to go. Especially not in India. In the countries that are considering such experiments (Canada, Switzerland, Netherlands etc.), to decide how much the basic income should be, people start by looking at the public welfare spending of the government and dividing it by the total population of the country. The idea is that all other kinds of welfare programs may be replaced by the single one of universal basic income. When I tried doing that for India with the numbers I found online, the result was laughable.
Besides that India specific problem, even if one were to experiment with it on a small scale, it will have to be a leap of faith. You can argue about the possibilities – good and bad – but to predict the real effects is impossible unless a long-term experiment is successfully conducted and analyzed. There are too many variables involved. Obvious technical issues of administration, inflation, labor market changes aside, the human behavior – especially when a whole population is involved – is nothing if not unpredictable. Some earlier attempts at experiments in other countries either did not survive long enough to get a result or the analysis never came forward or what came forward turned out to be faulty. Long-term experiments by governments seem to become the victim of political vicissitudes. Perhaps an NGO trying the experiment will fare better.
What I wonder about is if it would be possible to do an experiment of giving a basic income to people in some small, relatively isolated part in India. If the experiment is not universal (for the entire country), we have to deal with the conditionality which is not there in the original idea. Who all get the money? We don’t want it to be on the basis of income. So all residents of a relatively isolated place would make a good choice. Small and isolated will help in administration. We don’t want people shifting to the selected place surreptitiously just to get the money. If the place is small we should be able to identify the residents in the very beginning.I am still thinking about it.
To sign off, here are some articles related to universal basic income that you can read
- What If We Just Gave Poor People a Basic Income for Life? That’s What We’re About to Test.
- All of the problems Universal Basic Income can solve that have nothing to do with unemployment
- Is the World Ready for a Guaranteed Basic Income?
- What Would Happen If We Just Gave People Money?