COVID-19 and the case for the universal basic income

The idea of a universal basic income (UBI), also called a citizen’s dividend or national dividend, has a long tradition going back to Thomas More’s “Utopia” in the 16th century, and Thomas Paine, one of the US founding fathers in the 18th century. Among other prominent advocates have been the 19th century British philosopher Bertrand Russell and, under the guise of negative income tax, even American neoliberal economist Milton Friedman and President Richard Nixon. Advancements in artificial intelligence and automation have brought the concept back into vogue. Perhaps the most visceral example of why people have started taking it more seriously is the case of self-driving cars. The technology is already functional, and within a mere few years of being good enough to be widely deployed. It is expected to create about 100,000 engineering and related technical jobs in the US alone — the world’s biggest economy — but will kill a potential 4 million lower-skilled jobs.

And that is just one application of this new family of technologies. Other applications are expected to make large numbers of clerical, paralegal, even lower-skilled medical jobs obsolete. In previous technological revolutions, low-tech jobs have always been replaced by better, more skilled, better paid employment. But there is no law of nature to say that this needs to happen. And from where we are standing at the moment, it is just not obvious how we might, as a society, even begin to aim for some kind of ideal of full employment when we already think we can automate away more than half of the jobs we currently do.

So goes the argument in favor of looking at ways to keep people within the economic system, even as our societies may not be able to find meaningful employment for them.

And the simplest, most obvious way to achieve that is to give people direct subsidies. This ensures they can sustain themselves and their families, without governments having to engineer artificial jobs just because we feel strange about unconditionally giving people money to live on.

There are two arguments for why we should not try to implement any kind of UBI. The first one was the moral one, that it is not the job of the government to give people something for nothing. But when the government does not allow people to live off the land, because it has decided that land has private owners, and when the government then is unable to give people any other means to survive and feed themselves, this argument does not stand. Either the government stops enforcing property claims on land and allows people to feed themselves off the land directly, or the government owes people the sustenance it is currently denying them through these laws.

The second argument is financial — that we cannot afford to give everyone enough money to live on. Except that it turns out we can. In response to the lockdown imposed to contain the COVID-19 pandemic, the Trump administration announced that people will be sent checks directly from the federal government to help tide them over — though the details are still to be worked out. Or, for an example of how to do this properly, the government of Denmark has already guaranteed upwards of 75 percent of income to everyone affected by the lockdown they have imposed in their country.

But surely this kind of handout is not sustainable outside this very specific emergency? Paying $1,000 a month to about 300 million Americans, for example, adds up to $3.6 trillion per year. For context, the US government budget for 2019 was

$4.4 trillion, which amounts to only 21 percent of GDP. By comparison, European countries typically have budgets in the region of 40-50 percent of their GDPs.

Factor in the fact that UBI would allow the US federal government to eliminate a great deal of other social programs, and that Trump’s multitrillion-dollar tax break for companies and wealthy individuals in 2017 was unnecessary and easily reversible, and yes, UBI at $1,000 per month per individual is well within the realm of possibility.

This arithmetic was already known. It formed the basis of Andrew Yang’s campaign to become the Democratic party nominee for the presidency. What nobody expected was that this would be politically possible in the face of ideological opposition from Republicans. President Trump has just removed any basis for that opposition in the future. Sure, Congressional Republicans will continue to oppose UBI in principle — but they will not be able to claim that it is impossible.