Universal basic income still in ‘experimental’ stage

In Switzerland last June, they had a referendum on a universal basic income that would have given each adult Swiss citizen US$2,500 (86,450 baht) per month. It would have gone to everybody whether they were working or not and the horrified Swiss rejected it by a majority of more than three-to-one.

In Finland last January, the government launched a pilot programme for a “basic income”, but it was a timid little thing that gives the participants in the trial just $600 per month. It certainly isn’t universal: it only goes to jobless people who are receiving the lowest level of unemployment benefit.

And in Canada last Sunday, Ontario launched a pilot programme that sits somewhere between the other two.

It pays out more than the Finns, or CAD$1,400 a month (35,630 baht). Moreover, you don’t have to be unemployed to get it, just poor.

“The project will explore the effectiveness of providing a basic income to people who are currently living on low incomes, whether they are working or not,” explained Ontario Premier Kathleen Wynne. But it’s still far from universal, and its supporters are keen to stress that the ultimate goal is to get people back into work. As in Finland, they believe that the only real solution to poverty is full employment.

In the early 21st century, this quaint belief is about as credible as the Easter Bunny, but in last November’s US presidential election campaign both Hillary Clinton and Donald Trump were still peddling the same sepia-tinted fantasy of crowded assembly lines and the return of the Good Old Days.

Mr Trump was even promising to “bring back the jobs” from abroad, as if they were all now sitting in China or Mexico. But most of the missing jobs whose loss created the “Rust Belt” were killed by automation and simply don’t exist any more. And Ms Clinton was equally reticent about the fact that full employment is not a realistic option for the future.

But if you want to understand the rise of Mr Trump you first have to acknowledge what automation is doing to jobs, especially in the United States. And then you have to figure out how to prevent this huge shift from causing a great political, economic and social disaster.

That is why universal basic income is now a hot topic in political circles throughout the developed democratic countries: it might prevent that disaster. But the curious thing is that none of trials now being undertaken is actually universal, with everybody getting the same “basic income” regardless of what other income they may have. Why not?

UBI is not meant to be merely a more effective and less bureaucratic means of helping the poor. It is also intended to abolish the stigma of “unemployment” and the misery, anger, and political extremism it breeds. If everybody gets the basic income as a right, the argument goes, then receiving it causes neither shame nor anger. And if the anger abates, then maybe democratic political systems can survive automation.

But nobody really thinks we should introduce UBI at a national scale today. We will need a majority of people to go on working for a long time to come, and we don’t even know whether enough people would choose to do so after they start receiving the basic income. That is one of the questions that the current pilot programmes are designed to answer.

However, these UBI test programmes are being smuggled in disguised as antipoverty projects, with the announced objectives of streamlining the system and encouraging people to re-enter the job market. That’s because the public really isn’t ready for full-blooded UBI. There is a very strong popular belief that people should work for a living, even if the society as a whole is very rich and the work doesn’t actually need to be done.

This prejudice applies especially strongly to the poor. As Harvard economist John Kenneth Galbraith once put it, “Leisure is very good for the rich, quite good for Harvard professors — and very bad for the poor. The wealthier you are, the more you are thought to be entitled to leisure. For anyone on welfare, leisure is a bad thing.”

So these early experiments with guaranteed income pretend to be aimed solely at getting people back into work. But meantime they will be gathering valuable data about the actual behaviour of people who have a guaranteed basic income.

When the supporters of UBI come back with concrete proposals for national systems in five or ten years’ time, they may have much more solid arguments than they do now.