Universal basic income. It is worth thinking about today!

The idea of universal income minimum guaranteed by the government is dating us back to the 16th century: it occurs in the “Utopia” of Thomas More. For the first time in the new history, the idea of universal income was expounded at the end of the 18th century in the works of Thomas Paine and the Marquis de Condorcet. The concept of social dividends and equity has received wide support also in the UK. During the crisis and unemployment of the 1930s, the idea grew up into a national political movements that participated in elections in many countries. However, all these ideas remained as unfinished projects.

In some countries a guaranteed universal income have been tried and canceled (as in some cities in Canada and the USA), or is now being used (as in Finland), or is going to be implemented (as in France). Finland became the first EU country to start monitoring this social experiment. The goal of the project is to track how the behavior of the unemployed will affect the receipt by the state of monthly payments without any conditions to them. In this case, will they continue to search the job? Now, after the global financial crisis of 2008, many people see in universal basic income the best way to reform social security systems, which in the current form are no longer able to cope with the burden, as well as the response to the serious economic difficulties faced by the most countries in the world. The famous economists of the 20th century as Milton Friedman and Friedrich von Hayek believed that a guaranteed universal income in one way or another is the only best way to overcome poverty. In the face of growing financial and political pressure on the social security systems, some people believe that the implementation of universal basic income will be a logical solution to the problem. It can be indeed a more economical solution than existing social security mechanisms, mainly due to the fact that it is cheaper to provide and control. However, the main reason why many people returning to the concept of universal basic income today is that it sees a way to protect ordinary citizens from global economic shocks.

And such shocks are coming! The reason for them will not be in the next financial global crisis, but in the results of the industrial revolution 4.0. Better to say that the results of such a technological revolution will be in the form of mass unemployment and in the absence of the need for the economy in many professions and, accordingly, in the workplaces. The fourth industrial revolution is changing the labor market right now, right today. Many professions (drivers, guards, office workers, industrial workers, agricultural workers who are engaged in routine work) will be replaced by automated systems and robots. For people who lose their jobs will not be easy at all, because of acquiring a completely new qualification is not always possible in adulthood, well, it’s not even always economically feasible. Most likely, they have to realize themselves differently, by expanding the services, including the maximum possibilities of the creative economy, culture and art, by identifying those spheres of economic and social activity where robots and the digital economy will not be competitive in comparison with human capabilities. Nowadays, for example, even the IT labor market is in danger of mass reduction of personnel, since the existing technical capabilities and automation already completely replace programmers, web designers and other technical specialties. Such reductions this year were confirmed by the following IT giants like Infosys, Wipro and Cognizant. And here the universal base income is very important. A person who has lost his job will somehow have to survive. Such instrument will not only help to stay alive, but will provide a decent standard of living. However, there are different opinions both for and against the concept of universal basic income. The attention should be paid, since they basically do not take into account the factors of the new coming industrial revolution.

The arguments of supporters are refereeing to the following statements: it can solve the problem of poverty, the problem of technological unemployment, the problem of economic inequality. There are arguments that this instrument will reduce the administrative costs of social programs, allow people to do what they want, and not what the market requires. Among the supporters of the universal basic income implementation we can meet people of any ideology. Basically they are opponents of a complex system of social benefits and believe that the universal basic income will get rid of the welfare trap — payments will not depend on any circumstances. In addition, all benefits would be combined into one, which would reduce administrative costs at all.

At the same time, the arguments of the opponents are referring to other factors, since the criticism of the concept of universal basic income is based on economic and legal issues. However, the macroeconomic facts “against” have not yet taken into account the consequences of the fourth industrial revolution. In the context of globalization and development, it is difficult to implement in the current political situation on a global scale, the system requires large expenditures, will cause a massive influx of migrants. Also, some experts say that universal basic income significantly reduces the stimulus to work (encourages dependency), which diminish the productivity of labor in society. This idea is still doomed to failure in less prosperous countries with less developed social protection system, like in Switzerland or in Finland. And since the implementation of universal basic income implies a radical reforming of the existing system of social protection, many activists in the fight against poverty do not like it.

But at the same time, there are many actions that invite society to participate in the discussion about universal basic income. This problem has already pointed out some popularity, as long as the civic leaders of the free liberal business, such as Mark Zuckerberg and Elon Musk, the founders of the Facebook and Tesla, thinking and disputing about general revenues of the universal basic income. According to their opinion and taking into account the transition of the world economy to a new stage level in which automation and robotics play an increasing role, the idea of an universal basic income is expected to be extended in the next few years. Therefore, this issue of social importance cannot bypass the legislative field. We ought to pay attention to the study of two monographs by Daniel Häni and Philip Kovce, who tried to give a legal justification to the initiative of the universal basic income and to argue the importance of resolving the problem of the impending transformation of society, the labor market, and social and economic development. We are talking about “Was würdest du arbeiten, wenn für dein Einkommen gesorgt wäre?” Manifest zum Grundeinkommen (“Who would you like to work in conditions of guaranteed income? The Manifesto of the supporters of the “universal basic income”in 2017 and about the “Was fehlt, wenn alles da ist? Warum das Grundeinkommen die richtigen Fragen stellt” (“What is missing if everything is there​​” Universal income” ask us the right questions? “2015.

Supporters of the concept are forming a very strange group. Today, it includes the left, who view it as a step towards social justice, and some libertarians who see this ideology as the least dangerous way of redistributing income. But it is obvious that the time of universal basic income has come, but it needs to be implemented correctly. A few more years, and the reason for the mass distribution of such institution will not be left-wing liberal slogans about equality in the redistribution of income, but the phenomenon of involuntary unemployment. There come times that will completely change the usual ideas about professions, specialties and management positions. Some cautions about technological unemployment periodically appear from the time of the first steam engines and until now none of them has come true. However, the current situation is really unique. When the first cars appeared, even without the gift of clairvoyance, it was possible to understand that the coachmen, if taken as a whole, are retrained into drivers, and the stablemen — in auto mechanics. This time it takes a much more imagination to introduce new working professions, to which people who have lost their jobs due to cars without drivers can pretend. Achievements in the field of 3D printing and “Contour Crafting” will put millions of people engaged in production and construction in front of the threat of unemployment. If desired, this list can continued more — it will even have millions of managerial positions, which unemployment has not traditionally threatened. Artificial Intelligence and its mass promotion in the economic, managerial and production spheres are very real today. The merger of artificial intelligence and robotics will put an end to the era of mass employment. Analyst centers like Pew and large investment banks like Merrill Lynch are openly speaking about this. Robots and Artificial Intelligence become an integral part of our daily activities, performing various tasks and goals, providing reliability, security, mobility, convenience and entertainment. By 2025, responsible for 45% of production (today it is only 10%) will be robots. Those who do not monitor closely the development of science and technology, it is sometimes difficult to appreciate the pace of development of technologies that were born at the junction of robotics and artificial intelligence. And today there are a lot of reasons for anxiety. Society is likely very soon to be divided into those who will own Artificial Intelligence Power and, accordingly, all the rest. That is, a human being will be divided into two categories: “gods” and “everything else”. “The everything else” will have to survive, that will cause a massive planetary social explosion. That’s right here, and the high time comes for universal basic income, as an instrument for restraining inequality and dulling the impoverishment of the population. Here just the “gods” can create a world of full imaginary abundance, in which all work will be done by robots, and the “everything else” will only have to play games. It sounds scary and not comfortable. For this reason, technological progress is often blamed for aggravating social inequality. But on the other hand, if the redistribution of universal basic income is fair, then such income gives people freedom of action for self-development and self-realization, at least for those who will strive for it. Then the universal basic income will become the policy of the future — as the payment for ensuring that people live peacefully and regularly consume the goods created by the technology.

One more question: who will finance such income? One of sources may be taxes, compulsory contributions of individuals and businesses that are receiving more than profits when using the results of the fourth industrial revolution and the synthesis of artificial intelligence and robotics. Naturally, the size of such taxes will be increased. The business possessing such technologies must consciously understand how much social tranquility and well-being cost, and the governments, should already today anticipate the advent of such conditions and at the strategic level not for tomorrow, but already today think about the legal and socio-economic levers of regulating the issue of universal basic income. As tomorrow there will be no time to think about it and take the measures.

Sergiy Golubyev

EU structural funds, ICO projects, NGO & investment projects, project management, comprehensive support for business, expert with AgroChallenge foundation