Why Is Universal Basic Services A Better Alternative To Universal Basic Income
Giving free money to people is not going to solve future humankind problems
The 21st century has been the most dynamic time period for humankind. The introduction of technology had initially made our lives not just easier but also highly efficient. A quote by Sophocles best describes the transition of technology in and around our lives today.
Nothing vast enters the life of mortals without a curse
The unregulated power and unlimited scope of technology have made us realise that while it does make our lives easier, it can and will also replace our utility in the not so distant future. Some of the changes we see today are already adding to the paranoia of tomorrow.
For example, the biggest E-Commerce companies in the world are using robots in their warehouses for the work that was done by humans until five years ago. Postal and Courier's services are going to be on the brink of extinction once the drone delivery system is commercialised. There are multiple such examples which will eventually highlight the one common problem — Humans can and will be replaced in their jobs by technology.
Anticipating this problem and its consequences, various government officials, businessmen and scholars across the world suggested adopting the concept of Universal Basic Income to tackle the issue of future mass unemployment.
What is Universal Basic Income (UBI)?
UBI is a government-guaranteed payment system that provides the citizens of the country enough money to cover their basic cost of living, irrespective of whether they have a job or not. Simply put, UBI is the concept of giving free money to people so that they can continue to live their lives in the event of a situation where they lose their jobs.
To some extent, a vague version of UBI is implemented in over a hundred countries today. Most countries have some cash transfer program for certain sections of society. For example, farmers may get economical support from time to time, or the elderly get basic monetary support as well.
UBI is a more evolved approach. In the past, business cycles, natural calamities or older adults determined the free transfer of money for a certain period of time. UBI assumes that every individual, whether earning or not, going through financial problems or not, is entitled to a fixed sum of income from the government.
Arguments in Favour of UBI
Some of the reasons UBI is generating a high amount of traction is because of the following reasons:
It will help reduce Poverty: One of the common problems that UBI addresses, in theory, is that it will lead to a reduction in poverty. People will get a certain sum of money, which will help them take care of their basic needs and requirements irrespective of the economic conditions.
Reducing Income Inequality: It is very evident in high growth economies to notice how the rich get richer while the rest of the country bears no fruits of the growth of the economy. The top 1% of the world now take 20% of the total wealth compared to 11% in 1979. UBI, to some extent, will help reduce income inequality and help expand the lower and middle class.
Help buffer the Tech Revolution: One of the most important reasons to implement this policy is to help blue and white-collar people who will be left jobless as technology replaces them in their jobs. UBI thus provides a blanket of protection for people in the future.
Psychological benefits of having Fixed Income: People who lose their jobs due to economic reasons face numerous mental issues which end up impacting their peace of mind. If a recession hits today, the people who suffer the most are the ones who don’t have the money and need their jobs at all costs. Yet, it is them that are laid off. Giving money to people for their basic needs in a time of crisis will help them avert a lot of mental issues.
Most of the times, when you narrow down to a solution, you tend to look at only the benefits that arise from it and ignore the new problems that it may create. While UBI does solve many of the problems we face today and can face tomorrow, it creates a host of new ones making the solution highly counterproductive. Let us see how.
Arguments Against UBI
Theory vs Rationality of Human Reality: In theory, it seems very logical to give money to people to take care of their basic needs in a time of crisis. The reality, however, is quite different. Who is to say that someone with alcohol addiction and a family chooses to fuel his addiction instead of put food on the table for the family. Or that an eighteen-year-old might want to spend his monthly cheque on a new iPhone or gaming console. While the point of UBI is to make the lives of people easier, it can at best only hope the people do that themselves. Their own experiences skew the rationality of every mind. Having a blanket approach and hoping for the best is not a solution.
How do you define what is Universal and what is Basic: A flaw with the concept of UBI is that it assumes that people across a country, a continent or the world would have the same basic needs. How do you know that someone living in Downtown New York has the same basic needs as someone living on the outskirts of Detroit? This logic, when extrapolated across countries, can make UBI look like less of a problem solver. For example, in a country like Afghanistan, food and shelter may be a basic need, but in the United States having a wifi connection may be considered basic.
UBI is more suited for the Richer Countries: Providing someone with money regularly is only effective if that money has a stable value attached to it and can provide for the needs of the people. If you are part of one of the developing economies whose currency depreciates on average of 2% — 3% a year, the government would then need to add that much more money every year in the economy. This may fuel further depreciation due to inflation and reduce the value of the currency further. Another case could be that the politically stronger countries may decide to impose sanctions on your country, and your money could be worthless within a matter of months if not weeks. This could add to the problem of income inequalities on a global scale.
UBI can discourage people from working: Giving free money to people might discourage them from working or might push them into a permanent zone of complacency. From an economic standpoint, if this were to happen, it would mean that while the government is giving money every month to its people, their revenue from taxes will be on the decline. This, in the long run, can be very detrimental to a country and might force them into severe economic problems.
The point is that while UBI may provide temporary relief for unemployment, it is not a good long term solution. Instead, what we should be choosing is to adopt the concept of Universal Basic Services (UBS).
What is Universal Basic Services (UBS) and Why is it a Better Alternative?
UBS is a form of social security in which all citizens or residents of a community, region, or country receive unconditional access to a range of free, basic, public services, funded by taxes and provided by a government or public institution. This means that instead of giving money to people to let them decide what is basic, countries can provide basic services such as healthcare, education and transport.
Providing such services can have a productive impact on society as a whole. For example, helping people with addressing issues of how to stay relevant in the future considering the level of education required is evolving so rapidly is a much better approach than giving them two thousand dollars a month.
Let's delve deeper into what makes Universal Basic Servies a better alternative:
UBS aims for sufficiency and not minimalism: The concept of UBS gives people the benefit of having multiple services at their disposal. These services by nature are some of the sufficient experiences which shape our lives. Rather than providing you with the minimum amount of money that is decided based on a survey made by the government, UBS allows you to take a fair shot with education and assures you of being taken care of in the event of a health issue amongst other services that could be introduced to benefit from with the changing times.
Addresses the shift in the work culture in the new world: One of the greatest advantages of Technology is that you can sit at home and make a career freelancing just about anything. This means we are shifting to a time when more and more people are opting to work for themselves than they are for other people. Bloggers, YouTubers, Website designers are just the tip of the iceberg. This new age culture thus needs more people to be educated and have exposure to different aspects of life. UBS will be able to provide for that in a much better fashion.
Take the example of someone at the age of forty working in the manufacturing industry looking to pursue her/his passion in the field of photography. If governments could provide people access to free or subsidised education, it can go a long way in ensuring not only do people stay employed and contribute to the economy but also can stay mentally happy and content with a new phase in their lives. This is because they are being helped to invest in themselves.
UBS will reduce human inequality: Almost every time we think of inequality, it is in some way associated with money. Money is mainly a factor of the education, exposure and experiences you have in your life. A rich man can provide more of the above mentioned three factors than a poor man. With time this gap between rich and poor only increases. This is because every time the playing field changes, the rich can make the first move and adapt to the changes. Allowing people to have the exposure irrespective of the money they have and experiences that have shaped their lives can go a long way in changing the current norm of society.
If our goal today is to ensure that the problems of today do not continue to be a problem tomorrow, we must think of ways which are unconventional, self-sufficing and independent of a government’s policies. Adopting a policy such as UBI does not provide sustainable peace of mind or security. All it does is gives us hope that we might be able to make do with our lives in a minimal way when we lose our utility to the machines.
That in itself is us compromising on pushing ourselves to want more out of our lives and instead opting for a complacent and easy solution. Just because it looks easy, does not mean it is.
UBS, on the other hand, allows us to have control of our lives and make changes with the times irrespective of how technology shapes everything around us. It allows society to be more adaptive, independent and free in the true sense of the word.
See you next time…