IN A WORLD in which fiscal policy becomes more complex with each passing administration, an alarmingly simple proposal like universal basic income brings all parties into a state of shock. At its core, UBI seeks to give citizens a periodic, no-strings-attached cash grant to do whatever they want. Whether you are rich or poor, from San Francisco or from Bakersfield, every so often you receive a check in the mail for a fixed amount directly from the government. You could spend it all in a one-night extravaganza or save it to buy the car you always wanted—you could even burn the money in a bonfire if you like (though I would not recommend doing so). The fundamental principle behind UBI is for citizens to choose what they want to do with their money, whatever that choice may be.
On an individual level, that probably sounds appealing, but with such a simple concept as a no-strings-attached cash grant, our first impression is usually one of imminent failure. Still, there is a reason why thinkers from Martin Luther King to Milton Friedman have argued for some form of UBI—though we should start by saying that universal basic income is not as singular an idea as we might initially think. Some argue that UBI should function as a living wage while others conceptualize it as only a partial income to be supplemented with labor. On the funding side, plans for a UBI range from a tax on big corporations to a progressive tax break. For now, let’s take UBI to imply its most common form: a monthly cash grant to all citizens over the age of 18, given unconditionally. And let’s also briefly set aside the problem of the size of our UBI. We are going to try to understand how anyone could support this idea in the first place.
So picture a world in which every citizen received a check in the mail to do whatever they desired. Every month, you would get out of bed, walk to your mailbox, and find an envelope containing your monthly basic income. You might think that the majority of people would just grab the check and head straight to bed; dropping out of the labor force and living off your monthly deposit may be too great a temptation to ignore.
This is the overarching fear behind UBI: millions of citizens waking up once a month to cash a check and then returning to hibernation, effectively dropping out of the labor force. If you are the director of a large company, you might show up to the office only to find that all your employees had decided to quit. You might be driving your kids to school and find it unattended after most teachers had left their underpaid jobs. The room for potential disaster is vast, and you might prefer to avoid all risk and argue against a basic income altogether.
However, even if millions of individuals were to use UBI to quit their jobs, it would likely take a completely different form from the one you first imagined. The truth of the matter is that work plays a crucial aspect in the lives of most citizens. Individuals use their professions as sources of meaning and motivation; a basic income would only give them the opportunity to better define themselves in a free society. In this sense, the freedom to drop out of the labor force is one of the greatest benefits UBI has to offer. Through a basic income, people are given the ability to quit their jobs and improve their lives in any way they see fit. You could go back to school to finish your undergraduate degree, build the startup you always dreamed of, or even just look for a different job that leaves you more fulfilled. UBI grants you the ability to do with your life as you see fit, even if doing so goes against the conventional view that remaining in the labor force has inherent value.
Now the instances in which people use UBI responsibly are great, you might respond, but surely some will spend the money irrationally. There will always be that one person who gets out of bed, grabs their check from the mail, and heads straight to the nearest bar to spend it all in a night of drinking and debauchery. More power to this person, but empirical evidence suggests the exact opposite. If people are given a basic income, odds are that they will spend it productively.
Such a statement should also make sense. We tend to assume that others will spend money in an irresponsible manner, but the question should be: What would you do in that situation? If I gave you a $1000 grant, what would you spend it on? Most likely, you would use it to pay some bills, maybe to cover your student loans or to pay for essential healthcare. Overall, you would spend the money rationally. It should not come as a surprise that this is also the case for our fellow human beings. More often than not, we tend to consider ourselves more rational than others. We expect that others would blow their UBI in a sudden act of irrationality while we would spend it in the most reasonable manner possible.
Pushing the case further, irrational behavior is a privilege that today many of us are denied. If we could magically pass a UBI bill through the US Congress, we would find that most individuals would spend their cash grant according to pure economic necessity. Being born to a low-income family in the Bay Area, you would be forced to spend your cash grant to match rising housing prices. College students would certainly use it to cover tuition, and other Americans would have no other choice but to spend it on essential healthcare. Such investments would likely make the problem even worse, with companies increasing prices to match the public’s newly acquired purchasing power.
But in this defense of rationality, we also land on the most criticized aspect of UBI: the subsequent rise of inflation. This is mostly a problem for markets such as housing, healthcare, and education that are essential to everyday life—basic necessities for which prices are already out of control. Under our current social structure, most people would admittedly lack the freedom that UBI promises. The problem should not be the “reasonableness” of individuals’ investing their basic income, but whether they have the opportunity to spend their cash grants as they wish. If you had over $100,000 to pay in hospital bills, you would not have the freedom to use a UBI to quit your job and pursue a passion. In a society in which individuals are tied down by material constraints, irrational consumption is simply not an option.
In a strictly capitalistic society, this may be the one insurmountable challenge to UBI, but a basic income should not be the only social program in any society—nor should it require cuts to existing programs in healthcare and education. The only way to ensure that citizens are allowed to spend their cash grants however they desire is to reduce economic inequalities in markets like housing, healthcare, and higher education. Before we even consider a basic income, we have to invest in a comprehensive welfare state that provides real benefits to its citizens. UBI should be seen as just one of the many pillars of a strong and prosperous welfare state, but by the same token, only a proposal like basic income is capable of delivering the freedom that common approaches to welfare have failed to provide.
A basic income is ultimately about a world in which we are given the right to do as we see fit, freeing ourselves from any form of economic restriction. Let’s face it: even if you are lucky enough to live in a state where your constitution grants you the freedom to quit your job and pursue your dreams, economic reality prevents you from doing so. The world in which we live is one of rights, not one of possibilities. You have the right to send your kids to college, but it may be impossible for you to afford such a luxury. You are allowed to drop out of the labor force, but if you do, you may end up on the street. (You may still end up on the street if you don’t.) UBI is, in many ways, the solution to these problems. A basic income goes far beyond the monthly cash grant you will receive once it has been put into motion. It is the belief that citizens deserve the possibility to do whatever the state has promised them and, beyond the state, whatever they choose to do in life.
UBI is the shortest legislative route to a real-life utopia. Imagine a society in which you are able to quit your job to pursue your dream of studying classics, or work less time each week to read more books to your kids. A world where you are never forced to do anything by economic conditions, but one where you are moved by your individual desires. Even if we disagree on how to achieve such a world, we should all agree that it is a better world than our own. If universal basic income can get us one step closer to the best version of our lives, then it is (at the very least) an idea worth considering.
José Luis Sabau
Image courtesy of Nevit Dilmen on Wikimedia.