A Product of the Times

Up until very recently, most people had not heard of universal basic income (UBI). While the idea itself isn't entirely new, its significance has been explored lately because of job displacement fears intelligent automation is expected to bring with it. As such, UBI has been endorsed by experts from various industries, including some of the Silicon Valley's bigwigs. Now, some of the world's top economists are backing it up, too.

Speaking at a panel discussion at the 6th Lindau meeting on economic sciences back in June, winners of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — more commonly known as the “economics Nobel prize” — endorsed UBI as a solution to the inequality brought by globalization and automation.

The economics Nobel laureates. Image credit: Lindau Nobel Mediatheque
“We should not try to deal with inequality by stopping these global processes, because these have the capacity to bring more prosperity to the world,” Sir Chris Pissarides said. “We should welcome expansion of trade and the opening up of India and Africa, and improve R&D to bring robotics into production. After all, if there aren’t enough jobs for us all to do, we can take more leisure. We are ageing, so we can feel comfortable that machines will do more of the work that human beings currently do.”

The Basics of UBI

Simply put, a UBI program allows people to receive a fixed income regardless of circumstances — employment, social status, etc. Aside from potentially helping people cope with automation, those who favor UBI also see it as an alternative to today's social welfare programs. Others who are skeptical of it often point out how it could make people lazy and reluctant to find proper employment.

Sir Chris thinks it won't be the case. "Universal basic income is an easy way of providing for the basic needs of life. Then you can perhaps provide social services such as health and education through the market," he explained. "The state could subsidize wages in these industries, or employ people directly on reasonable incomes who otherwise would be unemployed. Rather than providing people with state-run services, you can trust people to decide for themselves how to spend their money."

Currently, a number of countries and even private institutions are already conducting UBI trials. Leading the bunch is Finland, Canada, and in the U.S., Hawaii. There's even a blockchain-based UBI. These trial runs are necessary to figure out details that come with implementing a basic income program on a larger scale.

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