Everything You Ever Wanted to Know About Universal Basic Income

Basic Income and the New Universalism

Universal basic income is firstly universal, secondly about income and only thirdly basic. In short, the most radical thing about basic income is that it touches everyone. This marks a significant change in how we view society at large.

The universal basic income has become a subject of increasing fascination across the entire ideological spectrum in recent years. Capable of much more than just a simple “employment fix”, basic income could help to create no less than a shared political vision for a future society.

There are a number of experiments in basic income about to be implemented this year around the world. The experiments offer basic income as a solution to automation, lack of disposable income, benefit traps or a bloated bureaucracy. In other words, the goal is to “fix” various parts of the existing relationships between the state, the individual and capital. Currently, the technology-driven vision for our society can be summarised thus: let robots do the dirty work, let a small group of creative entrepreneurs come up with new solutions to emerging problems and the rest of us can live on a universal basic income and the odd jobs the platforms provide.

In the present political climate, however, such visions could amount to suicide for any policy or movement. What people want are jobs for everyone, not basic income. In many countries, such as the UK and US, the public that cast its vote in recent elections expects this to happen though a return to a resurgent manufacturing industry: a modern-day version of the great industrial society of the past and a result of the fact that, for decades, politics has been about special groups and policies directed not at society as a whole but at those parts of it considered in need of fixing.

Amid all the talk about the new age of work and increasing automation, we have perhaps not seen the obvious. It is not just work that is changing, but entire societies. Somehow, we need to be able to convene both the automation of demeaning tasks (demand full automation^[1]) and take into consideration the desire to work that right now energises politics like no other idea. In order to bridge this gap, we need to look at the big picture. We need to understand what work means to people and what its precise role is in society.

Basic income has been compared to “the moonshot” (by us and others), where the process is much more important than the immediate goal. The process of basic income is in opening a new chapter in the discussion of automation and work. These work and automation phenomena do not occur in isolation from the rest of society. The current technological progress is once again evoking the question related to universals: what are the new infrastructures, new rights and new responsibilities that can weather the change?

In what follows, we suggest viewing basic income not as income, but as the capacity to produce and thus to participate actively in society. This perspective shifts our attention from automation and the increasingly rapid disappearance of (white-collar) jobs to the wider implications of what work has meant to us as a society. Viewed this way, the basic income combats the universally shared experience of the “spectre of uselessness” that haunts all parts of society, independent of social status or background. In doing this, it pushes us towards the “politics of what is shared”: the very process of getting basic income implemented is able to galvanise politics on a new level.

Framed in the right way, basic income can become much more than a quick fix for automation, or the societal flavour of the month of techno-fantasists. As a universal policy, it can ignite a new social movement and help to create a unifying vision for a post-industrial society.

Basic Income and Four Reasons to Fear the Future

Recent popular discourse on the subject of basic income has coalesced around four lines of argument. First, a wave of statesmen and business leaders from President Obamato billionaire business magnate Elon Musk have voiced their concerns over a future society where robots have replaced over half the workforce. As automation eliminates low-end jobs, an increasing number of people will be unable to make ends meet with earnings from low-paid, episodic or zero-contract-style employment.

That said, a couple of decades from now, advances in artificial intelligence, for example, might lead to us creating more wealth than we could ever have imagined before. This wealth would accumulate in the hands of the entrepreneurs and investors, however, and as incomes drop the economy as a whole collapses. There would be nobody able to buy the products and services that are automatically produced. These fears have contributed to the technologists’ enthusiasm for basic income. As such, it comes as no surprise that Y Combinator, the world’s leading start-up accelerator, is running its own basic income pilot with one hundred families in Oakland, California.

A third concern, a fixation on employment and incentives, currently dominates the thinking of the Finnish basic income experiment.^[2] There, the central argument is that basic income will break with the incentive structure of the current social benefits system: a system, it is argued, that discourages people from working. In Finland – as in many modern welfare societies – an individual has to navigate a web of income-tested “basic” benefits that are paid on top of one another. The joint effect of the layered benefits is that if a person who is receiving these benefits finds a job, work does not necessarily pay. Moreover, becoming an entrepreneur (or even “working” actively in the voluntary sector) can lead to losing one’s benefits entirely.

A fourth concern relates to the reduction of bureaucracy and administration. The transaction costs of means-testing the receivers of benefits are significant. The idea of an unconditional payment can therefore be seen as one way of providing a more efficient welfare system. This is the reason why basic income is of interest to the “liberal” end of the political spectrum, where streamlining the state is a major concern. The state can be reduced to these kind of “algorithms” that are simple and transparent.

Outdated Concepts of State v. Individual v. Capital

These four arguments for basic income are all relevant. That said, they are, however, all based on a somewhat outdated concept of the relationship between the state, the individual and capital. In the post-war societal consensus, work united employers, workers and the state in a shared mission (something that in the Nordic countries was dubbed the welfare state). The different formulations provided the basis for all the industrial societies of the West. In this vision, economic growth bound together the interests of the state, the people and private capital.

The state ensured a steady supply of labour for the employment markets by educating, re-educating and creating mechanisms for those that had fallen ill and could not return to the job market. Employers, for their part, supplied the state with taxable income, but also people with a sense of worth and income. Central to this vision was the idea that work is something permanent and not working permanently is a temporary situation that requires interventions: benefit systems, insurances, healthcare, re-education and more.

So now, the changes in work are not just changing work itself, but breaking this “machine”. If you take work out of an industrial society, the interests of capital, the people and the state are no longer aligned. And that is a major problem.

Indeed, work is not just simply about income to individual citizens. It is more, from both a societal point of view and an individual point of view. Work relates to our sense of worth, identity and social cohesion, and it plays a part in the contract that has bound together employers, the workforce and the state. Steady jobs and professions have been so central to our societies that currently our main way of contributing to society happens via work: that is how we identify ourselves, that is where we spend most of our waking time.

The current lines of argumentation see basic income as something that “fixes” what is happening to work. We propose looking at the big picture: work had a very special function in the industrial society. While work remains important to individuals, work (and therefore the social order) is changing. Currently, we are in a situation where technological progress and globalisation seem to break the connection between growth, productivity and human well-being.

Viewed from the perspective of the four arguments postulated above, basic income merely functions as artificial respiration extending the lifespan of industrial society. Instead, now that work is changing, we have to form a new type of “contract” between the state, capital and the people. Metaphorically speaking, basic income is not an app to save the industrial society, but it could be the start of a new operating system for the post-industrial society. Its creation is by no means an easy task.

To get the job done, we propose two things in particular: one, to rethink what basic income is and two, to rethink what politics is. Basic income needs to be about more than income for the precarious job markets. Politics needs be about “the people”. In order to speak to everyone, we need to rethink the foundations of basic income as something that relates to not just work but participates actively in the community we are part of.

In the next two sections, we aim to do just that. To discuss the return of politics based on shared experiences and unifying challenges, as well as basic income having the capacity to produce.

Basic Income to Generate Social Renewal

With the focus on fixing the industrial mode of production, we fail to see the scale and scope of basic income in terms of generating social renewal. For it is unique in its scale: typically, the biggest single share of most countries’ budgets goes towards the funding of social and welfare costs. By way of an example, it represents approximately a quarter of the entire budgets of many advanced economies, such as the Finland and US. However, the scope of basic income is even more dramatic. The most important characteristic of basic income is the fact that it is universal, that it is for everyone.

Currently, basic income is regarded mainly as a redistributive social policy instrument. As such, its foundation is often traced back to social rights, such as the right to social security and adequate social and medical services. As a flat-rate transfer given to everyone, the universal basic income has been hailed by many welfare state scholars as the ideal typical universal benefit, reviving the concept of social rights-based social security.^[3]

The idea of a universal basic income, however, can be traced back further in history to the establishment of civil rights, a far older embodiment of universalism and a more foundational set of rights. The basic income discussion commenced probably for the first time in its current form around the time of the American and French Revolutions in the late 18th century. It was a practical application of the establishment of the concept of universal human rights. The problem that philosophers puzzled over was how to reconcile the right to private property with the right to life and thus to a minimum standard of living.

As a solution, “founding father” and political theorist Thomas Paine proposed an early version of the basic income as a solution in Agrarian Justice.^[4] Paine’s argument centred on access to land. He departed from the premise that since land existed before man and was not created by man, it should belong to everyone equally. Therefore, every individual has an equal right to land by virtue of being human.

However, the development of agriculture, while contributing to civilisation, had dispossessed the majority of the population of their natural inheritance, but without compensation. For Paine, anyone born now should not be worse off than someone born before the onset of “civilisation”, when people, supposedly, had equal access to natural resources. Since the natural resources that had already been appropriated by individuals could not be separated from their cultivation (i.e. the labour of the proprietor), each individual should receive his or her entitlement in monetary form. In short, each man and woman should receive a lump sum of £15 when he or she turns 21. The amount was roughly two thirds of an agricultural labourer’s yearly income in Britain at the time.

To Understand the Present, We Must Understand the Past

Paine’s line of reasoning was echoed by the Nobel laureate Herbert Simon at the turn of the 21st century. While Paine focused on land, Simon justified redistribution through the claim that a producer’s output depends largely on human and social capital, such as shared values, scientific knowledge, trust and other social institutions. Following Paine, he argued that social capital belongs jointly to all members of society rather than specific individuals. Therefore, the producer should only be entitled to a relatively small share of the profit. The rest should be taxed and redistributed as a kind of basic income to all members of society. Simon even went as far as claiming that at least 90% of all wealth derives from social capital.^[5]

Indeed, much of the value in today’s society is created, renewed and sustained by us as a collective: the shared culture with its practices and manners, the trust in others, the shared language, the meetings in public spaces, the ideas we overhear, the conversations we enter into, the ideas that are in the public domain and not protected by licences or patents; the list goes on. All of these factors are in addition to – as Paine observed – the limited natural resources that lie in the hands of the few. There is no way an economic system of any kind could identify and capture all the value (through, for instance, taxes or markets) generated by these common elements, and allocate it fairly in the complex system of value creation that the modern economy is. In this way, the fact that we collectively produce things that enable market production but lie outside the monetary system is another reason to treat basic income as a universal civil right, rather than as a quick fix for an ailing industrial society.

But a right to what? What does basic income in fact represent in these arguments? We argue that both land and social capital should be seen as representing a capacity to produce. In the rural society of Paine’s era, land represented access to a means of production, or the ability to independently produce a harvest. People were fleeing the feudal Europe, where ownership rights had not been established and the land belonged to the king. Coming to the US meant that one could claim ownership of land. Paine’s discussion was initiated by the understanding that, at some point, the land would run out. This rudimentary basic income could therefore be seen as guaranteeing natural ownership rights, where ownership can be interpreted as the capacity to produce, in an age when most production was farming. Similarly, we can see that the social capital created in the 20th century through welfare and education, for example, improved the capacity to produce; this time, of course, in the context of industrial society.

Capacity to Produce in the 21st Century

What is equal to land in the 21st century? What does the capacity to produce entail in a post-industrial society? To answer that question, we should look at basic income as capital, and not just money. Capital can be seen as all the physical and intangible assets that combine with labour to produce the goods and services in an economy (data, machines, offices, intellectual property rights, brands, energy and software). In other words, money becomes capital when we have enough of it to invest in what Karl Marx called “means of production”.

Post-industrial means of production are very different to those in Marx’s time of industrial revolution. In their article “New World Order – Labor, Capital, and Ideas in the Power Law Economy”, the technology, economics and business scholars Erik Brynjolfsson, Andrew McAfee and Michael Spence point out that software-based products and services are changing the nature and the role of capital in relationship to labour.^[6] As today’s machines are more and more software-based, this new capital can be replicated with zero marginal cost. They point out, however, that even if this “digital capital” is in theory abundant and free, it accumulates in the hands of a few.

Furthermore, they argue that technological progress speeds up the accumulation of wealth (citing the work of Thomas Piketty in Capital in the Twenty-First Century^[7]). Brynjolfsson et al. write:

Machines are substituting for more types of human labour than ever before. As they replicate themselves, they are also creating more capital. This means that the real winners of the future will not be the providers of cheap labour or the owners of ordinary capital, both of whom will be increasingly squeezed by automation.

The real winners, the writers argue, are entrepreneurs who can create new solutions to new problems, while the rest will remain outside the new economy regardless of how much labour or traditional capital they can supply.

Here we have a great paradox on our hands: as a new kind of (digital) capital is becoming abundant and is replacing human labour in the production of goods and services, it is also slipping out of reach of most people. We are facing an era of abundance, in which the means of production are available to fewer people than before.

Therefore, in the era of capital accumulation, digital capital and renewable energy, we should see basic income not just as income for paying rent and buying food, but increasingly as access to capital in the productive sense of the word: in the same way as the right to own and claim land existed when moving from a feudal society to the era of nation states; and just as there was the right to healthcare and education after the move from an agrarian to an industrial society.

Now that we are moving from an industrial society to the next phase of socio-technological development, we have to ask what are the new rights people should have to remain active participants of society, to be able to produce, contribute and create value – not just to survive and have enough money for basic necessities, or, worse, to have state-sponsored jobs that could and should be automated.

In creating a new universal benefit system, we are creating a new relationship between everyone. Therefore, the real question about basic income is a big one: why? What is the purpose of this relationship? Why should anyone get this money? This question of framing should not to be confused with introducing conditionality to basic income (thus destroying its core idea). It is merely a question of how to communicate the purpose of basic income.

In this, we should look to the founding fathers and their idea of basic income as an extension of ownership rights. And ownership not just to have, but ownership as a freedom to produce. Picture this: this time we are not fleeing the feudal society, but an industrial one. Our industries can no longer provide us with the means of production. Work and politics no longer supply us with adequate means of participation. We need to figure out nothing more or less than a new way of collaborating to create value.

From Basic Income to Basic AI – Renewable Energy and Abundance

Current technological progress has the effect of driving down prices and wages. As this progress accelerates (a phenomenon we believe is clearly under way), the deflationary pressure it brings could increase and spread. In other words, the nature of money (and capital) is changing because of technological progress, such as the cheap and new forms of automation and global price transparency in consumer goods. In brief, it means that extreme advances in technological productivity are pushing down the prices of consumer goods, to the point where it is possible that the role of money is reduced. This is often referred to as technological deflation. The output per working hour keeps rising, even if salaries remain steady.

Some writers, technologists and economists have proposed that the information economy, coupled with the automation of cognitive tasks through AI and the eventual zero spot price of energy that renewables will bring, will force a drop in marginal prices to zero, or at least almost zero. In conditions of competition, this would also mean that prices drop, also to close to zero. Some thinkers have even claimed that we would then move into a new era, named provocatively and variously as the “age of abundance”,^[8] “post-capitalism”,^[9] “the world after capital”,^[10] “the post-scarcity society”^[11] or “the zero marginal cost society”.^[12]

Common to all these visions is an understanding that with the degradation of the price mechanism, markets will lose importance as the general-purpose resource allocation system. Markets may not disappear, but they will no longer be needed to allocate resources efficiently. In fact, efficiency becomes less important in resource allocation, as other values emerge. The focus shifts from efficiency to how to guarantee access to abundant resources, when capital is accumulating in the hands of a few.

If money loses its central role alongside work, we will have to rethink the idea of wealth and its distribution as well. “A post-capital society” would also mean that taxes will have to be collected in another form than money (an idea explored in this paper). Similarly, benefits such as basic income should be paid in something more directly useful than money, in basic productive capacity that is becoming abundant, such as free and equal access to new and emerging general-purpose technologies: capacity in computing, AI, 3D printing, DNA analysis, robots, (renewable) energy and so forth. These general-purpose technologies, as a result of a radical drop in their price and the difficulty of protecting the intellectual property related to them, become easily concentrated (in ownership) in the hands of a few and the services through which they are dispersed.

This type of post-scarcity and capital world is, of course, still some decades away, but requires that serious thought must be given to it. Therefore, we must already propose framing basic income as a basic tool for production, a seed money for the people, as an embodiment of the right to produce and participate in the common good – as opposed to an unemployment benefit that helps individuals to cling onto the search for work. For the difference between the two is stark: either basic income is a quick fix for a society where work in an industrial setting is the norm, and it provides a cushion for those times you are not employed by the “factory”; or, conversely, basic income is a universal right to produce and contribute to society as an autonomous actor.

The Return of Universalism

The last wave of universalism in politics ended in the 1970s and 80s, when the emphasis on universally shared characteristics gave way to the discourse on individualism and the needs of special groups. One manifestation of the end of universalism is identity politics: political activity that finds its justification in the experiences of injustice of members of certain social groups, to the extent that we have grown accustomed to nodding in agreement with the political truism that “we should become aware of and celebrate our differences”.

While identity politics has achieved a lot of good in highlighting the increasing diversity of our societies, some scholars have attributed to it the emergence of a moral panic about racial, gender and sexual identity, populist politics, and even see it as the root cause of so-called post-truth era politics, where individual experience trumps common facts.

For almost a generation, people of a specific religions, races or social backgrounds have formed exclusive political alliances by way of emphasising diversity. However, playing up to certain groups, politics and politicians have excluded others. The increasingly specific and differential relationships with the state have eroded the sense of trust and equity in society. The problem with identity politics is not that individual experience is not important; but quite the contrary.

New populist movements have indeed successfully exploited identity politics by emphasising how the displaced (largely white male) workers feel. Populists across the globe have broken down alliances between people, countries and religions, culminating in the outcomes of two key elections of 2016 – the US presidential election to Brexit. Populist movements are the pinnacle of identity politics. They reveal a fatal mistake in identity-based political thinking: by taking individual experience as a starting point, the winners in the end are the most powerful groups, not society as a whole. Identity politics hurts the people it was supposed to protect.

The Time is Now for a New Societal Vision

It is precisely in this situation that the idea of universalism can come to the rescue. For basic income to become reality, we must be able to start a new kind of politics. Political scientist Mark Lilla has argued that national politics in healthy periods is not about “difference”, but about “commonality”. Our generation is indeed in need of a broader societal vision. We desperately need a forward-looking and unifying vision to save us from the tyranny of what “majority politics” has suddenly turned into. Furthermore, at the moment, we do not lack common challenges; in fact most of the biggest challenges of our time are global and universal.

Automation, for example, will eventually affect people across every tier of work, from factory workers to lawyers and bookkeepers. In this sense, automation drives the middle classes into areas inhabited by the working classes for decades (if not always): a fight against a machine that does not sleep, get sick or demand a pay rise. The sociologist Richard Sennett already noted this 10 years ago. “The spectre of uselessness” haunts professionals as well as manual workers and an ageing population that is in good shape but driven outside the boundaries of working life.^[13] The spectre of uselessness is a common experience in which we can build a new kind of societal vision, one where (through the capacity to produce) we can be active, productive, creative, useful to others and thus participate in society, even if steady jobs and professions become the privilege of a few.

So the wider promise (the process of getting to the moon) that basic income has to offer is the politics of what is shared. The very process of getting basic income implemented can and must galvanise politics on a new level. Universal policies require universal visions. As history has shown us, universalism has the potential to bring together people from different backgrounds and ideological stances. The welfare state was a vision shared by most mainstream parties in the Western world and the founding fathers of the United States came to agree on civic – constitutional – rights from very different political backgrounds.

In fact, universal basic income already does this, as demonstrated by the variety of arguments by which it is backed. For instance, over half of the Finnish population supports a basic income reality, and most political parties have put together their own basic income blueprint.

Almost all the colours of the political spectrum seem to have their reasons for supporting universal basic income. Libertarians support it for the slim government it promises. The Left sees it as dignity for the poor and impoverished, since they would receive it with no humiliating strings attached. Other parts of the Left see it as a way towards income equality. Greens see it as a way of providing for the urban poor and agricultural parties view it as a way of supporting life outside the urban centres. Economists and technologists see it mostly as an opportunity to sustain the middle classes in the wake of automation. Social innovators see it as a platform for 21st-century governmental and civic innovations. Entrepreneurs and capitalists see it as a way of getting labour in less risky chunks. Finally, realpolitik politicians see it as a way to boost public finances by increasing the supply of labour, by collecting more tax and by decreasing the transaction costs of providing welfare (all in one go!).

Universal basic income, as something that touches everyone, is notably the first universal initiative of our generation. This, precisely, is the moonshot quality of the basic income proposition. Moonshot was never about getting to the moon. There was nothing on the moon. President Kennedy and his administration knew that. The point is that each generation must have their mission, something that encapsulates their vision.

This article was written by Roope Mokka and Katariina Rantanen and is part of The Next Era, a global initiative to track, connect, and amplify emerging ideas for an open and forward-looking society. The Next Era is a collaboration between the Finnish Innovation Fund Sitra and the Nordic think tank Demos Helsinki.

Footnotes and references

^[1] Srnicek N. and Williams A. (2015), Inventing the future: Postcapitalism and a world without work, Verso Books, London/New York.

^[2] Ministry of Social Affairs and Health (2016), “Ministry of Social Affairs and Health requests opinions on a basic income experiment”, press release, 25 August 2016.

^[3] Kildal N. and Kuhnle S. (2005), Normative Foundations of the Universal Welfare State, Routledge, London.

^[4] Paine T. (1797). Agrarian Justice, Alex Catalogue, Raleigh, NC.

^[5] Simon H. (2000), A Basic Income for All, A Forum Response, Boston Review. Available at: http://bostonreview.net/forum/basic-income-all/herbert-simon-ubi-and-flat-tax.

^[6] Brynjolffson E., McAfee A. and Spence M. (2014), “New World Order. Labor, Capital, and Ideas in the Power Law Economy”, in Foreign Affairs, (online) July/August 2014 Issue. Available at: www.foreignaffairs.com/articles/united-states/2014-06-04/new-world-order.

^[7] Piketty T. (2014), Capital in the Twenty-First Century, The Belknap Press, Cambridge, Massachusetts.

^[8] Diamandis P. H., and Kotler S. (2012), Abundance: The future is better than you think, Free Press, New York.

^[9] Mason P. (2016), Postcapitalism: A guide to our future, Farrar, Straus and Giroux, New York.

^[10] Wenger A. (2016), World After Capital, Gitbook, accessed at: https://worldaftercapital.gitbooks.io/worldaftercapital/content/.

^[11] Keynes J. M. (1937), “The general theory of employment”, The quarterly journal of economics, pp. 209-223.

^[12] Rifkin J. (2014), The zero marginal cost society: The internet of things, the collaborative commons, and the eclipse of capitalism, St Martin’s Press (Macmillan), New York.

^[13] Sennett R. (2007), The culture of the new capitalism, Yale University Press, New Haven.

Liiten M. (2016), ”Kysely: Perustulolla enemmän kannattajia kuin vastustajia”, in Helsingin Sanomat(online), 10 January 2016. Available at: www.hs.fi/kotimaa/art-2000002879059.html.

Lilla M. (2016), “The End of Identity Liberalism”, in The New York Times, (online), 18 November 2016. Available at: www.nytimes.com/2016/11/20/opinion/sunday/the-end-of-identity-liberalism.html.

Sadowski J. (2016), “Why Silicon Valley is embracing universal basic income”, The Guardian (online), 22 June 2016. Available at: https://www.theguardian.com/technology/2016/jun/22/silicon-valley-universal-basic-income-y-combinator.

Unkuri M. (2017), “Will Finland’s basic income trial help the jobless?”, BBC (online) 16 January 2017. Available at: http://www.bbc.com/news/world-europe-38593513.

Weller C. (2016), “Elon Musk says there’s a ‘pretty good chance’ universal basic income will become reality”, Business Insider Nordic (online), 7 November 2016. Available at: http://nordic.businessinsider.com/elon-musk-universal-basic-income-2016-11?r=US&IR=T.

Weller C. (2016), “Obama just warned Congress about robots taking over jobs that pay less than $20 an hour”, in Tech News (online), 10 March 2016. Available at: www.businessinsider.com/obama-warns-congress-about-robot-job-takeover-2016-3?r=US&IR=T&IR=T.