This post is part of the sequence Arguments for a Universal Basic Income.

The Land Dividend

In the depths of pre-history, before all of the land in the world was parcelled up and owned by individuals and organisations, the human population was quite low, and it was possible for a stone-age human to hunt, forage and maybe even subsistence farm on some land to eke out a meagre existence.  Life was hard, the margin of error was thin, a bad winter or a poor harvest could be fatal; yet in this anarchist’s dream world, unless another marauding tribe came to drive you away, you could live on and extract as much wealth from this land as you were able or inclined to…

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This post is part of the sequence Arguments for a Universal Basic Income.

Effective Stimulus

One of the problems with the economy as it stands is the positive feedback loop of recessions.  When times are good, things work well: people spend money, which allows businesses to pay their staff, who can then spend their money and so on.  Every pound or dollar spent flows around the economy several times, facilitating growth and prosperity.  When the economy slows however, people see hard times ahead, and will try to save money, reducing their expenditure, which in turn reduces businesses’ income.  These businesses feel the squeeze and may lay off staff, who then have even less money to spare, exacerbating the problem, reducing the flow of money and making a recession more likely.  The concept of a stimulus is an idea originally thought up by the economist John Maynard Keynes: the government can inject money into the system, often by funding large infrastructure programmes, or more recently by giving it to banks to lend out.  This has the effect of increasing the flow of money again, with the hope that this will kick-start the economy, improve employment, and get things back to normal…

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This post is part of the sequence Arguments for a Universal Basic Income.

More Stability

Entrepreneurialism is a risky business – most start-ups fail, losing the entrepreneur money, and yet as a whole, it is a process that is hugely beneficial for the economy, as it generates significant employment and innovation.  Unfortunately, this tendency to fail makes entrepreneurialism something that most people cannot risk.  If you are not already fairly wealthy, leaving a job to pursue an idea that may or may not generate any income is unaffordable right from the start.  Even for people with some money behind them, it can be difficult to make ends meet in the period between the initial capital outlay and when the company becomes revenue generating…

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This post is part of the sequence Arguments for a Universal Basic Income.

Removal of Market Distortion

It is a frequently made argument, that minimum wages distort the market. Either forcing companies to pay more for a certain activity than it is really worth to them, or rendering someone unemployable if their skills are not worth the minimum wage that a company is allowed to pay.  This is an unavoidable negative consequence of a minimum wage law, yet without it, companies would be allowed to pay many people so little that they would struggle to survive.  After all, what is their alternative – if no-one is willing to pay them any more money, their only other option is to not work, and either live off state benefits, or starve.  The provision of Universal Basic Income would mean that everyone was able to survive, and could then augment their earnings with additional employment income.  This would remove the requirement for a minimum wage, as everyone would have enough income to survive, which would then free up the companies to pay the market rate for the work they required…

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This post is part of the sequence Arguments for a Universal Basic Income.

A Robust Safety Net

One of the main issues with social safety nets as they stand currently is known as the “Poverty Trap”.  This is the phenomenon whereby benefits are curtailed when someone finds a job, in such a way that they are worse off than before.  This can happen in several different ways – either the reduction in benefits occurs at the same rate or faster than the increase in job related income, meaning that the additional time (and opportunity cost) spent working has either zero or negative net effect on income.  Alternatively, some benefits are removed entirely when a job is found, which is detrimental when that job is part time or a “zero-hours contract”, again resulting in a lower income than before.  This kind of benefit structure actively discourages people to find jobs, as unless they are able to walk into a reasonably paid, full time position, they are better off unemployed.  This then means that unless they can weather a period of even lower financial security, they are not able to gain work experience to enable them to seek better jobs…

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This post is part of the sequence Arguments for a Universal Basic Income.

Less Vilification of the Poor

A common attack levied against people at the lower end of the income spectrum, ultimately used to justify cutting state benefits, is that of benefit fraud.  People affording lavish lifestyles funded entirely by the state, or people sneakily augmenting this income by working a few hours cash-in-hand.  This spectre serves to drive wedges between the rich and the poor, and to tarnish all people down on their luck as lazy, scheming and probably criminal to boot.  The argument that your hard-earned taxes are going towards buying a family of nine a second widescreen TV can be both emotive and hard to refute.  Despite the fact that this kind of occurrence is very rare, there will always be someone that manages to do it somehow, and when they are caught, it will spur yet another wave of anti-poor vitriol…

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This post is part of the sequence Arguments for a Universal Basic Income.

Freedom from Gouging

Price gouging is a specific type of market failure that occurs when someone’s life is at stake.  As an example, in drought conditions, even though water may quite legitimately be expensive, it is possible for a water seller to make even higher profits than this, due to the desperation of the people in question.  If they had the time to shop around, they might be able to buy water at the (albeit expensive, due to the shortage) market rate, but they do not have time – they are dying of thirst, so would give the water seller the deeds to their house if it meant not dying.  There is a similar problem with money – ultimately in modern society we need money to survive.  It is essential for food, water and shelter, and without it your life is at risk.  People in desperate need of money are willing to do all sorts of things that they ordinarily wouldn’t even consider…

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This post is part of the sequence Arguments for a Universal Basic Income.

Less Bureaucracy, More Responsibility

In modern times, there seems to be a consensus in economically developed countries, that some form of social safety net is called for.  The extent of it may be a matter of significant debate, with conservatives preferring minimal intervention and others desiring more, but it is uncontroversial to say that at some level, one is needed.  From the fact that it can take time to find a new job if one finds oneself unemployed, to the fact that industries change, and people need to update their skill-sets to remain employable, there is a well-accepted need to balance “survival of the fittest” with compassion and dignity.  The intention of this section is not to convince anyone that some level of state assistance is required, as those believing that this is not the case are likely very few in number; but instead to extol the virtues of a Universal Basic Income from a “small government” conservative perspective, over other more mainstream forms of state assistance programs…

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The concept of a Universal Basic Income is one that goes beyond the more general idea of “Benefits” or “Welfare”.  Payments from the government to the poorest in society have long been the norm in developed economies; indeed, whilst it was a novel concept when Sir Thomas More published his “Utopia” in 1516, the following half millennium has seen his arguments become quite mainstream.  He writes:

“Petty larceny isn’t bad enough to deserve the death penalty. And no penalty on earth will stop people from stealing, if it’s their only way of getting food.”

However, most of these payment systems come with some sort of limitation, usually quite reasonable sounding: they may be means tested, so that the less poor you are, the less you get; they may be dependent on how much you have paid into them previously, more like a savings plan or employment insurance; they may not pay anyone that has a job, as these people need it less; or they may require you to spend all of your savings before you receive any payments, as if you have savings, you do not need assistance…

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