By Advait Moharir
Universal Basic Income has become one of the most discussed topics worldwide. The topic gained traction in India when the latest Economic Survey spoke positively about it. However, UBI is neither a recent phenomenon, nor a sudden offspring of the post-capitalism era. It has a long history and has been debated upon by economists and philosophers extensively, with multiple proponents and opponents.
The beginning of UBI: A historical overview
The idea was first talked about by Thomas More, a Humanist during the Renaissance period in Europe. The Renaissance brought the idea of welfare of the common people into the public domain. It was argued that providing everyone with means of livelihood is an astute way to stop theft. However, the father of UBI is considered to be his fellow humanist Johannes Vives, who famously said: Even those who have dissipated their fortunes in dissolute living through gaming, harlots, excessive luxury, gluttony, and gambling should be given food, for no one should die of hunger.
The idea emerged once more in nineteenth-century Europe, with the eminent philosopher Thomas Paine being a noticeable proponent. A libertarian and conservative, Paine called the government a necessary evil and argued that they have to ensure certain basic rights, as he believed in the inalienability of rights. He called for a universal basic income regardless of need, because he felt that giving income to some and ignoring others was unfair, as it would cause more strife and division than necessary.
[su_pullquote align=”right”]They are clear that this compensation or subsistence is an unconditional entitlement of only the poor and not all.[/su_pullquote]
Paine was a full-fledged proponent of a complete UBI. Utopian socialists like Fourier and Charlier argue for a compensation by the State, partly due to its exclusion of the people from right to access to land and resources. However, they are clear that this compensation or subsistence is an unconditional entitlement of only the poor and not all. Fouriers observations and demand of compensation found support from prominent philosophers like John Stuart Mill. There was a fundamental difference of opinion among various philosophers. This was that should basic income be universal, or applicable only to the poor.
The inroads of ideology
In the twentieth century, people across the ideological spectrum made cases for UBI, but for two different reasons. The conservative case for UBI stemmed mainly from the fact that its introduction would lead to the simplification of the welfare state, and withdrawal of the government from the economy. Milton Friedman called for minimization of the welfare state and a negative income tax. That is, a person earning below a certain level of income should get some amount from the government, instead of paying it. Other libertarians like Charles Murray have even gone to the extent of calling for the demolition of the welfare state by implementing Guaranteed Income (GI).
These ideas, too, however, have faced significant critiques, one of which argues that the tendency of the state to pay an unconditional amount of money will disincentivize the desire to work, and thus will create a lazy population.
There is significant support for UBI from the political Left too. The primary argument here is that a basic income is a measure to bring about social justice and reduce income inequality. Political philosopher Ronald Dworkin made important observations with regards to resource distribution and egalitarianism. He said that people are responsible, and should be held responsible for their choices, even though they arent responsible for the unchosen circumstances in which they make those choices. Thus, while he acknowledges human agency, he also recognizes that unfair circumstances can erode the same.
[su_pullquote align=”right”]The negative effects of these circumstances can be offset by the state being sensitive to the ambitions of people (what they choose to make of their life) and endowment.[/su_pullquote]
Dworkin suggests that the two principles can be reconciled only when there is a fair framework for interaction, i.e. a market with appropriate legal protection, and a certain amount of initial and basic endowment of resources. This endowment includes a compensation amount for the poor. While he attributes unchosen circumstances to pure luck, the negative effects of these circumstances, he argues, can be offset by the state being sensitive to the ambitions of people so that the unfavourable environment caused by birth and socialisation is removed. This idea of egalitarian distribution comes partly from a Rawlsian idea of justice, wherein knowledge of birth is shrouded under a veil of ignorance, and therefore, there must be fair resource distribution. Left-libertarian philosopher Van Parijs argues that basic income is a tool to bring real freedom of choice and achieve income redistribution. Erik Olin Wright and certain
The Central Government has suggested that a pilot Universal Basic Income program may be in the pipeline. | Photo Courtesy: The Indian ExpressLeft-libertarian philosopher Van Parijs argues that basic income is a tool to bring real freedom of choice and achieve income redistribution. Erik Olin Wright and left-wing economists also argue that UBI has to be funded by the rich. Basically, the rich have to be taxed more, so as to reduce the income gap. Leftwing, Marxist critiques of UBI are also widespread.
UBI, according to many, undermines the importance of work, and disconnects production and consumption, as work becomes optional. While technological advances create a utopian dream of a workless society, technology can only be accessed by a few, and the traditional form of production is still relevant. Thomas Piketty, French economist, and author of Capital In The 21st Century, argues that UBI tends to oversimplify the concept of social justice. He states that society must aim for a fair return to labour, and that involves a systematic change in public institutions and taxation, not just a rise in income.
Between theory and praxis
Basic income has gone beyond being a theory, as shown by its implementation in Finland. In India, too, the issue is being debated upon. Opponents argue that its implementation on such a large scale would exacerbate the fiscal deficit and that the additional income would be blown away on alcohol, drugs, and gambling. Supporters argue that it would help raise the poor above the poverty line and strengthen the weak labour and trade union movements. Ending other PAPs that are failing like MGNREGA would ensure that the funding is taken care of.
[su_pullquote align=”right”]Supporters argue that it would help raise the poor above the poverty line and strengthen the weak labour and trade union movements.[/su_pullquote]
The concept of basic income has expanded from being a mere suggestion for theft control to being a possible policy instrument. It is linked to core economic issues of equality, income distribution, poverty, taxation, and most importantly, social justice. Nobel Prize-winning economist Amartya Sen talks about how income inequality is not as important as economic inequality. Income, for him, is a mere means to an end, and individual heterogeneity makes it a difficult and volatile indicator of inequality. In an India-specific context, he has argued that there is a need to increase public investment to ensure that institutionalized inequality is reduced. Thus, Sen would certainly be skeptic about the idea of basic income.
Policy and politics: Implementation of UBI
With the spread of globalization across the world, and the consequent outreach and expansion of capitalism, wealth inequality is rising.
Governments, economists and planners are only just realizing the acute extent of wealth concentration in the hands of the rich, and the non-sustainability of the same. In such a critical scenario, a basic income is certainly a positive step forward to a more egalitarian world.
Firstly, the purview of basic income has to be decided. It makes no sense for the government to bear an additional burden to pay the already rich, as it doesnt affect their consumption and saving decisions. It needs to be restricted to those who really need it. To identify these groups, the government needs to conduct detailed surveys and identify potential beneficiaries. Both qualitative and quantitative indicators need to be put to use.
Most of the developing countries are running large fiscal deficits. It remains to be seen how basic income can be paid for. Basic taxation itself is a big issue in, as the rich and the powerful find ways to evade taxes. There is a need to find a way to provide basic income to the poor without antagonizing the rich, who still have disproportionate power. The way forward here is incentives: persuasion, rather than coercion. There could be policy formulation such that the government exempts the economically well off from certain taxes, provided they contribute to basic income to the tune equal to the taxation amount.
UBI is now a broad policy instrument in the hands of leaders, a concept touched upon by various philosophical debates. Its feasibility of implementation depends on political and economic contexts across countries. Thus, nations must be flexible and mindful of such differences in demography and economic inequality while taking decisions relating to the implementation of UBI.