Regina Saphier: Unconditional Basic IncomePosted: April 22, 2014
Most people think that income should be work based. At the same time most people don’t feel annoyed by most work being done for free? In fact the majority of work is voluntary and unpaid. Most income today is NOT work based, rather it is transferred income (eg.: redistributed tax money or family support). I believe it is a huge mistake to assume that income should be directly work related in developed countries. By redistributing the available funds (parts of the national budget), we could provide people with an Unconditional Basic Income or UBI if we created a smart plan in Hungary. Our Gross National Income (GNI) per capita per year is only around 9000 Euros, on the border line between developing and developed countries. (I feel that GNI is highly relevant here, this is why I am introducing this term in my essay.) That means we can work with 750 Euros per month per capita (9000 Euros divided by 12 months), and we should not give more to one person. However, anything below 500 Euros would not be a Basic Income that permits people to aim to join the middle class. Keep that in mind. And don’t worry, most people would still work, because people usually want more, it is human nature. So, we would not run out of consumers paying VAT, we would still have entrepreneurs building companies and employing people who when earning more (beyond the UBI) would also spend more and pay taxes. The money cycle would be faster and not slower, because people could try new things, and more citizens would start small businesses. In turn our per capita GNI would increase, and the UBI could be gradually increased.
Unconditional Basic Income (UBI) was mentioned during the last election in Hungary (“Feltétel Nélküli Alapjövedelem”) and many people assumed that it was a new thing. No it is not a new idea, and no it was not invented in Hungary. I have been preparing a blog post about UBI for a while (meaning I let my subconscious work on it on its own), long before it was used in the election (by the way Thomas Paine proposed it first, over 200 years ago in the US), and now it is time for me to publish my random musings regarding UBI. I am a strong supporter of UBI, by the way. The key idea of UBI is that everyone, from small baby to old lady would get UBI even when not working, and work permits people to earn beyond the UBI. Here is what I think (I am trying to be clear to everyone so I am working with examples to explain how I see the idea).
The End of Tenure “Paralysis”: Extended, More Efficient Intellectual Competition
Imagine the US where tenure is a university professor’s dream. You get tenure and you are set for life. Now compared to the millions studying via Coursera globally for free, there are only a handful of tenured professors. When you have tenure, you can theoretically do “whatever” you want as long as your work fits the academic framework and criteria, so you are intellectually free to create, nobody can kick you out. This unfortunately often leads to loss of creativity, because you have to compete less. When you review negative arguments against Unconditional Basic Income, it is often stated by naysayers that giving everyone a basic living allowance for a dignified life without having to work would make them universally lazy. Others say that UBI would make us all more creative. Now the fact is that some tenured professors become prolific researchers, writers and teachers. Others however get lazy. Let’s see the psychology of this problem. The first type who remains diligent has inner motivation and gets into flow via intellectual accomplishments. For that person work is fun, a source of mental wellbeing. The safety of tenure makes them even more creative. Those people who get lazy after becoming tenured probably never had inner motivation, external incentives were pushing them toward tenure, like family expectations, peer competition, fame, or prestige… These people stop producing quality, original work when tenure “hits” them, because their work was not fulfilling emotionally. This does not mean that these people are inherently unable to enjoy work, it only means that they are doing the wrong kind of work (often for the wrong kind of reason).
What is the major difference between tenured professors and people getting Unconditional Basic Income?
The competition does not go away when you get UBI! Let’s imagine why this would result in revolution even in Academia… We live in the age of citizen science. You can discover galaxies from your couch online while on UBI. You can publish in open source online journals. You can also study astronomy for free via Coursera. Now you see if you discover 365 new galaxies during your “innerly motivated, constantly learning, self starter” lifetime as a citizen scientist while living on UBI and a tenured professor only discovers 36.5 galaxies during his or her lifetime, that gets noticed after a while on a high level. So, UBI would bring back competition even in the tenured professor’s life when his or her motivational source is external or these people would be able to change careers by requesting UBI and leaving their unfulfilling academic jobs. Right now many tenured professors feel that they invested so much time and effort into their tenure that they are unable to quit. UBI would give them the freedom to try something else. This would be good for everyone involved due to completely flexible professional mobility.
The Immigrant in New York, The Intellectual in Budapest
An immigrant in New York often has no choices. He or she emigrated from his or her country because in the country of origin there were no opportunities and the atmosphere was suffocating. People who need to integrate into a new culture most of the time have no choices, must do anything that looks doable for money. Not ideal. A person who does not emigrate from the same country and lives in internal exile has enormous financial difficulties while attempting to produce intellectual work on a global level. What if both had Unconditional Basic Income? None of these diligent and enterprising people would have to endure major humiliation, stress and could have choices and options. Imagine the amazing creativity that would follow! (Again, if you wish to become rich, you would still have to work.)
Many would not have to emigrate in the first place and when not emigrating these people could keep focusing on dignified intellectual and social activities. Would not have to hide in their own homes because of the crippling financial vacuum. It is draining when people keep asking what you do, and how you earn money… This is what defines you: your income generating work and your income itself. Unfortunately, not your knowledge, not your humanity, not what you can do, not what you are able to create. If you have fantastic education and no job, you are nobody. If you have a job, but no work based income, you are again nobody. If you have a job and income, but no title and status, you are nobody, no matter how smart, intelligent and productive you are in some other way. This is a terrible mentality. People will judge you, and not know that two third of work in societies is unpaid, and the majority of people don’t live on directly work related income, rather receive transfer income from the state or their own families.
People Have Different Needs
Some argue, that people have different needs and abilities. I agree. Others say let’s leave everyone alone the very same way instead of supporting most people the same way, because they believe in the free market that governs itself. I believe that free markets see profits only. But who is focusing on the social elements, on well being, on justice? In my opinion the Earth belongs to all of us, and the results of our efforts should not end up in a select few people’s bank accounts. Redistribution is the only morally acceptable choice and it must be expected of the super rich for the health of all communities.
People do have different needs, but people also have different levels of network complexity around them, different cognitive abilities, different cultures, different levels of health, different family and educational backgrounds, different creative abilities and so on. Leaving people alone in a market economy disregards the importance and impact of where the individual is within the local and the global social network. Different emotional, cognitive, social, financial needs and levels are part of the issue. One writer made fun of the new Maslow pyramid, where wifi is the most fundamental need. Of course food, water, shelter and safety are most important. But what if I told you that you can not provide these to millions of people without digital access to digital global microwork on an individual level? See? I hate to witness when white academic males argue from their limited and well served point of view (tenured thinking with no tenure in Hungary). Your reality is not my reality. I keep improving and writing even without a penny of work related income. To me this is normal. I wish from time to time that I had UBI, because I could have more options with my creativity. If you are against UBI, you wish I did not have options. I wish you too had the option to move on from your isolated academic world … UBI would be marvelously useful for people with bubble thinking too.
Homelessness and UBI
Homeless people could rent a room and could purchase food and basic services… No more homelessness, no more begging, no more slave like conditions, no more public health crisis from this source. I think this speaks for itself.
The problem is: Hungary does not have the economy, the oil, the service or IT industry that could possibly support an optimal basic income to every citizen to lift them up into the middle class. We would not be able to provide 300 000 Ft for every citizen every month (approximately 1000 Euros when I publish this blog post). It is also true that Hungary is not a huge country, and does not have over 300 million citizens creating a strong market economy like the US, neither are we wealthy Switzerland with a high-tech economy and a small population of 8 million. No. We are a small market with a language nobody else speaks on Earth, we are poor in EU terms, we have no oil or gas like Norway (the little gas we have should stay where it is to protect the environment), and there are 10 million citizens (of which approximately 500 000 expats live abroad in more developed countries).
Getting Creative with UBI
Therefore I believe that the solution should be planned on an EU level, in combination with many other solutions (free online education via Coursera, global online digital work and the like). I would argue that we need an “opt in” Unconditional Basic Income in Hungary and I would combine it with tax free startup opportunities and tax free online global digital work opportunities. I would add Massive Open Online Courses (MOOCs) to the mix for free quality higher education. If you can make a living online you might not opt into the UBI program or you might transfer your UBI to someone else. If you are able to start a global business you would only take UBI as long as you don’t generate a good income. Make UBI need based, voluntary and bureaucracy free. I mean, if I had to fill in a form online stating my name, gender, age, location, education level, and volunteer activities, I could get an algorithm tell me how much UBI I could get and the software could ask me: Do you feel the personal need at this time to opt into the UBI program? And if I hit YES, I would start getting the monthly UBI, no other questions asked. However when I have a well paying job, I personally would like to have the independent option to either stop the payment on my own, or transfer my portion to a given person I wish to support. Alternatively unclaimed UBI could accumulate for each person as a saving, and it could be inherited from family members, or it could be invested safely. Richer people could divert payment based on perceived need to others. However, I would limit that personal transfer on both sides. I could only transfer my portion to 10 other people, and I could only receive transfer from only 10 people (this could help start a high profile NGO with other people, by redistributing UBI). Non-profits could also get UBI transfer payments from individuals to support the staffing of a worthy NGO.
Looking at the UBI from an EU Point of View
From an EU point of view, spending money on people’s UBI and supporting online global work and startups makes more sense than pumping senselessly spent EU development money into a country of paralyzed citizens (paralyzed by the stress of systems change, corruption, joblessness, and a hopeless “elite”). If richer countries don’t want the economic crisis fuelled nationalism to spread from poor EU countries, an EU level UBI would be enormously liberating and healing. I am telling you, Hungary and its citizens were punished on three different occasions during the last 70 years: after WW II, during communism, and recently during the misguided system change (that did not really change the system).
Capitalism only works on a large market among ideal circumstances. So, either be a large country, or be part of a large market (like the EU). Small markets isolated by language barriers, with limited exportable goods and services don’t work well unless there is a special income source, like oil. Even in rich Scandinavia the film industry only works by combining the resources and the audiences of each Scandinavian country. Hungary does not have that kind of cooperation with its neighboring countries because culturally these countries don’t identify with one another and their languages are very different. Teaching people English and teaching them how to make money globally makes more sense than forcing them to cooperate with geographical neighbors.
Should we be Optimistic about UBI?
There is a book on optimism bias (look up the TED talk if you have no time for the book). People tend to be unrealistically optimistic about personal risks or success. If people had realistic assessments of their real outcomes, most would never start families or businesses. They tend to see large scale, long term changes in darker color (I think). This is why people are afraid of social changes and innovation, like UBI. I am optimistic when I look at the digital opportunities that this new era brings on a large scale.
It was possible to provide hundreds of millions of people globally with many free digital services in such a short time… within 10-15 years… (like Google, Gmail, G+, Facebook, LinkedIn, Coursera, edX, TED and so on). Therefore it must be possible to provide livelihood, housing, clothing, education, even work, etc… When community resources are available, access to these services does not depend on your employment, nor on your personal income. These community resources are Unconditional Basic Services if you like. These services are financed the same way as UBI should be financed. I think we are already in the process. Leila’s Samasource is an excellent example of the economic spillover impact of digital businesses. Samasource provides digital microwork to people in Africa and the US.
So, would you prefer to live in a Kibbutz? Or would you prefer to get Unconditional Basic Income (UBI) and live anywhere you like? Anywhere… and I mean wherever you like… That might be possible in the very distant future, but not today, at least not in Hungary. Let’s take UBI to the global level in the distant future. Especially interesting now that we know: Hungarian expats are sending home hundreds of millions of USD per year… I believe that UBI would open up new opportunities for people who are doing meaningless jobs to sustain themselves day in and day out. You might find that it would slow migration. Existential fear or lack of opportunities are very limiting, and people migrate to overcome those limitations. We need more social mobility locally and probably less economic migration. People could learn online, draw, sing, teach, dance, write, start small business, work online, cooperate with others, build community resources, volunteer, use open source templates and systems, and stop worrying about sustaining their families and having to save them from poverty (because even your kids and your partner would get UBI). People could start using indiegogo, kickstarter, Patreon, Elance, oDesk, Amazon and similar services to earn money.
There is this educational story… the boss is asking: Ok, I should train these people, but what if someone is leaving after I invest in his or her development? Can I afford that? And his advisor says: Can you afford not to train people? Obviously, if you want a better outcome, you need to train your people, you must invest in people.
The same is true for UBI in my humble opinion. Would you rather have the lazy ones work for you for your money directly, with no results, or would you prefer to have them stay at home but not be without any income? You could hire those who are willing to work in spite of their UBI. In my opinion more people could figure out their own strengths and place in the world, and become more productive and satisfied. And add the aforementioned optimism bias. Imagine: no worries, you have UBI, more freedom, social mobility, opportunity to grow and optimism, while you can afford the internet or to travel to the big city to find a job (and have the money to travel home when there is no job for you). This plan looks good to me. Perhaps even the one who looked really lazy in one position could learn freely and be brilliant at something else, somewhere else.
So, how much?
I strongly disagree with the 50 000 Ft UBI level that one political party proposed in Hungary. 50 000 might be enough for an uneducated older person (who never travels) in a village with a small garden where produce is available at home and where a well is used to water vegetables and fruits, and where people are bartering goods and services, but this is subsistence level. Unless you move city dwelling intellectuals to villages, you have to calculate with at least 150 000 Fts (approximately 500 Euros today) for the highly educated, because rent is high, utilities and food cost a lot in the capital (where most of them live). You also want that intellectual to go out and see people if possible. If you can not afford to sit in a tea house with people, to go see a theater play, or occasionally eat out, you become completely isolated.
National and EU based Unconditional Basic Income (NUBI and UBIE)
Since VAT would be an ideal source of UBI, we need people to go out and spend, as well as we need people to pay UBI taxes when they have excess income beyond the UBI. Therefore differentiation is critical in a poor country, where education levels and living expenses are very different within the population, and where the state budget is very limited. Plus, I believe it is morally wrong to give UBI to the super rich unless someone for some reason suddenly does not have any income. For example due to family bankruptcy… it is possible to have a large estate and suddenly be without any cash after a major illness (or illnesses) in the family for example… if your estate does not sell and you have no cash flow and no savings, you are in huge trouble… so you should get UBI. However, if someone has 1 billion in the bank, why give them 150 000 Fts per months? No need for that.
On average I would say 100 000 Ft UBI should be spent on one adult. This is doable even within the Hungarian economy. What is not doable is an EU living standard. For that there should be an EU UBI Extension Fund on an EU level for each country introducing the National UBI (or NUBI). Remember the GNI? The Gross National Income per capita per year is limiting the possibilities in Hungary below 750 Euros per month in my opinion… and I also wrote that UBI should be above 500 Euros to support the entry into the middle class. So, let’s say, you get exactly 150 000 Fts NUBI (from your country) and another 150 000 Fts of UBIE (from the EU), if you are a highly educated middle aged person who does a lot of volunteer work in the community. You can also work for money and earn even more, or you can spend all your time volunteering, studying, or you can write, teach, whatever you like.
Update (September 08. 2016):
On the first link there is a UBI chart and in the article there is a link to an interactive UBI calculator chart (the second link below) that was published in 2016.
Basic income calculator shows policy’s feasibility
The original and interactive The Economist chart (with the full list of countries analysed):
Universal basic income in the OECD
The interactive calculator chart (originally created and published by The Economist Data Team) calculates with a 4 500 USD UBI per year for each Hungarian citizen at least and it also makes state budget predictions for the UBI at higher amounts. This UBI range supports my calculations in my 2014 UBI blog, the one that you are reading right now (and does not support the much lower Hungarian civic suggestions regarding the local UBI). 4 500 USD would be just a bit over 100 000 Ft per citizen per month today.
I believe that the UBI idea needs to be planned and introduced on an EU (UBIE) level while considering and incorporating the National UBI plans or programs. There is a UBIE initiative in the EU, but I don’t know the details of their proposal. It could even consolidate nationalism, via a narrative that aims to support people who wish to move back to their country of origin. Give them UBIE+NUBI (calculated based on citizenship and education levels) and those people will go home. It is even possible that people with high UBI (from richer countries with high NUBI) would migrate to low NUBI countries within the EU because their purchasing power would permit them a more fulfilling lifestyle there. This would stop emigration in poorer countries and would perhaps start a new kind of economic migration from west to east, plus add cultural development and understanding to the mix.
The UBI could be transferred anywhere within the EU, automatically. If you live in Paris, but you have a hungarian citizenship, you get your NUBI from Hungary in Paris, as well as your UBIE from the EU. If you are french and you live at Lake Balaton, you get your french NUBI in Hungary, as well as your UBIE from the EU. Both sums are adjusted to your citizenship and are extended with the UBIE from the EU. It might be interesting to give incentives for moving home to a less advantaged country, or for migrating from a more advantaged one to a less advantaged one. I would not permit the automatic, central, mass transfer of the UBIE beyond the EU, and I would also limit the central transfer of the NUBI to the specific country unless the EU citizen has an address in another EU country… but if you get it in Budapest and travel to Australia and spend it there, that is your call. The restriction really makes a difference because it’s ok if a few thousand spend it overseas, but it is not ok, if hundreds of thousands do that automatically. We want to finance wellbeing within the EU with our funds. (Of course all of this is just brainstorming and up for discussion.)
I know that pension funds are being drained by the ageing population, and middle aged people of today might not have any pension at all 20-30 years from now. However, when you have the choice of working meaningfully or getting your UBI no matter how old you are, no matter where you are in the EU, in a more productive and more relaxed society UBI would eliminate the pension tension too. Millions of people get stuck in positions because they fear to lose the job, and so lose the pension and the benefits. If you could forget about this fear, would you not start your own business or do freelance work even at 50? Of course you would. And how about free online learning? That is also possible. When you think of wealthy families you take it for granted that their offspring are rich too, because they are part of the family. When you think of UBI think of your country as an extended tribal family. If the “national tribal community” has the means, the only morally acceptable way to go is to redistribute the family wealth in a smart way. Even if yours is not the richest country, it is indeed located in the EU and has more economic power than most countries in Africa.
When I see the argument that people should not get UBI because it would mean nobody would do the horrible jobs… I get really angry… because this kind of thinking hides this kind of attitude: An elitist jerk is sitting in his comfortable chair and thinks, “lets keep people dependent and needy so that somebody would do the shitty jobs that …”… well, that the elitist jerk would never do even for a lot of money… This is the slave keeper attitude. Let’s keep them poor and uneducated… Horrible attitude, in my humble opinion! Here is the thing: let machines do those low level jobs. Let technology companies solve the problem of automatic waste collection (already possible) and selection for example. And let the poor learn and live with dignity (yes those people are able to learn and deserve dignity).
The Community is Supporting and Respecting You, and so In Return it is Only Natural to Support and Respect the Community
Giving people an Unconditional Basic Income does NOT take away their basic need for self worth, the motivation to serve or to lead, to create, to grow, or to go places! Crippling poverty, an economy waiting to be reinvented, a corrupt and superficial elite waiting to be replaced are the things that limit lives, NOT an Unconditional Basic Income! Create the conditions, the education, the culture for community service. Send the message that yes, now you do not have to struggle, but every job that is necessary (and that can not yet be done by technology alone) must be done by people and work it out. It is a matter of cooperation, communication, planning and a sense of community. The community is supporting and respecting you, and so in return it is only natural to support and respect the community.
UBI and Abuse Prevention
Before I close my UBI essay, here is a key idea that is very close to my heart. Children and abused women need independent income and savings and UBI would give them just that. In Hungary thousands of children are experiencing hunger. Others have to put up with abuse and have nowhere to go. Many children and women run away to escape family abuse only to find themselves prostituted because they have no income. UBI would eliminate a lot of suffering and dependency. And many abusive men might just feel less workplace and family pressure and many would never ever reach the point of losing it in the first place… if those men had UBI. The abuser is often the one being abused by someone else, for example by the employer. UBI based independence would bring the opposite of unhealthy dependency and laziness. It would lead to healthy independence, cooperation, actions, innovation and creativity.
Soon (and it is already happening) technology is going to replace so many jobs and produce so much profit that you won’t be able to afford not to give the jobless billions an Unconditional Basic Income to avoid major uprising. Machines, robots, computer algorithms will do more and more of the jobs, even the ones that were considered highly human, like writing (there are articles on the web right now that were written by an algorithm), driving (there are self driving cars being successfully tested on roads), teaching (one professor teaching over 100 000 people via Coursera globally is now a reality), caretaking (there are robots in Japan that lift people up from the floor), medical evaluation (there are algorithms being developed for this purpose), and things like that. Trust me, once even the male intellectual middle class starts to notice the end of work and work based income as we know it, UBI will become very popular. Because we need to survive on something, and we need to do something with our brains, while somehow being part of society. The process is not possible without labor and income innovation. Here is another blog post by me introducing Samasource and global microwork. And here is another post by me about online learning, MOOCs and Coursera.
If you think that having financial safety reduces creative urges, just ask well to do teenagers doing free online translations, or voluntarily participating in community efforts. Yes, true, there are lazy rich teens too, but the problem is never the fulfillment of their basic needs. Rather it is the lack of family and teacher attention, lack of culture and lack of healthy community (that destroys their motivation). When we start giving people UBI, we need to start community building and education for a healthier, more responsible society as well. We need new attitudes with the new opportunities. We need people to pay taxes, to learn and remain active.
Today there are already new attitudes, that created the sharing economy, good games, crowdfunding, Massive Open Online Courses for free on the Ivy League level globally, 3D printing, personal fabrication, automation, robotics, artificial intelligence, big data, social networks, social media, peer content, citizen science, online jobs… we are in the middle of social and economic change already. We need to research and plan how individual human existence can be continuously financed in this “future in the making” that we never experienced before as a species. The answer is Unconditional Basic Income. The “how” is country and budget dependent. The key question is not: Should we introduce it? The key questions are: How and when to introduce this new form of income? And of course if you want to earn more money, you can and should work beyond getting your Unconditional Basic Income. So, the motivation to get ahead is still there. Healthy competition is good for the economy. UBI is good for society. Income security is good for the individual, but we need to build Unconditional Basic Culture to provide people with meaning. If you don’t have to work, you can still live a meaningful life if you are able to set intelligent goals and reach them.
Note: There is another poll below. Please, be so kind and answer my UBI related questions (this one is multiple choice and I want to see how readers think after having read my blog post). Thank you for reading and adding your opinion below.
Written by Regina Saphier
- Regina Saphier: Unconditional Basic Income (virtualhumanism.wordpress.com)
- Regina Saphier: Futuristically Speaking (virtualhumanism.wordpress.com)
- Regina Saphier: Gross National Income… “DEVELOPING” and “DEVELOPED” Countries… and COURSERA (mycourserablog.wordpress.com)
- Regina Saphier: Weapons of Mass Construction: Leila Janah’s Samasource (virtualhumanism.wordpress.com)