Universal Basic Income: Far-Fetched or Inevitable?

Editor's Note: Automation is coming, and it's going to drastically reduce the amount of labor needed for society to function. This will result in many people – particularly unskilled workers – being out of work and having very little to do. This could have many negative ramifications, such as increased crime, substance abuse, and so forth. While I'm still apprehensive about UBI, we need to be prepared for automation and its consequences.

It is a utopian idea, literally, but is enjoying a renaissance as politicians and policy wonks grapple with technology-driven changes that could redefine our very understanding of work.

If robots and machine intelligence threaten to render many white-collar jobs obsolete, then what will people do for money?

Enter the concept of a "universal basic income", a flat sum paid to all regardless of your existing wealth or ability to work. It is one of the rare ideas that has support from both the libertarian right -- which favours tearing up the welfare state -- and the left wing.

In France, Benoit Hamon has emerged as the surprise Socialist candidate for April's presidential election first round, on a radical programme that includes such an income -- to be funded in part by a new tax on industrial robots.

National or local governments in other countries such as Finland, the Netherlands, Canada, Scotland and Brazil are already evaluating how such a revenue might work in practice.

Finland is furthest down the road. On January 1 it started a two-year trial to give 2,000 unemployed Finns a monthly unconditional payment of 560 euros ($590).

At the least, advocates argue, a basic income could replace the thicket of unemployment benefits currently on offer in many advanced economies. Those can, perversely, discourage people from retraining in new fields or taking on lower paid work that society needs, such as care for the elderly.

Less Is More

At its most ambitious, the proponents say, it would give everyone a safety net and encourage new modes of thinking: work might no longer define our lives and instead we might find productive existences in volunteering for the greater good, or in the creative arts.

"There's a whole new suite of technologies coming on stream and people will need to adapt somehow," said Anthony Painter, director of the Action and Research Centre at the Royal Society of Arts in London, which in December released a research paper after a year-long study into the idea.

"The basic income just gives them a fighting chance," he told AFP, stressing the more immediate benefits that would come from redrawing the existing tangle of support for the jobless.

If mass unemployment and fears of technology are modern trends, the concept of a universal income goes back centuries.

In his 1516 book "Utopia", English philosopher and statesman Thomas More imagined an ideal republic where private property is abolished and all receive a basic stipend.

It is a pre-industrial society, of course, where agriculture is the foundation of the economy and people's needs are basic.

Things are more complicated today.

Who Pays?

A December study by OFCE, an economics think tank linked to the Sciences Po university in Paris, said that to ensure nobody loses out from the elimination of existing benefits, a universal income for French adults would need to start at 785 euros per month.

That is a little over what Hamon is proposing -- although pollsters give him little chance in the election given the dismal standing of the Socialist party under the departing president, Francois Hollande.

OFCE found that that level would translate into supplemental spending of 480 billion euros, or an extra 22 percentage points of French GDP -- "which is unrealistic in practice".

There are also philosophical objections. In June, Swiss voters rejected a proposed universal income in a referendum after critics slammed the idea as rewarding the lazy and the feckless.

"If a large number of people choose not to work, or to work less, where will the money come from to finance their income?" commented Charles Wyplosz, economics professor at the Geneva Graduate Institute.

But evangelists argue there will be plenty of scope to innovate tax-gathering in the new economy, and say our current regimes for welfare are ridden with inefficiencies that could, with a radical overhaul, free up money for the proposed stipend.

"As new technologies replace work, the question for the future is how best to provide economic security for all," economist and former US labor secretary Robert Reich wrote in a blog post.

"A universal basic income will almost certainly be part of the answer."