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Money for nothing: the world's biggest universal income experiment ​

WGS001B15 Money for nothing Shutterstock 258312164
WGS001B15 Money for nothing Shutterstock 258312164

How will people earn a living when machines do everything?

 

Human work that has long been threatened – and in some cases already taken over – includes assembly line and low-skilled manual labour.

 

But middle-class careers such as journalism, marketing, law and even medicine may be going the same way.

 

So it is no surprise that there has been a rise in interest in the idea that everyone should be paid a basic living, whether or not they work.

 

An income for all

 

The notion of states paying all citizens a salary, regardless of age, wealth or income is not new.

 

The concept of a universal basic income was touched on by Sir Thomas More in his 1516 book Utopia and has gone on to win the support of thinkers, academics and economists throughout the ages, including Martin Luther King Jr, JK Galbraith and former US President Barack Obama.

 

Trials of Universal Basic Income, or UBI, are planned or under way in many countries, including Canada, Scotland and Finland, and the idea has won backing from wealthy tech entrepreneurs, including Elon Musk, founder of SpaceX and Tesla.

 

Speaking at the 2017 World Government Summit in February, Musk said: “I think ultimately we will have to have some kind of universal basic income. I don't think we're going to have a choice.”

 

For and against

 

Those who support UBI say it would prevent people from being tied to jobs they hate, level equality gaps between the sexes and the rich and poor.

Opponents argue it would deter people from finding work and encourage reckless spending on drink or drugs rather than education, childcare or basic needs.

However, while some studies suggest recipients spend or invest the money in things that improve their incomes, security and psychological wellbeing, there has never been a large enough study to show accurately how UBI might work.

A Finnish experiment has been accused by some as not working, hailed by others as a breakthrough, and criticised for being slashed by an incoming right-wing government and not providing a worthwhile sample.

Now, thanks to the biggest ever experiment in UBI, which is backed by the technology company Google and funded by charitable donations, we should learn much more about the impact of UBI.

Source Shutterstock

 

GiveDirectly

A US-based non-profit group, GiveDirectly, is working with leading economists to run an experiment to test rigorously the effects of different UBI models in Kenya.

It will conduct a randomized controlled trial comparing groups of villages using the following models:

  1. Long-term basic income: 40 villages with recipients receiving roughly $0.75 per adult per day, delivered monthly for 12 years.
  2. Short-term basic income: 80 villages where recipients receive the same monthly amount, but only for 2 years.
  3. Control group: 100 villages not receiving cash transfers.

 

More than 16,000 people will receive payment, with more than 6,000 receiving a long-term basic income. Professional researchers will work to produce results independent of bias.

GiveDirectly says it will have results on how long-term cash transfers influence short-term decisions and welfare within the first couple of years of the project.  

Comparing the groups will shed light on how important UBI is for immediate outcomes – such as starting a business – as well as how much difference it will make if that income is known to be long or short term.

What does UBI need to succeed?

The world is still waiting for the first results of this experiment but critics – including trades unions in Finland – argue UBI is untested in developed nations and idleness and poor economic performance could result.

However, as John Thornhill, innovation editor at the Financial Times, has said, Alaska has been paying a UBI-style dividend from its oil boom since the 1970s and there is no sign of laziness. “Partly as a result of its annual dividend, it is one of the most economically equal states and has one of the lowest poverty rates”, Thornhill says.

Meanwhile, Bill Gates, the entrepreneur and philanthropist, has suggested a robot tax could fund UBI, and Thornhill says Facebook could be a source of income in return for the data people give it.

Though some doubt Facebook alone could support the global population, there is support among advocates for a data tax.

Utopia or dystopia?

What is certain is that the gap between the haves and have-nots is widening.

While the AI-robotic future envisaged by Isaac Asimov and HG Wells offers the chance of equality for all, that is likely to come at a price: and if there is no attempt to redistribute wealth in this new world from those at the top to those at the bottom, social unrest, poverty and their resulting ills are likely to be among the side-effects.