Here’s a video that introduces the idea of a Universal Basic Income. Many of you will be deeply suspicious of the concept. I certainly was when I first thought about it while researching my book.
I was looking for solutions to the problem of how to recycle money through the productive economy, which is an essential feature of the system. If the money we spend isn’t replenished by income we can’t continue to buy the stuff that we need and businesses go bust. Without a steady cyclical flow of money our economy seizes up.
We currently recycle spent money via wages, investment income, and welfare (public pensions, disability & sickness benefits, tax credits, unemployment benefits, etc.).
The problem with wages is that they’re only available to people who have the ability to work and the good fortune to have a job. This accounts for less than half of the population in the UK.
Investment income is only available to the few who have been lucky enough to accumulate wealth in the past, and the income is precarious because it relies on the performance of the economy.
The problem with welfare is that the money has to be collected as taxes, the recipients have to be means tested, the money has to be distributed, and the whole thing has to be policed to prevent fraud. The system is cumbersome, inefficient, costly and divisive.
A Universal Basic Income would be a straight replacement for the income that people already get from welfare system. It would provide a reliable backstop for those who get their income from precarious means (employment or investment). And it would guarantee a continuous flow of money around the whole economy, reducing the chances and severity of recessions.
The video is hazy about how to fund the UBI but I propose a funding method in my book that is completely sustainable and has the added advantage of eliminating taxes on commercial activity (e.g. VAT and national insurance contributions).