Circulate on Fridays: What if we just gave everyone money?
Every Friday, Circulate rounds up a collection of interesting circular economy related stories and articles. This week, we take a closer look at the topic of basic income, what is it? Why is there growing support for it? What does it mean for the future of work?
In 1930, economist John Maynard Keynes famously predicted that by the turn of the century, production, the economy and technology would have progressed to a point where those living in Western Europe and the United States would be working a 15-hour week, instead spending far greater times on leisure and more creative activities. In many ways, the exact opposite has happened. Today’s economies are more efficient and can produce vast amounts of additional products, services and value, but the work week has not only failed to shorten, but even slightly lengthened. Meanwhile, rather from technological developments in production relieving people of the need to work, automated and AI tech is often seen as a threat to people’s livelihoods.
One concept gaining some traction that could be the beginning of the answer to some of these challenges is the idea of the state simply giving an allowance of money to its inhabitants to spend as they wish, otherwise known as Universal Basic Income. Such a measure would eliminate the need for people to work full-time, potentially freeing them up to enjoy more enriching lives, while also potentially reducing the costs of current welfare systems. More than a few countries have picked up on the idea with pilots being considered in Finland and Switzerland.
There are a lot of questions, some of which are discussed and answered in a piece written by Andrew Flowers for FiveThirtyEight. Capturing insights from Daniel Straub, a key voice for basic income in Switzerland, the article looks at the various arguments about the future of work and ability for society to function if a universal basic income was implemented. Interestingly, Flowers’ article ultimately steers away from the economic and moves to the social, perhaps suggesting that a previous ideology around work, driven by labour efficiency and rigour, isn’t as relevant today:
From Switzerland to the Netherlands to Kenya to Silicon Valley, a mixture of insecurity and curiosity are driving interest in basic income, but its dominant ideology — and appeal — is utopian. The core existential struggle lurking in the debates over basic income centers on what meaning work holds in our lives. Straub, the Swiss referendum organizer, remembers his great-grandfather working 10 hours per day, six days per week. That kind of toil is no longer necessary, nor desirable. The dream of a world where we produce more than we need has come true.
In a completely different context, some of the questions around basic income may be answered by a test being carried out by a charitable organisation called GiveDirectly, which is working to provide a basic income to people in the poorest in villages around Nairobi, Kenya. The concept is simple enough, provide them an annual income, enough to provide for their basic needs and hope to identify positive development within the communities. GiveDirectly’s founders argue that there is hard evidence that simply giving people unconditional cash will work as a development tool. It’s there intention to provide around 6,000 people in Kenya with a basic income for the next 10 to 15 years.
Too good to be true? Veiling something less “good”? That’s the argument put forward by Declan Gaffney in a Guardian piece on the Finnish conversation, rather than liberating people from work, Gaffney argues that basic income, as currently proposed, could actually lead to ordinary citizens being much worse off because of the dramatic cut in benefits justified by its introduction. Land Value Tax (LVT) could be one financial solution, at least that’s what Martin Farley argues in an engaging Medium post, Critically, he makes the following point:
If Basic Income increases incomes of recipients, there is a danger that those increases will be captured by rent-seeking landlords and others (i.e. rents or interest rates will just go up till they have absorbed all the extra money). If this happens, LVT will allow society to recoup most/all of the revenue captured by rent-seekers and push it back to Basic Income recipients.
Basic income is a topic just beginning to gain traction, no doubt there’ll be significantly more to discuss on this topic over the coming months, particularly as political discussions in Switzerland and Finland continue.
That’s all for this week’s Circulate on Fridays. Got a tip for us? Tweet us @circulatenews. Remember, you can check out the What We’re Reading section any time to keep up to date with essential circular economy news, selected by the Circulate team.