Universal Basic Income: More Freedom, Smaller Government


With a reeling economy and millions out of work, Universal Basic Income (UBI) is an increasingly hot topic. To many in the U.S., the idea of UBI might seem like heresy – antithetical to capitalism and “American values” like hard work, limited government, and individual freedom. However, it’s an idea whose time is approaching, if not overdue. And we can do it without sacrificing our values.

The reason we need UBI

The Fourth Industrial Revolution is here

As automation and AI become an increasing part of our workforce and world, the need for human workers trends downward. This is especially true in a capitalist society where efficiency and the bottom line trump all. The growing complexity of robots and AI means they can increasingly match or outperform humans in physical, intellectual, and even creative capacities. While some new fields and jobs will likely emerge from this “Fourth Industrial Revolution” even as others become obsolete – it remains to be seen whether there will be a net gain or loss.

If the current state of things is any indication, it’s not going to be good. As World Economic Forum Founder Klaus Schwab writes: “Technology is one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness.”

But this doesn’t mean we shouldn’t pursue better robotics, automation, and AI. These things can make us far more resilient to natural disasters. The recent COVID-19 pandemic is a perfect case-in-point. If we had more automation and AI built into our supply chains, they would not have been so disrupted by sick workers, mandatory quarantines, and employee deaths. The issue is not so much with robots and AI – though we must make sure we tread carefully and ethically with these advancing technologies – but making sure that humans impacted by them are taken care of. Thus enters UBI.

UBI complements capitalism and freedom

More entrepreneurship and freer markets

If robots and AI are going to take over many of our current industries, then entrepreneurship will become more important than ever for building new fields and jobs for humans. Luckily, UBI can foster entrepreneurship. When everyone is having their basic needs met, it makes it much easier to pursue one’s passions and build a business. More businesses means more competition which means more options for consumers at better price-points. On the consumer side, having one’s basic needs met means more disposable income to spend, which means a greater velocity of money and a stronger economy. It also provides extra economic resiliency in the face of natural disasters. The economic collapse from COVID-19, for instance, may have played out very differently had UBI already been present.

UBI can also empower workers in new ways. Since everyone is having their basic needs met, no one needs to take a subpar job out of desperation or necessity anymore. Any employers who don’t offer a rewarding workplace and perks will find themselves without the talent or manpower needed to keep them in business. This would essentially make employer regulations obsolete. There would be no need to regulate overtime, sick leave, and the like – the free market would take care of it. In fact, government in general stands to get a lot smaller with UBI.

UBI means smaller government and stronger society

Less regulation and less crime

UBI stands to make obsolete a lot of regulation and oversight – slimming down our government in the process. As noted above, in business, we could likely get rid of most regulation and oversight regarding how employers treat employees because workers will be empowered to work for who they want because they want to – rather than being forced to work for an unsatisfactory employer just to make ends meet. It could also greatly reduce the government patchwork we’ve built to fight societal ills like crime and poverty. Since UBI provides for basic needs, it means less need for food stamps, less need for affordable housing regulation, and maybe even less need for healthcare regulation (especially if coupled with Universal Healthcare). It also makes programs like Social Security obsolete – allowing for it to be phased out.

UBI also stands to make society more harmonious. There is already a noted correlation between poverty and crime. When people have their needs met there is less need to steal, engage in illegal activities, or harm others. And when hardships and crime decline, there is less reason to blame, ostracize, and hate others. UBI also allows people to further their own self-improvement by providing the time and money for further education, healthy eating, proper exercise, and other ways to improve physical and mental health. This all creates a feedback loop that even further reduces the need for government programs, law enforcement infrastructure, and the like.

All this is to say that our society stands to become a lot more cohesive and our government a lot leaner with UBI. But that doesn’t mean there aren’t any other lingering concerns about government and UBI.

Does UBI give too much power to government?

The power dynamic now isn’t any better – and might be worse

Of course, even if UBI may mean less government, there are understandable concerns about that government holding and distributing everyone’s paychecks. That lends itself to a lot of power. It’s important, then, to look at the power dynamic between the general populace and those who currently cut the checks: Big Business. Those in Big Business aren’t elected to their positions and they don’t often answer to their employees or the general public. Their concerns and focus tend to be mostly on themselves.

Our government, on the other hand, for all its flaws, is still “by the people, for the people”. We can engage with our elected leaders by email, phone, or even dropping by their office. And, ultimately, we as a country choose our leaders and have the opportunity to vote them out of office. We don’t often get to choose our CEO or remove the company board if we don’t like what they’re doing. In some ways, we have less of a say in how the company we work for is run than how the country we live in is run.

In other words, having a government cut the checks isn’t liable to be any worse than how things currently are in our country – at least not in regards to the power dynamic between payer and payee. But how does it impact work ethic?

Will UBI incentivize laziness?

People want to work

Setting aside the fact that laziness may not even exist, it’s important to note that places where UBI-like programs have been instituted, people did not stop working. In a Finnish pilot program, for example, it was found to actually increase incentive to work. It also had additional benefits, with people who received the UBI reporting “better financial well-being, mental health and cognitive functioning, as well as higher levels of confidence in the future”.

In other places, such as the U.S., this trend also holds true. In Alaska, where citizens have received an annual check from the government since 1982, the extra money has had no effect on employment. In North Carolina, the Eastern Band of Cherokee Indians Casino Dividend provides tribal members with thousands of dollars each year as well. Economists found that this hasn’t led to a reduction in work – though it has improved education and mental health while lowering addiction and crime rates.

But a long list of benefits doesn’t matter if we can’t afford it.

Can we afford it?

While expensive, the money is there

There’s no doubt that UBI would be expensive to implement – estimates range anywhere from $500 billion to $3 trillion, depending on how much you’re looking to pay everyone. As mentioned above, a lot of current spending could be canceled and diverted toward UBI – but the remaining price tag might still be in the range of $1 trillion. However, with a little extra taxation on the wealthy, we could more than afford it.

And for that reason alone, perhaps UBI is needed. While many in the United States may see it as a handout, UBI is really much-needed wealth redistribution. The evidence continues to indicate that Upper Class wealth is built on exploitation of the Working Class. The productivity-pay gap has become wider and wider since the 1960s, despite the fact that this is when the U.S. started to lower tax rates for the rich. Meanwhile, executive compensation has increased 940% vs the typical worker’s 12%. UBI can help correct this theft of wages.

So while robots and AI might be why we need UBI in the near-future, exploitation of workers and theft of wages are why we need it now.

Casey has a background in writing and journalism – and is known for his mediation and discussion skills. In his spare time he enjoys absorbing, dissecting and disseminating information — particularly in U.S. politics, religion, technology, science, music, gaming, and pop-­culture.

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