21 Dec 2014

Is the idea of an Unconditional Basic Income starting to get traction?

With Christmas just around the corner, it would be great to have something to give people hope.

Well, one thing that might make a difference is the fact that, at last, the idea of an Unconditional Basic Income is starting to appear in mainstream press.

Take, for example, an article called "How to Fix Poverty: Write Every Family an Basic Income Check" that just appeared in Newsweek magazine.  The article starts with some sobering figures :  "almost 15 percent of citizens (and almost 20 percent of children) live in poverty. Of those, slightly under 2 percent live on less than $2 per person per day."

The article then states that "In 2012, the federal government spent $786 billion on Social Security and $94 billion on unemployment. Additionally, federal and state governments together spent $1 trillion on welfare of the food stamp variety. Adding those costs together, that's $1.88 trillion."

"According to the U.S. Census Bureau, there are 115,227,000 households in the U.S. Split $1.88 trillion among all these households and each one gets $16,315.62. In other words, if you turned the welfare system into a $15,000 basic income payment, you’d end up saving over $150 billion (or $1,315.62 per American household)."

Doesn't that just make obvious sense? And that's just using the money that the US government already spends on Social Security. Give everyone the payments as a basic entitlement, and there would no longer be the division that we currently have between the "scroungers" and "productive members of society".

There was also a piece by Guy Standing, Professor of Development Studies at the School of Oriental and African Studies in London, that appeared in the Guardian called "Basic income paid to the poor can transform lives". He describes three recent Unconditional Basic Income schemes that have been tested in India, with support from Unicef.  The payments were modest cash payments - just one third of subsistence - paid individually, unconditionally, unversally and monthly - guaranteed as a right. 6000 men, women and children recieved the money, with the children's money going to the mother.

The results look very promising, with positive effects in four different areas.
  1. It had strong welfare, or “capability”, effects. There were improvements in child nutrition, child and adult health, schooling attendance and performance, sanitation, economic activity and earned incomes, and the socio-economic status of women, the elderly and the disabled.
  2. It had strong equity effects. It resulted in bigger improvements ... for all vulnerable groups, notably those with disabilities and frailties. This was partly because the basic income was paid to each individual, strengthening their bargaining position in the household and community.
  3. It had growth effects. Contrary to what sceptics predicted, the basic incomes resulted in more economic activity and work.
  4. It had emancipatory effects. The basic income resulted in some families buying themselves out of debt bondage, others paying down exorbitant debts incurring horrendous interest rates. For many, it provided liquidity with which to respond to shocks and hazards.
So, all this is looking very encouraging. A Basic Unconditional Income for all really could transform our planet.

Of course, one of the main arguments against such ideas is the question of how to find the money to make the payments. The Newsweek article rightly points out that you could finance a substantial Basic Income by simply redirecting existing welfare payments.

But, in case you didn't know, I have an even simpler proposal. Just apply a very modest financial transaction tax on all electronic transactions. For example, a 0.1% tax on the €2 quadrillion of transactions in the Eurozone would provide around €6000 a year for every man, woman and child in the the region.

There are lots of advantages of such a scheme - appart from eliminating poverty at a stroke. One of my favourites is that it allows debt based money to be laundered - converting it progressively into debt-free money that can be used freely.

Note added 26th December : And here's a piece that came out in Huffington Post too.


  1. You may find this interesting....


  2. Thanks for the pointer Matthew. I didn't know about reddit and it was interesting to see peoples' reactions.

    I think the criticism of using an FTT to finance the Unconditional Basic Income is simply wrong. With my proposals, the tax would be levied on all transactions denominated in a given currency - wherever they ocur in the world. No way to move Euro transactions elsewhere to avoid them. And even if we all ended up paying 1, 2 or even 3% on each transaction, this is still less than the credit card companies charge us. And way below what we pay in sales taxes like VAT.

  3. I agree with you Simon - I think you have hit the sweet spot.

    My argument has long been that it is a fundamental pillar of any BI that money be moved from the nonproductive financial sector of economies back into that of the productive economies through its most efficient agents, those folks who consume at the lowest echelons of the income scale. Would you have any comment on that?

  4. Couldn't agree more. Direct injection via citizens is obviously the most efficient and fair way of getting money into the real economy. I can't imagine anyone being able to argue the contrary. And in addition, it has the effect of transforming debt based money into freely usable money....

  5. Please visit www.i-globals.org for a new, private, digital currency that serves as a universal basic income. The key web pages are the following: Overview (top red button), fictions, alt money, income, gold, critics, investors and the Blog where there are many linked articles.

  6. Thanks Pierre,
    I hadn't heard about www.i-globals.org, so thanks for providing the pointer. It looks like it could be (yet another) way to potentially break the current stranglehold of debt-based money, and the idea of combining an independent transaction system with an Unconditional Basic Income seems pretty original. I approve of the initiative and wish them luck! Hey, I might even pay my €25!

  7. Your questions and comments are welcome. The WGO will be eventually be controlled and driven by its membership. It is also designed to be flexible and open-minded in order to adapt to future situations around the world. It only went "live" on the Internet on 9 December 2014 and already several thousand unique visitors from over 60 nations have reviewed it and membership is growing steadily as per the website manager. Thank you for your initial response. You and your friends and colleagues are certainly welcome to join anytime. Best wishes in all your endeavors.

  8. Hi again Pierre,

    So, I have indeed paid my €25. But I guess that not much will happen until WGO has signed up 2 million members, right? At that point the people who set up the system will have €50 million - more than enough to set up a usable system, I would have thought. I set up OWE'M which is about the same level of complexity for just the cost of the owem.net website. The software I use - Cyclos 4 - is virtually free, and people can use OWE'M now - if they want. Cyclos 4 could be set up exactly like WGO - for free. But, as I say, I'm prepared to throw €25 in the hat. And the first people to get a usable debt-free money system with a significant number of people involved will have saved the planet, civilisation, etc etc etc. Nobel Peace Prizes all round ;-)

  9. the process of registering and licensing in over 150 nations and 50 US states will begin after 250K people become members and will focus on the nations/states where there are the most members. The problem with Bitcoin and most other alternative currencies is they want to exist outside the national and international regulatory systems for financial and banking institutions. The WGO wants to comply with all existing laws for the protection of its members because Globals are intended to work locally, regionally, nationally and internationally. It may not be a "bank" but the USA and other major nations will consider it an administrator of a digital currency and a money service business (MSB) because it facilitates the transfer of real world goods and services via a new currency. If the many existing complementary and alternative systems continue to classify themselves as barter, time-share, or mutual credit operations, they will remain small and not very useful for people. But creating "income" and "money-currency" as legal-accounting fictions is a much greater purpose and would benefit many more people. The WGO also has to maintain many larger computer systems (hardware and software) in each nation, particularly if it handles millions of digital transactions a day - and that will cost much more money. (There are bonds and filing fees in most places that start at $500K and go to several million dollars.) We looked at Cyclos 4 and it might be used for certain local nodes of a members initially, but its website states it does not handle banking systems of over 1 million users. The problem is that many people think that starting the WGO and the Globals system is easy and cheap - it is not and the management team must plan accordingly as if it were a large financial institution - and they have significantly large expenses to maintain operations (legal, accounting, compliance, IT, and customer service departments). During the next 2 years, the membership must simply recruit more members so a universal basic income and the Globals Payment System (GPS) are worthwhile for more people. If a government provided a UBI, it would be easier since the financial systems are already in place to handle the simple digital transfers from a central treasury to the banks of citizens. However, it is unlikely that most governments will provide a UBI and people must collectively do it for themselves. A careful reading of many of the site's web pages points out all these issues. Thanks for asking and we look forward to steady growth of membership over the next 12-24 months. PM