Economy as a Common Project. State-Of-The-Art Of Basic Income

Economy as a Common Project. State-Of-The-Art Of Basic Income

The 20th century income distribution system has changed entirely. The traditional framework of value creation based on the interaction of private, public and third sector is irremediably compromised. More and more companies don’t generate profit, as well as public administration doesn’t produce public value, and, thus, the society struggles to generate shared social value.

Given this scenario, where globalization and technological have had a disruptive impact on labor markets and systems of tax and there is growing concern about precariousness and insecurity, new innovative solutions are welcomed and necessary.

One of the most discussed ideas it’s the introduction of universal basic income (UBI). Unusually, basic income has a strength: both the right and the left appreciate that: leftist parties (i.e. Scottish National Party or Green Party in UK) place the emphasis on lower poverty, the rightist ones focus their attention on slimming down welfare system (in Finland it is a warhorse of Prime Minister Juha Sipilä, leader of the liberal and right-leaning Centre Party of Finland. Also, the far-right party Finns Party is interested in this policy).

According to the Basic Income Earth Network (BIEN), “A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement”. Summarizing, basic income is:

  1. Periodic;
  2. Cash payment;
  3. Individual;
  4. Universal:
  5. Unconditional.

Although this clear description, a wide variety of different Basic Income proposals are circulating today and there are different opinions: Finland launched a pilot project, Canada and the Netherlands have announced experiments whereas in Switzerland, 75% of voters rejected a basic income in 2016 because it would have meant increasing welfare spending. Let’s try to show the most important projects.

First of all, Finland that is the first country in Europe to applicate basic income to its inhabitants. Here, as elsewhere, the proposal hasn’t fulfilled the five criteria suggested by BIEN. In this case, 2,000 unemployed Finns aged 25 to 58 will receive a guaranteed sum of 560€ for two years. This nationwide pilot basic income project will replace part of their existing social benefits and will be paid even if they find work. According to Kela, the Finland’s social security body, the aim of the trial is to cut red tape, poverty and unemployment that nowadays stands at 8.1% in Finland.

Then, we have India, where about 6,000 men people in eight villages received a small basic income for 18 month. The results were compared with what happened in twelve villages where basic income wasn’t provided. In this case, the project born to reduce poverty has produced several positive effects on welfare (such as improved nutrition, better health and improved schooling) and on equality (the basic income helps the disabled more than others). Plus, basic income has reduced inequality and has driven a growth in productivity, output and in self-employed work.

Finally, we have tech giants in Silicon Valley where the “obsession” with basic income is very high. In a The New York Times article, journalist Annie Lowrey affirms that, “many technologists believe we are living at the precipice of an artificial-intelligence revolution that could vault humanity into a postwork future”. This vision of the future has lead Silicon Valley to invest in basic income projects “as a palliative for the societal turbulence its invention might unleash”.

For example, it is important the case of GiveDirectly, a nongovernmental organization that is not affiliated with any political party and is supported by tech industries. GiveDirectly is based in the United States but started a basic income project in Kenya to show that a basic income is a cheap, scalable way to aid poorest people on the planet. Roughly 6,000 people in Kenya will receive regular monthly payment for 12 years unconditionally. Furthermore an additional 80 villages, with 11,500 residents, will receive a two-year basic income.

Other well-known cases include those of Chris Hughes and Sam Altman. Mr Hughes is a Facebook founder that has started a $10 million, two-year initiative on basic income while, Mr Altman is the president of Y Combinator, a start-up incubator that is planning to hand out money to 1,000 families in Oakland, California. Read here to go into that.

In conclusion, we can assume that the situation is in fieri and is far from being over, especially in Europe. Last month the European Parliament have discussed this topic but rejected universal basic income as a compensatory measure for unemployment in tech sector caused by the use of robots and automation in labor market. For further discussion, it should be recalled what has been said in the Indian Ministry of Finance’s annual survey of the economy: a basic income “gives concrete expression to the idea that we have a right to a minimum income, merely by virtue of being citizens. It is the acknowledgement of the economy as a common project.”

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Nonostante l’introduzione del reddito di cittadinanza universale sia un tema divisivo su cui non c’è ancora un accordo su come debba essere portato avanti, qualcosa si sta muovendo in tutto il mondo, con iniziative nate sia da attori privati che da attori pubblici.