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Basic Income! The good, the bad and the ugly!

I wrote yesterday about some of the basics of Basic Income. And I promised more. So here it is.


  • One universal unconditional welfare program instead of the multitude we have today
  • Lower cost of administration as compared to current welfare programs
  • The potential to eradicate poverty
  • With a basic financial backing (to not worry about survival), people are expected to invest in “themselves”. They’ll likely allocate their additional financial resources to pursuing higher studies in areas of interest, work in jobs that interest them.
  • Philippe Van Parijs has argued that has argued that basic income at the highest sustainable level is needed to support real freedom, or the freedom to do whatever one “might want to do.” All people should be free to use the resources of the Earth and the “external assets” people make out of them to do whatever they might want to do. Money is like an access ticket to use those resources, and so to make people equally free to do what they might want to do with the external assets of the world, the government should give each of individual as many such access tickets as possible—that is, the highest sustainable Basic Income.
  • (I’ll let you take that last one in)
  • Some supporters have argued that Basic Income is needed to protect the power to say no, which these supporters argue is essential to an individual’s status of as a free person. If some other group of people controls resources necessary to an individual’s survival, that individual has no reasonable choice other than to do whatever the resource-controlling group demands. Before the establishment of governments and landlords, individuals had direct access to the resources they needed to survive. But today, resources necessary to the production of food, shelter, and clothing have been privatized in such a way that some have gotten a share and others have not. Therefore, this argument goes, the owners of those resources owe compensation back to non-owners, sufficient at least for them to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because people can consider themselves free only if they are not forced to spend all their time doing the bidding of others simply to provide basic necessities to themselves and their families. Which to me is freedom in a true sense.

The BAD!

  • FREE MONEY! Who need to work right?
  • Less work = Less tax revenue = Less money to give out as Basic Income = Back to Square one, or worse (The counter-argument being, this would depend on how generous the payment is)
  • What do you think food stamps are most widely used for now-a-days, huh? Well, now everyone gets food stamps.
  • If the traditional welfare schemes are known to create a disincentive for work, how do you think this is going to fare?
  • Preliminary studies have indicated that even though the incentives weren’t permanent, participants showed a reduction in the work ethic


  • Where do the funds come from?
  • Who manages the funds? What about corrupt officials?
  • How do we EVER settle the debate of whether it’s good or bad? How do we get consensus on getting it approved for universal (or limited to the country at least) use
  • How do we know its going to work without trying it out?
  • What about loopholes in the system that people leverage to obtain fraudulent incomes?

So, while there are a number or open questions yet to be answered and settled, the concept of Basic Income has been gaining traction lately, at least as a limited trial option. A number of visionaries have been citing/supporting the idea including Elon Musk.

To me it most definitely is an interesting concept, one that would likely restore some of the natural balance that has been tampered by capitalism. More information on Wikipedia.

-Akshar Rawal

Equal Income to all, Basic Income that is!

Finland is going to test Universal Basic Income (UBI) or so the news say. Finland is going to be choosing some 2000 people at random, irrespective of their financial or educational backgrounds in the working age group (25-58) to receive $581 each month through the end of 2018.

The idea of UBI is fairly timed, with some of the discussions dating as back as the 18th century (Thomas Paine seems to be the person to bring it up apparently). The idea here is that every citizen receives an equal pay, NO QUESTIONS ASKED! You can still keep your job(s) and get the Basic Income.

What caught my curiosity was HOW, just how would it work? Who’s going to pay for all that money. We’ll it’s all grounded in a theory and we’ll get to that. But before that let’s settle the question of the numbers. As it turns out,

  • Social Justice Ireland estimated that it would be affordable with a 45% tax rate.
  • Charles M.A. Clark estimates that the United States could support a Basic Income large enough to eliminate poverty and continue to fund all current government spending (except that which would be made redundant by the Basic Income) with a flat income tax of just under 39 percent.

Doable, huh! Now, now, before you go on ranting about an even higher tax rate, let’s get the theory straight.

The original theory behind UBI is that nature was created equal for all. Over time, privatization has left more natural resources with a select few. So with a UBI scheme, the “holders” of the resources will, through taxation, share the resources with the rest. UBI will enable anyone and everyone to have the absolute minimum to sustain basic life. Moreover, as more and more jobs start being replaced with automated versions, unemployment might be heading upwards. UBI would reform social security to make it equal for everyone, no discrimination.

Here’s the sequel on the possible consequences, pros and cons of the strategy.

-Akshar Rawal

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