A Universal Basic Income (UBI): Has Its Time Now Come?

By Norman Clark

This short piece has been written having just read Guy Standing’s book “Basic Income” [Pelican, 2017]; it has been driven by my belief that the time for UBI may now at last have come. Standing argues that the advocacy of UBI as a necessary ingredient for all civilized societies has been around for a very long time going back at least to Thomas More’s Utopia and probably long before that in ancient Greece. But the impact of the coronavirus pandemic has arguably created an unprecedented urgency to this and related potential public policy issues. The traditional arguments in its favour range from its status as a basic public benefit right due to the natural bounties of nature, through its role as counterweight to chronic and growing levels of socioeconomic inequality and insecurity to its advocacy by Keynesian economists as a necessary mechanism to expand aggregate demand in periods when economic systems are experiencing chronic austerity. More recently that has been much discussion of is possible impact on relief of mass technological unemployment. Conversely those on the right of political debate maintain the UBI would instill a malingering cult on the part of normal citizens who they maintain are naturally lazy. They refuse to accept that even minimal levels of UBI would have low disincentive effects.

All this has changed with the sudden advent of the coronavirus. The response has begun with massive attempts to infuse economic systems with cash, mainly at first to bolster the supply side of things through corporate bailouts and measures to ensure continuous bank lending, but slowly to a realization that conventional monetary policy is simply not working. Repeated injections of liquid money since 2008 involving large scale asset purchases [so-called quantitative easing] have merely left billions of currency sloshing about in banking systems where even near zero interest rates have not led to much real investment. And lack of investment leads to low rates of technology development, chronic low productivity and limited real economic growth. Instead whatever growth that has taken place has benefited elite groups that have too much already.

But now the problem reveals its true nature, viz. how to create the incomes needed to maintain aggregate demand at a viable level under conditions of economic meltdown? The immediate response in the UK was to protect the levels of demand. But quickly it was realised this was only part of what is necessary. For the real need is to stabilize incomes of those outside the formal corporate sector. One major category is the self-employed person [or group] whose lack of income will stifle aggregate demand so much that the larger corporations will go bust. But this is not just an issue for the self-employed; it also impacts the informal [so-called gig] economy and those living in poverty, with disabilities or receiving social security benefits for a host of other reasons. In other words, the poorest and most vulnerable sections of society. Witness the massive levels of unemployment we are now confronted with.

On a larger canvas, however, we are starting to bear the fruits of a longer term set of issues. Up to now the blame here in the UK is currently focused on an austerity programme which many now see as an unwarranted, unnecessary and damaging response to the banker-led crash in 2008. But actually the distribution issue goes back to the 1970’s since when it has become an endemic feature of modern capitalism. Relevant examples of scholars who have shown this unequivocally are Stiglitz, Piketty and Tooze [sources cited in the reference list below]. They cite data showing that living standards for the majority of citizens in most countries have remained relatively static for the past half century. Economic growth has gone massively to the richer strata of most countries. This hollowing out of living standards in all classes and between regions is clearly associated with global governance and does not augur well. Similar events are occurring internationally creating huge problems of immigration in Europe and North America.

But the advent of Covid19 has upped the policy ante in the following sense. It has illustrated the fundamentally integrated nature of economic systems. No longer is it feasible to focus either on the “supply” or the “demand” side of analysis. Economic systems are complex and need both monetary and fiscal interventions to keep the show on the road. What we are now seeing is a radically changed response, one of putting massive resources into economies to ensure the necessary incomes neededa to keep production going. It has finally nailed down Keynes’ argument that economic systems are not Newtonian. They do not naturally equilibrate with minimal state control. And eit is here that advocacy of UBI becomes persuasive since it could well be a necessary means towards more balanced macroeconomic interventions. Moreover, the sheer brutality of the coronavirus impact has reflected the poverty of much conventional economic thought.

The underlying arguments are by now well-known and have been analysed in some detail by Guy Standing who is probably the leading UK authority on the subject and whose 2017 book sets out in detail the major issues involved. In summary, he cites a whole series of relevant initiatives across many countries such as Holland, Finland and Switzerland that were designed to explore the introduction of UBI. Some of these were experimental, designed to explore specific outcomes [sometimes as pilots with small population samples]. An example here is the Mincome experiment in Canada, funded by federal and provincial administrations, where the outcomes on most indicators of well-being were overwhelmingly positive. Others like the Alaska Permanent Fund established as a dividend linked to oil revenues, initially formulated as a national policy justified on grounds connected with repayment of natural capital exploitation. Yet others have been schemes promoted not by governments but by charities interested in exploring aspects of the UBI idea, lke the GiveDirectly, a California crowd-funded charity that gained wide publicity for its activities in East Africa. This provided low income men and women with large lump sum monthly unconditional cast transfer.

In practically all of the many examples cited, the outcomes have been positive in improving conditions for low income families, in that UBI provides a minimum level of security and certainly for all citizens. In most cases, there have been positive distributional and productive impacts but Standing cautions against regarding UBI as a substitute for conventional social insurance measures. These should be maintained though substantially improved. Indeed, the advent of UBI may well make them much better as a source of support since, in the UK at least, they appear to be foundering under the weight of an unresponsive [and very expensive] bureaucracy.

What then is the basis for UBI? At bottom is the view that most countries [certainly the richer ones] have reached an economic level where poverty has become endemic. The growing resort to food banks, the necessity for families where both parents must hold down jobs to maintain a basic living wage, the clunky nature and inefficient roll-out of whatever social security system exists, in short, the degree of endemic inequality, is such that radical changes must be considered.

It was this that led to the formation of the Basic Income European Network [BIEN] in 1986. By 2017, there were 34 affiliated networks promoting forms of UBI internationally across all continents and comprising most countries. Also, since that time, a whole series of symposia and gatherings have taken place and experimental projects launched to explore how UBI might best be initiated to deal with the basic issue of chronic insecurity amongst large proportions of society. It was largely this that has led to a huge upsurge in social experiments designed to do just this (when added to similar work done in past periods). As noted above, there are many of these funded by federal and provincial administrations, where the outcomes on most indicators of well-being have been overwhelmingly positive.

The big issue is how to handle the inevitable right-wing backlash from those who inveigh against any attempt to redistribute resources, as for example in the US health system case, where it makes economic sense to do so. I suggest that all politically active agencies place this firmly on their agendas and explore ways in which the UBI idea can best fit the contexts whey individually face. There may not be a straightforward answer immediately, but detailed discussion of the issues involved is, in my view, now desperately needed. After all, nothing can be worse than the plight we have got ourselves into.


Picketty T [2014] Capital in the Twenty-First Century, Cambridge MA, Harvard University Press.
Standing G [2017] Basic Income, London, Pelican.
Stiglitz J [2017] The Euro, London, Penguin Random House, UK.
Tooze A [2018] Crashed: How a Decade of Financial Crises Changed the World, London, Penguin.