Universal Basic Income (UBI): Conceptual

Background and Possible Implementation in Sri

Lanka?

There are people who believe that UBI is primarily a neoliberal concept or a
plot. No doubt that some neoliberals have hijacked the concept or distorted it.
But our historical narrative shows that the basic concept is much much older
than neoliberalism. Then how can we reconcile the situation?

by Laksiri Fernando-May 25, 2018

( May 25, 2018, Sydney, Sri Lanka Guardian) The concept of a universal basic
income (UBI) for all is relevant to both developed and developing countries alike,
as all our social systems deprive large portions of people of their basic human
needs and decent living. This is undoubtedly more so in developing countries like
Sri Lanka than developed ones, for example, Australia. Although there are
extensive discussions going on in Australia on the subject today irrespective of the
far-reaching welfare measures, unfortunately this matter is hardly discussed in Sri
Lanka, while even the existing welfare measures are being stealthily dismantled.
It is difficult to say whether this lacunae is a result of a general philosophical
poverty or a question of even the capable people for such a discussion are
preoccupied only in constitutional reforms or how to keep this or that
government in power.
Genesis of the Concept
The genesis of the concept can be traced back to the pioneer socialist thinker,
Thomas More of the early 16th century. More’s concept was not the today’s
twisted notion of ‘mere monitory grants’ for all or some, in the name of UBI. It
was mainly a policy of guaranteeing a ‘method of living’ and thus a ‘minimum
income’ in avoiding poverty and the social consequences.
In the initial dialogues of the ‘Utopia,’ this was put forward as a remedy for theft
and horrible punishment of hanging. As More’s spokesperson Raphael said,
“There are dreadful punishments enacted against thieves, but it were much better
to make such good provisions by which every man might be put in a method how
to live, and so be preserved from the fatal necessity of stealing and dying for it.”
It has to be emphasized that More talked not about the ‘rich thieves’ here, but
the poor ones. His utopian country with an image of our pre-capitalist Ceylon, as I
have argued (‘Thomas More’s Socialist Utopia and Ceylon’) utilized the measures
and methods on how all people could be put into a way of living, akin to socialism
or closer to it.
Then it was More’s friend one time Professor at the University of Louvain, but
originally from Valencia, Johannes Vives (1492-1540) who argued that ‘Even those
who have dissipated their fortunes in dissolute living should be given food, for no
one should die of hunger.’ What he suggested nevertheless was not a ‘free lunch’
but some means for people to live and also contribute to society. On the matter
of social responsibility, he even argued that Emperor Justinian was right in
‘imposing a law that forbade everyone to spend his life in idleness.’ If the poor
cannot be parasites, why could the rich? He asked. (‘History of Basic
Income,’ http://basicincome.org/basic-income/history/ ). These were the initial
ideas of a welfare state.
Liberal Thinkers
There were other thinkers. Montesquieu is famous among political science
students as the advocate of separation of powers. But he also advocated a
welfare state, saying, “The State owes all its citizens a secure subsistence, food,
suitable clothes and a way of life that does not damage their health.” This
thinking also was common among many republicans during the democratic
revolutions in Europe and America. Marquis de Condorcet (1743-1794) in France
was famous in advocating a comprehensive scheme of ‘social insurance system.’
Thomas Paine (1737-1809) who traversed between the American and the French
revolutions, advocated the old age pension, child and women welfare schemes.
Therefore, it is unfortunate that those who advocate ‘democratic
transformations’ in Sri Lanka today are almost completely divorced from the
concerns about the poor, the needy and the speedily dismantling of welfare
schemes in the name of modernization and market reforms.
Socialists and Combiners?
In this narrative on the genesis of UBI, there is no much need to talk about how
the socialist thinkers from Charles Fourier to Karl Marx visualized the UBI or
associated concepts as they are well known and quite obvious. In the case of
Marx, it is sufficient to emphasize his umbrella concept ‘from each according to
his ability, to each according to his needs’ (‘Critique of the Gotha Program’). This
was the same concept which was in operation in Thomas More’s Utopia. This
principle not only refers to free access and distribution of goods, capital and
services but also the contributions of labour, both manual and intellectual, for the
betterment of society and people.
It is however interesting to note that while John Stuart Mill tried to marry
liberalism and socialism in espousing the concept of ‘a certain minimum for all’
and the ‘liberty to acquire more’ on the basis of capital, labour or talent, Bertrand
Russell (1872-1970) combined anarchism and socialism in advocating the same
type of thinking. But it was less ‘capitalistic’ than Mill’s. He said ‘a certain income,
sufficient for necessaries, should be secured to all, whether they work or not.’
Then ‘a larger income should be given to those who are willing to engage in some
work which the community recognizes as useful.’
All these are nice ideas conceptually, but would they work?
UBI and Neoliberalism
There are people who believe that UBI is primarily a neoliberal concept or a plot.
No doubt that some neoliberals have hijacked the concept or distorted it. But our
historical narrative shows that the basic concept is much much older than
neoliberalism. Then how can we reconcile the situation?
A convincing advocacy of UBI today from a left wing perspective is by Nick Srnicek
and Alex Williams in their innovative work, ‘Inventing the Future.’ The long term
vision is about post-capitalism and a world without work! It may be too
idealistic/theoretical to grasp or difficult to implement fully under the present
circumstances. But in a context where even Sri Lanka is fast moving in the
direction of automation, replacing labour, UBI or universal basic income is a
primary necessity.
If you throw people out of work to accommodate automation, then they should
be given a UBI. Conversely, if you reduce the workforce accommodating
automation, then the working days and working hours should be reduced without
pay cuts.
The advocacy of UBI or such measures is something missed by the ‘folk politics’ of
the left even in Sri Lanka. They are engrossed in petty and short term issues
without looking at the big picture. In consequence, they are trapped in the
neoliberal market economics and political projects. In countering the neoliberal
hijacking of the concept, there are two measures that are important.
First, automation in society should be guided by democratic politics/state and not
merely by the market.
Second, the implementation of UBI should not dismantle the welfare state or
measures, but reinforce and supplement them.
Sri Lankan Context
Is the UBI concept completely new to Sri Lanka? No, it is not. However this is not
about what we know as the ‘minimum wage.’ The minimum wage concept applies
only to those who work and it is a ‘minimum.’ But UBI applies to all and what is
determined or calculated as ‘basic income.’ UBI should be a basic human right of
all, whether in Sri Lanka or elsewhere, to meet their human needs and decent
living.
The UBI concept is not incompatible with the welfare state (WS), although many
neoliberals propose it to liquidate the welfare state. Both WS and UBI should go
hand in hand complementing each other. Welfare state or welfare measures
particularly in health and education are very familiar in Sri Lanka although several
aspects have become dismantled or liquidated within the market. However, the
welfare state per se does not guarantee a basic income for all other than
supplying certain services and redress.
What might come closer to UBI in Sri Lanka is Samurdhi which was initially started
in 1995. However, the objective was different and aimed at mainly reducing
poverty and hunger, distributing food stamps etc. When the objective is merely to
reduce poverty, the predicament is that those who are assisted might again and
again fall into the same trap. Apart from that conceptual fault, the program
became extremely politicized, distorting even the limited objectives. What were
beneficial for the recipients were the welfare measures, and a commendable
element of promoting savings and basic entrepreneurship for others through
Samurdhi banks etc.
International Experiments
There have been several small scale (sample) experiments akin to UBI conducted
in several countries during the last few decades. A main aspect has been giving
liberal cash grants without conditions. These experimented countries have ranged
from developed to developing, including US, Canada, Netherlands, Finland, Italy,
Namibia, Uganda, Kenya, Mexico, Brazil and India etc.
The evidence show that most of these sample experiments were qualified
successes and people who received the grants did not abuse them although
conditions were not usually attached. Some of the experiments were aiming at
the future to see how the society could be organized when robots take over many
of our present day work. A major experiment in Alaska beginning 1976 showed
(Alaska Permanent Fund) that both permanent and part time work improved in
quality and commitment in the long run, though not immediately. Because the
people used the grants to improve their education and training, apart from their
life styles.
The above could be exceptional. Alaska was better placed to give generous grants
($ 2,000 per person monthly) because of oil and mineral income. This is not at all
possible in poor countries. Sri Lanka might be slightly different as we boast now
as a ‘middle income’ country! However in even poor countries (India and Africa)
these experiments have reaped positive results. Only difference is that a most
recent experiment in Finland shows, in a well established welfare state, the cash
grants per se might not mean much with negative or zero results.
The overall basic lesson is that don’t hesitate to give cash grants to the poor and
the needy. The poor and the needy on the other hand should ask and demand UBI
as a basic human right.
What Should Be Our UBI?
There are two apparent views on UBI implementation. One, based on neoliberal
orientation argues that by introducing UBI, a country can cut down on welfare
and state administration in managing such services. Second, based on socialist or
left thinking argues that since the present welfare measures have not completely
managed to bring social justice and equity to many and majority in society,
therefore a universal basic income grant is necessary. My views are on the second
argumentation.
As I have stated before, UBI is not just about poverty alleviation. Therefore, we
cannot be satisfied with Samurdhi grants. The country’s politicians (may I say
bourgeois politicians, also to include some so-called leftists!)) often rejoice that
they have lifted many people out of the poverty line. This is an illusion. A decade
ago, a dollar a day was considered necessary to keep a person above poverty.
Now it is 2 dollars. This means about Rs. 10,000 a month. This is not sufficient to
meet the basic needs and decent living of any. In addition, the country’s income
gaps have widened.
‘Basic needs and decent living’ are relative concepts. The requirements increase
when a country develops and when only some people become filthily rich or
when a country comes into contact with developed countries. The demonstration
effect also works.
Our per capita income is around Rs. 50,000 a month. Then why can’t we
determine Sri Lanka’s UBI as at least Rs. 5,000 a month for the needy including
children? This is modestly calculated roughly as a dollar a day assuming other
incomes and also considering present capacity. This is half of the poverty
threshold. This should be increased incrementally. This should be in addition to
welfare measures (i.e. health, education etc.) while enhancing them. For
Australia, given the general welfare, this is modestly calculated as $ 6,100 per
year (‘The Economist,’ 9 November 2017). The Greens (not the Sri Lankan
Greens!) are fighting for it while the Labour is committed to some aspects. A
higher UBI could be applicable to the aboriginal communities.
As a Universal Right
When a ‘basic income’ necessary for ‘human needs and decent living’ is discussed,
the adjective ‘universal’ is added like in discussing (universal) human rights. It
should have a purposeful meaning. The meaning at present is narrowly defined as
applicable to all persons in a country. This is not necessary.
For example, the calculated Rs. 5,000 does not need to be given to all Sri Lankans.
It is not necessary and not affordable. Why should the rich or the corrupt
politicians and administrators be given such a grant? It can be given to the bottom
20 percent of the population first. Giving such a grant is not a waste, although
finding resources might be difficult (not impossible) which is not discussed in this
article. As experiments in other countries have shown, people may use such a
grant for education, training and better health in addition to consumer needs (not
for drinking hopefully!). This would also increase the effective demand in the
economy.
However, the word ‘universal’ has and should have a different meaning. That is
the meaning like in ‘universal human rights.’ If the rich countries really believe in
‘globalization’ and universality of values and human needs, they should cooperate
with poor and needy countries in implementing such a UBI scheme. Why not they
scarp all nuclear and destructive armaments first and give that money to
developing countries for a UBI scheme? Those who fight for universal human
rights in the civil and political sphere also should agitate for the implementation
of a proper Universal Basic Income in the world.
In the Sri Lankan electoral context, what might be interesting to see is what
political parties or politicians are going to commit themselves (genuinely) for such
a UBI in Sri Lanka. In America, before the last presidential elections, Hilary Clinton
flirted with the idea first and then abandoned it! What is necessary in Sri Lanka is
not a verbal promise, but a genuine commitment.
Posted by Thavam