Mayday, Mayday: The Urgency of Universal Basic Income Day
an overview of an idea whose time has come
Imagine gathering with family and friends on Board Game Night. Tonight’s game is Monopoly, and you do pretty well for about half the game. Then, a key failure to purchase a utility or develop your properties, plus a few ill-timed setbacks like drawing the Go To Jail Card (do not pass “Go”, do not collect $200 — the UBI of this particular game) and you slowly but surely are dispossessed of all properties, titles and cash. So are all the other players, though — that’s the game, after all. Everyone has a good time and the board is put away for the next Game Night.
Except what if you couldn’t leave the game? What if you had to keep sitting there, circling the board, collecting $200 that immediately goes into the maw of the already bloated coffers of the winning player, until you go negative…and you still couldn’t quit? What if that winning player got tired of the game and left, sitting his son or daughter in his stead, while you and the other players continue to mortgage your properties, sell them at a loss, and spend time in jail losing turn after turn, lengthening threefold the time it takes to circle the board and collect $200 to turn over to the game’s new overlords?
“Game Night” suddenly sounds like the title of a new horror movie, the follow-up directorial effort of Jordan Peel, who brought us Get Out.
But that’s where we are today. Put simply, we have reached the end of the Monopoly game, the ending actually envisioned by the creator of the game, who constructed it as a cautionary tale against radical wealth inequality.
Monopoly was designed to reflect our system — a capitalistic system that makes players bankrupt to the eventual and inevitable single winner.
Today, income inequality has become so great that even “winners” among the 1% are beginning to speak uneasily of pitchforks coming for them.
Meanwhile, people in the 99% are tired of the current game. Those standing on the sidelines either know better than to enter the game at this late stage (and instead enter alternate economies, including crime and cash-based, off the grid endeavors). Those that enter the game today find themselves working multiple jobs fighting the impossible odds against the amassed power of the economically elite 1%.
Monopoly is a game that shows what happens as a made-up, fiat currency-based, capitalistic economy plays out over time. Today, too large of a percent of individuals are effectively bankrupt, with no personal sources of power.
The Current System is Unsustainable
The United States is becoming, as the French economist Thomas Piketty warns, a hereditary aristocracy of wealth and power.
As the game of Monopoly was created to demonstrate, money keeps making money, compounding inequality and income divides. Income equality in the U.S. is now the widest it’s been since the 1920s:
- The total wealth of the Forbes 400 is greater than the GDP of India, a country with a population of over a billion
- In the past 50 years, the wealth of the one percent grew sixfold, while families in the the tenth percentile went from having no wealth on average to being about $2,000 in debt
- The top 0.1% on the wealth distribution curve are worth more than the bottom 90% — over 190 million households.
- Eight individuals now control as much wealth as 50% of the population, globally. Six of these individuals are corporate or financial executives.
And the trends are accelerating: ninety-nine percent of all new income is going to the top 1 percent, leading Senator Bernie Sanders (VT — Independent) to declare the issue of wealth and income inequality:
Data suggest the crushing burden on the shrinking middle class will continue unabated: according to an Oxford University study, 47% of US jobs are threatened by computerization. The U.K. Institute for Fiscal Studies suggests that wages will still be below 2008 levels….. in 2021.
In his post Airbnb and the Rotten Results of Rentier Capitalism, Democracy Earth Foundation’s Herb Stephens reviews the latest by Guy Standing, “The Corruption of Capitalism”(Biteback Publishing 2016), which poses the question for our times: What do we do when work no longer pays? (He also reviews 2 other books by Standing, so it’s worth checking out the post as a Cliff’s Notes on this author) What stood out most for me was this: Standing, proponent of basic income, warning of a “pending and necessary revolt”’ of the precariat if these key stress issues are not immediately addressed.
Wealth > Majority
Money doesn’t just give the very rich a chance to express a view or support a candidate; it gives them leverage to reshape the American economy in their favor. Indeed, a study by political scientists Martin Gilens (Princeton) and Benjamin Page (Northwestern) found that the preferences of the wealthiest Americans have a far bigger impact on policy than the views of middle-income and poor Americans (i.e. everyone else). When the super rich support a a policy (like the carried interest deduction) it has a 45% probability of being enacted, whereas a policy they oppose has just an 18% probability of becoming law. This translates to an effective veto power of, by and for the wealthy.
With the people’s power is in the hands of a few and in the control of corporations and institutions, no amount of effort by the people can or will make meaningful change occur in the existing system.
As a society, we must intervene. Productivity gains must accrue to more than the elite; for a healthy economy workers must proportionately share in the value they create for their communities.
As billionaire investor Nick Hanauer notes, “No society can sustain this kind of rising inequality….there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out.”
“You show me a highly unequal society, and I will show you a police state or an uprising. There are no counterexamples.”
The Time Has Come For Universal Basic Income
Around the world, communities are coming together to explore basic income as a way to lessen the vulnerabilities of working people exposed to the effects of globalization and automation.
We live in an age where technology advancements are so rapid, full employment may never again be a possibility — what the economist John Maynard Keynes termed “technological unemployment” is upon us and growing. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people.
Although the designation of May 1st as Universal Basic Income Day is new, the concept of basic income is not. Basic income has proponents as varied and storied as Thomas More, Richard Nixon, Martin Luther King Jr., and Elon Musk.
This year Finland launched a nationwide two year basic income pilot in which 2,000 unemployed Finns aged 25 to 58 will receive a guaranteed sum. Silicon Valley startup incubator Y Combinator is preparing a pilot project in Oakland, Calif., in which 100 families will receive unconditional cash grants. Additional basic income pilots are underway across the world, from Livorno Italy to the Netherlands to Ontario Canada. Scotland will likely become the first part of the UK to trial basic income with the launch of Citizen’s Basic Income Network Scotland.
A recent survey found nearly 7 in 10 people across all 28 EU member states would “definitely or probably” vote in favor of some form of basic income. Beyond economic security, proponents of guaranteed income say such will stimulate the economy with consumerism, jobs growth and business creation; evidence from trials support this.
The Indian government is actively studying basic income as a means of alleviating poverty, with initial trials resulting in an uptick in local commerce, children’s developmental weight, and overall community health: consumer spending went predominantly to school clothing, supplies, tutors, healthcare, medication, and food.
Similarly, a trial in Canada in the 1970s improved health and well-being indicators for recipients, while hospitalizations and mental health diagnoses fell.
Basic Income has been proven to be not only possible but feasible, desirable and affordable. Most importantly, the technology now as never before exists to enable deployment of basic income on a large, even global scale, delivered directly to and controlled digitally by self-sovereign citizens.
…But Restoring the Middle Class Will Take More Than Basic Income
Only with a vibrant middle class can the economy fully recover. Even the IMF has conclusively linked rising inequality to slower economic growth, while undermining to progress in health and education.
What can we do to reverse these extreme inequalities of wealth? Most proposed strategies — including Universal Basic Income — will be insufficient to reduce the distorting effects of concentrated wealth.
Martin Luther King Jr, who remarked in his “Where Do We Go From Here” speech that although we are called upon to help the discouraged beggars in life’s marketplace,
“We must come to see that an edifice which produces beggars needs restructuring.”
Universal Basic Income is a step in the right direction, but the real solution must be systemic. The time has come to reset our global system. With the advent of the second generation of the internet upon us — the era of decentralization brought about by distributed public ledgers and mobile technology — we now have the tools to reset our economy, our global governments, and democracy itself.