Basic income around the world

The unexpected benefits of unconditional cash transfers

By Otto Lehto

The idea of a universal basic income (UBI) is that the state should give to all citizens (or residents) a modest regular cash transfer, regardless of their job situation, social status, family position or other discriminating factors. The only limiting conditions, in most UBI models, are 1) residency/citizenship, 2) age of reason (adulthood), and 3) obedience to the laws of the country. A basic income is a “disarmingly simple”1 but hotly debated idea. It has been variously called “universal basic income” (UBI), “basic income guarantee” (BIG) and “negative income tax” (NIT). It is an old idea that was kickstarted by radical writers like Thomas Paine (1797). It has been revitalized in the 20th Century by economists and philosophers such as Milton Friedman (1962), James Tobin (1967), James Buchanan (1997), Philippe van Parijs (1992, 1995) and Karl Smith Widerquist (2013). But while support is rapidly gaining traction, the debate on whether such a reform is desirable or feasible polarizes people across the political and ideological spectrum. This paper explores the rationale and the socio-economic context for UBI experiments around the world. As it turns out, this paper is also the story of the unexpected benefits of when governments dare to rely on the self-directed efforts of poor people to make autonomous decisions. It is the story of how poor people can regain their freedom and dignity – in poor and rich countries alike.

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