Has coronavirus put unconditional basic income back on the political agenda?
By: Enrique Dans
Tags: Economy, Basic Income, Spain, Coronavirus, USA

The first proposals for unconditional basic income were made many decades ago, and the idea has been revived in recent years, with discussion and experiments in several countries. But the coronavirus pandemic and the economic depression that is looming as a consequence, has given added urgency to the need to provide a safety net for the many millions of people who will soon find themselves without work, with politicians in the United States — Republican and Democrat — as well as in Europe, as well as the Pope, supporting the idea. The World Economic Forum has been advocating this system for years.

The idea has been connected to initiatives such as the stimulus checks sent by Donald Trump to millions of Americans to avoid recession or the minimum income proposed by Pablo Iglesias, a deputy prime minister in Spain’s left-leaning coalition government, which has led some European newspapers to speculate that Spain might become the first European country to implement a universal basic income system.

The problem with much of the current discussion is that unconditional basic income is intended to cover all types of state aid, even when it is neither basic nor unconditional. Giving money to vulnerable people during a pandemic is obviously a good idea but does not constitute an income (which by definition is regular, not a to a given situation), and is not unconditional (because in order to access it, certain conditions must be met). Neither Donald Trump, Pablo Iglesias nor Luis de Guindos (a former Economy Minister under Spain’s previous, conservative, government, and now vice president of the European Central Bank) are really talking about unconditional basic income, but instead of temporarily helping vulnerable people to weather a deep and lasting recession and avoiding homelessness, which we may or may not support, but I repeat: none of those proposals is unconditional basic income because the money isn’t paid to everybody.

Unconditional basic income must meet three requirements: it must be a permanent payment; secondly, it must be basic, in other words, it must cover people’s basic needs. And thirdly, it must be unconditional, meaning that it has nothing to do with income or people’s vulnerability. It must be given to everybody.

Obviously, those who do not need the money will find that by incorporating an extra source of income they will end up returning their payment via their tax returns. This answers one of the main misunderstandings about unconditional basic income: that there won’t be enough money to pay for it. In reality, in rich countries, what we are talking about is giving money to many people who simply return it to the state a few months later. For those who do need it, universal basic income does away with the countless payments the state makes based on means testing.

The charge that people would just sit around and watch television all day or spend their money on drugs if their basic needs were covered has been rejected by practice. Universal basic income simply increases people’s security and enables them to make better choices, with greater degrees of freedom. It does not generate inflation, although some inflation is not necessarily a bad thing, and when it does, payments are updated accordingly. In the future, with increasingly productive machines, there will be less work than ever. Does it make sense in a highly productive society to increase the number of people in poverty?

The advantage of unconditional basic income over means-tested benefits is that it does away with the stigma of “being on welfare”. Secondly, and most importantly, because a universal payment cannot be used by politicians in the way that President Trump is trying to do by putting his name on the stimulus checks being paid in the United States at the moment; or what countries like Venezuela or Argentina unfortunately do: subsidize certain groups so as to garner their support.

Sadly, that’s one of the reasons so few politicians support unconditional basic income: they have nothing to gain from it directly. They prefer the complex and costly system of cash handouts, which at best are a band-aid solution and at worst, simply keep people in poverty.

If we’re going to talk about universal or unconditional basic income, let’s be clear what we mean, and not compare oranges with apples.