Unconditional Income - right now!

The discussion about an unconditional basic income (UBI) has been going on for more than a half century. Despite many experiments, no government is ready to introduce UBI. The majority of voters are also against it. For example, in the referendums in Switzerland and Austria, voters refused to introduce UBI!

There is a simple suggestion to break the deadlock: if it is dangerous to introduce a full-fledged UBI, let's start small, but right away. At the start, unconditional payments can be quite small. They shall be periodically increased. At a certain stage, the growth of payments may be stopped, or even reduced - depending on the circumstances.

It is logical to link the process of increasing payments with changes in society. The first payments should be enough for food. And at the same time, eliminate begging and abolish the system of distribution of free food (free goods, free canteens, etc.). A further increase in payments is aimed at eliminating homelessness.

Unconditional payments, the value of which can change, are called here “dividends of citizens” or "citizens' dividends". This expression has been used before and defined differently, but I have not found a more suitable replacement for it. Dividends of citizens, like UBI, are unconditional payments for everyone without conditions and obligations, but their value can be less or more than the base level.

Treating unconditional payments as legitimate dividends rather than handouts to meet basic needs radically raises the social status of recipients. About this in the next chapter “UBI trap”.

Citizens' dividends are financed from taxes. Wherein, the tax burden on the super-rich should be increased. This redistribution of the tax burden in itself favors economic growth and social justice. More about this in the chapter “Who will pay for justice?”.

Are unconditional payments for everyone a fair deal?

Citizens' right to unconditional payments must be justified from the point of view of justice:

First. Citizens should have the right to receive dividends from the land's natural resources and land's fertility. This is the cornerstone of many theories such as Georgism.

Second. The means of production of the national economy were created by workers of several generations. Therefore, it will be fair to share part of owners' profits to all citizens as heirs of previous generations. From this point of view, it is fair that the owners have to pay for the capital (created by the people) - in the form of a capital tax.

Third. The English engineer Major Clifford Hugh Douglas (still at the beginning of the last century) put forward the following idea. He disagreed with the classical economists who recognized only three factors of production: land, labor and capital. Douglas considered a society's "cultural heritage" to be the most important factor of production. He defined cultural heritage as the knowledge, methods and processes that have gradually accumulated within us since the dawn of civilization. Consequently, mankind does not have to constantly "reinvent" the wheel.

“We are merely the stewards of this cultural heritage, and in that sense cultural heritage is the property of all of us, without exception”. It is therefore unfair that the dividends from 'cultural heritage' accrue only to the owners of industrial and credit capital, whose efforts are minimal. Every citizen should have the right to receive a certain share of dividends as an heir of previous generations.

How fast should citizens' dividends be increased?

Unconditional payments are intended to stimulate the economy by increasing effective demand. With small payments, prices can remain stable, as production capacity is not currently 100% used and production can grow without new equipment. With a sharp increase in the monetary income of the population, a rise in prices is inevitable due to the lack of equipment. It will take time and investments to increase production and bring prices (and new wages) to new stable levels. Nobody knows how quickly citizen dividends can be increased without threatening economic stability. Let's assume that an increase of €50 every three months would be optimal. With this step, the payments increase to 200 euros in one year and to 800 euros after 4 years.

Where are the growth limits of citizen dividends?

UBI advocates fight for the freedom to work or not to work. But with the value of unconditional payments of 1500 or even 1000 euros, the employment rate will decrease. Accordingly, the production of goods also falls and the expected increase in standard of living will not be achieved. In addition, the economies of modern Western countries are very unstable. Therefore, even a 5-10 percent drop in employment can result in economic disaster.

It can be expected, that as unconditional payments are gradually increased, prosperity will first increase (due to stimulating consumption in the economy) and then begin to decrease (due to inflation and decrease in employment). No one knows what the optimal level of unconditional payments is.

Most likely, the Nordic countries, as well as Japan, can support the level of unconditional payments close to the "basic" level. This should be possible thanks to a very homogeneous population with a high work ethic.

On the contrary, in caste-divided India, it is hardly possible to introduce unconditional payments over 50 or 100 euros. The lowest and most despised caste of Dalits (untouchables) are forced to do the dirtiest work. And when these people get a guarantee that they won't starve, they stop working - because it's a shame to work, and all decent people don't work. As a result, India will go under in mud and shit...

Perhaps the optimal unconditional payments for Germany will be 600 or 800 euros. With such a low income, the motivation to work is quite high. And the absence of bureaucratic barriers should raise employment levels and real well-being.

Even with such small payments, so-called “wage slavery” is already being eliminated. The Citizens' Dividend can be viewed as an endless strike fund that strengthens workers' negotiation power in labor disputes with employers. For example, workers in “dirty jobs” can achieve higher wages than office workers.

But it is also conceivable that the real income of employees in dirty jobs will not increase, but decrease. This can happen if supply on the labor market increases by reducing bureaucratic hurdles. A guaranteed income could dramatically and unexpectedly change the job market. Other unforeseen changes are also possible. That is why it is irresponsible to introduce a basic income “overnight”.

Continue: UBI trap