There is a belief in some quarters that the present universal basic income (UBI) debate is being motivated by the wish to gain political popularity and win votes at the 2020 elections and such is the nature of democratic politics. Therefore, it is quite surprising that the Guyana government: one of the 193 countries that has committed to the 2016 United Nations Sustainable Development Goals that require its implementing UBI kinds of arrangements, did not take the wind out of the sails of all proposers by simply constructing the present UBI demand as a part of the UN process. Instead, in this highly political environment it unnecessarily dithers and now; confronted by a largely skewed debate (since the most important principle has been set) it appears to be blowing in the wind!
The government committed itself and its successors to ‘Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.’ The UN document says that ‘floors’ may include UBIs: they are ‘a basic set of essential social rights and transfers in cash and kind to provide a minimum income and livelihood security for all and to facilitate effective demand for and access to essential goods and services’ (SN: Future Notes, 22/08/2018).
That said, in the current context, the discourse about UBI in Guyana is useful but to reduce the biases that are unavoidable in conversations of this nature here I wish to suggest that we indulge in a discussion that is less anecdotal. For substantial philosophical reasons, glimpses of which are contained in the following paragraph that I will expand upon next week, I have been a long-time supporter of UBI kind of approaches for reasons that are only indirectly related to poverty alleviation. Also, UBIs have to be crafted to fit their ideological and material surroundings and as a backdrop to what I will be saying next week, this presentation is biased in the sense that while empirical it is essentially on the positive side of the discourse.
Last year after the Working People’s Alliance (WPA) began to champion the idea of a UBI and based upon a 2017 proposal I made on this issue (‘A universal basic income for all Guyanese:’ SN: Future Notes, 30/8/2017), I concluded ‘I can easily visualise how much more pleasant our lives, our human and material environments and our security will be if we can afford to provide everyone with the basic necessities of living without them having to work. In the interest of solidifying citizenship, I proposed that ultimately a UBI be given to all Guyanese, but our perceptions usually view cash grants as directed towards the poor and the types of class societies in which we have lived for centuries have ingrained in us a worldview that seeks to protect the interest of capital over its producers – the labourers. Given the drudgery and anomie that have historically been associated with work, it is not surprising that notions of giving the poor money for nothing are easily dismissed as dangerous and destabilizing. The evidence suggests that this is a myth, and far from being a disincentive to work and innovation, UBIs are essential to the modern work environment’ (SN: Future Notes, 22/08/2018).
Thus, in the interest of providing something of a common basis for my future interventions the remainder of this article will outline my understanding of some of the important features of the general debate some of which are discussed in greater detail in the two articles referenced above.
1. On UBI proposals. ‘The notion of a universal basic income is not new and can be traced to the pre-industrial work of Sir Thomas More (1478-1535). Contemporarily, for many converging reasons, the idea has now become popular in usually opposing ideological circles: (Martin Luther King, Milton Friedman, Mark Zuckerberg and President Obama, have all shown an interest, the literature is growing and many projects and pilot projects have been established’ (SN: Future Notes, 30/8/2017).
2. UBI encourages antisocial behaviour. ‘Another usual objection associated with cash transfers is that they encourage binging on parties, alcohol, cigarettes, etc., but 19 studies ‘almost without exception, … find either no significant impact or a significant negative impact of transfers on expenditures on alcohol and tobacco. … It is also consistent across conditional and unconditional cash transfer programmes. The evidence suggests that cash transfers are not used for alcohol and tobacco at any significant levels.’
3. UBIs do not help the poor. ‘The evidence on the impact of cash transfers on poverty outcomes shows an overwhelmingly positive picture. Cash transfers are mostly having a statistically significant effect on beneficiaries’ expenditure and poverty levels and when they do, they increase expenditure and (improve) poverty indicators’
4. Government poverty alleviation programmes are better than UBI. ‘Countries like India have a host of subsidies and transfer schemes aimed at helping poor people. Many of these programmes fail to reach the poor. The leakage rate of India’s Public Distribution System has been estimated at 40 percent. Replacing these inefficient subsidies with cash transfers would ensure at the very least that the poor are getting the intended monetary benefit.’ Subsidizing food items means that the poor must consume these items regardless of their quality. ‘By contrast, a cash transfer means that the poor person can choose how to spend the money. If the quality is poor, they have alternatives. There is also the question of whether the transfer should be universal or targeted to the poor. While targeting is preferable in principle, in practice there are so many problems in identifying the poor that a universal scheme may do just as well.
5. Government is a better manager of national resources. ‘The World Bank’s senior director for development economics claimed that many oil-rich developing countries suffer from poor public spending outcomes and that one reason for this is that oil revenues go directly to the government without passing through the hands of the citizens, and thus many citizens do not know the magnitude of revenues or even believe that they belong to them. As a result, there is little incentive to scrutinize how the monies are spent by the government. If the oil revenues are instead transferred directly to citizens, with government having to tax them to finance public spending, at least two changes can be expected. Citizens will now know the magnitude of oil revenues and will have a better incentive to monitor how they are being spent. Even without these changes, a simple transfer of 10 percent of oil revenues could effectively eliminate poverty in several oil-exporting countries.’
6. Design and implementation issues. In shaping poverty impacts, two potentially important design and implementation features are for ‘transfer levels …. to be meaningful in order to reduce poverty rates [and] … for the transfer to have a bigger and more sustainable impact, beneficiaries should be receiving the transfers for longer periods of time.’
Next week I will argue that the demand for UBI type arrangements is not necessarily motivated by opportunistic vote buying or poverty alleviation but can be rooted in deeper humanistic concerns.
