To UBI or not to UBI?

Spoiler alert: to UBI!
The fact is: sooner or later setting up some sort of Universal Basic Income (i.e.: free money for everyone, working or not) will become cheaper than maintaining social order.

This may happen within just over a decade or take a lot longer, but as the technology advances, it will make automation ubiquitous and lower the costs of goods further and further.

If this sounds like just a crazy socialist-ish utopia without fundament, let’s go through the numbers!

Today, the cost per prisoner per day in most western countries is in the order of 100€/$ per day. That is over $36,000 per person per year.
It can be vastly higher or lower depending on the individual country, but the point to keep in mind is that in the coming 10 years, we are expecting 1/3 of the population losing their jobs to automation.

Such high unemployment rates Will lead to social disorder. In France they are already experiencing it in this beginning of 2019 with the gilet jaune protests, and the numbers aren’t nearly there.
In the best case scenario unemployment will mostly increase “subsistence crime” of people stealing food and essential goods.
However 1/3 of the population are tens or hundreds of millions of people per country, and a relevant number of them may perceive their situation as unjust. Perceived injustice is a common driver for anger, and a society with millions of angry people, is a society with more than just a subsistence crimes’ problem.
At that point running prisons will cease being the main cost center, while keeping the society safe will start taking a larger and larger toll.

The poverty line in USA is set to about $22,000 for a family of 4; that is less than $6,000 per person. It is a lot of money, but it’s worth considering a few factors here:

  • our society is not optimised for 1/3 of people being unemployed, operating the necessary optimizations, the cost per person could be vastly lowered (i.e.: we could lower the poverty line)
  • although unideal, any Basic Income is a better starting point than no Basic Income when it comes to crime prevention, even one that doesn’t fully allow an individual to live above the poverty line, or one that is not entirely Universal. This could allow for further savings.
  • enhanced costs to maintain public safety, extra police patrolling, and damage to individuals and their wealth need to be factored in if the choice is to not fund a basic income
  • automation will lower the cost of food and essential goods in the coming years, potentially to a fraction of what it is today, and this will drive further savings as the time goes by

To sum it up, today for each person that we prevent from committing subsistence crime (or any crime really), we save $36,000 per year: enough money to provide basic income for at least 6 free people. Appropriate policies and technological advances will drive this number up easily to 10 or even 20 within a decade.

Between now and then, we will likely find that it proves cheaper -not to mention far more humane- to provide unemployed people with a basic income, rather than turning into a police state.

– Before closing, just two notes to deal with common objections:

  1. What is described is not Universal basic income (accent on: universal)
    true, but UBI doesn’t mean taxes on employment will cease to exist, and in that respect at least in the beginning UBI will probably be a bit of a gimmick for employed people, as the same money that will be given as UBI, will be taken away by taxes. Nonetheless, the meaning of a UBI is that of providing a basic income that is Universal, and a similar policy will still get that delivered.
  2. With UBI people will slack for the rest of their lives
    I started writing about this… but it gets so lengthy that I opted for writing a whole specific post on this topic instead… want the short version? A) Maslow’s hierarchy of needs proves you wrong, B) out consumerist culture discourages that…
    …more details to come!

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