Finland Begins Paying Cash to Unemployed; India and Scotland Considering the Scheme?

On January 1, 2017, Finland became the first sovereign nation to implement a Universal Basic Income (UBI) for its citizens. Under this scheme, the government randomly selects 2,000 citizens from those currently receiving unemployment benefits or an income subsidy. For the next two years, the selected Finns will receive EUR 560 ($587) a month regardless of whether they work or not. If the experiment proves to be successful, a UBI will be granted to all Finnish citizens.

Denis Balibouse / ReutersA large poster in a square in Geneva, Switzerland, promoting the idea of a universal basic income.

Universal Basic Income, first proposed by Thomas More in his 1516 book Utopia, is fast gaining traction in today's world. The explosive growth of artificial intelligence and automation -- from self-driving cars to entire factories operated entirely by robots -- is begging the question: How much longer before robots replace humans as the dominant work force on the planet? And when they do, what happens to us?

The answer to this question is simple yet radical: Guaranteed basic income for everyone. Every person in a city, state, or country is given a fixed monthly payment, regardless of the person's wealth, gender, political affiliations or employment status, by the governing administration. The amount received by each person, regardless of the demographic they fall under, remains the same. This is the concept behind UBI which is in the process of being implemented by multiple countries across the world.

Following in the footsteps of Finland, Scotland will pilot a basic income program in its Fife and Glasgow councils this year. Utrecht in Holland and Ontario in Canada are running similar experiments as well.

India has already completed three pilot runs of the UBI program in close cooperation with the Basic Income Earth Network movement (BIEN). Guy Standing, leader of the BIEN, reported that there was a dramatic improvement in welfare in the villages, "particularly in nutrition among the children, healthcare, sanitation, and school attendance and performance" as a result of the scheme.

The financial experiment also proved to have a powerful social and psychological impact in the community, something the team had not foreseen occurring. "The most striking thing which we hadn't actually anticipated is that the emancipatory effect was greater than the monetary effect. It enabled people to have a sense of control. They pooled some of the money to pay down their debts; they increased decisions on escaping from debt bondage. The women developed their own capacity to make their own decision about their own lives. The general tenor of all those communities has been remarkably positive," he reported.

Advantages of Universal Basic Income

The implementation of a Universal Basic Income would lift a huge number of people out of abject poverty. It would provide food, shelter and other basic survival commodities to millions who lack the means to possess them. A UBI would also improve the quality of life for the employed class of people who are already earning.

Advocates of the scheme reason that if everyone received the basic amount of money needed for survival, people would follow their passion and work in less-profitable streams like art and education instead of working in jobs generated by market demand.

Why it may not work

Not everyone is excited about the prospect of implementing a basic guaranteed income though. The Swiss, on June 5, 2016, voted overwhelmingly against a referendum which would guarantee all Swiss citizens an unconditional basic income. And their reasons for doing so are quite understandable.

Opponents of the scheme argue that the guarantee of an unconditional income would rob people of the incentive to work. Also, it could easily cause a massive influx of immigrants who would be able to enjoy life at the expense of working citizens.

Another big concern is where would the money come from? Switzerland estimated the cost of providing basic income to all residents at 208 billion Swiss Francs, which is around 35 percent of the country's GDP. The only possible solution would be to raise taxes or implement new ones, both of which would affect the working class again.

The idea of a Universal Basic Income is appealing. But, unless the countries experimenting with it are able to pull it off successfully and provide a model for the rest of the world to follow, it will remain an unfulfilled Utopian dream.