Universal Basic Income – The statesman

The Covid-19 has caused an unprecedented crisis and disruption in the world. It inflicted the greatest pain on those who were already made most vulnerable, causing great hardship and growing unease among low-income families and microenterprises. It uncovered existing inequalities and created new ones. A basic income ~ an unconditional regular payment distributed by the government ~ has been strongly advocated by economists, captains of industry and policy makers across all ideological nuances. It is seen as an important tool in staving off hunger, misery and large-scale social unrest in times of crisis like a pandemic as well as in normal times so that people are not helpless when a crisis hits them.

We have seen smaller versions of the pandemic already in the past hundred years and the case for better preparedness cannot be overstated. Denis Goulet maintains that the concept of development is best expressed in the expression “human ascent” and in the ascent of all men in their quintessence of humanity, including the economic, biological, psychological, social dimension. , cultural, spiritual and transcendental. The idea of ​​a Universal Basic Income (RBI) has made recurring appearances in history ~ beginning with Thomas Paine in the 18th century.

UBI is based on the idea that the government would pay a lump sum to each adult citizen, regardless of their engagement in skills-building activities or the paid labor market, as a partial or complete replacement for social security programs and existing social protection systems. UBI is gaining traction as governments seek to revamp their social safety nets. India is the most serious new aspirant. In a UBI system, the government gives citizens a regular injection of free money without any strings attached. These efforts are aimed at providing a lifeboat to help low-income families and microenterprises survive this pandemic, and most importantly, continue to deal with daily emergencies as normal economic life stutters through the downturn.

The proliferation of social benefit transfer programs in India has already resulted in inequalities and inefficiencies ~ while some households receive multiple benefits, others do not. One of the reasons why, despite so many decades of humanitarian action, social disparities have continued to widen is that India lacks databases with information on populations. UBI is a large, untargeted periodic cash payment (Cash Transfer-CT) distributed unconditionally to everyone, rich or poor, on an individual basis. The idea is to ensure that every person in society has the means to live with a minimum of freedom and dignity, regardless of their ability to earn a living or the availability of a job.

Cash transfers are not tied to recipient behavior, and they are free to spend the money as they see fit. In contrast, an example of a conditional in-kind transfer in India would be the midday meal program, where the meal ~ an in-kind transfer ~ is conditional on school attendance. UBI ensures that people will not be impoverished, go hungry and be protected against job loss due to automation while reducing the need for many other forms of social security. A basic monthly income can also replace a series of social grants for the poor that India currently has in place.

Getting a guaranteed and regular cash injection can certainly make people happier and less stressed (even if that money is not enough to cover all of their needs). Yet most countries do not. The philosopher Michel Foucault, exploring the ideological foundations of neoliberalism in lectures at the Collège de France in 1978-79, argued that neoliberal logic views economics as a game in which the state makes the rules and guarantees their application.

A guaranteed income “should prevent one of the participants in the economic game from losing everything he has and therefore not being able to continue playing”. No one should have anything to lose; the state sets up a safety net for all. This universal income system is “based on the need to help those who are poor, without asking who is to blame for being poor” and differs from traditional social policies in that it makes no distinction between ” merits ”and the“ undeserving ”poor.

“After all,” Foucault said, “we don’t care, and it’s only normal that we don’t care, why people have fallen below the level at which they can participate in social play – we ‘regardless of whether they are drug addicts or voluntary unemployed. The State is satisfied, “without looking any further and therefore without the need for investigations by the public service (national security officers), police and justice, to pay them a subsidy, according to rules that encourage them to cross the threshold again. But it does not matter if they do not want: they will still receive the subsidy. “C is the essential.

The fundamental objective of UBI is to reduce inequalities due to the distribution of wealth and other assets. Income inequalities arise from: (i) inequalities in human capital (levels of literacy, skills, health, etc.), (ii) inequalities in opportunities (in education, employment, etc.) ) and (iii) inequalities in living conditions. The four main objectives of the UBI are security and social protection (for young people, the elderly, the disabled, women); development and economic growth give the poor the security they need to invest in higher risk / reward options such as new crops or improved livelihoods; break intergenerational poverty (through better nutrition and education for children) and rights and equity (reduce income inequalities and promote the status of girls and women).

Cash grants to the poor are better than many traditional forms of aid when it comes to reducing poverty. They are considered to be one of the fairest, most cost-effective and efficient ways to reduce poverty and stimulate economic growth. Instead of relying on an expensive and complex aid industry, and bypassing NGOs and governments, cash transfers made directly to poor families will enable them to decide the most effective ways to escape poverty. Even when assistance programs get things done, they often do so in extremely expensive and inefficient ways. This is partly due to overhead costs.

But what is most worrying is the real cost of buying and distributing cows, gas stoves, bags of food grains, etc. The experience of most development agencies suggests that delivering products to the poor costs much more. UBI can significantly reduce the losses of corrupt intermediaries. In addition, the digital payment method leaves no possibility for intermediaries to mop up funds. But it cannot simply reshuffle the sometimes corrupt decision-making process that determines who is entitled to benefits in the first place.

The late French philosopher Charles Pguy remarks, in his classic essay on poverty: “The duty to tear the destitute out of their misery and the duty to distribute goods equitably are not of the same order. The first is an urgent duty; the second is a duty of convenience. When all men are provided with the necessities, what does the distribution of luxury matter? Envy should not be the motive for equalizing wealth. We need to have a more nuanced understanding of the issue.

But two areas remain the subject of intense debate: targeting and subjecting these revenues to specific conditions. Should recipients be asked to fulfill conditions such as sending their children to school or having them vaccinated? There is often a conflict between technocrats’ envy for tight targeting to “maximize efficiency” and public rejection in favor of universality. Targeting seems particularly divisive as there is only a small gap between the poor and the non-poor in many low-income countries.

There are several drawbacks: recipients can abuse the money they receive; it will make people work less or create a disincentive to work. In the words of Thomas Piketty, the famous French economist “the cost of a substantial tax redistribution would be considerable, as it would decrease the return on investment (for individuals) in human capital and therefore decrease the incentives for individuals to do such investments… ”The great US President Franklin D. Roosevelt gave us a wonderful mantra in 1937.

It is more relevant today than ever: “The test of our progress is not whether we add more to the abundance of those who have too much; it is if we provide enough to those who have too little.

(The author is the author of the village diary of a heretical banker. He can be reached at [email protected])