The theory, not the practice, of Basic Income started five hundred years ago with Juan Vives’ book On Subsidies to the Poor (1526).
Bertrand Russell argued in its favour one hundred years ago. Milton Friedman
proposed negative taxation, where below a certain income level, the government
pays you. Tesla’s Elon Musk and FB founder Mark Zuckerburg have been
enthusiastic about its implementation. Just before the pandemic, Andrew Yang, a
US democrat, had made it the backbone of his campaign. And last week, the Pope called for a universal basic wage.
Why should something that has not happened for five hundred
years happen now? Once this nightmare is over, wouldn’t it be business as
usual? Isn’t public memory short?
Two reasons why the basic income reform may actually
happen.
*****
Public memory is short. But pandemics can be long.
Their devastating impact can drive the world to change the ways in which it
operates. A pandemic underlines the fact that the health of a society depends
on the health of the most vulnerable.
After Black Death, the 14th century plague
pandemic, public health was institutionalized and made a state responsibility.
All wars were temporarily abandoned. (Currently, no news on Syria, Brexit,
Kashmir, Ukraine etc). Viruses have checked
imperialist projects. Napoleon’s transatlantic ambitions were halted by a
yellow fever epidemic in today’s Haiti. His eastern ambitions were thwarted by
dysentery and typhus.
Covid-19
pandemic, if it continues for two years, will be equivalent to a World War in
terms of the resultant economic devastation. The Second World War, though a
man-made event, gave birth to several reforms. Decolonisation was one of its
biggest gifts. Global institutions such as the United Nations and International
Court of Justice; and UK’s NHS - free health care for all, were all products of
the Second World War.
A
prolonged pandemic is likely to halt wars for a few years. But like the WWII,
it may trigger reforms that could not happen in normal times.
*****
The
second reason is the actions that have started. The USA has legislated a cash
transfer of 1200 $ to people below a certain earning level. Another proposal to give 2000 $ for six months is under consideration. The UK govt has promised to
pay 80% of salaries under certain conditions. Spain will start a basic income
scheme for its poorest. The longer these rescue acts continue, the more difficult
it becomes to withdraw them. Any HR manager will tell you that reducing
somebody’s package is simply not done. These countries will need to have a
rationale for stopping such direct transfers. They will also need to explain
how they are funding the stimulus packages.
In
a few months, poorer nations will be obliged to borrow, and institute similar
basic income schemes for their citizens. Lockdowns will lose all meaning if
starvation and bankruptcies kill the people saved from the virus.
*****
A
precedent has been set. It can be binding in the future.
Ravi
You may be right. UK's emergency pay scheme for furloughed workers goes live, drawing 67,000 claims in 30 minutes. This is the news today.
ReplyDeleteWhile universal basic income, is a laudable objective and must be pursued in the light of this pandemic, it has it's downside.It disincentivises, need to work for a living. It is similar to the left ideology where you are supposed to get equal pay for whatever you do. This is also true when rice and wheat is provided free of cost or at Re1 per KG, the farmer says, why take the effort of farming, when I am fed at state cost. These has been practical experiences on the ground.
ReplyDeleteTherefore such universal basic income schemes need to be very carefully crafted, and made applicable only to senior citizens and medically challenged persons.We need to be extremely careful before we implement something like this, because as Ravi rightly says, it will be very difficult to withdraw once intoduced.