Corona Daily 477: Don’t throw the UBI out with the bathwater

My definition of the ‘Universal’ in UBI is that every person in the world is given a survival salary. Like climate change, UBI is more meaningful if tackled globally. Of course, countries are so diverse, implementation will take a few years, but that is the destination. A body like the G-7 or G-20 can be made responsible. Contributions and payments are a matter of bookkeeping.

Why should America give free money to a woman in Africa, you may ask.

America should, because Nike shoes are made by the poor in Bangladesh or Vietnam, sometimes in sweat shops. (They just do it.) On the other hand, Nike Inc. pays dividends mainly to Americans.

More than 2 billion non-Americans keep creating content freely to keep Mark Zuckerberg in the top ten list.

Jeff Bezos, the world’s richest man, gets richer every time a Chinese or an Indian places online orders with Amazon. In the USA, Amazon has paid zero federal income tax in the last two years.

A Sovereign state or nation state are political concepts. Trade and money-making are global.  Stock markets of all countries move together like synchronised swimmers.

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In my view, UBI has been discussed or tried in the wrong countries. American economists discuss UBI for Americans, and the Swiss reject UBI in a referendum. Both were blunders. The sums became so astronomical; UBI was thrown out with the bathwater.

It’s like an 18-year old who wants a vehicle to travel to his university four miles away. His father looks at the price of the Mercedes, and says buying a vehicle is a bad idea. But a second-hand car could have been bought. Or a bicycle. A bicycle is all that the son needs, why even look at the Mercedes pricelist?

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My suggestion is to separate the principle and the amount. Establish the principle first. Don’t start with 1000 dollars; start with 100 dollars a month. That amount is in fact adequate for survival in many countries, including India. UBI is critical for poor countries, with little or no social security. Tomorrow I will give specific figures for a worldwide UBI system with suggestions on how to generate the funds required.

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How much should the basic income be in your country? Not as difficult a question as it sounds. Just take your current expense in the lockdown month. That figure is very close to what you need for survival.

Ravi