There are two schools of the Universal Basic Income advocates. One wants to replace the existing
social security with UBI. The other wants to retain all the current welfare
measures and have UBI added on.
If social security were scrapped, financing UBI is easy.
In the USA, by dismantling the current social security, 92% money needed for
UBI (13000 $ a year) will be released. But this could make matters worse for many
beneficiaries (maternal/disability). Switzerland rejected UBI because of this
threat.
UBI as an incremental income stands a chance. It is
more expensive, but beneficial for low-income countries with no social
security. Following is my four-point plan.
*****
Start
with 200 $ per annum: to every person
in the world, to get the UBI ball rolling, to establish the principle.
Americans looking for 13000 $ will be shocked at the 200 $ figure. But 200 $
per annum will overnight take entire Sub-Saharan Africa (more than 1 billion),
and poorest Asian countries like Bangladesh, Nepal, Myanmar (more than 500
million) out of poverty. Remember it is 200 $ per head, so a family of five
gets 1000 $, which is enough for survival in low-income countries.
The cost of paying 200 $ annually to everyone in the
world is 7.8 billion x 200 $= 1.56
trillion $.
(To get a perspective, in 2009, G20 paid 9.6 trillion
$ to rescue the financial sector, six times the above amount.)
*****
Moratorium
on wars for 10 years: USA not engaging
in a war would guarantee such a moratorium. Current military expenditure is at
least 1.822 trillion $ per annum. Save and allocate 30% of this cost to UBI. = 546 billion $.
This
is not a pipe dream. Costa Rica and Thailand reallocated military expenditure
to social security. Costa Rica, in fact, abolished its army in 1948. Its
constitution makes re-forming it illegal.
*****
Start denuclearising the world:
The pandemic has once again highlighted the utter uselessness of nuclear
budgets. 190 states of the world have pledged in writing not to have nuclear
weapons. Only 9 states have that white elephant in the name of deterrence. This
undemocratic savagery must end. An estimated 70 billion $ are spent on nukes
each year. Allocate 20% of that budget to UBI (and the rest to dismantling). = 14 billion $.
*****
Inheritance tax: Currently,
the world’s 47 million $-millionaires hold a combined wealth of 160 trillion $.
(44% of global wealth held by 0.6%). Their average age is above sixty, so by
2060 most of them will be dead. Charging 25%
inheritance tax (net of exemptions) will produce 40 trillion dollars over
the next forty years. = 1 trillion $ per
annum.
*****
Cutting
military expenditure (546 bn $), denuclearisation (14 bn $) and inheritance tax
(1 trillion $) are able to finance paying 200 $ per annum to every citizen of
the world, directly benefiting the poorest of the poor. The four-point plan also triggers the building
of infrastructure for cash transfers.
As
to why any of this should or may happen just because of a small virus, I will
answer tomorrow.
Ravi