Sir Thomas More (1478 - 1535). (Photo by Hulton Archive/Getty Images)

A short history of UBI

Universal Basic Income has been around for a while

Features

This is part of series on UBI, see the case for it here and the case against it here.

The idea for a basic income paid to citizens by the government has been around for a while. Sir Thomas More suggested it in Utopia in 1516 and in 1526 Moore’s friend Johannes Ludovicus Vives wrote a note to the Mayor of Bruges proposing a subsistence payment to the poor, adding that even those who had wasted all their money on riotous living should receiver it, “for no one should die of hunger”.

In recent years several countries have considered the idea. In 2016 a Swiss referendum overwhelming rejected a scheme to pay a monthly income of 2,500 francs (£1,755) to every adult and 625 francs (£510) for each child. In 2017 the Indian government analysed the idea in an official paper.

More recently, UBI has caught the attention of European policymakers in the wake of the coronavirus pandemic. Spain is poised to roll out a scheme costing €3 billion (£2.6 billion) a year in order to provide its poorest 2.5 million citizens with a guaranteed income of about half the minimum wage, regardless of their employment status.

Andrew Yang on Friday, Feb. 7, 2020. Photographer: Adam Glanzman/Bloomberg via Getty Images

In the US the issue went mainstream when Andrew Yang made a UBI of $1,000 (£780) a month a cornerstone of his (unsuccessful) 2020 Democratic presidential campaign. But in Alaska, a version of the scheme has been running for decades, albeit at a more modest level. Since 1982 Alaska’s government has shared some of its oil revenue with citizens in an annual payment. Last year a family of four, for example, received a total of $6,424 (£5,050). The handout ranges from several thousand dollars per person in a good year to a few hundred dollars when oil prices are low.

Finnish researchers concluded that UBI didn’t encourage recipients to gain employment but improved mental wellbeing

More generous cash giveaways tried by governments have often focused on the needy, rather than on the “universal” nature of UBI. Between 2017 and 2018 the Finnish government paid 2,000 randomly selected unemployed people a regular monthly income of €560 (£490), with no obligation to seek work but no reduction in their payment if they got a job. Researchers concluded that it didn’t encourage recipients to gain employment but it did improve their mental wellbeing and life satisfaction.

However, back in 2010, the Iranian government established a truly universal system in which nearly the entire population of 75 million is now covered. The government had been paying about £85 billion a year in order to artificially reduce prices on products, primarily fuel. But the regime decided that scrapping the subsidies and paying everyone a fixed sum of money to make up the difference would be simpler. Every Iranian is now entitled to about £30 a month, payable to heads of households (e.g. £150 for a household of five members) although almost 2 million people have decided not to claim it. In the first year of the scheme the regime paid out £30 billion directly to citizens.

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