One of the difficulties in the social sciences, when compared with the physical sciences, is that it is hard to experiment with the subjects under review. This means that social scientists have to take their data points wherever they arise, often using a set of surrogate readings to either confirm or refute their previous theoretical conjectures. The scientific method in the social sciences is essentially inductive. Data points are observed and theoretical underpinnings are conjectured.
In recent years, there has been a growing belief in a Universal Basic Income (UBI) as a means to resolve the issue of inequality. The proponents advocate this policy as a means to deliver a decent basic standard of living to everyone. This would be achieved by everyone receiving a regular payment without any strings attached. It would allow people to study without having to earn a living, it would allow people to have a financial firebreak to start a business, and it would allow people to focus on unremunerated care giving. The absence of being forced to earn a living would allow the innate creativity within people to flourish.
There have been a number of limited trials of UBI. The results of these are best described as mixed. None have been a resounding success. The supporters of UBI hold that the trials have been poorly implemented, the payments not entirely unconditional, and the levels of funding too low to hit critical mass. All of this is true, but it disguises the principal objection to UBI - the cost. For UBI to be at all effective, the recipients have to receive a significant sum of money. Across a population, that presents a taxation challenge.
Prior to the pandemic, UBI as a proposal was quietly falling out of fashion. It is expensive and is seen as an inferior policy device when compared with payments targeted on those who need them. The pandemic has changed that perspective. As an employment support measure - in the UK - the government entitled all staff to a payment of 80% of their salary. This is conditional. The conditions are that the staff do not work in their jobs. They can get a different job. They can stay at home and do nothing. They can engage in their hobbies or even start a business. They can do anything except return to their jobs during the furlough period.
This is almost a surrogate for UBI. The take up of the furlough scheme (somewhere between a quarter and a third of the UK workforce over 2020) was large enough to make this a statistically significant sample. On the issue of cost, it is difficult to fix this because a variety of schemes were under way at the same time and rates of fraud were exceptionally high. However, the cost of the furlough scheme between March and September was estimated by the National Audit Office as something n the region of £47 billion. Simply multiplying the numbers up suggests that the total cost of a UBI of £2,500 per month (the furlough ceiling) for the UK workforce (about three quarters of the population) would be in the region of £350 billion to £400 billion a year. These are the rocks of affordability upon which the ship of UBI flounders.
There then arises the question of the benefits of UBI. It is supposed to unleash a surge of creativity. Has that happened under the furlough scheme? Admittedly, it is a bit early to tell in definitive terms, but some early indications do highlight the direction of travel. We ought to discount what people reply to surveys and look at how they deploy their cash. This is a more revealing approach. During the furlough period, companies selling pizza deliveries are reporting record sales. Streaming TV services are reporting record subscriptions. Even adult web sites are reporting high subscription levels. There doesn't appear to have been an outpouring of literature, or fine art, or music. The expected wave of creativity has yet to materialise. What does that tell us? Perhaps people would rather watch TV eating pizza than locking themselves away to paint that masterpiece? As I said, it is too early to be definitive on this matter, but the evidence there is points in one specific direction.
No doubt the more resolute promoters of UBI will say that the evidence is tainted, or that we have drawn false conclusions from a limited data set. These are valid objections. However, most unbiased people will see that this is an experiment that has proven to be very costly and has yet to deliver the promised results. It has little to recommend it. Perhaps now, as an idea, UBI can die a quiet death?
Stephen Aguilar-Millan
© The European Futures Observatory 2021
No comments:
Post a Comment