17 November, 2018

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Universal Basic Income (UBI): Conceptual Background & Possible Implementation In Sri Lanka?   

By Laksiri Fernando –

Dr. Laksiri Fernando

The concept of a universal basic income (UBI) for all is relevant to both developed and developing countries alike, as all our social systems deprive large portions of people of their basic human needs and decent living. This is undoubtedly more so in developing countries like Sri Lanka than developed ones, for example, Australia. Although there are extensive discussions going on in Australia on the subject today irrespective of the far-reaching welfare measures, unfortunately this matter is hardly discussed in Sri Lanka, while even the existing welfare measures are being stealthily dismantled. 

It is difficult to say whether this lacunae is a result of a general philosophical poverty or a question of even the capable people for such a discussion are preoccupied only in constitutional reforms or how to keep this or that government in power. 

Genesis of the Concept 

The genesis of the concept can be traced back to the pioneer socialist thinker, Thomas More of the early 16th century. More’s concept was not the today’s twisted notion of ‘mere monitory grants’ for all or some, in the name of UBI. It was mainly a policy of guaranteeing a ‘method of living’ and thus a ‘minimum income’ in avoiding poverty and the social consequences. 

In the initial dialogues of the ‘Utopia,’ this was put forward as a remedy for theft and horrible punishment of hanging. As More’s spokesperson Raphael said, 

There are dreadful punishments enacted against thieves, but it were much better to make such good provisions by which every man might be put in a method how to live, and so be preserved from the fatal necessity of stealing and dying for it.”          

It has to be emphasized that More talked not about the ‘rich thieves’ here, but the poor ones. His utopian country with an image of our pre-capitalist Ceylon, as I have argued (‘Thomas More’s Socialist Utopia and Ceylon’) utilized the measures and methods on how all people could be put into a way of living, akin to socialism or closer to it.  

Then it was More’s friend one time Professor at the University of Louvain, but originally from Valencia, Johannes Vives (1492-1540) who argued that ‘Even those who have dissipated their fortunes in dissolute living should be given food, for no one should die of hunger.’ What he suggested nevertheless was not a ‘free lunch’ but some means for people to live and also contribute to society. On the matter of social responsibility, he even argued that Emperor Justinian was right in ‘imposing a law that forbade everyone to spend his life in idleness.’ If the poor cannot be parasites, why could the rich? He asked. (‘History of Basic Income,’ can be read here ). These were the initial ideas of a welfare state. 

Liberal Thinkers 

There were other thinkers. Montesquieu is famous among political science students as the advocate of separation of powers. But he also advocated a welfare state, saying, “The State owes all its citizens a secure subsistence, food, suitable clothes and a way of life that does not damage their health.” This thinking also was common among many republicans during the democratic revolutions in Europe and America. Marquis de Condorcet (1743-1794) in France was famous in advocating a comprehensive scheme of ‘social insurance system.’ Thomas Paine (1737-1809) who traversed between the American and the French revolutions, advocated the old age pension, child and women welfare schemes.  

Therefore, it is unfortunate that those who advocate ‘democratic transformations’ in Sri Lanka today are almost completely divorced from the concerns about the poor, the needy and the speedily dismantling of welfare schemes in the name of modernization and market reforms.  

Socialists and Combiners? 

In this narrative on the genesis of UBI, there is no much need to talk about how the socialist thinkers from Charles Fourier to Karl Marx visualized the UBI or associated concepts as they are well known and quite obvious. In the case of Marx, it is sufficient to emphasize his umbrella concept ‘from each according to his ability, to each according to his needs’ (‘Critique of the Gotha Program’). This was the same concept which was in operation in Thomas More’s Utopia. This principle not only refers to free access and distribution of goods, capital and services but also the contributions of labour, both manual and intellectual, for the betterment of society and people.   

It is however interesting to note that while John Stuart Mill tried to marry liberalism and socialism in espousing the concept of ‘a certain minimum for all’ and the ‘liberty to acquire more’ on the basis of capital, labour or talent, Bertrand Russell (1872-1970) combined anarchism and socialism in advocating the same type of thinking. But it was less ‘capitalistic’ than Mill’s. He said ‘a certain income, sufficient for necessaries, should be secured to all, whether they work or not.’ Then ‘a larger income should be given to those who are willing to engage in some work which the community recognizes as useful.’ 

All these are nice ideas conceptually, but would they work? 

UBI and Neoliberalism 

There are people who believe that UBI is primarily a neoliberal concept or a plot. No doubt that some neoliberals have hijacked the concept or distorted it. But our historical narrative shows that the basic concept is much much older than neoliberalism. Then how can we reconcile the situation? 

A convincing advocacy of UBI today from a left wing perspective is by Nick Srnicek and Alex Williams in their innovative work, ‘Inventing the Future.’ The long term vision is about post-capitalism and a world without work! It may be too idealistic/theoretical to grasp or difficult to implement fully under the present circumstances. But in a context where even Sri Lanka is fast moving in the direction of automation, replacing labour, UBI or universal basic income is a primary necessity. 

If you throw people out of work to accommodate automation, then they should be given a UBI. Conversely, if you reduce the workforce accommodating automation, then the working days and working hours should be reduced without pay cuts. 

The advocacy of UBI or such measures is something missed by the ‘folk politics’ of the left even in Sri Lanka. They are engrossed in petty and short term issues without looking at the big picture. In consequence, they are trapped in the neoliberal market economics and political projects. In countering the neoliberal hijacking of the concept, there are two measures that are important. 

First, automation in society should be guided by democratic politics/state and not merely by the market. 

Second, the implementation of UBI should not dismantle the welfare state or measures, but reinforce and supplement them. 

Sri Lankan Context 

Is the UBI concept completely new to Sri Lanka? No, it is not. However this is not about what we know as the ‘minimum wage.’ The minimum wage concept applies only to those who work and it is a ‘minimum.’ But UBI applies to all and what is determined or calculated as ‘basic income.’ UBI should be a basic human right of all, whether in Sri Lanka or elsewhere, to meet their human needs and decent living. 

The UBI concept is not incompatible with the welfare state (WS), although many neoliberals propose it to liquidate the welfare state. Both WS and UBI should go hand in hand complementing each other. Welfare state or welfare measures particularly in health and education are very familiar in Sri Lanka although several aspects have become dismantled or liquidated within the market. However, the welfare state per se does not guarantee a basic income for all other than supplying certain services and redress. 

What might come closer to UBI in Sri Lanka is Samurdhi which was initially started in 1995. However, the objective was different and aimed at mainly reducing poverty and hunger, distributing food stamps etc. When the objective is merely to reduce poverty, the predicament is that those who are assisted might again and again fall into the same trap. Apart from that conceptual fault, the program became extremely politicized, distorting even the limited objectives. What were beneficial for the recipients were the welfare measures, and a commendable element of promoting savings and basic entrepreneurship for others through Samurdhi banks etc. 

International Experiments 

There have been several small scale (sample) experiments akin to UBI conducted in several countries during the last few decades. A main aspect has been giving liberal cash grants without conditions. These experimented countries have ranged from developed to developing, including US, Canada, Netherlands, Finland, Italy, Namibia, Uganda, Kenya, Mexico, Brazil and India etc. 

The evidence show that most of these sample experiments were qualified successes and people who received the grants did not abuse them although conditions were not usually attached. Some of the experiments were aiming at the future to see how the society could be organized when robots take over many of our present day work. A major experiment in Alaska beginning 1976 showed (Alaska Permanent Fund) that both permanent and part time work improved in quality and commitment in the long run, though not immediately. Because the people used the grants to improve their education and training, apart from their life styles. 

The above could be exceptional. Alaska was better placed to give generous grants ($ 2,000 per person monthly) because of oil and mineral income. This is not at all possible in poor countries. Sri Lanka might be  slightly different as we boast now as a ‘middle income’ country! However in even poor countries (India and Africa) these experiments have reaped positive results. Only difference is that a most recent experiment in Finland shows, in a well established welfare state, the cash grants per se might not mean much with negative or zero results. 

The overall basic lesson is that don’t hesitate to give cash grants to the poor and the needy. The poor and the needy on the other hand should ask and demand UBI as a basic human right. 

What Should Be Our UBI? 

There are two apparent views on UBI implementation. One, based on neoliberal orientation argues that by introducing UBI, a country can cut down on welfare and state administration in managing such services. Second, based on socialist or left thinking argues that since the present welfare measures have not completely managed to bring social justice and equity to many and majority in society, therefore a universal basic income grant is necessary. My views are on the second argumentation.    

As I have stated before, UBI is not just about poverty alleviation. Therefore, we cannot be satisfied with Samurdhi grants. The country’s politicians (may I say bourgeois politicians, also to include some so-called leftists!)) often rejoice that they have lifted many people out of the poverty line. This is an illusion. A decade ago, a dollar a day was considered necessary to keep a person above poverty. Now it is 2 dollars. This means about Rs. 10,000 a month. This is not sufficient to meet the basic needs and decent living of any. In addition, the country’s income gaps have widened. 

‘Basic needs and decent living’ are relative concepts. The requirements increase when a country develops and when only some people become filthily rich or when a country comes into contact with developed countries. The demonstration effect also works. 

Our per capita income is around Rs. 50,000 a month. Then why can’t we determine Sri Lanka’s UBI as at least Rs. 5,000 a month for the needy including children? This is modestly calculated roughly as a dollar a day assuming other incomes and also considering present capacity. This is half of the poverty threshold. This should be increased incrementally. This should be in addition to welfare measures (i.e. health, education etc.) while enhancing them. For Australia, given the general welfare, this is modestly calculated as $ 6,100 per year (‘The Economist,’ 9 November 2017). The Greens (not the Sri Lankan Greens!) are fighting for it while the Labour is committed to some aspects. A higher UBI could be applicable to the aboriginal communities. 

As a Universal Right

When a ‘basic income’ necessary for ‘human needs and decent living’ is discussed, the adjective ‘universal’ is added like in discussing (universal) human rights. It should have a purposeful meaning. The meaning at present is narrowly defined as applicable to all persons in a country. This is not necessary. 

For example, the calculated Rs. 5,000 does not need to be given to all Sri Lankans. It is not necessary and not affordable. Why should the rich or the corrupt politicians and administrators be given such a grant? It can be given to the bottom 20 percent of the population first. Giving such a grant is not a waste, although finding resources might be difficult (not impossible) which is not discussed in this article. As experiments in other countries have shown, people may use such a grant for education, training and better health in addition to consumer needs (not for drinking hopefully!). This would also increase the effective demand in the economy.  

However, the word ‘universal’ has and should have a different meaning. That is the meaning like in ‘universal human rights.’ If the rich countries really believe in ‘globalization’ and universality of values and human needs, they should cooperate with poor and needy countries in implementing such a UBI scheme. Why not they scarp all nuclear and destructive armaments first and give that money to developing countries for a UBI scheme? Those who fight for universal human rights in the civil and political sphere also should agitate for the implementation of a proper Universal Basic Income in the world. 

In the Sri Lankan electoral context, what might be interesting to see is what political parties or politicians are going to commit themselves (genuinely) for such a UBI in Sri Lanka. In America, before the last presidential elections, Hilary Clinton flirted with the idea first and then abandoned it! What is necessary in Sri Lanka is not a verbal promise, but a genuine commitment.      

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Latest comments

  • 0
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    it all boils down to income equality which is measured by the GINI index.Whether it is through UBI,welfare measures or higher taxes on incomes and distributing through services,it all amounts to trying to redistribute the income and get a lower GINI index.The lower it is the better.

    belgium,czeck rep,denmark,finland ,netherland,norway,sweden have GINI index below 30 and good incomes too.However these countries have substantially less population than ours.So we can’t be like them and do what they do.The larger the population the more difficult it is to give anything free.simple mathematics.If you have 5 children you can’t feed them all like if you had 2 children.

    france,germany,korea and japan have GINI indexes between 30 and 33.They have good incomes and large populations,and have distributed the income well.I don’t think they give a free lunch to anyone,except that the dole and welfare are the for the unemplyed in france and germany,but even these are not available in the work culture of korea and japan.These 4 countries are a good model to follow for srilanka which is having a gini index of 38.I think they are taxing the incomes of the people a lot and also good and services taxes,but are using that income efficiently in providing the services that are necessary to run the country.laksiri should have a look at how they distribute the income and wealth in a fair manner than us and advise sira and ranil who will do the needful.

    ps.because our gini index is so high any political party that genuinely believes in lowering it will win the elections hands down.People will vote for the party that will redistribute the wealth.

  • 3
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    Yeah, our fellow Lankans aren’t lazy and entitled enough. Great idea!

    • 2
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      Hahaha, Basnayake, you are correct yet, this could be the only solution for the unwillingness to work, how about a compulsory paid national service to be rewarded with a UBI. The stick and the carrot.

      • 0
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        Wannihami,
        Rajakariya in other words?
        Our MP’s have to do only 5 years of not-so-hard work.

  • 0
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    The “greatest happiness of the greatest number” – a concept of Jeremy Bentham, is a good foundation for a democratic socialist state.

    https://en.wikiquote.org/wiki/Jeremy_Bentham

    It encompasses all that contributes to human welfare/happiness, and not merely income.

  • 0
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    I think the UNiversal Basic Income doe snot work. See how USA went bankrupt. They kept on increasing salaries and wages, kept on building mega cities catering to businesses which are international or world and sent all the manufacturing to overseas countries. Some how, the capitalist business ideals believe that the inflation makes prices go up every year. the result is UBI should go up too.
    Instead making the Share market happy in order to make foreign company come to Sri lanka, Control the yearly inflation. that will stop increasing salary or wages every year, printing money and people have a reasonable income to live. See those days, people did not have lot of money. so they were not fat. Now, everything is going up so the girth of people. Some how, there is no clear solution as we fight with peoples greed here, at least controlling or stopping the inflation stops many problems. In brief, if the price increase stops, there is no need of a UBI or UBI may work.

  • 0
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    Sri lanka doe snot need a welfare state. In the west, where the industrial manufacturing was the norm, unemployed needs some income assistance. One reason was to stop the build up of communist theory and to cut down the thefts liek behaviour. In the case of Sri lanka, the govt pays every one anincome assitance and says there ar eno labourers to do agricultural work. Indians,. chinese and probably pakisthani labour comes on visitor visa and do that work. On ther other hand, O/L, A/L passed and graduates are unemployed. but when we go overseas, I have heard even Sri lankan vice chancellors had worked as technicians when they went overseas. So stop income assistance, there will be people for agricultural work and for construction.

  • 0
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    Laksiri has this noble Utopia dream. Even in Utopia, the UBI concept may not work. It may be possible to create conditions in which all can EARN an income comparable to the dream UBI.
    Thomas More perhaps never foresaw that states will be built on bricks of corruption/nepotism/impunity. This probably started with Lucy (the 2 million old lady who lived in what is now Ethiopia). Are these bricks natural and organic (to boot)?

  • 0
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    A great article, thank you. The author says:
    ” The long term vision is about post-capitalism and a world without work! It may be too idealistic/theoretical to grasp or difficult to implement fully under the present circumstances”.

    It could be an ideal scenario for Sri Lanka where there is a highly discontent labour force! Currently in Sri Lanka there is a huge labour shortage and also there is significant unemployment because there is an aversion for manual labour, whether in farming, construction, manufacturing or even in the service sector. That is why we need structural change both in modernization and automation of those sectors and also a structural reform of the employment sector. Latter could be something like compulsory paid national service that could be rewarded with a UBI afterwards.

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