DAVOS — Professor Guy Standing today told the World Economic Forum that each person in Britain could have received a state income of £50 per month if the Bank of England’s four-year £375 billion quantitative easing plan had been paid out as a universal basic income (UBI) instead.
Standing, a professor at the University of London, is a leading advocate of a UBI, a scheme by which every resident of a country would receive a regular state payment regardless of working status.
Americans may have been even better off. Standing estimates that if the US Federal Reserve’s $475 billion in QE had been paid out instead as a basic income, every “non-millionaire” American household would have received $56,000 over the period.
It is not clear exactly how Standing reached those numbers (although he made a similar estimate for the US with earlier figures in 2015). Brown University political economist Mark Blyth reached the same $56,000 figure using “back-of-the-envelope” calculations in 2014.
Standing gave his estimates at a panel in Davos today on the topic of whether UBI was feasible. Several UBI pilot schemes are currently being tested, including one proposed in Scotland.
He believes that UBI could liberate countries from the instability that has driven the election of Donald Trump, the UK’s vote to leave the European Union, and the rise of far-right European populists such as Marine Le Pen and Geert Wilders.
“Basic economic insecurity … is behind this drift to populism,” Standing said. “The emancipatory value of basic income is greater than the monetary value.”
Neelie Kroes, the Dutch politician who was once a European commissioner for digital issues, expressed scepticism. “In the UK, when you are going to this system, with 35 hours working for a week, a £7.20 minimum wage, and when you count 52 million people over 18, you need to take it into account £680 billion is involved in [setting up] this system — you need to find £680 billion. That is one-third of UK GDP.”
We may soon have some real-life numbers from India.
Amitabh Kant, CEO of National Institution for Transforming India, an Indian economic development think-tank, told the panel the Indian government was “looking very seriously” at the feasibility of adopting UBI.
Kant said that if India’s two main welfare programs, the National Rural Employment Guarantee scheme and the Public Distribution System, were replaced or “cannibalised” by a UBI paid in cash, then India may be able to afford to pay 1,000 rupees per month (about $15) directly to female heads of households below the poverty line. “One thousand rupees per person below the poverty line would provide substantial purchasing power” in the Indian economy, Kant said.
Kant added that India has a self-interest in trying to make the scheme work.
He said: “If the global economy is going to become less interlinked due to protectionism in the US and the UK, then India must look at spurring domestic demand to boost its own economy.”
The most enthusiastic round of applause, however, followed a suggestion by Harvard professor Michael Sandel that a UBI ought to come coupled with some kind of requirement of all citizens who receive it.
“A UBI coupled with a conditionality … maybe to requirement of voting in elections. It’s a way of bringing together two principles,” Sandel said.
“A sense of mutual indebtedness wedded to a sense that everyone has a duty to contribute to the common good.”