Thread by @manansmehta5

Is Universal Basic Income the future?

I've been doing some research on this for a while.

Here's a findings thread 🧵

Make sure you like and retweet 🚀

1. What is Universal Basic Income? 💰

Imagine a state where the Government covered your cost of living. What would you do? Would you would you still go to work? Go back to school? Not work at all?

This concept is called a universal basic income.

Universal basic income is gaining momentum around the world and a growing number of countries are considering UBI as an alternative to welfare schemes.

A lot of countries have already started providing a fixed amount of money to its citizens to examine the effect.

2/ What is the need for UBI? 💰

Job losses created due to the acceleration in the field of automation and AI might be the primary reason.

Automation is the future. Check out @Kurz_Gesagt's video on this.

If you look around, self-checkout screens and self-driving cars are the next big thing.

Eventually, there will be very few tasks that a human can do better than robots. Tesla's factory is testament to this fact.

Check out @MKBHD's video:

3/ Why the controversy then? 🤨

Right now people can't really agree on what universal basic income is or should be.

Some want to use it to eliminate welfare.

Others want it as a free extra for existing programs, or even want it to be so high that work itself becomes optional

4/ If we hand out free money will people just spend it on booze and stop working? 🍺

A 2013 study by the World Bank specifically examined if poor people waste their handouts on tobacco and alcohol if they receive it in the form of cash.

The clear answer, no they don't.

The extra time was used to achieve goals like going back to school or looking for better jobs.

This should definitely make life easier and happier?

But this brings us to issues with UBI

5/ The issue with a "Universal" Basic Income 💰

A negative argument frequently brought on the table whenever UBI is being discussed is, it would be of no use to the super-rich class since it would be a very negligible amount to them...

and thus providing UBI to them will be like handing a 100 dollar bill to Jeff Bezos.

Another beautiful video from @Kurz_Gesagt on the subject:

6/ Why then do we need "Universal" Basic Income? 💰

Suppose a bar is set like only the poorest 15% will receive a Universal Basic Income. What if you fall in the 16% category.

Now there's motivation to actually be poorer. This is why we need an absolute Universal Basic Income.

This has traditionally been the problem with Welfare schemes. Imagine a benefit of INR 1,000 each month.

In a lot of programs if you earn a single rupee extra the whole thing is taken away.

If you take a job, that's paying INR 1200 you might not only lose your benefits...

...but because of your taxes and another costs like transportation

You might end up having less money than before. So if you actively try to better your situation, and your total income is not improving or even a shrinking.

7/ The Inflation Conundrum 📈

Some people also argue that when UBI would be implemented it would have no effect because ultimately it would spike up the inflation and everything would be just the way it was.

However, Since the money is not being created by magic or printers it needs to be transferred from somewhere. It's more of a shift of funds than the creation of new ones

Hence; no inflation.

8/ How do you fund UBI? 💸

There's no right answer here because the world is too diverse.

How well-off the country is, what the local values are, Are things like high taxes politically acceptable or not? How much welfare is already in place and is it effective?

The easiest way to pay for a UBI is to end all welfare and use the free funds to finance it.

Not only would this make a number of government agencies disappear, which in itself saves money, it would also eliminate a lot of bureaucracy.

The second way - higher taxes especially for the very wealthy.

@BernieSanders would support this. The wealth gap is rapidly widening and many argue that it might be time to distribute the spoils more evenly to preserve the social peace.

A more futuristic idea:

There could be taxes on financial transactions, capital, land value, carbon, or even robots.

9/ Universal Basic Income and India 🇮🇳

Esther Duflo and Abhijit Banerjee analyze the concept of UBI in India in their book, Good Economics for Hard Time (excerpt below):

thewire.in/books/abhiji-b…

10/ Future of Universal Basic Income 💰

If you ask me, the future is filled with robots doing menial tasks and UBI is large enough to live a middle-class existence.

If we set the financial obstacle aside, this idea fundamentally challenges, how our society is constructed.

By earning money, you earn the possibility to take part in society this determines your status and options.

However, it also forces people into jobs they hate. What happens to these people if you give them some form of UBI?

Would they stop working? We don't know for sure.

11/ Other issues 🤦‍♂️

A universal basic income doesn't tackle all problems when it comes to equality.

Rents for example - while INR 10,000 might be great in the rural sector, it's not a lot for expensive metropolitan areas like Mumbai.

This could result in poor people moving outwards and the difference between rich and poor becoming even more extreme.

So is the universal basic income a good idea? The honest answer is that we don't know yet.

And that's okay!

P.s. - A lot of the ideas and research for this thread are from @Kurz_Gesagt.

Definitely go check them out!

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Here's a link back to the top of the thread 🧵

https://twitter.com/manansmehta5/status/1443149313434025987?s=20