Unconditional Basic Income (UBI)

Unconditional Basic Income (UBI) will provide more wealth for all and enable liberty for New Zealand

This post is designed to demonstrate how Unconditional Basic Income (UBI) is a step closer to Liberty; not away. It will also further show that UBI will increase wealth for the majority of New Zealand. Today the world is going through technological changes that are not only driving decentralisation but also driving cultural differences. 

We are heading towards a society where our ability to exchange Labour for a medium of exchange is diminishing. What was once possible, is not being replaced in the pursuit of productivity increases.

The pros and cons of this new world are out of the scope of this post. We may delude ourselves, believing that we can stop the progress (aka Luddites) or we will find new opportunities (linear style economics). We are radically being made aware that there will be a period of disruption between no jobs and new jobs.

This changing society will dictate how civilisation moves forward, with predictions of 40% unemployment, a solution is required. There are multiple options to this new world, one option is to free the market; allowing the ‘capital’ owners to thrive and utilise wealth to build walls. Another option is a complicated means-tested benefit structure which would validate the need for a parental authoritarian state and higher taxes. 

My preference is a UBI. Enabling less complexity and allowing the people to fund such a platform; however, they see fit.

In scope

To define if the UBI should be classified as a step towards a libertarian society and how this will create wealth. 

Not in Scope

How it will function, how much it should be, who will pay for it and if the beneficiaries of today are better off.

The assumption’s of this argument is the following.

• No further taxation is required
• Over 18-year-Olds will receive UBI with a kiwi passport and who can show their address in N.Z.
• All benefits and pensions will stop and be replaced
• Not increasing UBI as inflation takes over

What is UBI?

UBI is a benefit to every citizen, designed to relieve the stress of being out of work, topping up lower-income earners and removing the waste from our government departments. UBI is given regardless of situations, and therefore no means testing is required. It should be an amount that allows the individual to meet the needs in life aka food, shelter and warmth. (not iPhones, Broadband and flat-screen T.V.s).

Liberty for ALL!

The first aspect of this post is to show that UBI actually promotes Liberty, aka freedom. We can split this up into defining Liberty and then linking how UBI is a step closer to such an ideal and not away.

Liberty is a state of being free within society from oppressive restrictions imposed from a hierarchy; in other words, this is the ability to make choices in your life how you best see fit, as long as those choices do not restrict the Liberty of others. Today we have a democratically formed government, which makes this simple definition, complex. Hierarchy government imposes laws that we must all abide by irrespective if you agree. This is not to underestimate the large population that may believe in democracy and even promote it as a great way of making decisions; however, if there is one person…. Even one person, who does not wish to participate in this system, means that we do not have Liberty for all and telling them to go live in Somalia is also not helping.

Strawman Voting

Our current system allows us to vote for political parties as opposed to outcomes(1). In its current format, the larger voting populous tends to vote for more policies that fir their needs (Humans, in general, make decisions for the benefit for themselves and their direct tribe(2)). This welfare state has grown over the last 60 years; not only can we not sustain it, but it was never designed to be this big(3).

UBI will remove the ability for voting for forced redistribution of wealth to only specific areas of the economy and will replace with an even redistribution to every individual who qualifies. You can choose to receive or not, but you cannot influence another person from taking or not taking the basic income.

Coercion and Social

As per the definition of Liberty, having any form of hierarchical force goes against the philosophy of Liberty. Thus coercive means of the state can push individuals into compliance (unless they wish to go to Somalia or Jail), and so they voluntary comply. This same logic can progress into the workplace; due to the debt that each individual is born into (New Zealand has $ XX’XXX (4)) and the fact that the moment you leave home, you must be part of the rat race to keep up with paying back that debt.

Only individuals on the full-time benefit have the privilege to think and create, and yet they cannot take advantage of such time as society distances themselves from the lazy “welfare bludgers”. If they decide to get a job, they may receive less money than they would if they didn’t work! Going from a creative life, full of time and clarity, to a rat race full of extrinsic motivation, you can understand why some choose not to participate.

UBI will handle both these points in parallel. With everyone on UBI, there are no isolating factors to unemployment, and it would be a choice if you wish to take time out and learn a new skill or utilise your skills to provide value to society(5). Your way of life may be disrupted, but due to the UBI, you can negotiate your contract with your employer, become self-employed or leave your unethical job without the fear of starving or freezing to death.

Waste

Government waste is a frustrating factor. Without a long-term goal for ministries, they will always find it hard not to increase waste. In the most profitable business, there are 90 days to three-year strategic objectives with infinite mindset for vision. In government ministries, there are elections every four years with potentially opposite views. We hear about projects in mid-flight or going over budget monthly, and it has become such a norm now that there are multiple Tax meme groups on Social.

I have worked with many organisations, both private and public. I can fully back that a change in strategic thinking costs the consumer or the taxpayer millions (maybe billions – update in 2020), and then there is the actual running of the departments, the dreaded opex vs capex. These costs can range into the billions(6). UBI would use the current technology to have a user-operated system, utilising their passport number and bank account. It would be fully automated and would only require a skeleton crew for customer service, negotiations with the bank (whom bid for the contract). A fully automated benefit state is a more liberal state.

Privacy

Ever had to go to MSD, IRD or any state department and ask for money? See how much information you have to give? When I was audited by the IRD they let slip that my Facebook had “X” info on and Linkedin told me I had an IRD visitor. Let alone they requested access to all my bank accounts, address, financial statements, what car I drove etc. It was a ridiculous invasion of privacy and the remark I got “it’s not what the website (IRD website) says, it’s what I say”. UBI will require no information, no intrusion. If you want it? Put your passport number in and your bank account number. Anything else would be voluntary and not a prerequisite.

If everyone has 10k then no one has 10k

As we release 10k (for example) per person into the market, the market will likely inflate in specific markets and constrict in others. Causing a 10-20 year inflation to make the UBI redundant. This may sound harsh, but this is the idea of removing the need for a benefit and should be a long-term goal of the UBI.
As society moves from an extrinsically motivated group (money) to an intrinsic motivator group (passion) the need for money for the basic requirements will filter out. This may seem contradictory to my above statement about technology removing jobs. Still, if you look carefully, we are MOVING into a new society, and it’s this transition that everyone needs basic needs to get through. Once we are there and there is a 40% unemployment, businesses with no labour like food generation(7), house building(8) and energy(9) will lower their costs so much that the inflated UBI will still mean you will not starve. You will not freeze, and personal responsibility will yet be required to live a better lifestyle.

Further libertarian points could be sourced, as you can imagine that once you start to automate the state, you can begin to automate competition. Imagine healthcare that is linked to your UBI payments? Police? In fact, imagine a fully automated service that splits your UBI up to all the companies you wish to support for that year? Without much shifting, we would be a more free society 10 years from now. Liberty is not black and white, it is a spectrum that we agree to.

Greater Wealth

The current benefits system has no driver for the individual to be off of the benefit (other than social drivers). Social drivers have reduced over the past decade as we accept that more money is a right and not a privilege (10). 

To break this down on how UBI will drive greater wealth, we must look at how wealth is created and also what drives innovation and productivity. We live in a zero-sum game. Wealth begins with an idea…. The human mind finds an answer to a problem that we currently have or a problem that is to come, they then use resources and promote such a problem solver to other humans who in turn will pay more than the resources are worth. AKA resource cost + Idea = product cost. Suddenly, you have transferred that idea into a tangible medium of exchange that can be used for that lovely Ferrari you want. 

You may argue you are merely redistributing from another product and in effect you are. Still, if more people have these ideas, then more people are taking control of their life’s and redistributing wealth back to themselves. This isn’t just entrepreneurs; this is the window washer which takes opportunity cost and solves the problem of dirty windows all the way to Elon Musk who is addressing macro-level issues. 

Either way, there is a need for innovative thinkers in society to create wealth for themselves and for the community around them. Also, for those that do not create wealth directly, they may create it indirectly through productivity! When creating a product or a service as humans, we want to use the least amount of resources to create the same result(11). As an employee or a self-employed individual, if you can perform the equal value in a shorter time or with fewer resources, you are in effect creating more wealth (hopefully, not just to the Australian business owner).

Innovation and Min Wage

We finally realise that innovation requires time and less stress. Have you ever gone for a walk and had plenty of ideas? Or on holiday and suddenly you have the next best invention to replace post-it notes? Or better yet just a lunchtime walk with colleagues, and now you have solved your problems?

We know that through neuroscience and psychology that we need an environment for creativity and innovation. This environment must be free of stress(12). The majority of people’s stress comes from their financial life(13).

Google has understood this well. Instead of just paying the most, they pay only enough to take the thought of money off of the table and then provide their employees with the freedom to choose how they work. The key here is paying their employees enough to take the idea of bills and food off of the table.

If your partner provides you with organic food every day from your garden and your Trust pays the rent on your house, and your solar panels kept you warm. How much more innovation would you have in the knowledge that your NEEDs are actually met without any additional effort?

There is a reason that once people make their first Million… the next 10 are accessible. Minimal wage does solve this if you can get a job (which is going to get more complicated). With a min wage job, you SHOULD be able to take the thoughts of food and shelter off of the table, but due to how jobs are centralised, the cost of living is far more than the min wage allows.

Productivity

As an agile coach, my daily life has seen multiple industries focus on intrinsic motivation, the individuals will work faster, have higher quality and deliver to market faster time after time. (14) Due to the idea that humans live to fill their time with what they are passionate about. During the industrial revolution, we created processes to drive humans to automate and thus redirecting their productivity and mastery (think Henry Ford) and this worked great at the time. Still, the moment we automated people’s jobs with machines which do a great job, we required humans to fulfil a new ‘thinking’ job…. We have failed to change the way we manage.

At a macro level, this is precisely the same and allowing individuals the time to follow their passions with seeing them joining the work that best suits them, and thus productivity will increase.(15) UBI gives them that opportunity, individuals can leave and take a month out to think about what they want to do. Utilise free resources online to gather new skills and join different growing industries instead of being stuck in a candle making business.

Opposing arguments

There is plenty of fear-based opposing arguments out there, and I can fully understand why. We want everyone doing what WE WANT THEM to do instead of allowing them to do what they want. It may sound backwards, but I hope the above shows by allowing them to lead themselves to fruition it can lead to a higher value for all of New Zealand and less dependency. However, I do want to address a few opposing arguments and rectify them where I see fit.

“People on benefit now don’t do anything, why would UBI change that”

I was a big proponent of this originally until I spoke to people on welfare or family tax credit here in New Zealand. They do not have many benefits NOT to be on welfare. Moving off of the welfare is similar to earning more than $70k… the more effort you put in the less value you get proportionately.
With UBI there is no barrier to entry for anyone on the benefit, they will not lose any benefit, and instead of losing the life they currently have…. any increase in earnings would better their circumstances. They keep any additional funds. It would be advantageous for mothers to do some part-time work, as it would also add to their income vs losing significant benefits. However, if people can live and enjoy their life on the UBI then there only contribution to society would be rates and GST, and if that is their choice, then who am I to judge?

“We can never afford it”

Afford what? All arguments are based on affordability of today’s benefits, and we haven’t even talked about that…… Let’s assume 10k per person with the above conditions. 

This is $192 per week. Around 800’000 Kiwis are living overseas[16] and roughly 400’000 perm resident holders[17] and 1 million children below 18[17] this leaves us approximately (would be good if the state gave us the figures) 3.3 million adults in New Zealand giving us a total of $33 billion NZD. We currently spend $25.2 billion[18] direct expenses to social welfare. This leaves a gap of only 8.1 billion, which is where we are trending towards income levels. 

This doesn’t include the additional tax we more than likely would bring in through this strategy or several expenses we could knock on the head due to the UBI. At a crowdsourcing level, we would find a solution if we wanted a fair and equal system. So no… we wouldn’t need to raise taxes, we just wouldn’t have the ability to reduce taxes.

In Conclusion, most arguments are based on sound conservatism logic. WE don’t want THEM having something because WE don’t want to pay for it. Well as a NON-passport owner myself I am a promoter of the UBI without even receiving the benefit, I also am a high taxpayer and STILL think this is better. I want to enable our population irrelevant of income. I want people to think for themselves and not have boundaries that the state imposes. I want min wage abolished and allow people to negotiate their own rate. I want my kids when they leave school to have the ability to do something innovative and productive and not be forced into a crappy job just to feed themselves. 

Most of all I want all of us to be able to mitigate this next paradigm shift, I want us to find our own new bespoke place in the world as Googles A.I. removes jobs and Robots make us lazy. There will be so many opportunities to do something that YOU will want to try lots of things. 

Getting $192 a week… is enough to take the stress away from having to sell blood to get food or be on the ever expensive welfare system that will end up bankrupting the state, which leads to the rich building that Wall?