Universal Basic Wealth

Do we need to work to live well? If you look at the tiny sliver of the top 0.001 % - their families often do not do market-labor. They live off the rents they raise from their accumulated capital. A few of them may be self-made, but the larger mass of the wealthy are the inherited folks. They are the landlords. If we do not question the inherited entitlement of the rich - the Trumps for example, why do we question such a desire of the poor?

The coronavirus pandemic has taught us that some occupations are more essential than others. We need the farmers, the sanitation workers, the doctors and nurses, more that the landlords at this moment. Yet, the landlords and the rent seekers hold significantly more wealth that the essential workers who live vulnerable lives - pay check to pay check. There is something sick about such a system, where the classes that do not work preach the gospel of work to those who actually work. "The poor are lazy", they say, while they themselves live off rents.

Every now and then people have identified and stated this irony, and the response to this irony has varied. Marx advocated for communism - a proletariat revolution against the capitalist rent seekers with the goal to socialise the means of production. But he implicated the bourgeois with the rent seeking capitalists. That was a mistake, as this ultimately led to the failure his entire movement. The bourgeois i.e. the city dwelling educated middle class, are the lifeblood of the knowledge economy and the source of economic, technological and often social progress. It were the bourgeois around the world who were the initial groups most receptive to liberal economic ideas of freedom and equality. They were not the enemies of progress as Marx imagined them to be. He held the bourgeois, the city folks, the industrious, the entrepreneurs in low regard, which made him and his movement an anti-knowledge-worker, anti-entrepreneur, anti-individual exercise.

We have learnt from the past that the best response to the above irony is not communism. So then what is it? Over the last decade new ideas have emerged to tackle this problem of unfair inequality. The first idea is the idea that community-orientation is an essential pillar of social support. For example, Rajan suggests in his new book (The Third Pillar) that when market, state and community are in balance then society is on a path to progress. When the balance fails there is chaos like the one we see today. Today in his view, communities have weakened considerably especially in post-industrial societies. However, in countries like India community matters, and it matters probably too much. While a majority of Indians are unable to raise emergency funds during a crisis, among those who can raise such funds almost half of them get it from their family and friends. The problem is, poor people have poor communities too, and rich people have rich communities. Hence, while communities matter and their importance can not be undermined, yet they can help the vulnerable only in limited ways.

The second idea is the idea of universal basic income, which posits that everybody should get a monthly check from the government that is large enough for them to live just fine, whether or not they work. This idea seems to be a closer response to the question - does a person have a right to live well even if they refuse to labour? Basic income proponents says yes. Yet there remains a problem. This system creates dependency on the government. Basic income is not a right, it is only a handout. As long as the government is charitable the public will get that income. If the government and its ideas changes, the public will once again be deprived of such basic income. Basic income still does not address a fundamental problem. It is wealth, not income that leaves millions vulnerable and exposed to uncertainty. The rent seekers get a good deal, not because of their high incomes, but rather because they have wealth (inherited or not) that they can seek rent off.

Hence, a way forward - distinct from communism, community-orientation or basic income - is the path of universal basic wealth. We need to create the conditions such that nobody is compelled to work just because they have rent to pay. Such a work-so-you-can-pay-the-bills, is a form of wage slavery that we need to address today. We need to take cues from the early European settlers, who occupied unsettled lands and called it their personal property, becoming their own little sovereigns. They no longer bowed to a monarch, but as owners of substantial lands they became their own rulers. We need to universalise this idea of sovereignty, where all citizens of a country have sovereignty and ownership over some substantial property/wealth on which they can build their lives as they please.

The idea of basic wealth can rest on three social endowments that every adult can be gifted unconditionally with:

1. a basic house/apartment, gifted to them by society/state, unconditionally.
2. access to individual savings that were made on their behalf while they were growing up, collectively by society/state in a National Childhood Fund.
3. unconditional emergency funding, especially that arise for emergency and rare disease healthcare needs (see MediCorps).

The coronavirus pandemic offers us a chance to relook how we support each other. Basic wealth in the form of three endowments - a house, some savings, and emergency funding - can help in reducing vulnerability in the lives of people, and turn them into their own little sovereigns.

It is possible that some say these ideas are costly or difficult, but when implemented on a war footing building housing to shelter all is not a radical idea. Singapore has reached close to such a case of universal housing. This can be done. Similarly, unconditional basic income to children which can be accessed when they grow up, may be more effective, better targeted and affordable than universal basic income, cash transfers or subsidies. In the same way, unconditionally insured emergency healthcare funding is a low hanging fruit that can help bring millions of lives out of fear and insecurity. None of these ideas are radical, but together these solutions can provide a new deal - a package of basic wealth that can protect people, especially the poorest, and help us all lead better, fuller lives.

(This article appeared on IIMB’s faculty blog on 19th May 2020.)