The basic income debate

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The basic income debate

In the future, factories will need just one worker and a dog. The dog would guard the machines and the worker will feed the dog. This is no joke. It may be a little exaggerated, but nevertheless it is the sad eventuality of the fourth industrial revolution.

This got billionaire venture capitalist and president of Y Combinator, Sam Altman, to thinking. And so the start-up accelerator launched a campaign for a private enterprise — an offering of universal basic income.

From August, the company began a pilot program in Oakland, California, not far from its headquarters in Silicon Valley, by giving 100 individuals $200 a month for one year “to live on with no strings attached,” hoping to learn what people would do with their free time when there is enough money to cover the basic living expenses.

“Although basic income seems fiscally challenging today,” the company blog says, “in a world where technology replaces existing jobs and basic income becomes necessary, technological improvements should generate an abundance of resources and the cost of living should fall dramatically.”

There are those who believe basic income is the way of the future, a foregone conclusion. One day, they imagine, basic income in the form of state allowances will be given out to individuals without any conditions attached.

It’s bizarre that such a costly project is being tested in the prestigious hotbed of innovation in a capitalist market like the United States. Yet basic income has been long-debated by both left and right-wing economic schools.

The 19th century British philosopher John Stuart Mill argued that social surplus from production should be equally divided among community members.

“From each according to his ability and to each according to his needs” was a concept championed by the German philosopher and sociologist Karl Marx during the same century.

Capitalists shunned the theory of basic income, arguing that the unrealistic financial cost and potential moral consequences made it unfeasible. The common thought was that a person would fall into moral hazard if he or she relies on handouts. But this belief is now being challenged.

There are many who believe we all deserve some level of social protection, no matter how hard we work. A Korean mother and her two adult daughters committed suicide a few years back because they could not afford to live. They received no help from the state.

The rightists believe basic income would save bureaucratic costs. Instead of the convoluted process of arranging public welfare, the state only needs to wire money to the people in need. When the system is in place, the state would not have to build homes for the poor, either.

Public officials won’t have to cross-examine and go through personal details like income and family members to match the funds to beneficiaries. The simple but straightforward policy would work well for a small government.

In a Swiss referendum asking public opinion before adopting a basic income system in June last year, 76.6 percent of the people disapproved. The majority voted against not the idea itself, but opposed it because they did not have enough faith in the government’s fund-raising plans. The Swiss government plans to do some fine-tuning.

The Finnish government this year launched a two-year pilot project to provide basic income. It is giving out $587 a month to 2,000 people living off unemployment allowances to test whether people will be able to pick themselves up and look for jobs they seriously want when they do not have to worry about losing unemployment benefits.

The government will be monitoring whether basic income can improve lives and breed hope for its citizens.

Some aspirants for president such as Seongnam Mayor Lee Jae-myung and Justice Party Chair Sim Sang-jung are proposing unconditional universal payment to young or senior citizens. Their ideas, however, do not come from the context of broad public welfare.

They cannot be strictly referred to as basic income nor are they backed by clear funding plans.

Leading opposition candidates Moon Jae-in, An Hee-jung and Ahn Cheol-soo, to name a few, are leaning towards reinforcing selective welfare programs for the underprivileged, as it would be controversial to suggest a basic income when there are other state subsidies.
Who is more right is hard to determine. But isolated people will increase as technology advances. The current social security net cannot reach the many.

We need to discuss an entirely new welfare paradigm. The theme should be heatedly discussed in the upcoming presidential campaign.
JoongAng Ilbo, Feb. 13, Page 28

*The author is the business news editor of the JoongAng Ilbo.

Kim Jong-yoon
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