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Universal Basic Income Will Be A Colossal Failure
Unless we seriously reconsider how to pay for it
Unless we seriously reconsider how to pay for it
Tens of millions of Americans are underpaid, underopportunized, underemployed, and unemployed.
Purchasing parity is the same as 1978.
Rent is unaffordable in every single state in the union.
The stock, crypto, and real estate markets are at an all-time high.
Which begs the question: How will everyone survive?
Universal Basic Income
I love Universal Basic Income. Who doesn’t love free money?
Every American has the declarative right to life, liberty, and the pursuit of happiness, and a $7.25 federal minimum wage isn’t enough to fund that right.
Plus, I think it’s silly to pay bureaucrats to pay unemployed people when we can just pay people directly.
Will giving out $2000/month free to every adult make some people a bit lazier? Of course. But will the net gain be a society where children aren’t raised in poverty, where the underpaid can refuse exploitative work, where the underopportunized have the margin to get educated and take risks like starting a business, where the underemployed have a safety net, and the unemployed don’t suffer? Absolutely.
The challenge is how we pay for it — because the current model is a perpetual motion fairy tale.
How to Fund UBI
Right now, most politicians assume there are only two ways to pay for UBI:
Tax the rich.
One of my life rules is to avoid false dichotomies. When given two great options, choose both. When given two bad options, choose neither.
#1 won’t work because printing several trillion unbacked dollars every single year will just hyper-inflate the economy. Just think of what the Covid “stimmy” checks did: They contributed to the biggest stock, crypto, and real estate bubble in history. If we print $2000/month/person, it’ll soon be worth pennies on the dollar and we’ll have to keep adding zeroes to the checks.
#2 won’t work because the rich hate the poor and are done paying taxes. Through tax evasion, tax manipulation, and tax avoidance, the elite’s corporate tax share has been steadily dropping for decades and will not be reversed because they own the government.
If we try to fund UBI by these two methods, it is bound to fail.
Thankfully, there’s a third option.
Fund UBI With Asset Profits
In an individualist capitalist economy, corporations create and sell goods and services and deliver profits to their shareholders in the form of dividends.
In a commons-focused economy, countries, states, and cities will be shareholders in a majority of these corporations and use their portion of the profits to deliver UBI to the masses.
This isn’t a new idea. Norway’s sovereign wealth fund recently surpassed $1.3 trillion. The City of London Corporation stewards an 800-year-old $3+ billion portfolio on behalf of its citizens, earning nearly $100 million in annual profits by owning markets, office buildings, parking lots, schools, condo towers, nurseries, forests, museums, theaters, art galleries, and power stations, which it uses to subsidize City programs to the tune of tens of millions each year.
But you don’t have to be an oil-rich country like Denmark or a mega-city like London to enjoy the fruits of commons investments.
A Real-World Case Study
I have a friend who ran for mayor of an extremely conservative town of 4,000. He got elected and used the town’s credit to finance a much-needed old folks home. It’s heated and cooled by geothermal and has its own in-house composting system, plus a medical clinic, dental unit, and hair salon. It also has a pub and a daycare so that adult children, teenage grandkids, and toddler great-grandkids would spend more time around their elders. Once the center was built, the town spun it off the municipal books as a not-for-profit, tasked with running the center and paying off the debt until it reverts to the town debt-free.
Do you see what he did there? He essentially gave his community a sustainable, culture-creating, income-producing asset for free.
Every village, town, and city in America could use this model to acquire all sorts of community-enriching assets.
We Can Start Today
Be assured, corporate-captured federal politicians will continue to drag their feet on UBI while the masses suffer. (Never forget: The minimum wage hasn’t increased in 12 years.) So don’t feel like you have to wait for corrupt governments to get started. Any group can create their own UBI project:
States, counties, municipalities, and neighborhoods can create or acquire commons assets like fish-stocked hydroelectric lakes. (My village of 1,400 owns our local market and we just bought the local pub!)
Religious denominations can invest billions in commons assets like geothermal volcanism.
Workers can organize new co-ops like Suma to ensure they receive 100% of the value of their labor without the need for skimming shareholders.
And it needn’t be large groups that get in on the UBI action — small groups of friends can create their own micro-UBI projects.
Have a buddy that likes brewing? Get ten friends to chip in on a brewing kit so you can all enjoy at-cost beer for life.
Have an empty garage? Get your church mates to each contribute a piece of equipment and then you can all skip the gym fees.
Go in with some family members on a woodlot and you’ll never have to pay for heating again.
Get wildly creative. When half the jobs are gone and prices have doubled, we’ll be looking at a world of rampant inflation, desperate poverty, or both.
At that point, we’ll need all the crowd-funded UBI we can get.