Universal Basic Income: Why Now?

In simple terms, the Basic Income or Universal Basic Income is a monthly payment received by each and every one of the citizens over the age of 18 in a country without any consideration, and which is equivalent to an amount greater than or equal to the poverty line. In the ideal, it is a minimum right of subsistence, so the payment is universal, it does not matter if they have other income or not, it is the same for everyone and it does not have any type of conditioning and cannot be annulled under any circumstances.

To many people this sounds crazy. It is clear in the opinion polls that a majority of Argentines are opposed to increasing social benefits – misnamed “plans” – under the false premise that “they generate lazy people who do not work.” Even “libertarian” politicians make this a campaign issue (Did they know that Milton Friedman was proposing something like a universal basic income?). On the other hand, those who support it affirm that there are not enough resources for that.

Let’s go by parts, first of all let’s understand what the welfare state is. Every month the national State spends (I prefer to say “invests”) half of its budget in its pension system. Half of the taxes we pay return to the economy in the form of direct transfers to retirees, pensioners and AUH beneficiaries. If we add to that the so-called social plans, we will have a significant amount of the national budget. That social security system is in a terminal crisis, not only in Argentina but throughout the world. Basically because the premises on which it was built -the life expectancy of its beneficiaries, the birth rate that would support it, the actuarial calculations on which the benefits were valued, etc.- no longer exist. Moreover, for many years now, half of the income with which this system is financed corresponds to VAT, the most regressive tax of all and the main income of the state. It is evident that the workers needed to maintain the system will not be born, nor will the beneficiaries live the years they were supposed to live (if not many more), nor can some privilege benefits continue to be paid by virtue of the amount contributed. In short, today the system creaks and somehow it has to be solved.

Nobel laureate in economics Esther Dufló – who received this distinction for her studies on poverty – often says that one of the biggest problems that the poor have in overcoming their situation is the prejudice that officials and other people develop about them. In Argentina we have an immediate precedent when the Universal Child Allowance was implemented. Two unprovable myths quickly emerged: the first was that women would get pregnant to collect more plans, the second that they were spending the AUH on drugs and casinos. Regarding the first prejudice, it was clearly shown to be false: ten years after its implementation, an ANSES report revealed that none of this had happened: 80 percent of the beneficiaries had a maximum of two dependent children, more than half had only one. . The total average number of children in the entire universe of beneficiaries was 1.8 children. The second is also obviously false, contrary to what they stated, it did not increase the problematic consumption of substances or gambling, on the other hand, it did increase the consumption of animal protein and children’s footwear. Although it may seem incredible to some, many children in Argentina did not have (and do not have) shoes to go to school.

There is one last common point in this discussion and it is about resources. The world had this same discussion when it tried to create the retirement and pension system. An important sector of politics at the time believed that there were no resources to pay pensions to the elderly or pensions to the disabled – most of them due to wars – and that the system could not be implemented. At that time, new taxes were created, the existing ones were improved and this allowed the consolidation of one of the most important processes of economic development and poverty reduction in the entire history of humanity.

Today the world is going through similar conditions to those it was going through when the pension system was created: unprecedented inequality, a huge number of middle-class people who become poor, and something unusual: workers who still have jobs remain in poverty. Perhaps, as then, it is time to explore new paths to reformulate the welfare state.

Some of these paths could entail: 1) Improving the collection of current taxes by digitizing payment methods, as Brazil is demonstrating through Pix, its free digital payment infrastructure promoted by the Central Bank. This would allow more to be collected, but it would also open up the possibility of making the current fiscal scheme more progressive, which weighs heavily on the poor and SMEs. 2) Open ourselves up to the discussions that the world is having about new taxes on the super-rich or on digital platforms that profit from people’s data and pay minimal taxes locally. 3) Explore the possibilities of the new (crypto) economy through the tokenization of the energy reserves of Vaca Muerta and/or those of lithium. In fact, there is already a project promoted by the Secretary for Strategic Affairs, Gustavo Béliz, and the Governor of Chaco, Jorge Capitanich, on the tokenization of environmental services. Through these or other ways, an enormous opportunity can open up to think of a universal basic income outside the box.

Perhaps the world’s political leadership is lacking the audacity to meet the new challenges. Perhaps the growing distance in the relationship between politics and people has to do in many ways with some of this.

(The author was born in Buenos Aires in 1979, has a degree in Information Sciences (Univ. Austral), a Master in Political Action and Citizen Participation (Univ. Del Rey Juan Carlos, Madrid) and a Diploma in Public Management (Inst. Tecnológico de Monterrey, Mexico DF) He is currently the editor of Algoritmo magazine, in which he addresses topics such as public policies, geopolitics, technology and blockchain.)

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