There is a big idea that might lead to a paradigm shift in governance and the economy in many nations. The idea is basic income; and it is about to burst into the political mainstream, because of the French Presidential Election.

A strong supporter of basic income named Benoit Hamon scored an impressive upset victory in the primary election for France’s Socialist Party on January 29. Hamon won 59% of the vote; and easily bested the front runner Manuel Valls, who was seen as President Francois Hollande’s handpicked successor.

Hamon’s campaign promises include a basic income; a monthly cash payment of €800 ($861.16) for every citizen of the French Republic between the ages of 18 and 25, beginning in 2018. That scheme would eventually be expanded to include every resident of France.

Nor is Hamon the only person talking about basic income. Governments in Finland, some Italian cities, the Netherlands and the Canadian province of Ontario are experimenting with variations on the idea right now. The government of India endorsed the concept of basic income in a recent White Paper and the Scottish government is considering a pilot program.

So what is Basic Income Anyway?

Under an unconditional or universal basic income (UBI) scheme a government automatically pays every resident of a region; or country, a set amount of cash on a regular basis.

Unlike a traditional welfare program there is no means testing, application process, or much paperwork involved. Everybody receives the payment and is feel to do whatever they want with it. Most modern basic income schemes involve the use of next-generation payment technologies; such as cryptocurrencies, debit cards or digital wallets, to disperse funds directly to the populace.

The idea is not new libertarian thinkers including; Thomas Paine, F.A. Hayek and Milton Freidman, all endorsed the idea decades or even centuries ago. So did some political leaders; including U.S. President Richard M. Nixon and Martin Luther King Jr. More recently Silicon Valley guru Elon Musk and investment legend Bill Gross have gotten on the basic income bandwagon.

Musk and Gross share Hamon’s belief that technology is killing jobs faster than the economy can create them. They want a basic income because we might soon reach a point where there are not enough jobs for everybody.

“According to all serious studies, there are hundreds of thousands of unskilled or low-skilled jobs that are beginning to be destroyed in Western economies,” Hamon told La Monde. “We must manage this transition and make the most of this amazing opportunity that the digital revolution offers us to work less and live better.”

Advantages to Basic Income

There are some inherent advantages to basic income that make it very attractive especially to libertarians and center-right politicians. These include:

  • Eliminates the need for the costly, inefficient and often ineffective welfare bureaucracies.

  • Does not put the poor or working class at the mercy of social services bureaucrats.

  • Can quickly be implemented with modern technologies such as digital wallets or payment apps.

  • Is more flexible than traditional welfare systems.

  • Eliminates the stigma attached with traditional welfare, there’s no need to stand in line to collect a dole.

  • No need for costly bureaucratic procedures such as means testing, applications, trips to the unemployment office etc. All the poor have to do is download the Basic Income app to collect it.

  • Might reach needy people that would shun the traditional welfare system.

  • People that need the money could collect it quickly.

  • Gets groups such as the young and the chronically unemployed participating in the market economy.

  • Will stimulate the economy by giving people more spending money.

  • Might encourage some people to work, because there will be no fear of losing benefits because they are making too much money. This is a huge problem in some countries like Finland and the United States.

  • May encourage entrepreneurship; and participation in the gig economy, by giving poor or working class the ability to survive without a job.

  • Might reach groups in need not served by the traditional welfare state; such as the rural poor in India or the United States.

  • Addresses the problem of underemployment by providing extra income to those working on a part time or temporary basis.

  • Might encourage job creation by allowing employers to pay a lower wage.

  • Would give some groups that do not participate in the political process; such as young people and the working class, a strong incentive to vote. They would want to protect their benefits much as senior citizens who receive Social Security (basic income for older citizens) in the United States do.

Disadvantages to Basic Income

There are also some serious potential disadvantages to basic income. These include:

  • Might discourage some people from working.

  • May encourage employers to pay lower wages because basic income will fill the gap.

  • May reward behaviors some people regard as immoral such as drug addiction.

  • Politicians would have the ability to buy votes by promising to raise or expand the basic income.

  • Might discourage young people from military service or seeking an education. Why join the army or go to college when I can collect basic income and play video games all day.

  • Irresponsible people might waste the money on alcohol, gambling, drugs or video games and end up destitute.

  • Might make some social problems like drug addiction and gambling worse. Some people would spend the basic income on football pools or heroin.

  • Nobody knows how basic income would be paid for. Governments are having a hard time financing existing benefit schemes such as Social Security in the United States and the National Health in the UK. Where would the money for basic income come from?

  • Would require increased taxation, possibly more income taxes or a high national sales tax. That might be politically impossible in some countries. A potential solution might be the Border Adjustment Tax proposed by the American Republican Party.

  • Might not be sustainable. One of the few existing basic income schemes; the Permanent Fund in the American state of Alaska, is slowly running out of money because of low oil prices. Alaska’s basic income is financed by royalties on oil wells and mining.

We all need to start thinking about basic income, because it looks like the idea is here to stay. All of us, including the people who dislike the idea, will have to deal with the concept of basic income because its time might be here.

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