Can Universal Basic Income Save the World?

In his 2017 Harvard commencement speech, Mark Zuckerberg rightly pointed out that “our culture of entrepreneurship is how we create so much progress,” in the United States and around the world.

He emphasized that progress is under threat, however, because rising wealth inequality and indebtedness have made it difficult (if not impossible) for millions of people to pursue creative, innovative, and entrepreneurial projects that don’t immediately pay the bills. Sadly, there’s a lot of evidence he’s right.

To combat this, Zuck encouraged the class of 2017 to be giving of their time, skills, and money in support of those less fortunate. Teach a man to fish – and help him buy a sturdy pole if you can.

The other important idea he floated was universal basic income (UBI), a policy that would guarantee everyone enough money to support themselves and their dependents. Direct cash transfers from government that could be adjusted to keep up with inflation and cost of living. No strings attached. For everyone.

Why UBI?

Proponents of universal basic income argue that it would give people the freedom to do whatever they find meaningful, fueling the formation of new businesses and intellectual property, even improving health. It's been tried in several places – most recently in Finland – with positive results that seem to support this logic.

The main argument against UBI is that it would disincentivize people from working. But the evidence so far suggests otherwise. Besides, our current system isn’t doing much to incentivize work in the first place.

There’s also a growing consensus that something like UBI may become necessary, as automated systems are poised to take millions of jobs from manufacturing and driving to research and retail.

Who would pay for it? In the U.S. context, Zuckerberg, Warren Buffett, Bill Gates, and many others have said they would gladly step up. Considering the potential costs of inaction, some version of this policy increasingly looks like a good new deal.

The cost of climate change

The other reason to consider UBI is that we need to transition away from fossil fuels, fast. The latest news from Antarctica is unequivocal: sea levels anywhere from 6 to 160 feet higher await us and our children if we keep burning oil, coal, and gas at the current pace.

This means phasing out millions of existing jobs in the fossil fuel industry worldwide, and abandoning an estimated $20 trillion worth of fuel reserves. You can imagine the forces militating against this.

But if everyone could be guaranteed a safety net, and not feel compelled to maintain oil company jobs or stock prices, this transition might be manageable quickly enough.

Getting from here to there

In the U.S. and other developed countries, reasonably taxing the trillions of dollars in corporate profits and offshore wealth, combined with some restructuring of existing welfare programs, could make UBI a reality overnight.

In fossil fuel-dependent countries like Saudi Arabia and Russia, the hurdles are higher. Their economies need to be diversified in order to afford social safety nets without oil and gas revenue, which will take precious time. The international community should consider speeding up this process through investments in renewable energy projects and other industries.

Universal basic income isn't a cure-all. Even developed countries have a fairly long way to go in terms of setting up alternative energy infrastructure (not to mention a litany of other challenges). But as we work toward solutions, UBI might be a sensible hedge against climate catastrophe, automation, and economic instability.

As Zuckerberg said, “the greatest successes come from having the freedom to fail.”