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Episode
33

Universal Basic Income

First published on
March 6, 2020
Economics
-
19
minutes
Economics
Income inequality
US politics
Bernie Sanders

What would happen if the government just gave everyone money?

That's the idea of Universal Basic Income, and it's an idea that has supporters from all across the political spectrum.

Today we're going to take a look at how it works, why people love it, why people hate it, and what happens when you just give people money without asking for anything in return.

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Transcript

[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds by Leonardo English. 

[00:00:10] The show where you can learn fascinating things about the world at the same time as improving your English. 

[00:00:17] I'm Alastair Budge, and today we are talking about Universal Basic Income, sometimes known as citizens income, guaranteed minimum income or just basic income. 

[00:00:30] It's the idea that the government guarantees you enough money to live on. 

[00:00:37] It's an idea that has gained a lot of traction, a lot of new supporters and followers over the past few years. 

[00:00:45] And today we are going to ask ourselves why exactly that is.

[00:00:51] Before we get right into it though, let me just remind those of you listening to this podcast on Spotify, Apple Podcasts, iVoox or wherever you get your podcasts, that you can get a copy of the transcript and key vocabulary for the podcast on the website, which is leonardoenglish.com. 

[00:01:08] The transcript now comes in fancy, new animating format, which I think is a bit like subtitles, but even better. 

[00:01:16] So go and check that out, that's at Leonardoenglish.com. 

[00:01:20] Okay then. 

[00:01:22] Universal Basic Income has gained a lot of popularity in recent years, but it's not actually a new idea at all. 

[00:01:32] In fact, Thomas More, who was an advisor to Henry the Eighth, the subject of one of our last episodes, he proposed the idea of a basic income guaranteed to all citizens in a book called Utopia, and this was back in the year 1516, over 500 years ago. 

[00:01:56] There have been various different variations on this idea throughout the past 500 years, but the principle has remained fairly similar. 

[00:02:08] The intention of Universal Basic Income is that it's a payment to provide enough to cover the basic cost of living and provide financial security for all citizens, so that the citizens of a country have enough money to survive, to meet their basic needs.

[00:02:30] It's become more and more popular recently as there is this fear that technology and automation will lead to more and more job losses, that robots will take everyone's jobs. 

[00:02:44] The idea is that the profits of this automation will go to a much smaller group of people, to the entrepreneurs, the investors, the programmers, the shareholders, the people who control the robots. 

[00:03:01] So as a way to counteract this, taxes should be raised and the money would go towards paying for a Universal Basic Income to guarantee all citizens a basic standard of living. 

[00:03:18] There are different opinions on who should actually qualify for this income, who actually gets the money.

[00:03:26] Some suggest that every citizen should receive this income - from someone without a job and any income, right through to a billionaire. 

[00:03:36] Because it's universal, everyone should get it, and giving it to everyone reduces a large amount of the bureaucracy and administration that would be involved around deciding who gets it.

[00:03:51] While others suggest that only people who are below a certain income level or below the poverty line would receive this, or also that only people who have lost their jobs to automation, to robots, would get it. 

[00:04:07] And there are also different views on who should pay for it. 

[00:04:12] Some people say that taxes should be increased on the wealthy, while others say that corporations should be taxed.

[00:04:21] This is of course, a difference, but the fact that a lot of the most wealthy people get the majority of their income through a business or businesses, or shareholdings in a business means that ultimately the money is coming from a similar place.

[00:04:39] Interestingly enough, Universal Income is an idea that has supporters from right across the political spectrum, from right-wing libertarians, right through to left-wing socialists, and people support it for very different reasons of course. 

[00:04:57] We'll go into exactly why people support it and why people hate it in a minute. 

[00:05:04] First though, let's just talk about some of the people who are pushing for some form of Universal Basic Income. 

[00:05:12] Firstly, Andrew Yang, the former candidate for the Democratic nomination for president of the United States is a big proponent of it, and it formed a big part of his campaign. 

[00:05:27] His signature policy was what he called a Freedom Dividend, where every person over the age of 18 would receive $1,000 per month, regardless of whether they were working or not, so everyone would get it. 

[00:05:46] But it's not just Yang. 

[00:05:48] The famous economist, Milton Friedman, who was probably the father of neoliberal economics, he had proposed a similar thing, but it was just called a negative tax, whereby people who earned below a certain level would be given a top-up, given cash, by the government.

[00:06:13] And the cofounder of Facebook, Chris Hughes, has written extensively about why he thinks a Universal Basic Income is a good idea, saying that "cash is the best thing you can do to improve health outcomes, education outcomes, and lift people out of poverty." 

[00:06:35] It's a very popular idea with the tech industry, and I guess you could say that people working within technology have the best idea of the impact that automation will have. 

[00:06:49] Mark Zuckerberg and Bill Gates have spoken in favor of Universal Basic Income as have Sir Richard Branson and Elon Musk.

[00:07:00] Elon Musk, the founder of Tesla and SpaceX, has been very outspoken about the fact that robots are coming to take everyone's jobs and has said that Universal Basic Income is the only solution. 

[00:07:16] So there are evidently a lot of very knowledgeable people who are in favour of Universal Basic Income. 

[00:07:24] Other than the fact that they say that lots of jobs will be lost due to automation, there are a load of other benefits that people think will come from widespread adoption of Universal Basic Income. 

[00:07:38] For example, it would lead to people being able to gain and develop new skills and become more productive instead of being forced to work in a low skilled job. 

[00:07:50] It would mean that people wouldn't be trapped in terrible jobs with nasty bosses and could have the freedom to quit and find a job they wanted instead of being trapped in a job that they hated just to pay the rent.

[00:08:08] It would also get rid of one of the problems of the poverty trap, where in some countries, the more you earn the less benefits, the less money from the government you get, and so in some situations people find themselves with actually less money if they work than if they didn't. 

[00:08:29] So that's what's called the poverty trap, it's very hard to get out of this cycle. 

[00:08:35] A Universal Basic Income would remove this, as you'd get the money whether you worked or not. 

[00:08:43] Working would just mean that you got more money, not less. 

[00:08:48] Also, and this is something that we touched on in our podcast on bullshit jobs, a Universal Basic Income would be far easier to administer.

[00:09:01] What this would mean is it would remove a lot of the bureaucracy and administration that is involved with the dishing out of social security. 

[00:09:13] If a set amount, a set sum of money, is just given out to everyone, then you remove a huge amount of administration that is currently involved with assessing, examining, administering funds, checking up on people and so on. 

[00:09:33] If instead of paying people to administer the distribution of money, you just gave everyone the money, everyone would be happier and better off, so the theory goes. 

[00:09:48] This is one of the main reasons that it's popular with libertarians, that it means that you can reduce a huge amount of government administration.

[00:10:00] And finally, for countries that are worried about citizens not having children because they are unsure about their economic future, a Universal Basic Income would give young people the confidence that they could start a family without having to constantly worry about putting food on the table. 

[00:10:21] So in theory, there are a lot of positives and a lot of things in favour of some form of Universal Basic Income.

[00:10:31] But of course, there are those that are vehemently opposed to it, they hate the idea. 

[00:10:39] There are probably three main categories of why people are opposed to it. 

[00:10:44] Firstly, there's the "how are we going to pay for it?" category. 

[00:10:50] Obviously handing out cash, handing out money, to a large proportion of society is more expensive than not handing out cash to a large proportion of society, and so just from a financial point of view, opponents of Universal Basic Income are against it because you'd have to raise taxes. 

[00:11:11] If we take the example of implementing it, of doing it, in the United States of America, there are around 180 million working age adults, and it would cost about two point two trillion dollars to pay each of them $1,000 a month, so that's $12,000 a year. 

[00:11:32] That's evidently a lot of money. 

[00:11:34] And even when you factor in that it would replace the existing welfare programs, which cost about $1 trillion a year, that's still an extra one point two trillion dollars that needs to come from somewhere.

[00:11:50] And then there's the argument of "it'll make people lazy and why should I pay for other people to sit on their backsides?" 

[00:11:57] That if everyone is suddenly given a handout by the government, it will mean that the incentive to work is removed and people stop working, people don't apply for jobs, and people will fall into a vicious cycle whereby there isn't the incentive to get a job, so they don't develop new skills, and so they become even more unemployable.

[00:12:23] Lots of people are against Universal Basic Income because they just don't like the idea of working hard just to pay for someone else to get money handed out by the state, to get their money. 

[00:12:38] And that's a fair argument, right? 

[00:12:39] Why should I work just to make money that is then given to someone else who isn't working?

[00:12:46] And then there are the "it's an economic bad idea" arguments. 

[00:12:50] Firstly, that if everyone just received more money, people would spend that money and it would increase inflation because there was more demand for goods, the higher prices would then make it harder for those with less money to get by, to manage to keep a decent standard of living.

[00:13:11] And it would just be a vicious circle

[00:13:15] There's also the argument that actually comes mainly from the left that Universal Basic Income will give employers, will give companies, an excuse to pay less than they should in salaries because they know that workers are already getting their needs met, that they are getting enough money to live on from Universal Basic Income.

[00:13:41] So critics say that this means employment wages, the money that people get from work, is likely to go down. 

[00:13:50] The counter argument here is that pay for jobs that people really would rather not do is likely to increase, but pay for jobs that people would probably quite like to do will decrease. 

[00:14:05] So if we take a practical example here, let's take the example of two jobs. 

[00:14:09] Firstly, a toilet cleaner, which I guess is a job that most people would not choose to do. 

[00:14:17] Because fewer people wouldn't want to do it, the pay for that should increase. 

[00:14:23] And let's say a job like museum curator or film critic, which is a job that many people would love to do, I'm sure, the pay for that would be forced down. 

[00:14:36] So there are a lot of pretty persuasive theories, good arguments, both for and against Universal Basic Income. 

[00:14:45] And the really interesting thing is that quite a few countries are actually testing it out, not on a countrywide level, but are testing it out with small sections of society.

[00:14:59] The most famous Universal Basic Income experiment was in Finland where it gave 2000 unemployed people 560 euros a month for two years, even if they found work. 

[00:15:14] So it cost about 27 million euros to do. 

[00:15:20] The programme has now finished, but the people on the programme said that they were very supportive of it and that it gave them more confidence, it reduced their stress levels and gave them more of an incentive to find a good job, not just any job, or also to start their own business. 

[00:15:43] The Finnish government was meant to test out the scheme with employed people too, to see whether it gave them an incentive to find better jobs, but this scheme never actually took off, never actually happened. 

[00:15:58] Overall, it's deemed that the Finnish experiment was a moderate success, but not enough of a success to roll out to the entire country.

[00:16:08] One other interesting test of Universal Basic Income was actually in the West African country of Liberia. 

[00:16:18] Researchers wanted to test out whether giving money to alcoholics, drug addicts and criminals would mean that they just spent the money on drink, drugs and bad things, or whether they put it to better use.

[00:16:34] Actually what happened was the complete opposite of what critics of Universal Basic Income say. 

[00:16:42] What happened is that the people who were given the money, they spent the money on things like food and activities that helped to try to pull themselves out of their bad situation.

[00:16:56] And Universal Basic Income is also being tested in various states in the United States. 

[00:17:03] However, it's a bit too early to come to any great conclusions about how effective they are.

[00:17:09] Whatever you think about Universal Basic Income, I think we can agree that it's a pretty interesting idea and there are evidently pretty compelling, pretty strong arguments for and against. 

[00:17:25] And while I'm sure we'd all agree that we want to live in a society where everyone is free to not have to worry about having a roof over their head or putting enough food on the table, there are obviously many different theories about what the best way to do that is and Universal Basic Income is just one of them. 

[00:17:48] I always say that I'd love to know what you think of the podcast, and in this case it's especially true. 

[00:17:54] We have listeners now from I think 140 different countries, and obviously what you think may well depend on the country you're from.

[00:18:03] Perhaps in your country, there are already some places where Universal Basic Income is being tested. 

[00:18:11] So I'd love to know what you thought of the podcast, both from a general point of view and also what you think of Universal Basic Income. 

[00:18:19] You can let us know on Facebook, Instagram, or of course email that's hi@leonardoenglish.com.

[00:18:28] And if you are interested in becoming a member of Leonardo English and not just getting access to all of the transcripts, key vocabulary and bonus podcasts, but also supporting the podcast, then you can check that out at leonardoenglish.com/subscribe. 

[00:18:43] We now have options to subscribe weekly, monthly, and annually, and it starts at just under two euros a week.

[00:18:50] So it would be great to have you. 

[00:18:53] As always, thank you very much for listening to the show. 

[00:18:56] You've been listening to English Learning for Curious Minds by Leonardo English. 

[00:19:01] I'm Alastair Budge and I'll catch you in the next episode.


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[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds by Leonardo English. 

[00:00:10] The show where you can learn fascinating things about the world at the same time as improving your English. 

[00:00:17] I'm Alastair Budge, and today we are talking about Universal Basic Income, sometimes known as citizens income, guaranteed minimum income or just basic income. 

[00:00:30] It's the idea that the government guarantees you enough money to live on. 

[00:00:37] It's an idea that has gained a lot of traction, a lot of new supporters and followers over the past few years. 

[00:00:45] And today we are going to ask ourselves why exactly that is.

[00:00:51] Before we get right into it though, let me just remind those of you listening to this podcast on Spotify, Apple Podcasts, iVoox or wherever you get your podcasts, that you can get a copy of the transcript and key vocabulary for the podcast on the website, which is leonardoenglish.com. 

[00:01:08] The transcript now comes in fancy, new animating format, which I think is a bit like subtitles, but even better. 

[00:01:16] So go and check that out, that's at Leonardoenglish.com. 

[00:01:20] Okay then. 

[00:01:22] Universal Basic Income has gained a lot of popularity in recent years, but it's not actually a new idea at all. 

[00:01:32] In fact, Thomas More, who was an advisor to Henry the Eighth, the subject of one of our last episodes, he proposed the idea of a basic income guaranteed to all citizens in a book called Utopia, and this was back in the year 1516, over 500 years ago. 

[00:01:56] There have been various different variations on this idea throughout the past 500 years, but the principle has remained fairly similar. 

[00:02:08] The intention of Universal Basic Income is that it's a payment to provide enough to cover the basic cost of living and provide financial security for all citizens, so that the citizens of a country have enough money to survive, to meet their basic needs.

[00:02:30] It's become more and more popular recently as there is this fear that technology and automation will lead to more and more job losses, that robots will take everyone's jobs. 

[00:02:44] The idea is that the profits of this automation will go to a much smaller group of people, to the entrepreneurs, the investors, the programmers, the shareholders, the people who control the robots. 

[00:03:01] So as a way to counteract this, taxes should be raised and the money would go towards paying for a Universal Basic Income to guarantee all citizens a basic standard of living. 

[00:03:18] There are different opinions on who should actually qualify for this income, who actually gets the money.

[00:03:26] Some suggest that every citizen should receive this income - from someone without a job and any income, right through to a billionaire. 

[00:03:36] Because it's universal, everyone should get it, and giving it to everyone reduces a large amount of the bureaucracy and administration that would be involved around deciding who gets it.

[00:03:51] While others suggest that only people who are below a certain income level or below the poverty line would receive this, or also that only people who have lost their jobs to automation, to robots, would get it. 

[00:04:07] And there are also different views on who should pay for it. 

[00:04:12] Some people say that taxes should be increased on the wealthy, while others say that corporations should be taxed.

[00:04:21] This is of course, a difference, but the fact that a lot of the most wealthy people get the majority of their income through a business or businesses, or shareholdings in a business means that ultimately the money is coming from a similar place.

[00:04:39] Interestingly enough, Universal Income is an idea that has supporters from right across the political spectrum, from right-wing libertarians, right through to left-wing socialists, and people support it for very different reasons of course. 

[00:04:57] We'll go into exactly why people support it and why people hate it in a minute. 

[00:05:04] First though, let's just talk about some of the people who are pushing for some form of Universal Basic Income. 

[00:05:12] Firstly, Andrew Yang, the former candidate for the Democratic nomination for president of the United States is a big proponent of it, and it formed a big part of his campaign. 

[00:05:27] His signature policy was what he called a Freedom Dividend, where every person over the age of 18 would receive $1,000 per month, regardless of whether they were working or not, so everyone would get it. 

[00:05:46] But it's not just Yang. 

[00:05:48] The famous economist, Milton Friedman, who was probably the father of neoliberal economics, he had proposed a similar thing, but it was just called a negative tax, whereby people who earned below a certain level would be given a top-up, given cash, by the government.

[00:06:13] And the cofounder of Facebook, Chris Hughes, has written extensively about why he thinks a Universal Basic Income is a good idea, saying that "cash is the best thing you can do to improve health outcomes, education outcomes, and lift people out of poverty." 

[00:06:35] It's a very popular idea with the tech industry, and I guess you could say that people working within technology have the best idea of the impact that automation will have. 

[00:06:49] Mark Zuckerberg and Bill Gates have spoken in favor of Universal Basic Income as have Sir Richard Branson and Elon Musk.

[00:07:00] Elon Musk, the founder of Tesla and SpaceX, has been very outspoken about the fact that robots are coming to take everyone's jobs and has said that Universal Basic Income is the only solution. 

[00:07:16] So there are evidently a lot of very knowledgeable people who are in favour of Universal Basic Income. 

[00:07:24] Other than the fact that they say that lots of jobs will be lost due to automation, there are a load of other benefits that people think will come from widespread adoption of Universal Basic Income. 

[00:07:38] For example, it would lead to people being able to gain and develop new skills and become more productive instead of being forced to work in a low skilled job. 

[00:07:50] It would mean that people wouldn't be trapped in terrible jobs with nasty bosses and could have the freedom to quit and find a job they wanted instead of being trapped in a job that they hated just to pay the rent.

[00:08:08] It would also get rid of one of the problems of the poverty trap, where in some countries, the more you earn the less benefits, the less money from the government you get, and so in some situations people find themselves with actually less money if they work than if they didn't. 

[00:08:29] So that's what's called the poverty trap, it's very hard to get out of this cycle. 

[00:08:35] A Universal Basic Income would remove this, as you'd get the money whether you worked or not. 

[00:08:43] Working would just mean that you got more money, not less. 

[00:08:48] Also, and this is something that we touched on in our podcast on bullshit jobs, a Universal Basic Income would be far easier to administer.

[00:09:01] What this would mean is it would remove a lot of the bureaucracy and administration that is involved with the dishing out of social security. 

[00:09:13] If a set amount, a set sum of money, is just given out to everyone, then you remove a huge amount of administration that is currently involved with assessing, examining, administering funds, checking up on people and so on. 

[00:09:33] If instead of paying people to administer the distribution of money, you just gave everyone the money, everyone would be happier and better off, so the theory goes. 

[00:09:48] This is one of the main reasons that it's popular with libertarians, that it means that you can reduce a huge amount of government administration.

[00:10:00] And finally, for countries that are worried about citizens not having children because they are unsure about their economic future, a Universal Basic Income would give young people the confidence that they could start a family without having to constantly worry about putting food on the table. 

[00:10:21] So in theory, there are a lot of positives and a lot of things in favour of some form of Universal Basic Income.

[00:10:31] But of course, there are those that are vehemently opposed to it, they hate the idea. 

[00:10:39] There are probably three main categories of why people are opposed to it. 

[00:10:44] Firstly, there's the "how are we going to pay for it?" category. 

[00:10:50] Obviously handing out cash, handing out money, to a large proportion of society is more expensive than not handing out cash to a large proportion of society, and so just from a financial point of view, opponents of Universal Basic Income are against it because you'd have to raise taxes. 

[00:11:11] If we take the example of implementing it, of doing it, in the United States of America, there are around 180 million working age adults, and it would cost about two point two trillion dollars to pay each of them $1,000 a month, so that's $12,000 a year. 

[00:11:32] That's evidently a lot of money. 

[00:11:34] And even when you factor in that it would replace the existing welfare programs, which cost about $1 trillion a year, that's still an extra one point two trillion dollars that needs to come from somewhere.

[00:11:50] And then there's the argument of "it'll make people lazy and why should I pay for other people to sit on their backsides?" 

[00:11:57] That if everyone is suddenly given a handout by the government, it will mean that the incentive to work is removed and people stop working, people don't apply for jobs, and people will fall into a vicious cycle whereby there isn't the incentive to get a job, so they don't develop new skills, and so they become even more unemployable.

[00:12:23] Lots of people are against Universal Basic Income because they just don't like the idea of working hard just to pay for someone else to get money handed out by the state, to get their money. 

[00:12:38] And that's a fair argument, right? 

[00:12:39] Why should I work just to make money that is then given to someone else who isn't working?

[00:12:46] And then there are the "it's an economic bad idea" arguments. 

[00:12:50] Firstly, that if everyone just received more money, people would spend that money and it would increase inflation because there was more demand for goods, the higher prices would then make it harder for those with less money to get by, to manage to keep a decent standard of living.

[00:13:11] And it would just be a vicious circle

[00:13:15] There's also the argument that actually comes mainly from the left that Universal Basic Income will give employers, will give companies, an excuse to pay less than they should in salaries because they know that workers are already getting their needs met, that they are getting enough money to live on from Universal Basic Income.

[00:13:41] So critics say that this means employment wages, the money that people get from work, is likely to go down. 

[00:13:50] The counter argument here is that pay for jobs that people really would rather not do is likely to increase, but pay for jobs that people would probably quite like to do will decrease. 

[00:14:05] So if we take a practical example here, let's take the example of two jobs. 

[00:14:09] Firstly, a toilet cleaner, which I guess is a job that most people would not choose to do. 

[00:14:17] Because fewer people wouldn't want to do it, the pay for that should increase. 

[00:14:23] And let's say a job like museum curator or film critic, which is a job that many people would love to do, I'm sure, the pay for that would be forced down. 

[00:14:36] So there are a lot of pretty persuasive theories, good arguments, both for and against Universal Basic Income. 

[00:14:45] And the really interesting thing is that quite a few countries are actually testing it out, not on a countrywide level, but are testing it out with small sections of society.

[00:14:59] The most famous Universal Basic Income experiment was in Finland where it gave 2000 unemployed people 560 euros a month for two years, even if they found work. 

[00:15:14] So it cost about 27 million euros to do. 

[00:15:20] The programme has now finished, but the people on the programme said that they were very supportive of it and that it gave them more confidence, it reduced their stress levels and gave them more of an incentive to find a good job, not just any job, or also to start their own business. 

[00:15:43] The Finnish government was meant to test out the scheme with employed people too, to see whether it gave them an incentive to find better jobs, but this scheme never actually took off, never actually happened. 

[00:15:58] Overall, it's deemed that the Finnish experiment was a moderate success, but not enough of a success to roll out to the entire country.

[00:16:08] One other interesting test of Universal Basic Income was actually in the West African country of Liberia. 

[00:16:18] Researchers wanted to test out whether giving money to alcoholics, drug addicts and criminals would mean that they just spent the money on drink, drugs and bad things, or whether they put it to better use.

[00:16:34] Actually what happened was the complete opposite of what critics of Universal Basic Income say. 

[00:16:42] What happened is that the people who were given the money, they spent the money on things like food and activities that helped to try to pull themselves out of their bad situation.

[00:16:56] And Universal Basic Income is also being tested in various states in the United States. 

[00:17:03] However, it's a bit too early to come to any great conclusions about how effective they are.

[00:17:09] Whatever you think about Universal Basic Income, I think we can agree that it's a pretty interesting idea and there are evidently pretty compelling, pretty strong arguments for and against. 

[00:17:25] And while I'm sure we'd all agree that we want to live in a society where everyone is free to not have to worry about having a roof over their head or putting enough food on the table, there are obviously many different theories about what the best way to do that is and Universal Basic Income is just one of them. 

[00:17:48] I always say that I'd love to know what you think of the podcast, and in this case it's especially true. 

[00:17:54] We have listeners now from I think 140 different countries, and obviously what you think may well depend on the country you're from.

[00:18:03] Perhaps in your country, there are already some places where Universal Basic Income is being tested. 

[00:18:11] So I'd love to know what you thought of the podcast, both from a general point of view and also what you think of Universal Basic Income. 

[00:18:19] You can let us know on Facebook, Instagram, or of course email that's hi@leonardoenglish.com.

[00:18:28] And if you are interested in becoming a member of Leonardo English and not just getting access to all of the transcripts, key vocabulary and bonus podcasts, but also supporting the podcast, then you can check that out at leonardoenglish.com/subscribe. 

[00:18:43] We now have options to subscribe weekly, monthly, and annually, and it starts at just under two euros a week.

[00:18:50] So it would be great to have you. 

[00:18:53] As always, thank you very much for listening to the show. 

[00:18:56] You've been listening to English Learning for Curious Minds by Leonardo English. 

[00:19:01] I'm Alastair Budge and I'll catch you in the next episode.


[00:00:04] Hello, hello, hello, and welcome to English Learning for Curious Minds by Leonardo English. 

[00:00:10] The show where you can learn fascinating things about the world at the same time as improving your English. 

[00:00:17] I'm Alastair Budge, and today we are talking about Universal Basic Income, sometimes known as citizens income, guaranteed minimum income or just basic income. 

[00:00:30] It's the idea that the government guarantees you enough money to live on. 

[00:00:37] It's an idea that has gained a lot of traction, a lot of new supporters and followers over the past few years. 

[00:00:45] And today we are going to ask ourselves why exactly that is.

[00:00:51] Before we get right into it though, let me just remind those of you listening to this podcast on Spotify, Apple Podcasts, iVoox or wherever you get your podcasts, that you can get a copy of the transcript and key vocabulary for the podcast on the website, which is leonardoenglish.com. 

[00:01:08] The transcript now comes in fancy, new animating format, which I think is a bit like subtitles, but even better. 

[00:01:16] So go and check that out, that's at Leonardoenglish.com. 

[00:01:20] Okay then. 

[00:01:22] Universal Basic Income has gained a lot of popularity in recent years, but it's not actually a new idea at all. 

[00:01:32] In fact, Thomas More, who was an advisor to Henry the Eighth, the subject of one of our last episodes, he proposed the idea of a basic income guaranteed to all citizens in a book called Utopia, and this was back in the year 1516, over 500 years ago. 

[00:01:56] There have been various different variations on this idea throughout the past 500 years, but the principle has remained fairly similar. 

[00:02:08] The intention of Universal Basic Income is that it's a payment to provide enough to cover the basic cost of living and provide financial security for all citizens, so that the citizens of a country have enough money to survive, to meet their basic needs.

[00:02:30] It's become more and more popular recently as there is this fear that technology and automation will lead to more and more job losses, that robots will take everyone's jobs. 

[00:02:44] The idea is that the profits of this automation will go to a much smaller group of people, to the entrepreneurs, the investors, the programmers, the shareholders, the people who control the robots. 

[00:03:01] So as a way to counteract this, taxes should be raised and the money would go towards paying for a Universal Basic Income to guarantee all citizens a basic standard of living. 

[00:03:18] There are different opinions on who should actually qualify for this income, who actually gets the money.

[00:03:26] Some suggest that every citizen should receive this income - from someone without a job and any income, right through to a billionaire. 

[00:03:36] Because it's universal, everyone should get it, and giving it to everyone reduces a large amount of the bureaucracy and administration that would be involved around deciding who gets it.

[00:03:51] While others suggest that only people who are below a certain income level or below the poverty line would receive this, or also that only people who have lost their jobs to automation, to robots, would get it. 

[00:04:07] And there are also different views on who should pay for it. 

[00:04:12] Some people say that taxes should be increased on the wealthy, while others say that corporations should be taxed.

[00:04:21] This is of course, a difference, but the fact that a lot of the most wealthy people get the majority of their income through a business or businesses, or shareholdings in a business means that ultimately the money is coming from a similar place.

[00:04:39] Interestingly enough, Universal Income is an idea that has supporters from right across the political spectrum, from right-wing libertarians, right through to left-wing socialists, and people support it for very different reasons of course. 

[00:04:57] We'll go into exactly why people support it and why people hate it in a minute. 

[00:05:04] First though, let's just talk about some of the people who are pushing for some form of Universal Basic Income. 

[00:05:12] Firstly, Andrew Yang, the former candidate for the Democratic nomination for president of the United States is a big proponent of it, and it formed a big part of his campaign. 

[00:05:27] His signature policy was what he called a Freedom Dividend, where every person over the age of 18 would receive $1,000 per month, regardless of whether they were working or not, so everyone would get it. 

[00:05:46] But it's not just Yang. 

[00:05:48] The famous economist, Milton Friedman, who was probably the father of neoliberal economics, he had proposed a similar thing, but it was just called a negative tax, whereby people who earned below a certain level would be given a top-up, given cash, by the government.

[00:06:13] And the cofounder of Facebook, Chris Hughes, has written extensively about why he thinks a Universal Basic Income is a good idea, saying that "cash is the best thing you can do to improve health outcomes, education outcomes, and lift people out of poverty." 

[00:06:35] It's a very popular idea with the tech industry, and I guess you could say that people working within technology have the best idea of the impact that automation will have. 

[00:06:49] Mark Zuckerberg and Bill Gates have spoken in favor of Universal Basic Income as have Sir Richard Branson and Elon Musk.

[00:07:00] Elon Musk, the founder of Tesla and SpaceX, has been very outspoken about the fact that robots are coming to take everyone's jobs and has said that Universal Basic Income is the only solution. 

[00:07:16] So there are evidently a lot of very knowledgeable people who are in favour of Universal Basic Income. 

[00:07:24] Other than the fact that they say that lots of jobs will be lost due to automation, there are a load of other benefits that people think will come from widespread adoption of Universal Basic Income. 

[00:07:38] For example, it would lead to people being able to gain and develop new skills and become more productive instead of being forced to work in a low skilled job. 

[00:07:50] It would mean that people wouldn't be trapped in terrible jobs with nasty bosses and could have the freedom to quit and find a job they wanted instead of being trapped in a job that they hated just to pay the rent.

[00:08:08] It would also get rid of one of the problems of the poverty trap, where in some countries, the more you earn the less benefits, the less money from the government you get, and so in some situations people find themselves with actually less money if they work than if they didn't. 

[00:08:29] So that's what's called the poverty trap, it's very hard to get out of this cycle. 

[00:08:35] A Universal Basic Income would remove this, as you'd get the money whether you worked or not. 

[00:08:43] Working would just mean that you got more money, not less. 

[00:08:48] Also, and this is something that we touched on in our podcast on bullshit jobs, a Universal Basic Income would be far easier to administer.

[00:09:01] What this would mean is it would remove a lot of the bureaucracy and administration that is involved with the dishing out of social security. 

[00:09:13] If a set amount, a set sum of money, is just given out to everyone, then you remove a huge amount of administration that is currently involved with assessing, examining, administering funds, checking up on people and so on. 

[00:09:33] If instead of paying people to administer the distribution of money, you just gave everyone the money, everyone would be happier and better off, so the theory goes. 

[00:09:48] This is one of the main reasons that it's popular with libertarians, that it means that you can reduce a huge amount of government administration.

[00:10:00] And finally, for countries that are worried about citizens not having children because they are unsure about their economic future, a Universal Basic Income would give young people the confidence that they could start a family without having to constantly worry about putting food on the table. 

[00:10:21] So in theory, there are a lot of positives and a lot of things in favour of some form of Universal Basic Income.

[00:10:31] But of course, there are those that are vehemently opposed to it, they hate the idea. 

[00:10:39] There are probably three main categories of why people are opposed to it. 

[00:10:44] Firstly, there's the "how are we going to pay for it?" category. 

[00:10:50] Obviously handing out cash, handing out money, to a large proportion of society is more expensive than not handing out cash to a large proportion of society, and so just from a financial point of view, opponents of Universal Basic Income are against it because you'd have to raise taxes. 

[00:11:11] If we take the example of implementing it, of doing it, in the United States of America, there are around 180 million working age adults, and it would cost about two point two trillion dollars to pay each of them $1,000 a month, so that's $12,000 a year. 

[00:11:32] That's evidently a lot of money. 

[00:11:34] And even when you factor in that it would replace the existing welfare programs, which cost about $1 trillion a year, that's still an extra one point two trillion dollars that needs to come from somewhere.

[00:11:50] And then there's the argument of "it'll make people lazy and why should I pay for other people to sit on their backsides?" 

[00:11:57] That if everyone is suddenly given a handout by the government, it will mean that the incentive to work is removed and people stop working, people don't apply for jobs, and people will fall into a vicious cycle whereby there isn't the incentive to get a job, so they don't develop new skills, and so they become even more unemployable.

[00:12:23] Lots of people are against Universal Basic Income because they just don't like the idea of working hard just to pay for someone else to get money handed out by the state, to get their money. 

[00:12:38] And that's a fair argument, right? 

[00:12:39] Why should I work just to make money that is then given to someone else who isn't working?

[00:12:46] And then there are the "it's an economic bad idea" arguments. 

[00:12:50] Firstly, that if everyone just received more money, people would spend that money and it would increase inflation because there was more demand for goods, the higher prices would then make it harder for those with less money to get by, to manage to keep a decent standard of living.

[00:13:11] And it would just be a vicious circle

[00:13:15] There's also the argument that actually comes mainly from the left that Universal Basic Income will give employers, will give companies, an excuse to pay less than they should in salaries because they know that workers are already getting their needs met, that they are getting enough money to live on from Universal Basic Income.

[00:13:41] So critics say that this means employment wages, the money that people get from work, is likely to go down. 

[00:13:50] The counter argument here is that pay for jobs that people really would rather not do is likely to increase, but pay for jobs that people would probably quite like to do will decrease. 

[00:14:05] So if we take a practical example here, let's take the example of two jobs. 

[00:14:09] Firstly, a toilet cleaner, which I guess is a job that most people would not choose to do. 

[00:14:17] Because fewer people wouldn't want to do it, the pay for that should increase. 

[00:14:23] And let's say a job like museum curator or film critic, which is a job that many people would love to do, I'm sure, the pay for that would be forced down. 

[00:14:36] So there are a lot of pretty persuasive theories, good arguments, both for and against Universal Basic Income. 

[00:14:45] And the really interesting thing is that quite a few countries are actually testing it out, not on a countrywide level, but are testing it out with small sections of society.

[00:14:59] The most famous Universal Basic Income experiment was in Finland where it gave 2000 unemployed people 560 euros a month for two years, even if they found work. 

[00:15:14] So it cost about 27 million euros to do. 

[00:15:20] The programme has now finished, but the people on the programme said that they were very supportive of it and that it gave them more confidence, it reduced their stress levels and gave them more of an incentive to find a good job, not just any job, or also to start their own business. 

[00:15:43] The Finnish government was meant to test out the scheme with employed people too, to see whether it gave them an incentive to find better jobs, but this scheme never actually took off, never actually happened. 

[00:15:58] Overall, it's deemed that the Finnish experiment was a moderate success, but not enough of a success to roll out to the entire country.

[00:16:08] One other interesting test of Universal Basic Income was actually in the West African country of Liberia. 

[00:16:18] Researchers wanted to test out whether giving money to alcoholics, drug addicts and criminals would mean that they just spent the money on drink, drugs and bad things, or whether they put it to better use.

[00:16:34] Actually what happened was the complete opposite of what critics of Universal Basic Income say. 

[00:16:42] What happened is that the people who were given the money, they spent the money on things like food and activities that helped to try to pull themselves out of their bad situation.

[00:16:56] And Universal Basic Income is also being tested in various states in the United States. 

[00:17:03] However, it's a bit too early to come to any great conclusions about how effective they are.

[00:17:09] Whatever you think about Universal Basic Income, I think we can agree that it's a pretty interesting idea and there are evidently pretty compelling, pretty strong arguments for and against. 

[00:17:25] And while I'm sure we'd all agree that we want to live in a society where everyone is free to not have to worry about having a roof over their head or putting enough food on the table, there are obviously many different theories about what the best way to do that is and Universal Basic Income is just one of them. 

[00:17:48] I always say that I'd love to know what you think of the podcast, and in this case it's especially true. 

[00:17:54] We have listeners now from I think 140 different countries, and obviously what you think may well depend on the country you're from.

[00:18:03] Perhaps in your country, there are already some places where Universal Basic Income is being tested. 

[00:18:11] So I'd love to know what you thought of the podcast, both from a general point of view and also what you think of Universal Basic Income. 

[00:18:19] You can let us know on Facebook, Instagram, or of course email that's hi@leonardoenglish.com.

[00:18:28] And if you are interested in becoming a member of Leonardo English and not just getting access to all of the transcripts, key vocabulary and bonus podcasts, but also supporting the podcast, then you can check that out at leonardoenglish.com/subscribe. 

[00:18:43] We now have options to subscribe weekly, monthly, and annually, and it starts at just under two euros a week.

[00:18:50] So it would be great to have you. 

[00:18:53] As always, thank you very much for listening to the show. 

[00:18:56] You've been listening to English Learning for Curious Minds by Leonardo English. 

[00:19:01] I'm Alastair Budge and I'll catch you in the next episode.