Why the unconditional basic income is not just a dream of left-wing utopians

On 5 June 2016, Switzerland voted on the unconditional basic income (UBI). With this initiative Switzerland showed once more how direct democracy allows social and political innovation other countries would not even dare to dream of. Such innovation is possible, because direct democracy allows for irritation from outside the system (a problem many other systems such as industries or companies struggle with). On the other hand, even the most optimistic people didn’t believe that a majority of the Swiss population would have voted yes on 5 June 2016, so what was it all about?

This article argues that the unconditional basic income it not a luxury for a rich nation such as Switzerland allowing people to freely follow their passions, but that the UBI is an appropriate answer to the forthcoming challenges in a highly digitalized and automated economy.

The age of abundance

Digitalization reverses general economic principles: instead of managing limited resources by the means of a free market, Western societies will have to think about how to handle abundance of resources such as idle money, knowledge or data. Online universities and crowd-funding platforms are just the beginning of an age where everyone has access to education and capital, no longer depending on today’s gatekeepers. At the same time, organizations lose their importance as employers, when individuals can easily offer their manpower on platforms like upwork or Uber. These platforms allow a much more individualized work environment as the users decide when, what and how much they want to offer. But there is also a downside of it: as self-employed service providers, people lack social security.

Automatization

Also, Digitalization is not only the promise of a free world but also bears potential for rationalization. Robin Chase, co-founder of zipcar and author of the book peersinc, argues that self-driving cars will be able to manage today’s mobility with 10-20% of today’s vehicles, taking over the job of 3.5 millions of truck drivers (US) in less than 5 years. Numbers from the US Bureau of Labor Statistics show that the median probability of automation is correlated with the occupation’s median hourly wage. As a result, up to 50% of all jobs might be automated in the near future.

So we do not only face a society in which traditional organizations lose their importance as employers and individuals offer their expertise on a highly individualized job market without today’s social security standards but where labor demand in low-paid job is dramatically declining in general.

Many people see these developments as a great danger. Indeed, they will change the way we live today dramatically. But there is also an opportunity: People will have more capacity to take care of things that really matter, e.g. solving today’s great challenges or caring for others.

But there is also a more rational argumentation for the UBI. Armin Steuernagel from the neopolis network compares today’s economic changes with the industrial revolution of the 19^th century. Back then the family has been replaced by the social security system we know today. His argumentation goes like this: As employers lose their importance today just like families back then, it would only make sense to also adapt social security to a more flexible and individualized system that takes into account the societal changes we already started to face.

It might not have been the time yet for the UBI on June 5, 2016. But our societies will have to come up with a new solution as soon as more people are affected by the changes in the job market. And those are coming soon.