In the frenzy that arose from the Covid-19 pandemic, several countries are considering huge packages of fiscal and economic stimuli to mitigate their effects.
Essential plans, of course, but they must be strategic and sustainable. To avoid creating new problems, first of all, you need to add a new element, an old knowledge that is always underestimated: the Minimum Universal Income. Universal Basic Income (UBI). The only thing that can get us out of the quagmire.
Rule number one in case of crisis: when you are in a hole, stop digging immediately.
Opponents, and there are many, point out that it will not work because no country can afford to regularly distribute money to all citizens. They will argue that we will have unsustainable deficits, which cannot be financed.
This is a valid concern. But the alternative is a greater spike in inequalities and tensions. Factors that would cost governments even more and open countries to an enormous risk of social conflict.
The abuse virus
The pandemic that began in China has raged across Asia and beyond, exposing the inequalities and vulnerabilities of huge sections of the population.
Se 1.3 billion people, two thirds of the Asia-Pacific workforce, as well as migrants (100 million in India alone) will lose their livelihood, without a safety net, the social costs will be unsustainable. Economic instability will be outclassed by social chaos.
The debate on universal minimum income is inevitable, indispensable
A new social contract that can rebalance the profound inequalities prevailing between societies. To put it bluntly: the question must no longer be whether resources for effective social protection can be found, but HOW they can be found.
USA and Canada are finally studying it. The Canadian Prime Minister Justin Trudeau it provided 2.000 Canadian dollars per month, for the next four months, to workers who have lost income as a result of the pandemic. Other countries in the world are further ahead (even Italy thanks to a measure, the citizenship income, which conceptually goes in similar directions). Now it needs to be expanded and made to work for the long term.
We can do it
In my opinion, we need to change our approach from the past. The universal minimum income should not be considered as a dispensation, nor as an additional solution to be added to those already in place. Rather, it must be a catalyst for changes in other sectors as well: the minimum universal income can and must be the factor of change that we need.
Domino effect on other reforms
We will need, to say, fair taxation. Countries will have to work together, sharing data, to prevent people and companies from evading taxes. We all have to pay our fair share, and less. We can no longer privatize profits and socialize losses.
Subsidies, in particular for fossil fuels, which hinder the path towards sustainable development goals, should be stopped. In particular, the objectives of climate change. This would benefit all of us, while generating financial resources for a universal minimum income, but also to support fossil fuel companies.
Even Warren Buffet and Bill Gates, among the wealthiest people on the planet, have asked that the rich pay more taxes. According to Credit Suisse Global Wealth Report 2018, 10% of the richest people in the world own 85% of the wealth.
Multinational corporations are not paying their fair share
Apple, Amazon, Google and Walmart, to name just a few, generate staggering profits and, after taking advantage of all the flaws of the tax systems, pay ridiculous amounts.
If even only the top 1.000 companies in the world were taxed fairly, a modest universal minimum income could be distributed rigorously and reasonably worldwide.
When governments are deprived of the funds they should legitimately have to build a better state, something is simply wrong.
The beautiful, magnificent theories on the global economy (some proposed by today's so-called "frugal countries") is deeply flawed. To work effectively, they say, a global economy needs ground rules that can also help companies move capital to places where they can optimize their performance. And this without hindering national governments' goal of meeting the legitimate expectations of their citizens for a fair share in the benefits and costs of globalization.
Basically the full barrel and the drunk wife. It is evident that it cannot work.
To achieve "acceptable ground rules" and "fair share of benefits and costs" would require global coordination. Otherwise, highly mobile capital flees to countries that "frugally" do not charge enough taxes.
There is no doubt that the universal minimum income will be difficult to start
It is important to consider the pros and cons impartially, the reasons why it has not been widely implemented so far and what could make it viable.
A complicating factor is that it should complement existing social programs. Another important element would be to leave an incentive to work. The universal minimum income should be sufficient to support a person leaving them motivated to work, save and invest.
Not easy, as said. But the alternative to not having a universal minimum income is the growing likelihood of social unrest, conflict, unmanageable mass migration and proliferation of politicians or extremists who capitalize on social disappointment.
It is in this context that we must seriously consider a well-designed universal minimum income.
