Universal Basic Income as a Social Glue for Ukraine

Universal Basic Income

‘Social glue’ is a term that has increased in usage in the last few years.

Sociologists define it as something that binds together members of a social group and creates a feeling of solidarity and group cohesion.

After analyzing the results of the surveys conveyed on a weekly basis during political talk show "Shuster Live" from October 9, 2015 to December 20, 2016, Savik Shuster, the  host of the talk show and president of the Open Mind Foundation, is absolutely certain that Ukraine is desperately in need of social glue. Hence, he recommends a series of unbiased experiments that would combine qualitative and quantitative research methods to explore the impact of collective emotions on a specific region or country.

“The study of collective emotions in Ukraine can tell us a great deal on the state of mind of the population. This research can help to determine the reasons for popular disapproval of the government and anticipate violent mass protests. It would be no exaggeration to say that such knowledge may save lives. If our goal is to live in a free, democratic society, we must strive to measure and monitor the levels of basic collective emotions – hope, fear, humiliation and anger – to understand at which point their mixture may become explosive.”

In his book, Freedom of Speech vs. Fear and Humiliation. A Social Experiment on Live Television: The First Map of Collective Emotions of a Country, he proposes using a Universal Basic Income as one of the solutions to the startling emotional divergence which exists in Ukraine among regions, between generations and between the sexes.

The provocative idea that has come to be known as Basic Income is, in an important sense, very simple. Bertrand Russell wrote in 1918, “A certain small income, sufficient for necessities, should be secured for all, whether they work or not”. According to Philippe Van Parijs, “A Basic Income is an income paid by a political community to all its members on an individual basis, without a means test or work requirement”.

In one form or another, under one name or another, this idea has been discussed for more than two centuries, but it is only in the last 50 years or so that it has become a major topic of academic research. Since about 1960, this literature has become extremely rich, covering such diverse topics as the philosophical justification of the idea; its economic and political feasibility; and its impact on freedom, social justice, economic activity, psychological well-being, and much more.

Basic Income provides a stream of regular cash income to every citizen or resident of a country. The payments can be made by direct deposit or by some other means on a monthly basis. Unlike existing minimum income schemes, Basic Income is both universal and unconditional. It is universal in the sense that it is paid to every citizen. It is not a categorical benefit either, which is only paid to certain individuals who fit specific criteria for eligibility. It is unconditional in the sense that recipients are not required to perform any duties in return for their benefits other than to maintain their citizenship. It is paid regardless of whether the recipient is working, willing to work, or has a work record. As a universal, unconditional benefit, it is paid regardless of whether the recipient has other sources of income and irrespective of disposable income. It is paid regardless of whether the recipient is young or old, able or disabled.

Most people who favor Basic Income do so because they believe that everyone should have unconditional access to the resources required to meet their basic needs, but there is no consensus in the literature as to whether that aspect is an essential part of the minimal definition. A Basic Income large enough to meet a person’s basic needs is usually called a full Basic Income. A smaller, regular, unconditional payment is sometimes called a small Basic Income, or a partial Basic Income.

Usually, Basic Income advocates argue that it should be paid on an individual basis. As a truly individual right, it is not dependent on the household size or type of family in which one lives. Payment on an individual basis also implies that separate payments will be made to each member of the family rather than one payment to the family as a whole or to a person designated as the head of the household.

Universal, unconditional, and individual: once properly understood these three key features make Basic Income a radical departure from traditional welfare-state policies. Although welfare states differ greatly in specific policies and in their level of generosity, they all tend to be conditional not only in that they require recipients of government money to fall into one of many different categories, but also require them to have a past work record. Unemployment compensation is aimed at those with the ability to work who are unable to find a job. For those deemed unable to work, welfare systems typically need to further categorize recipients to fit one of many possible programs. They might have one program for people who are too old to work, another for people who are too young, another for the long-term disabled, and so on. Basic Income instead provides one small comprehensive benefit that protects everyone from destitution regardless of what might have caused them to become destitute. Recipients do not have to work or to have a work record. They do not have to demonstrate that they are willing to work or that something makes them unable to work. Basic Income represents a major change in direction from a typical welfare state.

Furthermore, most transfer programs in modern welfare states do not preserve incentives to work more and/or to develop a professional career. Recipients of social assistance, unemployment insurance, disability benefits, and many other transfer programs usually have to face the harsh tradeoff of having to sacrifice the whole of their transfer income if they take any job at all. This phenomenon is often called the “dependency trap” or the “poverty trap” by economists. Basic Income avoids this trap entirely.

The Basic Income idea has existed in one form or another for hundreds of years, but it has only become widely discussed in the last 50 years or so. It has attracted support from a very diverse set of groups and individuals, from every corner of the political spectrum.

Thomas Paine, one of the Founding Fathers of the United States, was an early advocate of the basic income idea and can be viewed as its American originator. In his 1795 pamphlet, Agrarian Justice, he argued that in the pre-capitalist past, before land became private property, it belonged to everyone, and that this common ownership should still be honored. He wrote:

“In advocating the case of the persons thus dispossessed, it is a right, and not a charity ... [Government must] create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age.”

He later noted the unconditionality of such a grant: “The payments [have to] be made to every person, rich or poor. It is best to make it so, to avoid invidious distinctions”.

Although prominent figures like Thomas Paine discussed ideas along the lines of a Basic Income, the discussion of a true Basic Income erupted only in the first half of the 20th century due to increasing public interest in welfare states. In his Proposed Roads to Freedom (1918), Bertrand Russell offered a strong plea for a guaranteed income. In the same year, two members of the British Labour Party, Dennis Milner and his wife Mabel, published a Scheme for a State Bonus (1918), in which they proposed the introduction of a Basic Income for all citizens of the United Kingdom. It was widely discussed during party conferences in the 1920s, where for the first time, an important political movement focused directly on the idea.

In the 1960s and 1970s, Basic Income became a hot topic in many industrialized countries in Europe and North America. The political discussion was often connected with the work of academics, especially in economics. Among the major advocates of the idea were several Nobel laureates, such as Friedrich Hayek and Milton Friedman.

In 1986, a group of academics and Basic Income activists gathered in Louvain-la-Neuve, Belgium, at a conference organized by Philippe Van Parijs. They decided to set up the Basic Income European Network (BIEN), which quickly became a platform for the exchange of information about Basic Income in Western Europe and beyond. In September 2004, BIEN turned into a worldwide network and changed its name to the Basic Income Earth Network. At the national level, several networks have been created in the past three decades, and BIEN now has officially recognized 20 national affiliate organizations.

Basic Income has managed to make its way into the political agenda in many countries within the past several decades. National governments and parliaments (for instance in Finland, Ireland, Germany, the Netherlands and the United Kingdom) and some regional governments (like Catalonia and the Basque Country in Spain, or Quebec in Canada) have sponsored or analyzed reports on Basic Income. The topic has also often appeared in many electoral campaigns in major European and North American countries.

Ukraine, as a truly European country, has decided to join the above-mentioned countries in trying out a Basic Income system. On 29 September 2018, Savik Shuster hosted a press conference in Dnipro, where he proposed introducing a Universal Basic Income Grant in the region that could provide social cohesion between regions, generations and genders. It’s important to mention that the city had been chosen intentionally because the results of the study showed that Dnepropetrovsk region is the most emotionally unstable region of Ukraine: 43% of its inhabitants expressed Fear of the future and Humiliation because of the present. The press conference sparked the creation of “Basic Income Ukraine”, a Ukrainian organization focused on implementing UBI in the country. Currently, the government officials of Pavlograd, an industrial city with a medium-sized population located within Dnipropetrovsk Oblast, and the council of Podilske, a small village in Cherkassy region, expressed their interest in conducting the experiment.  Pavlograd’s plan is to disburse the equivalent of 100 €/month to each of 2,000 randomly-selected adult citizens (the average monthly salary in Ukraine is around 9000 UAH, or 286 €), for a 24-month period. Although city officials have stated that the budget wouldn’t be able to contribute to the experiment’s financing, they are planning to raise funds from public and private charitable organizations in Ukraine, as well as foreign organizations. At the same time, Podilske plans to raise living standards by introducing a regular, unconditional cash transfer of up to 200 €/month to all of the 500 villagers over the same period of time. Regarding the funds, Mr. Kuharenko, the youngest village mayor in the country at age 25, stated that they would be raised via crowd funding and from potential domestic and international investors.

The closest existing program to a Basic Income in the world today is probably Alaska’s Permanent Fund Dividend. It meets the broad definition of Basic Income above, but it is sometimes called a resource dividend or a citizen’s dividend instead of a Basic Income. The state of Alaska invests a portion of its oil revenue in a fund, and distributes a portion of the returns to that fund to each state resident every year. The amount of the Permanent Fund Dividend usually varies between $1,000 and $2,000 per person, per year, because of market fluctuations.

The Permanent Fund Dividend makes a regular, unconditional, in-cash payment to every U.S. citizen who lives in the state of Alaska for the full year. In that sense, it is a Basic Income. However, it is far less than enough to meet each individual’s basic needs, and because of that, it can only be considered a partial Basic Income. Most Basic Income proposals do not specify but presume that payment will be regular enough that it provides recipients with some sort of permanent economic security. As a relatively small, variable payment that comes only once a year, recipients tend to see the Permanent Fund Dividend as a bonus to be used for discretionary spending rather than as something to meet basic needs. However, it has proven to be effective and extremely popular. Many nations have discussed imitating it the program. Mongolia has promised to begin phasing in a resource dividend, and Iran now has already begun phasing in a program that very closely approximates a small Basic Income.

In the light of all these developments, even if Basic Income’s political future remains uncertain, it is clear that it has now left the realm of exclusively theoretical public debates.