Automatically Distributed Universal Basic Income - ADUBI
Adubi — name given to a girl in Yoruba culture which stands for: ‘one we struggled to birth’
Universal Basic Income (or the UBI) is now firmly in the mainstream conciousness. For those of you living under a rock, this is the idea that everyone (and that means everyone) will receive a lump sump of cash zero questions asked. People often focus on the good UBI could do in the developed world. Although I see this being radical and will change society in profound ways, it is NOTHING in my opinion to the good the UBI could do in the developing world.
In total 4,818,386 (at the time of writing) people have died from covid-19 (if you believe the figures). Well, what perhaps you didn’t know was that every year (pre-covid — the number is certainly higher now), around 9 million people die from hunger. Negating the fact that the mainstream media are categorically silent in their uproar over this tragedy, that the introduction of a UBI would do, would eliminate extreme poverty instantly meaning that those deaths would stop.
Why Universal Basic Income & not other welfare programs?
Due to its integrate-ability into the existing economic system the UBI is by far the most practical solution to ending global poverty. And by utilising the invisible hand of the market, the UBI would do so far quicker than any other available policy in the toolkit.
Aside from the obvious short term benefits such as the immediate eradication of the effects of extreme poverty (the side effects of which cannot be understated), the UBI will act as an economy stimulator or quantitative easing for the people. With this ‘stimulation fund’, private & public investment would be able to enter markets & develop infrastructure (schools, hospitals, houses, roads, energy, finance, insurance) with safety in the knowledge that there was sufficient ‘market liquidity’ or ‘market potential’ to pay for it. Importantly, even with the absence of investment by the public sector (governments), the private sector would still be able to enter & take care of society’s most pressing needs.
Artificial Intelligence Worries
The next reason and one that seems to garner the most attention (an unfortunate reality in this individualistic, nationalised world we live in) is that Artificial Inteligence & computers arepredicted to replace 100s of millions of jobs over the coming century. Some say this is doom & gloom however walk into Mcdonalds and what do you see? Lines of self check-out machines ready to take your order. What do you see when you look at the Mcdonalds employee statistics? Well since these machines were rolled out in 2016, the number of employees has more than halfed dropping from around 420,000 to 200,000. Some say that we shouldn’t worry and that new jobs will be created quoting the awful example of the invention of machines replacing jobs in the 18th century and the fear that the farm labourers had then. However today things ARE different. Machines replacing jobs is not-the-same as computers replacing them. And self-driving lorries/taxis — although they might not be here now — are coming.
How will it be paid?
Each citizen will receive the income streamed directly to their bank account (digital wallet). This will remove any potential for intermediary corruption (ie politicians siphoning off money, wasteful spending etc).
Is this affordable?
People say things like the UBI isn’t affordable. Here data is taken from the amazing research of Simon Thorpe who analysed data from the Bank of International Settlements (the ‘Central Banks Central Bank’).
Global Financial Transactions between 2012 to 2019 amounted to nearly $97 quadrillion (Yes, $97 quadrillion).
A 0.01% tax on this amount would have collected $9.7 trillion in that time or $1.2 trillion per year. That equates to around $1600 for every man, woman and child on this planet. The World Bank has set the extreme poverty line at being $693.5 per year. Implementing this tax and distributing it directly to people would eliminate global poverty in an instant.
Note: we must recognise that although $1600 per year for those living in extreme poverty would be life transformational, that amount wouldn’t do much in the developed world. In developed economies where there are functioning tax and social welfare systems, it makes far more sense to implement the basic income in the form of a negative income tax.
Of course, we must realise that the chance of collecting ALL those taxes is unlikely. Unless all transactions in society went through a decentralised globally distributed ledger and were taxed automatically via a smart contract (smart taxation). It would literally take a few lines of code to implement the tax on all transactions going through the BIS — Bank for International Settlements (the ‘central banks central bank’).
Isn’t a transaction tax bad for markets?
The following page is dedicated to answering this question here.
What about privacy?
Individuals transaction information & history will be hidden from public view with the use of privacy enabling technologies. The only information required for the smart contract to work is the total amount of transactions on the network.
ALTERNATIVE OPTION
Perhaps you think the idea of a decentralised globally distributed ledger is unrealistic. Here we introduce another proposal which would work at a more localised level:
‘The amount an individual receives is determined by the average cost of living in their local constituency.’
How will this be determined?
It will be automatically determined by ‘price oracles’ connected to the ‘Internet of things’ (IOT). In other words, a smart contract will automatically adjust the size of the UBI each person receives according to price data sent to it from price oracles connected to data-points around society (such as the local price of rent, food, education etc). As prices go up and down at the local level, the price of the UBI that each person receives will adjust accordingly. The combined individual adjustments will in turn be reflected in an overall adjustment to the global transaction tax rate.
NOTE: Initially there will be ‘holes’ in the data causing inaccuracy however as more data points become available, the system will become more precise.
BENEFITS
- The entire system is self regulating. Runaway inflation is prevented through the variability of the transaction tax.
- Automatic taxation will increase tax receipts reducing the overall tax rate of society.
- As everyone pays this tax, the never-ending issue of “who pays for it?” ceases to be relevant.
- Market stability will increase due to a decrease in short term unproductive financial speculation.
- No more poverty. Imagine.
