The Case For Universal Prosperity (Part 3)
Michael Hrenka
2015-11-09 00:00:00



These requirements would be contrasted with what I don’t consider necessary for a “prosperity” lifestyle:





All of these things might be nice, and people of course have the right to aspire achieving them through hard work, but they are not a requirement for a happy life.

Under very optimistic circumstances, we might have universal prosperity by around 2040 within the current industrialized nations.



How could universal prosperity be reached?



The word “universal” indicates that everyone should be able to have this “prosperity” life standard. Because not everyone can work or owns lots of capital, we need a UBI to achieve this goal. Unfortunately, even the wealthiest nations would have to increase taxes to insane levels to finance a UBI that would grant prosperity to everyone. So, this is hardly a viable option.

What can be done however, is introducing a UBI at a merely sufficient level, say within the next ten years, and then coupling the amount of the UBI to the level of economic growth. Because a modest UBI should stimulate economic growth, this is a much more realistic path to universal prosperity than waiting 25 years and introducing a generous UBI only then.

Apart from that, we cannot wait 25 more years before introducing a UBI, because technological unemployment will be rampant long before 2040. Not dealing with that trend proactively will most likely ruin the economy.

Once technological unemployment really takes off, it will be necessary to increasingly tax capital gains, as income taxes from labour will break away.



Make it ecological



When it comes to economic growth, there is valid criticism that it usually entails ecological degradation. However, that doesn’t need to be the case, since increases in efficiency through the use of better technology can create growth that doesn’t cause additional ecological costs.

Rather than demanding a stop of the economic growth paradigm, we should focus on “ecological growth” [Morrison 2013], which would be based on





A focus on technological solutions doesn’t automatically generate ecological growth, but if a decidedly technological approach is combined with intelligent regulations that favour ecologically sound alternatives, economic growth can very well become ecologically sustainable.

For that purpose, we may need to replace simple conventional economic metrics like GDP and GNI with metrics that consider the ecological costs of economic activities. The Sustainable National Income and the Genuine Progress Indicator [Harris, Roach 2013] are good examples for such “eco metrics”.

By coupling the amount of the UBI to the “eco metrics” SNI or GPI, rather than the GDP or GNI, people would have an incentive to demand ecological growth. I call such an “eco-growth coupled” universal basic income a Sustainable Universal Prosperity Income (SUPI).



How the Sustainable Universal Prosperity Income would work



The SUPI starts with a UBI at a merely sufficient level which is introduced in a certain year, say 2025. This year would be the reference year of the SUPI. From then on it will only be adjusted to inflation and the change of the chosen eco metric.

For example, if the inflation rate is 2%, then the UBI payments will be increased by 2%, preliminarily. Next, we need to consider the change of the eco metric. If it has increased by 3%, then the SUPI will increase by about 5%. This increase comes from 2% inflation and 3% eco growth. However, if the eco metric has decreased by 1%, the SUPI will only increase by 1%, which won’t be enough to compensate for inflation. Consequently, the purchasing power that people get from their UBI will decrease – because some problematic economic activity has degraded the environment.

If the nation managed to generate an average eco growth of 3% over 25 years, by 2050 the SUPI will be at 209% of the sufficiency level of the reference year (this is automatically adjusted for inflation). This could be enough to generate sustainable universal prosperity.

Such a high level of ecological growth may be optimistic, but the positive stimulus from the UBI, increased thermodynamic efficiency, and efficiency gains from the use of robots and artificial intelligence could make it possible.



Why would a SUPI be a good idea?



The idea to give everyone more money than they need to stay alive, healthy, and productive for free may seem quite excessive at first glance. That’s why there need to be really good arguments in favour of such a system. Even though there are some valid philosophical and ideological arguments for a generous universal basic income, I restrict myself to ecological, social, psychological, and economic arguments that can ideally be accepted by everyone.



Ecological reasons



Sadly, the current ecological footprint of the Western world is unsustainable. We’d need much more than one single planet to sustain that lifestyle if everyone in the world adopted it. There are different ways to react to that fact, but the most rational approach is to aggressively use intelligent technology and policymaking to reduce our ecological footprint even while increasing our standard of living.

A SUPI would of course be a foundational piece of intelligent policy-making. Conveniently, it can also accelerate further technological innovation, as is explained further below.

Because we live on Earth and depend on the environment that it provides to us, we should naturally have a strong incentive not to destroy it. However, in the face of more immediate economic pressures this basic sensibility all too often takes a backseat. This is why politics and economics need to be realigned so as to support the natural incentive to protect our natural wealth. If people’s incomes directly and immediately depend on the state of the environment, they get useful feedback that can stimulate them to demand a transition to a sustainable economy.

With a “normal” UBI there’s the problem that the increased consumer demand could accelerate economic activities that degrade our environment. This issue is not absolutely dismantled with a SUPI, but at the very least a SUPI creates the right conditions and incentives that support the creation of an ecologically responsible economy. People who suffer from relative poverty simply don’t have the “luxurious” option to buy “ethical” products that don’t contribute to the destruction of the environment.

Finally, people receiving a SUPI can easily choose not to work in a job that has detrimental social and ecological impacts. When companies with unethical business models notice that it gets really hard to them to attract and keep workers, then they are likely to reconsider their strategy. After all, with a SUPI, the company leaders themselves don’t really need to run such a business anyway.



Social reasons



In the next decades automation will eliminate a vast number of jobs and many of those who will have lost their jobs won’t be able to find a replacement job soon. More work can be done by less people. And the average level of qualification required to get a job will most likely rise significantly. So, an increasing number of people will require further education and training. With a SUPI they get the chance to focus on that, instead of being forced to take kind of job they can find.

Nevertheless, sooner or later, many jobs and even companies will become fully automated through advanced artificial intelligence which will even be able to do very creative tasks. Only a small number of people will be able to do any kind of conventional work that creates an income for them. Without a SUPI the existence of most people would become quite unpromising. With their SUPI however, they can choose to do whatever gives meaning to their lives without having to worry about making a living. Great freedom and liberty for everyone can become a reality.

Still, inequality will be an issue even when people don’t need to work for the basic necessities of life. After all, those who have work or capital can still continue to get wealthier while those without only have their basic income. This divide will become increasingly difficult to bridge as the number of available jobs gets smaller and smaller. This is why the basic income needs to rise over time in order to limit income inequality. Otherwise increasing inequality will threaten societal cohesion to a dangerous degree. It is much less likely that there will be civil unrests, uprisings, revolts, or even revolutions if everyone gets a SUPI.



Psychological reasons



The fact that the SUPI is coupled to the economical and ecological wealth of the nation effectively turns its citizens into shareholders. Thus, they have additional motivation to support their nation as effectively as possible. Therefore, interest in politics will probably grow, and people will demand improved methods of democratic or direct participation. Everyone will have a good reason to strive for the holistic optimization of societal systems, because that’s what actually gets them an income raise.

Sure, the influence that an individual may have on the economy at large is very marginal, but you have to consider that the same is true for the influence a single voter has on the politics of a democratic country. If it’s a valid line of reasoning to keep the basic income relatively low because that would save costs, the same line of reasoning could be used to justify the abolition of democratic elections. Costs are a bad reason for denying citizens their empowerment.

The higher the SUPI, the more motivation will shift from extrinsic motivation to intrinsic motivation. With a sufficiently high universal income, people who do work because they find it inherently rewarding and meaningful will be more likely not to bother about using work as a source of income. Instead, they will work voluntarily and for free, because they just want to help the organisation and people they work, or because the work is genuinely interesting and engaging. Money would just be an annoying distraction in that case. After all, extrinsic motivation can negatively interfere with already existent intrinsic motivation, as studies have shown. Purely intrinsically motivated people are happier, more creative, and more innovative.

Therefore, the fraction of work that people are actually directly paid for will in all likelihood decrease dramatically. The purpose of work will shift towards personal accomplishment, solving real problems, gaining reputation, mastering hard challenges, and collaborating with like-minded people.

And indeed, the SUPI creates a solid basis that allows everyone to focus on solving the real challenges that we are faced with: How do we make our lives and the world as a whole better? Everyone will have much better chances to work on his own personal development, and on creating positive change in the world around him, because worries about money will be rather unnecessary.