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Can UBI Survive Financialization?

If a universal basic income is used primarily to service debt and secure new loans, it cannot fulfill its promise as a revolutionary pathway to freedom from the whip of the market. On the contrary, such a financialized UBI would simply leave citizens more indebted and dependent on rentier capital.

RIO DE JANEIRO – Universal basic income is hardly a new concept, but it has taken on a new life in recent years. Voices on both the left and the right now argue that a UBI could be the key to addressing major social and structural problems, including technological unemployment and underemployment, extreme poverty, welfare traps, and hidden disincentives to work. By freeing people from the shackles of low-quality jobs and endless bureaucracy, the logic goes, a UBI would enable them to reach their full potential.

It is certainly an appealing argument, especially at a time of protracted wage stagnation, persistent poverty, rising inequality, and low economic growth. But, so far, the only versions of UBI that have been tested – in places like Canada, Finland, Kenya, and the Netherlands – are essentially just new modalities of unemployment and welfare benefits. These experiments contradict the fundamental logic of a UBI.

To be sure, incremental approaches to UBI can drive forward welfare reform. In particular, by reducing or eliminating the need for means testing and other forms of conditionality, these so-called UBI-based schemes can alleviate bureaucratic burdens and the associated administrative costs, while delivering a new income stream to the poor.