Every once in a while, an idea surfaces that catches the imagination of the public: academics, policy wonks, economists, entrepreneurs and even some governments.
Universal Basic Income (UBI) is one of those ideas that, after plenty of debate, has predictably, divided opinion into two opposing camps: Those who think a universal or unconditional basic income would result in disaster, as humans cannot be trusted. The other camp feels that a UBI would be liberating, allowing people to concentrate on the important things in life, not just earning a living.
Rutger Bregman is a writer, widely acclaimed for his book, ‘Utopia for Realists’. In it, he champions universal basic income and a 15 hour work week. So we went to the Netherlands to ask him if the time for these ideas has arrived.
Utopias work both ways
Bregman told Renegade Inc. humanity has made incredible progress over the past 200 years: We’re richer, we are wealthier, we are healthier than ever and that is something that should be celebrated.
“If you travelled back in time to the 17th century, kidnapped someone and used a time machine to bring them back again, he or she would say that this is Utopia,” said Bregman. “You’ve done it, you know? You’ve made utopia real.
“I think that the big problem of today is that we don’t know where to go next. We don’t have a big utopian vision of how we could radically improve our lives in the 21st century.”
The author says the first step is acknowledging that every milestone of civilisation, the end of slavery, democracy, equal rights for men and women, the welfare state as it exists today: these were all once utopian fantasies.
“Utopias become real all the time,” he says. “But it’s also important to remember that it works both ways.
“Something like Brexit was completely unimaginable, 10-15 years ago. Think about something like the rise of Donald Trump. We would laugh about an idea like that just five years ago. It happens. It works both ways.”
Real change always comes from the fringe
Bregman says that real change never comes from the centre, it always comes from the fringes, “where the crazy people are”, and begins moving ever closer to the centre.
While many journalists focus on the politicians in the centre, Bregman says that’s not an area he’s really interested in, “because that’s not where the real action is”.
“It starts with the people who are first dismissed as unreasonable lunatics,” he says. “They’re unrealistic. Their plans are unaffordable. That’s where it starts. So especially if you’re young and people call you ‘unrealistic,’ you should be happy because that’s exactly what you should be.”
The West often equates realism with pessimism. Our culture says that the idea most people are selfish is a realistic take on humanity. But Bregman says it’s completely the other way around.
“If you look at recent scientific evidence – from anthropology, biology, from even, new developments in economics – it turns out that most people are pretty nice,” he says. “Most people want to make something of their lives. Most people have ambitions, are creative, are altruistic.
“There are very deep, evolutionary roots for all this behaviour. It matters what we assume in each other.
“If we assume that most people are creative, are altruistic or are full of empathy: that’s what we get. But what do we do? We create a welfare state, we create a democracy that is based on the idea that most people are selfish. Well guess what happens? That’s what you get out of people if you do that.”
The system assumes the worst in all of us
Bregman says the welfare state operates under our ‘fundamental’ assumption that people can’t be trusted.
“This is the case in Holland,” he says. “It’s the case in the UK. If you want to get some support from the government, you have to prove all over again that you’re depressed enough, that you’re sick enough, that you are a really hopeless case that won’t get anything done in your life.
“You have to fill in thousands of forms, and go to interviews with dozens of government officials and then finally at the end of the road when you are really depressed, maybe they’ll give you a little bit of support. And then we’re surprised that people become depressed from that.
“It’s a system that produces dependency. It’s a system that produces depression. Because that’s what we assume in other people.
“Now what I would say is, let’s turn it completely around. What if we say to everyone – especially the poor and the working poor – what if we say, well ‘I think you’ve got great ideas. You just lacked the means. Here are the means. I’m very curious to see what you’ll come up with’. That’s basic income. It’s very simple.”
The Basic Income experiment:
Bregman says the most common pushback he receives from pessimists is that they can be trusted to spend the money wisely, but others can’t be.
“The first thing people say is, if you would give me a basic income, that would be great but if you give other people a basic income, they’ll probably waste it on drugs, alcohol, Netflix. It’s human nature. People people just want to be lazy,” he says.
“I always respond with, let’s just look at the scientific evidence. We can have an argument for hours about human nature and philosophy and blah, blah, blah, but we’ve got decades of scientific evidence, researching exactly this question.
“It turns out, every single time we experiment with basic income, it works. People are not lazy.
“We’ve got huge experiments from Canada and the US in the 1970s. We’ve got dozens of cash transfer programs around the world. And every single time it turns out the reductions in total amount of work hours, is mostly one, maybe two, maybe three percent. That’s it. And this is all compensated by people doing more volunteer work.”
Let’s look at the refugee situation in Europe. If people are selfish, competitive, nasty, why did we get one of the biggest humanitarian responses since the Second War in Europe?
During the 2015 ‘refugee crisis’, Bregman recalled that there were so many volunteers signing up to refugee programs, they had people sitting on waiting lists for months, his sister among them.
Turns out there were too many volunteers. All while the newspapers inaccurately reported the crisis as a disaster, that many citizens were angry and how will we ever cope?
“One month later I calculated that there were two volunteers for every refugee coming in,” said Bregman. “So this was the big story but it was hardly reported in the media because the news is always about what’s going wrong.
“If you watch a lot of the news, at the end of the day you know exactly how the world does not work. Because you have only heard about these exceptions.”
Living in an inverse welfare state
This brings us to the cognitive dissonance. The stories we tell ourselves about the world, and the story that is actually happening, are often two different things. Often we get the story we tell ourselves about the world from the news, and they have their own agenda, an agenda which often doesn’t match up to the human agenda.
How do you begin to heal this cognitive dissonance? The things we tell ourselves about how the economy works and how it actually works are also two different things.
The result is we have come to live in what Bregman dubs an ‘inverse welfare state’.
“The story that we are told is that there are a lot of very productive, ambitious people on the top, and they earn a lot of money, but they also pay a lot of taxes and we should be grateful for them,” says Bregman, because ultimately they’re wealth creators.
“But if you look at what’s really happening in the economy, for example, when you just ask people: ‘Do you think your job is useful or not?’, you’ll find out that many of these so-called wealth creators think their job is actually bullshit.”
The author says there is an almost perfect correlation, that the more money you earn, the more likely it is you think that your own job doesn’t add much value.
“I’m not talking about the teachers or the garbage collector or the nurses,” says Bregman. “I’m talking about consultants, corporate lawyers, bankers: These are the people, who often tend to think that their job doesn’t add much value.”
Three-to-four centuries ago, most wealth came from the land. Those who owned the land were rich and could just sit back and relax because everyone would be paying them rent. Nowadays real estate and the land is still an important source of wealth and inequality, but now there are all sorts of ways to earn rent. If you own money, if you own technologies, if you own knowledge etc, you can rentier on those things as well.
“But the crazy thing is that we often use the language of work, and creativity, and wealth-creating to describe what is, in fact, just sitting back and doing nothing and just collecting rents,” says Bregman.
“The most pernicious example of it is the Internet economy: Google, Facebook, Amazon, these are all rentier companies. What they basically do is they let us pay to access our content that we provide to them for free. Google and Facebook, they get about 60-70% of all advertising revenue these days because they have huge monopoly power.”
Statistics show that inequality is obviously growing. More-and-more the rich get their income out of capital, out of owning what they have. But even a lot of people who seem like they earn their money with working are actually just earning their money collecting these rents. The best example of this is the financial sector.
“The financial sector would be unimaginable without the housing market, but if you look at recent reports from the International Monetary Fund, even they write that when a financial sector becomes too big, it becomes bigger than 100% of GDP, it starts gobbling up wealth,” says Bregman. “Starts destroying wealth instead of creating it. This is the case in almost every developed country.”
Wall Street is well above 200%. Holland is 278%. The author says that more than half of all bankers should be earning a negative salary because they destroy more wealth than they create.
“There are a lot of people on the right who like to talk about meritocracy,” he says. “I think that’s a great idea.
If we lived in a real meritocracy, the nurses, the garbage collectors, the teachers – would earn the most – and the bankers, the consultants, and the corporate lawyers would have to pay for doing their work because they destroy more wealth than they create.”
What the left gets wrong
Incidentally, this is also what’s wrong with the approach taken by The Left.
“They say ‘oh well, the poor. Oh, the poor. We should help them, and we should we pity them. We should give them money because they can’t take care of themselves,'” says Bregman.
“It’s completely the other way around. We are dependant on the lower-middle classes.
If they stopped working, it would be a disaster. If all the garbage collectors stop working it would be a disaster.
“I found only one example throughout history where the bankers went on strike, in Ireland 1970. The strike lasted for six months and nothing happened.”
And here enlies the point: unless we understand this, we will continue to be caught in this terrible Mexican standoff.
Tune into the full episode above to find out how what happens when the way we talk about the world and the economy correlates to how they really operate.