- Replacing existing welfare systems with a universal basic income has the potential to streamline bureaucracy, eliminate welfare traps, and reduce poverty.
- The idea is being trialled by governments across the world including Scotland, United States, Canada, and Finland. These studies contribute to a growing body of evidence on the effects of basic income on employment and poverty.
- While recently advocated by Labour’s John McDonnell, basic income has a rich intellectual heritage on the free market right. Nobel Prize winning economists such as Milton Friedman, F.A. Hayek and George Stigler have advocated replacing existing welfare systems with a negative income tax (a form of basic income).
- Automation and globalisation will deliver massive benefits for ordinary people, but they also run the risk of creating short-term mass unemployment. Existing welfare systems are ill-suited to handle the transition and mass retraining programmes rarely deliver their promise.
- There is strong evidence that unconditional cash transfers are incredibly successful at alleviating poverty in the developing world. With studies in Kenya, Namibia, India and Uganda supporting the view that simply giving cash is one of the most effective forms of development aid.
[ > Adam Smith Institute — 2018 ]