Finland has a huge economic problem. Unemployment is high and growth is low. The country earned the accolade of being Europe’s worst-performing economy in the third quarter of 2015, which is a feat considering the sluggish growth across the EU in recent years. As part of its search for solutions, Finland is toying with the idea of giving thousands of its citizens cash payments every month through what’s called a universal basic income scheme. Universal basic income is exactly what it sounds like: The government gives everyone a certain amount of money — enough to survive, but not much more. While UBI has never been widely implemented, the theory has proponents among both liberals and conservatives, and there is an ongoing experiment in the Dutch city of Utrecht.
One of the greatest challenges faced by mankind is determining what sort of responsibility we should be held to have toward our fellow man. Ask an American Conservative, and what you’ll probably hear is some form of “I got mine, they can damned well get their own”- dog eat dog capitalism devoid of compassion or a sense community. The primacy of the individual over the interests of the collective.
Ask an American Liberal like myself, and what you’ll probably hear is a riff on the moral imperative that is the Social Contract, the idea that we’re all in this together with a responsibility to look out for one another. The public good outweighs the interests of the individual.
Scandivanian socioeconomic systems have struggled to create a system that doesn’t look like either of those two very American attitudes, but that addresses the perceived reality that attending to the interests and need of the individual IS the public good. What most American Conservatives deride as “socialist” economies, with their robust welfare and public works systems (and the accompanying higher personal tax burden) is really about a people accepting communal responsibility and trying to find the sweet spot between balancing the needs of the individual and that of the collective. Scandinavian citizens have for years willingly accepted the tradeoffs that go along with paying higher taxes that pay for a greater range of social services.
Finland ginds itself toying with a very new and different idea. The government there is mulling a proposal that would guarantee every Finnish citizen a basic minimum income. Universal minimum income is a relatively new idea, but there’s some solid economics behind it that can argue for its efficacy. Once one begins to examine the idea, it often raises more questions than answers. For instance, WHAT should a basic minimum income consist of? Who would be eligible for it? How would it be dispersed? Would it create dependence on government largesse? How can a socioeconomic system that hands money to its citizens hope to foster and inspire innovation?
Preliminary research shows that giving people cash generally doesn’t keep them from working hard. A pilot program in India in 2010 found that people who received government payments displayed more entrepreneurial behavior than people who didn’t. The results suggest that UBI could encourage people to be more creative and take more risks because they aren’t spending all of their energy trying to pay basic expenses.
But implementing what is, in theory, a very simple idea is harder than it seems. Should very wealthy people get money? What about children? The elderly? Should people with children receive more than single people? What about those who are chronically ill or physically disabled? Further, how do you define “everyone”? All citizens? All residents?
So while Finland does seems to be seriously considering a basic income scheme, it has not settled on how to go about it. The government is giving Kela, the country’s social insurance institution, €20 billion (about $22 billion) to conduct some sort of UBI experiment between 2017 and 2019.
At its most basic, universal basic income operates on a very simple theory- people who have money spend money, thereby supporting the local economy and in turn props up the national economy. People who don’t have money are unable to purchase needed goods and services, and the people who provide them can’t sell them. As with any system, there are problems and flaws with the theory and application…and so the question becomes one of whether or not the end result will be a net gain for society.
From my perspective, what Finland is contemplating seems a fascinating experiment, as well as a significant shift in the view of the role of government. What form universal basic income will take and whether or not it will have the desired impact remains to be seen, but I think the Finnish government should be applauded for thinking outside the box. Perhaps if our own government wasn’t so committed to spending untold billions on corporate welfare and our bloated, horribly inefficient military, we might recognize the importance of valuing people over political considerations.
What American Conservatives deride as “socialism” is merely recognition that the highest and most important role of government should be caring for its people. If we weren’t so beholden to our self-important devotion to American Exceptionalism, perhaps we’d be more amenable to creating a more just and equitable social system. Then again, we’re Americans; we dictate to , not learn from, other countries.
