Y Combinator, one of the largest venture capital firms in the US, plans to conduct an experiment to find out what happens when you give people free money.
The Business Insider reports:
YC will select 3,000 people across two states and divide them into two groups. The first group will include 1,000 people who will receive $1,000 a month for up to five years. The second group of 2,000 people — which the study will consider its control group — will receive $50 a month.
If this sounds to you like some social experiment to test the feasibility of “universal basic income,” (UBI) then you’d be right.
UBI is a form of income redistribution that guarantees every person a certain level of income throughout their lifetime, simply for being alive.
In addition to Y Combinator, governments have also rolled out plans to implement small-scale UBI programs. Ontario will launch a UBI program in three cities with 4,000 recipients participating, while Finland has had a UBI program up and running for several months already with 2,000 citizens receiving an unconditional income.
Switzerland, however, has rejected the UBI (so far). In June of 2016 voters overwhelmingly voted against the proposal with 77% backing it and 23% in favour of it.
Only time will tell if a UBI is the way to go to alleviate poverty and widespread unemployment brought on by ever increasing automation (and possibly artificial intelligence in the near future).
The benefits extolled by the supporters of UBI are solid and have merit: decrease in stress, elimination of chronic poverty, increased mental and physical health, an incentive for people to take entrepreneurial risks due to a financial safety net providing relief, and an overall increase in happiness and sense of fairness and social justice among the populace.
But what happens if things go too far and people become slothful and disengaged from productive and meaningful work?
Psychology professor and clinical psychologist Jordan B. Peterson has said he thinks humans can be thought of as “beasts of burden” that need something to work for, strive for, and test their limits.
Just like muscles grow stronger from the stress imposed on them from weight training, so do humans as a whole, when they are engaged in productive and challenging work that give meaning and fulfillment to their lives.
This is why it’s critical to have a set of routines and habits in place if you lose your job. You don’t want idleness to set in and rot your mind, body, and soul.
There is a subset of the population that could be affected negatively if a UBI is instituted on a large scale. These are people that would have no idea what to do with their lives if they subsisted on UBI payments. They are also the kind of people that would succumb to destructive lifestyles.
Think about what most people you know do outside of work. Then think about what would happen if they suddenly didn’t have to work. Would their lives improve and would they find a grand purpose, or will they atrophy and fade away into nothing?
Like welfare, UBI may prove to be a double-edged sword – a blessing to some but a curse for others.