UBI Utopia or Deathbed of Meritocracy?

Nothing highlighted the shortcomings of the welfare systems of many countries like the COVID-19 pandemic. Coupled with the increasing use of job automation and declining population growth, it created a strain on welfare states' schemes, with many fearing the situation would lead to a rise in social violence due to unemployment and inequality.

To prevent a worst-case scenario, many nations have today adopted Universal Basic Income (UBI) as a welfare scheme where each citizen receives an unconditional fixed income from the state. Spain was one of the first countries to roll out a UBI scheme during COVID-19, however it was Finland who first ran an EU UBI experiment between 2017 and 2018, when two thousand unemployed people received it instead of traditional unemployment benefits.

In 2040, UBI schemes are commonplace and are funded by higher (but equal income) taxes on all. A global taxation standard now protects against tax evasion through overseas tax havens, and corporate tax rates are standardized.

Not surprisingly, there's been a backlash against standard taxation on all personal income instead of progressive taxation. Still, proponents of the scheme say there's an inherent sense of fairness in an equal tax that allows equal basic income to all. Plus, executive and capital gains bonus schemes are regulated and are more highly taxed than the basic salary to reduce inequality.

A common criticism of UBI by some academics and professionals was that unemployment would become a choice, and meritocracy would suffer. Opponents of this however, claimed the overall societal benefits of UBI far outweighed the few unmotivated individuals who likely wouldn't thrive in a non-UBI environment anyway.

Today, it appears clear that those who support UBI schemes are correct. UBI has not proven to disincentivize people to work. On the contrary, when someone no longer needs to work to merely survive, it seems their innovative and creative potential is unleashed, sparking a revival in entrepreneurship and art. We are now witnessing a sort of artistic renaissance not unlike the one in 15th-century Florence.

In recent years, there's been a voluminous artistic production of digital art, music, and film, and content creation is recognized as a true art form. Digital mixed with creative entrepreneurial activities and cultural output have become enormous economic engines that drive growth and prosperity --all because UBI allows people to live with the creative freedom and space to undertake activities they are passionate about and interested in.

In the 2020s there were two significant trends that emerged which spurred the rapid adoption of UBI: (1) experts feared a stagflation crisis due to rapidly rising global inflation and slowing economic growth; and (2) post-pandemic UBI projections became more realistic.

By 2030, large-scale UBI plans were in place, as AI led to job reductions and increased unemployment, although it also created excess wealth. Many cities and governments began with UBI for children, offering working parents more stability and security at home.

Those who said UBI would lead to stagflation because the increase in income allotments would be known ahead of time, and producers could simply raise prices to “soak them up” have also had their fears allayed. “Where will governments find the money?” is no longer a valid objection to UBI, and fears it would trigger inflation have also proven unfounded. Today, experts agree UBI can and is serving fiscal policy goals while providing a vital safety net for citizens everywhere.

Today, one need only look around to see that an overall cultural renaissance movement is underway. People receiving a basic income are devoting time to pursuits that interest them, with self-employment and entrepreneurship becoming the primary means of employment and economic output. Not surprisingly, workplace stress levels have considerably declined, as unemployment is no longer something to be feared but an opportunity for innovation and well-being.

As to fears UBI would usher in the death of meritocracy, the opposite appears to be true. SMEs and community-based businesses and cooperatives are thriving in a world no longer dominated by huge capitalist conglomerates. As income inequality is reduced, people's physical and mental health are improved.

The debate is no longer about whether UBI is needed but which form of UBI will prove the most effective.