Time For UBI: Single Bailout Insufficient To Weather Coronavirus Storm — Can Blockchain Technology Help?

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Money for nothing: Blockchain technology can enable UBI
Money for nothing: Blockchain technology can enable UBI

Blockchain Technology Could Be The Catalyst To Enable Universal Basic Income At Scale

During this unprecedented time of extreme global trauma, in a world masked and locked down because of coronavirus, it is natural for us to seek out salving signs of hope for a brighter tomorrow, the green shoots of a new world. And blockchain technology might illuminate a planet in which universal basic income is critical.

How will life differ in the AC (after coronavirus) era? The COVID-19 pandemic has almost overnight made us all — young and old, rich and poor — reassess what is truly valuable in our lives. As a result, most of us have become kinder, more respectful of our mortality and grateful for life and liberty.

It has also forced governments to rethink their financial, economic, and labour policies, as unemployment rises to unprecedented rates, and many people find themselves suddenly facing personal financial collapse and economic ruin.

Several governments have responded rapidly and radically, with purse strings yanked open for one-off payments to stricken businesses and individuals. While expedited policy-making and relief packages are welcome, it is insufficient to make real changes that ensure greater economic stability in the long term.

Spain must be applauded for taking the lead in seeking to roll out a universal basic income (UBI) mechanism “as soon as possible”, Bloomberg reported on April 5. Additionally, politicians in Australia and New Zealand are also discussing the feasibility of UBI. Other nations will follow, surely.

As General António Guterres, the United Nations Secretary-General, posited: the outbreak is the biggest global challenge since the Second World War, and it could, he warned, trigger a recession “that probably has no parallel in the recent past”.

Those in authority now need to go further to shore up people’s defences ahead of the looming economic crash. A bailout, via a single $1,200 grant in America, for example, is woefully insufficient when experts are now predicting millions of job losses in the next six months. New data, analysed by the Guardian, suggests that for an average individual earning $75,000 (c. £60,000) a year with average monthly expenses totalling $2,876, even after the stipend there are $1,678 in outstanding bills remaining to be paid.

People are already living paycheck to paycheck — they don’t have the savings to bolster themselves, nevermind their families. The question, therefore, becomes more about how to break the paycheck-to-paycheck model and promote policies that enable people to save money.

By providing unconditional income in perpetuity people would be able to rely on a certain amount of regular income to help cover all their daily expenses, and have more opportunities to develop their own personal and household security. Ultimately, these are the structural changes that would lead us towards a more resilient global economy to weather future storms. Here, then, is a unique opportunity to press the reset button on traditional systems, and future-proof humanity.

A Brighter Tomorrow With UBI And Blockchain Technology?

“Historically, pandemics have forced humans to break with the past and imagine their world anew,” wrote Indian novelist Arundhati Roy, author of Man Booker-Prize-winning The God of Small Things, in the Financial Times Weekend on April 4. “This one is no different.

“It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.”

Also in the latest FT Weekend, an editorial, titled Virus lays bare the frailty of the social contract, read thus: “Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy.

“They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”

Indeed, UBI — a model for providing every person with an unconditional sum of money, regardless of employment status, income or resources — is becoming an increasingly obvious solution to the economic frailties that many of us live with, even in advanced economies.

Leaders across the political divide are championing UBI, and as the coronavirus fallout forecasts darken, the prospect of a new financial mechanism that widens the safety net for those who need it most offers brightness amid the gloom. Although we focus on creating frameworks that focus on delivering UBI in a non-government administered model at GoodDollar, it is encouraging to see basic income policy becoming an accepted and valid part of policy proposals all around the globe.

“The pandemic is making it even more imperative that we introduce basic income in every part of the world,” says Guy Standing, a professor of Development Studies at the School of Oriental and African Studies in London, and Co-Founder of the Basic Income Earth Network (BIEN), the leading global group in this field. On April 2, his thoughts were published by Wired.

Looming Economic Crisis — We Need To Act Now

In the interview, Professor Standing notes that while the coronavirus crisis is comparable to the Spanish flu — which killed up to 50 million people between 1918 and 1920 — there is one crucial difference between the two pandemics. “What was extraordinary about [the Spanish flu] is that there was no economic crisis immediately afterwards,” he says. “By contrast, the coronavirus pandemic is going to be associated with an incredible economic crisis that spreads across the world. And it’s this combination — the pandemic and the economic crisis — that is going to cause many more people to die or have lives of misery.”

He continues: “Since globalisation began the economic system of the world has become increasingly fragile, fragmented, and dangerously unbalanced. In addition, we have the biggest crisis of all, and that is the ecological crisis, the fear of extinction, the realisation that we have to change our growth model, that we have to have more sustainable respect for the environment and the way we live.

“It will become a legitimate part of our social fabric very quickly. And as it does so, I think you will find people having a greater sense of freedom, a greater sense of community.”

Professor Standing can undoubtedly spot the green shoots of recovery and regrowth. “[People] will want to shift their lifestyles to spending more time doing work that is not labour, doing care work, doing community work, doing voluntary work, doing ecological work, doing the sort of activities that don’t eat up the resources and eat up the planet and cause extinction,” he says, “but rather actually help to reproduce our communities, our sense of localism and our sense of slowing down — and that I think is a very healthy prospect.

“Because then people will feel they’re gaining control of their lives, and in that process I believe new forms of social solidarity, new forms of collective action will spring up, and I think the potential for that is a wonderful liberation, a wonderful return to the values of the enlightenment, the values of community, the values of creativity, and leisure, real leisure in the sense of the ancient Greeks looking after our culture, looking after the values, and reproducing the ethics of empathy and compassion.”

Professor Standing’s view on a world with greater economic security that enables us to pursue lives of greater creativity and leisure may sound appealing. However, the question remains: how do we pay for this? Even former Democratic presidential candidate Andrew Yang’s proposal of $1,000 per American, per month, would cost the Federal Government over $2.8 trillion a year — nearly $1 trillion more than the relief package approved by the US Congress.

As UBI increases in popularity and becomes a more legitimate policy proposal, we also believe it is the right time to explore new frameworks for implementation, including models that are sustainable and non-governmental. Blockchain technology can help, we believe.

At GoodDollar, we are working towards delivering a global UBI solution by embracing blockchain technology and token design. As the horrifying situation across the globe, with months of uncertainty stretching ahead, makes clear, there is a desperate need for UBI. Together we can build a better future.

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