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Universal Basic Income and Ethical Concerns

  • Category
    Ethics
  • Published
    4th Apr, 2019
  • Universal Basic Income (UBI), first mooted by Economic Survey 2016-17, has once again become the centre of public discourse in the wake of general elections in India following the Indian National Congress (INC) party’s manifesto promising a minimum income guarantee anti-poverty programme orNyuntamAay Yojana (NYAY) scheme which seeks to cover 20% of the population.
  • Union government also started a targeted Direct Benefits Transfer (DBT) scheme for farmers, PM-KISAN (KisanSammanNidhi), in Union Budget 2019-20. Other similar schemes are KALIA of Orissa government and RythuBandhu scheme of Telangana government.

Issue

Context:

  • Universal Basic Income (UBI), first mooted by Economic Survey 2016-17, has once again become the centre of public discourse in the wake of general elections in India following the Indian National Congress (INC) party’s manifesto promising a minimum income guarantee anti-poverty programme orNyuntamAay Yojana (NYAY) scheme which seeks to cover 20% of the population.
  • Union government also started a targeted Direct Benefits Transfer (DBT) scheme for farmers, PM-KISAN (KisanSammanNidhi), in Union Budget 2019-20. Other similar schemes are KALIA of Orissa government and RythuBandhu scheme of Telangana government.

About

What is Universal Basic Income?

UBI is a universal income grant available to every citizen without conditions like means test or work requirement. It would alleviate abject poverty and redistribute wealth. The universal basic income is a more cost-efficient replacement for current welfare systems as a method of alleviating poverty. It also provides a greater level of autonomy to the recipients to spend government issued money as per their own needs and requirements, which cannot be found in current welfare systems where money is issued paternalistically and restrictively.

 Need of Basic Income:

  • UBI is a form of social security which will help in eliminating abject poverty and containing as well as reducing inequalities.
  • It provides dignity to the individuals along with security as it provides them autonomy and agency to decide their needs & requirement and spend money accordingly.
  • It seeks to reduce paternalistic state’s role in people’s lives.
  • UBI helps in tackling the problem of leakage and pilferage in other welfare programmes as it’s universal and more efficient.
  • UBI is seen as imperative by the technology sector which sees it as a solution to endemic unemployment as the human labour gets substituted by technology and wages along with purchasing power gets reduced in the wake of technologies like Artificial Intelligence.

Analysis

Ethical Concerns of UBI:

  1. Utilitarian Analysis:

In utilitarianism, the principle of greatest happiness guides the actions. Utility also refers to the pursuit of happiness and the mitigation of unhappiness. UBI fosters social solidarity by alleviating poverty through the redistribution of wealth and, thus, reduces inequality. Although this might violate individual rights as money is redistributed from the rich to the poor. However, utilitarianism permits infringing the rights of a few if the act yields happiness for the majority. UBI, thus, becomes morally permissible on the grounds it maximizes utility.

  1. Consequentialist Analysis:

Consequentialism is closely associated with utilitarianism, as both determine an action’s moral value based on the consequences it yields. A consequence in the sense of consequentialism refers to the action and the outcome brought about by this action. UBI seeks to provide basic income to the population, provides them a basic and decent standard of living, and reduces abject poverty. Thus, consequentialist ethics favour a basic guaranteed income.

  1. Categorical Imperative or Kantian Ethics:

The Categorical Imperative (CI) prescribes a standard of rationality to which all moral and rational agents are held. It places significance on the duty aspect rather than the consequences of the actions. The concept of duty is essential to moral decision-making as it provides a clear conception of the obligations as to ‘what ought to be done’. Kantian ethics also dictates human beings should be treated as ‘ends in themselves’. The moral permissibility of a UBI is through our duties of beneficence i.e. helping others, and duties of perfection i.e. cultivating one’s talents, and UBI fulfils both of these duties independently.

  1. Fiscal Imperatives:

One of the major issues with UBI is the inability of countries to fund UBI. A UBI may be economically infeasible if countries cannot afford the program without high taxation rates. The latter may consequently act as disincentives to work and entrepreneurship. It, specially, is an area of concern for India as the subsidy burden of Indian economy is itself very high given the various subsidies like fertilizer subsidy, food subsidy, and other social programmes.

  1. Increased Role of Private Sector:

One of the fundamental ideas behind UBI is that when everybody has a guaranteed income, market forces are allowed full play without being circumscribed by market-distorting social schemes. But private sector pricing of some essential sectors might lead to rent-seeking as private sector runs on the principle of profit-making primarily. Examples of higher education and private schools in India show that private players in social sector are not desirable in the present status of Indian socio-economy.

  1. Other ethical issues:

Aconcern with increased autonomy that comes with UBI is the elimination of the incentive to work or to exceed job expectations. This may lead to one type of moral hazard in the population. Also, the UBI does not really tackle the economy’s structural problems that keep people poor or generate vast inequalities in economy. Countries like Switzerland have rejected the idea of UBI because of these reasons.

Conclusion:

The utilitarian and consequentialist approach along with Kantian ethics warrant the granting of basic income to individuals as a distinctive legal rights status, although their methods of arriving at the conclusion that a UBI is morally permissible are different.

The universal basic income has conceivably gained political traction chiefly because of its appealing potential to address the shortcomings of the current welfare state, but the questions of where funds for the program come from, who benefits and who loses are still being answered in experiments as no country has fully functional policy of UBI as yet.

It is challenging to assess the moral permissibility of an action where the consequences have yet to materialize, forcing us to apply foreseeable consequences that may differ considerably from actual consequences.However,UBI will be very difficult to repeal once introduced and so the government must take caution and deliberate over the issue before taking the plunge due to its populist attraction.

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