Universal Basic Income: What about the Geopolitical Implications?

I’m sure a most of you have heard those three words before, and thus know what universal basic income, or UBI, indicates at its core. It is a social security system that provides each and every individual a guaranteed source of income from the state. Although theorists over time have come up with distinctively different grand visions for the basic income, the same essentials are always there. Only the details vary from one scholar to another. However, we often limit ourselves to the discussion around these details and ideologies, and thus only analyze the socio-economic implications and rarely mention how such a revolutionary concept could affect the relations between states in the international system, or how states could use UBI as an instrument against one another.

If one state implements the concept ahead of others, an imbalance is set to be established that could disrupt regular, free movement of people and instigate a large movement of populations, all of whom are seeking for the free universal coverage of basic expenses. For example, if Germany implements such a social security system, how could the German state handle the extra pressure from all the people who are hoping to get access to the universal benefit? Could the state survive or would it have to fight against it values, possibly limit the immigration of people to its territory? Can basic income exist in the world of free movement of goods, services, and people? Moreover, even if the benefit is tied to citizenship, should all recipients also be required to reside in Germany?

Therefore, the affair soon turns into a geopolitical discussion in which states are required to cooperate in the creation of the system, possibly create a truly universal system that covers not only all the people within one state, but within an entire continent, or else the basic income would simply be too overwhelming revolution to undertake in the first place. Is there willingness or capabilities e.g. in the EU to create such a coordinated system? At this moment in time, considering the vast disparity between the member states in economic wealth, and the sheer political disagreements that have unraveled the Union to its knees, one would have to admit that such a system seems highly unlikely in the contemporary political climate.

Another geopolitical aspect that should be considered is the general contention between in nation-states in the economic domain. EU states often contest against one another to produce the best products at the best price. How could UBI disrupt this affair? In the neoliberal context, basic income is often not considered more as a guarantee for basic well-being of citizens but rather as a tool that allows the state to discontinue the century-old tradition of collective bargaining in the labor market. Essentially, UBI is a state subsidy for companies, and as it provides employees with basic economic safety net, employers can afford to offer lower wages for their labor.

Theoretically, replacing the contemporary – and expensive system of social security – with slightly more expensive but far more evenly distributed system, taxes would only rise marginally but the price of labor, especially at the service sector, could contract substantially. Therefore, states with UBI in place have an advantage in the international market as non-UBI states cannot simply provide their citizens the same welfare and cheap labor costs simultaneously. Competition in labor market economics could be what instigates the UBI revolution, rather than automation, although the latter will undeniably also play a substantial role in the process.

Could competition therefore lead to cooperation? Provided that the economic benefits of this type of UBI, states one after another could opt to implement the system according to their own national context. However, several obstacles still remain. The theory proposed above only applies to UBI that is extremely simplified and relatively low in value, a policy which many would call right-wing economics. The model would not be nearly as extensive as what some of the contemporary European welfare system are, and this is a worry for many on the left of the political spectrum. The contention between left and the right, which both agree on the concept but not on the details, will undoubtedly remain a defining characteristic around UBI for years to come. Moreover, states have to be sure about the system is functional before revolutionizing their whole society at once. This requires previous experience and trials with UBI. Unfortunately, such trials remain scarce, and efforts to test out UBI, such as the one in Finland, are often flawed according academics specialized on the topic as they do not fully examine the wider political and economic consequences for the citizens and the society.

The topic itself should attract more broad discussion as the system is quite simply the most revolutionary concept human societies have ever managed to create. Most articles around UBI focus on automation, and do not seem to appreciate the wider consequences of the system, such as on the contention between nation-states, or the necessity for collaboration in the implementation of such a scheme, or the implications for both immigration of foreigners and the emigration of citizens who might or might not be entitled to receive the benefit.

I might return to debate this topic in the future.

The writer is a political risk analyst and new member to the STEEM community. I hope to create short and highly critical content related to issues in modern media, geopolitics, international security, international economics and technology on a regular basis. All content will be available for use and distribution to everyone without a need for permission.