Universal Basic Income: A Theoretical Review, and an Exploration of a Possible Solution Based on Creation of New Wealth

Abstract

Universal Basic Income has been in the lexicon for some time now, propagated as a requirement for the projected disruption that may be caused by automation, and advances in machine learning systems, as well as the ever-rising inequality in society. Proponents often regard it as a viable solution to protect society from unrest. However, an idealist approach is not the only ingredient required to better the economic circumstances of the masses, and a Universal Basic Income not funded through creation of new wealth could also play a negative role and instigate inflationary forces, or economically, be a net-neutral rather than a net-positive. This article examines Universal Basic Income funded without creation of new wealth, its economic and financial viability, and, also, direct and indirect ways it may cause inflation or have no positive economic benefit for society. The article examines evidence relevant to Universal Basic Income, and, also, presents a potential solution for policymakers, based on creation of new wealth, that may provide the necessary financing needed to support the projected displaced workers, as their numbers increase.

Keywords: Universal Basic Income, Transfer Payments, Evaluation of UBI as a Proposition, Public Policy, Redistribution, UBI Funding, SWF Approach for UBI Funding, UBI Funding Mechanism