The Covid-19 pandemic and its associated economic disaster has functioned as “an x-ray, revealing fractures in the fragile skeleton of the societies we have built.” Society is, in many respects, at a breaking point now and the pandemic only reminds us that climate change may bring even worse disasters sooner rather than later. This situation demands critical and sustained work to build a more resilient society and a more humane future. By redesigning and reimagining the social contract, recommitting to the common good rather than exclusively pursuing individual consumption and pleasures, and more equally distributing the goods of our economy and our earth, we can build a more humane future for our children and their children to inherit.
One strategy that has been widely proposed for addressing both the pandemic and the economic pain experienced by billions as a result of the global economic contraction, is the widespread adoption of a Universal Basic Income (UBI). UBI is meant to provide a regular, no-strings attached, government supported income to citizens. Several experiments are now being run to determine the efficacy of this approach to addressing joblessness, inequality, and poverty. And, right now the evidence for success is mixed. One Finnish UBI experiment found that the recipients did not seek new work, but their well-being did improve. The costs are high. Democratic Presidential candidate Andrew Yang’s plan would exceed the entire cost of the US budget, which is perhaps a bit unrealistic.
If enacted early in the pandemic, a UBI would have funded people to stay home when sick, slowing the spread of the virus, thus saving billions in lost GDP, lives, and healthcare provision.
While there are certainly virtues to Universal Basic Income and, undoubtedly, there are program designs that would go a long way towards providing cures for joblessness, inequality, poverty, and unhappiness without disincentivizing work, there is a more expansive framework that would incorporate some form of UBI while going much further to build a society in which ownership is more widely and equitably distributed. Universal Basic Income is simply a first step, but we shouldn’t allow it to distract from a better longer-term goal of building Universal Basic Assets.
To build the new social contract and heal the fractures in our society, we can’t rely exclusively on an income strategy; we need an ownership strategy. The new social contract must also “address more equal access to primary assets that generate better economic and social outcomes.”
The problem with our economy is not simply that there are far too many people who struggle to meet their basic needs, much less save for the future or successfully handle an unexpected expense. The problem is that such incredible gaps exist between the rich and the poor. And, of course, these gaps manifest in access to future opportunities. As UN Secretary-General António Guterres said recently “… while we are all floating on the same sea, it’s clear that some are in superyachts while others are clinging to the floating debris.”
Broader access to assets and a greater share in the goods of the economy, the earth, and our public life are necessary to close this gap. We need a wider distribution and ownership of assets. As Thomas Piketty (quoted by Marina Gorbis) has documented “it’s impossible for a person simply earning a salary to see the same economic returns as investors and capital owners secure through their assets.”
The Institute for the Future manifesto on Universal Basic Assets characterizes three types of assets: public, private, and open. While we need to expand access to traditional assets like land and money, we also need to expand access (at least in the United States) to public assets because this lack of access to public assets significantly impacts long-term socio-economic outcomes. These public assets include good schools, transportation, and healthcare, which are now unequally accessible and underlie the reasons why so many of our youngest children do not have to start in life that every child deserves and which the science of human development shows us is essential to their lifelong flourishing. Countries (e.g. the Nordics and Canada) with broad access to high-quality public assets (like good schools and healthcare) are also the countries in which the neighborhood of your birth does not determine your life’s outcomes.
The 1936 Rural Electrification Act is an example of public asset building through public-private partnership that has substantially advanced the interests and development of rural America.
Prior to the 1930s, the scattered population of rural America largely lacked access to electricity. The high cost of building the required infrastructure deterred most private companies from investing in the electrification of rural communities. Great swaths of the country were left in the dark and denied the economic benefits that came with electricity. This existing market failure was only exacerbated by the onset of the Great Depression in 1929.
The REA brought electricity to rural America. It made loans for large-scale infrastructure such as power plants and lines, and connected houses and farms to them. This is the origin of many rural electric cooperatives, now a standard feature of rural life. These not-for-profit, consumer-owned electric cooperatives are governed by their members — the citizens who receive electricity from the cooperative — and they hold public assets from which all may benefit. It is impossible to imagine any sort of rural economic development during the second half of the 20th century without these cooperatively-owned and governed public assets from which we all benefit and upon which we can all build our shared future.
Income is obviously important, and the parents of young children need income, but the task before isn’t simply one of alleviating poverty, supporting those who are jobless, and ensuring that the sick do not feel compelled to go to work. The task is much bigger, and deserves a much bigger strategy that can incorporate Universal Basic Income without being limited to it. We must narrow the gaps between the rich and the poor. In a democratic and free society, the poor are as deserving of a stake in our economy and our social life as anyone else. As the recent homegoing celebrations for the late Rep. John Lewis reminded us, democracy is not just what we do on election day, but it is a guiding ethos for any society that wishes to govern itself, even in its economic and social life. Broader ownership of all our assets, will help us achieve the dream of a just society and a fair prosperity for the people, by the people.