Author: Spike @ Contributor of PermaDAO

Reviewed by: Lemon @ Contributor of PermaDAO

UBI Development History: The Combination of Utopia and Fantasy

Universal Basic Income (UBI) is an economic advocacy and social trend aimed at providing a certain level of economic support to every citizen, regardless of their employment status. The emergence of this concept can be traced back to early economists and philosophers who deeply contemplated issues of social justice and wealth distribution.

In the late 18th century, philosopher Thomas Paine proposed a similar concept in his work "Common Sense," advocating for the provision of a basic income to every citizen to ensure their basic needs are met, thus achieving social fairness and justice. He advocated for equal distribution of the nation's resources and wealth to every citizen, believing that people should share in the nation's wealth rather than solely relying on earned income.

Subsequently, in the 1960s and 70s, American economists Nils Alstrup Dahl and James Tobin also put forward similar concepts. They advocated for providing all citizens with a fixed cash payment to alleviate poverty and inequality.

In the early 20th century, economist Keynes also expressed similar views. He believed that the government should stimulate the economy and promote consumption and investment by providing basic income. Keynes believed that this policy could reduce economic fluctuations and sustain society in a more stable manner.

Over time, the concept of UBI has gradually garnered more attention from scholars and social activists. Since World War II, the UBI concept has received increasing attention and research. Some countries and regions, such as Finland, Canada, and Kenya, have begun implementing pilot projects to explore the feasibility and effectiveness of UBI.

For example, the earliest implementation attempt was the "Mincome" (Manitoba Basic Annual Income Experiment) project conducted in the province of Manitoba, Canada. The project, carried out from 1974 to 1979, aimed to test the effects of providing low-income families with a basic income supplement. The research results showed that the project did help alleviate poverty and improve social welfare. However, due to changes in government and financial pressures, the project was canceled after several years.

Another early implementation attempt was the "Permanent Fund Dividend" program in the state of Alaska, USA. The program, which began in 1982, distributed a portion of Alaska's oil income to residents, providing a basic income to every eligible resident. This program is still in operation, paying out hundreds of dollars in dividends to residents annually.

In addition, the sovereign wealth funds of Gulf countries and Norway can also be considered as broad UBI practices. For example, the Norwegian sovereign wealth fund, established in 1996, currently has assets totaling $1.6 trillion. Based on 2019 prices, each Norwegian could receive an average of $180,000 in dividends.

The UBI concept was not seriously included in academic discussions as an independent economic advocacy until the 1970s. Attempts have been made in both developed and developing countries, but the overall scale is not large, and it is difficult to have a sustained impact.

• Canada: Canada was one of the first countries to introduce a UBI pilot project. In 2017, the province of Ontario implemented a pilot project called "Basic Income Pilot," providing up to 1,330 Canadian dollars per month to 4,000 low-income families.
• Finland: Finland conducted a pilot project called "Basic Income Experiment" from 2017 to 2018. The project provided 560 euros per month to 2,000 randomly selected unemployed individuals, regardless of whether they found work. The goal of the pilot project was to test the impact of UBI on employment and the welfare system. However, no clear conclusions were drawn after the project ended in 2018.
• Kenya: A project called "Basic Income Pilot" was initiated by the non-profit organization GiveDirectly in Kenya in 2016. The project began in 2016 and provided basic income to some villages in Kenya for two years. The goal of this project was to test the impact of UBI on impoverished areas and the potential effects on individuals and communities.
• United States: The city of Stockton, California launched a pilot project called the "Stockton Economic Security Project" in 2019, providing a monthly basic income of $500 to 125 families.

At this stage, it is mainly an exploration of UBI. The real implementation of effective practices will require the large-scale spread of the COVID-19 pandemic. In this context, it has given rise to actual quantitative easing by European and American governments and financial sectors. Secondly, it is the replacement of human productivity by AI.

The two complement each other. The pandemic has led to a reduction in social financing costs, with the living space of a large number of people being confined to rooms and communities, and online platforms becoming the truly available production and living space. The massive development of AI has benefited from the reduction in social financing costs and has found a real user base, entering a practical stage.

In March 2020, the Federal Reserve launched an unlimited quantitative easing policy. Subsequently, major economies such as the European Central Bank, the Bank of Japan, and the Bank of England chose to create inflation to counter the economic crisis, resulting in a massive influx of liquidity in the market. However, at the same time, the wealth gap between individuals and businesses, as well as between small and micro-enterprises and listed companies, continues to widen.

Image Caption: Trend of changes in the Federal Reserve's policy interest rates before and after the pandemic

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The Federal Reserve's asset size expanded from around $42 trillion in March 2020 to approximately $83.5 trillion in September 2021, nearly doubling. The consequence of this is the surge in inflation, which has truly ignited AI.

Here, AI refers to OpenAI, which, as its name suggests, was initially a defensive move against Google's acquisition of DeepMind, hoping to use an open-source approach to make AI serve humanity. In 2016, it received an initial investment of $1.2 million from YC. The turning point came in July 2019 when Microsoft made its first investment of $1 billion. Subsequently, in 2021, it invested again, with the largest being a massive investment of $10 billion in January 2023.

It can be understood that OpenAI is becoming increasingly closed and no longer adheres to open-source standards. However, it has truly bet on the direction of LLM, becoming the first general artificial intelligence model (AGI). However, its revenue in 2022 was only $28 million, and it is still in a continuous loss.

And Altman's another idea is Worldcoin, which aims to create a UBI economic system that is enjoyed and shared by all through the offline casting of personal identity systems, known as proof of personhood, and subsequently putting it on the blockchain. This officially binds UBI and blockchain together.

However, it is important to note that Worldcoin cannot fully guarantee the security of user data. Its distributor model, rather than a company-operated model, ensures that data collected from Worldcoin hardware scans will be deleted. However, this is essentially a "promise" rather than a technically verifiable process.

In 2023, there was a case where hackers stole the login credentials of the Worldcoin operator responsible for registering new users, allowing them to access internal information and even profit from selling user data. For example, before the launch of the Worldcoin mainnet, intermediaries purchased local people's data in Cambodia or Africa and then sold it to professional data mining studios.

Nevertheless, the widespread practice of Worldcoin has deeply popularized the concept of UBI, at least achieving widespread user participation on a global scale. People can equally participate in the value circulation of the global network. In the era of post-globalization, this can be considered a remarkable feat.

Returning to the recognition of the universality of human value, this is the greatest value orientation of UBI.

Challenges and Controversies of UBI

As a social welfare policy, UBI has some potential benefits. Firstly, UBI can provide economic security, alleviate poverty, and reduce inequality. By providing a basic income to everyone, UBI can ensure that everyone has enough to live on, reducing the number of people living in poverty. Additionally, UBI can mitigate income inequality, making society fairer.

Secondly, UBI can promote innovation and entrepreneurial spirit. With a certain level of economic security, people can pursue their dreams and entrepreneurial opportunities more freely, without worrying about financial risks. This can inspire innovation and creativity, driving social progress and development.

Lastly, UBI can simplify the social welfare system and reduce administrative costs. Traditional welfare systems are often complex and require significant administrative resources to manage and distribute. UBI, by including everyone in the same system, simplifies welfare management and reduces administrative costs.

However, as a new social welfare model, UBI also faces some challenges and controversies:

• Financial Feasibility: The implementation of UBI requires significant financial expenditure, including issues related to funding sources and distribution. Some are concerned that UBI could lead to fiscal deficits and inflation, as funds need to be transferred from other social welfare programs to support UBI.
• Work Incentives: Supporters of UBI believe that providing everyone with a basic income can improve social equity and people's quality of life. However, some are concerned that UBI could weaken people's work incentives, leading to more people relying on welfare and being unwilling to work.
• Inequality Issues: The implementation of UBI may lead to wealth and income inequality. Some are concerned that UBI could provide more income to the wealthy while offering relatively less help to the poor. Additionally, UBI may not address other social issues such as inequality in education and healthcare resources.
• Social Impact: The implementation of UBI may have profound effects on society. Some are concerned that UBI could lead to social unrest and changes in people's attitudes towards work. Additionally, UBI may have unpredictable effects on the labor market and economic structure.

In conclusion, the concept and practice of UBI have not been widely popularized and accepted. Even in developed countries, its implementation is based on the social context of the pandemic. Once the pandemic is over, the Federal Reserve resolutely combats inflation to restore genuine social and economic growth.

However, blockchain is a natural fit for UBI, especially from the perspective of DAO. Global collaboration, matching of labor types, smart contract and voting system management can play an important role in promoting UBI. Taking PermaDAO as an example, let's try to think about how the future UBI model should operate.

Future Development Direction of UBI

Blockchain technology will change the operating model of UBI.

With the continuous advancement of technologies such as AI, Web3, and DID, UBI will be reshaped from a technological paradigm.

• Blockchain technology innovation will change the way data is collected and analyzed for UBI. Traditional UBI practices mainly rely on centralized institutions such as governments, enterprises, or NGOs to allocate specific tasks. However, blockchain technology can use DID to verify people's identities and maintain accounts and consensus by recording workloads on the chain, changing the chronic issues of sustainability.
• AI will introduce machines into all aspects of human life for the first time. In Altman's view, one important trend is the powerful AI, capable of meeting the material needs of all humanity. Therefore, the fundamental issue is not to create more material increments, but to distribute wealth in a more moderate manner. AI is based on algorithms, follows complete rationality, and what humans need is to ensure that their workload is recognized by AI.
• Web3 will change the workflow and service model of UBI. Traditional UBI practices cannot solve the issues of funding sources and flows, such as the long-standing phenomenon of developed countries transferring payments to developing countries. People in developing countries cannot participate in the supply side and can only passively accept donations. Once the funding chain breaks, the UBI model will quickly collapse. Web3 will treat the workload of any population equally, no longer distinguishing by region, gender, or race.

Blockchain technology innovation will have a profound impact on the development of UBI. By changing the way data is collected and analyzed, AI fundamentally reshapes the relationship between people and material production, and will truly enable UBI to be widely adopted in practice.

Conclusion

The development of UBI and the concept of a unified world in the East, as well as the utopian thinking in the West, have a fundamental consistency. After being included in serious philosophical discussions and developing into a real economic advocacy, a part of its thinking has been absorbed into the welfare system and widely recognized.

However, the operating model of UBI itself is difficult to sustain in the long term, mainly due to the issue of income sources. In other words, UBI needs its own ability to generate income in order to operate independently without relying on the charity of the wealthy or developed countries.

Under the influence of the pandemic, the quantitative easing policies in Europe and the United States stimulated the emergence of AGI like OpenAI. For the first time, there is a possibility of a reversal in the comparison between humans and machines. If AI can complete most of the work of humans, where should humans seek their value?

Most people's answer may be hedonism, but it is also possible that in a society with highly developed material production, labor will become the primary need for people. Of course, this will require a very long period of development.

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