Original Author: Spike @ Contributor of PermaDAO
Original Editor: Lemon @ Contributor of PermaDAO
Universal Basic Income (UBI) is an economic proposition and social trend aimed at providing a certain level of economic support to every citizen, regardless of their employment status. The emergence of this idea can be traced back to early economists and philosophers who deeply pondered the 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 providing every citizen with a certain basic income 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 alleviating poverty and inequality by providing all citizens with a fixed cash payment.
In the early 20th century, economist Keynes also proposed a similar viewpoint. 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 the fluctuations of the socio-economic system and maintain social functioning in a more stable manner.
Over time, the idea of UBI has gradually garnered more attention and research from scholars and social activists. Since World War II, the concept of UBI 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 effects of UBI.
For example, the welfare state construction in Europe, as well as minimum living allowances, unemployment insurance, and China's subsistence allowances, can be considered as part of relevant practices. However, UBI in the usual sense differs slightly from welfare systems, as will be discussed below.
One of the earliest implementation attempts 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 effect of providing low-income families with a certain 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 the state's oil income to residents, providing a certain basic income to every eligible resident. This program is still in operation and pays 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 UBI practices in a broad sense. For example, the Norwegian sovereign wealth fund, established in 1996, currently has assets totaling $1.6 trillion. Based on 2019 prices, each Norwegian can receive an average of $180,000 in dividends.
The concept of UBI was not seriously included in academic discussions as an independent economic proposition until the 1970s. It was not until then that policies were designed according to the relevant ideas of UBI.
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 2,000 randomly selected unemployed individuals with a monthly basic income of 560 euros, regardless of whether they found employment. The goal of the pilot project was to test the impact of UBI on employment and the welfare system. However, the project did not yield clear conclusions after it ended in 2018.
Kenya: A project called "Basic Income Pilot" was initiated by the non-profit organization GiveDirectly in Kenya since 2016. The project began in 2016 and provided some villages in Kenya with two years of basic income. 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 125 families with a monthly basic income of 500 dollars.
At this stage, it is mainly an exploration of UBI. The real and effective practice still requires the large-scale spread of the COVID-19 pandemic. In this context, it has given rise to the actual quantitative easing of governments and financial sectors in Europe and the United States. 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, and the living space of a large number of people has been compressed to rooms and communities, making online spaces truly usable for production and living. The large-scale 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 resist economic crises, resulting in a huge amount of liquidity in the market. However, at the same time, the asset gap between individuals and businesses, as well as between small and micro-enterprises and listed companies, continues to widen.
Image Description: Trend of interest rate changes in the policies of the Federal Reserve before and after the pandemic
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The asset size of the Federal Reserve has expanded from around $42 trillion in March 2020 to around $83.5 trillion in September 2021, an increase of nearly 100%. The consequence is the soaring inflation, which has truly ignited AI.
Here, AI refers to OpenAI. True to its name, OpenAI was initially a defensive move against Google's acquisition of DeepMind, hoping to make AI serve humanity in an open-source manner. In 2016, it received an initial investment of $1.2 million from YC. Before Altman joined as CEO in 2019, OpenAI's donations and financing were not high. The turning point came in July 2019 when Microsoft first invested $1 billion in it, followed by another investment in 2021. Of course, the largest investment was a huge $10 billion investment 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 income in 2022 was only $28 million, and it is still in a continuous loss.
Another idea of Altman's is Worldcoin, which aims to create a UBI economic system that is enjoyed by all and shared by all, by casting a personal identity system offline, known as personality proof, and then going online, thus formally binding 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 by Worldcoin hardware will be deleted. However, this is essentially a "promise" rather than a technically verifiable process.
In 2023, there was a case of hackers stealing the login credentials of the Worldcoin operator responsible for registering new users, allowing the hackers 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 ingrained the concept of UBI, at least achieving universal user participation on a global scale. People can equally participate in the value circulation of the global network. In the post-era of the great navigation, this can be considered a remarkable feat.
Returning to the recognition of universal human value, this is the greatest value orientation of UBI.
Challenges and Controversies of UBI
As a social welfare policy, Universal Basic Income (UBI) has some potential benefits. Firstly, UBI can provide economic security, alleviate poverty, and address inequality issues. By providing everyone with a certain basic income, UBI can ensure that everyone has enough to cover their living expenses, thereby reducing the number of people living in poverty. Additionally, UBI can help mitigate income inequality, making society more equitable.
Secondly, UBI can promote innovation and entrepreneurial spirit. With a certain economic security, individuals 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 for management and distribution. UBI, by including everyone in the same system, simplifies welfare management and reduces administrative costs.
However, as a new social welfare model, UBI faces several challenges and controversies:
Fiscal feasibility: Implementing UBI requires significant financial expenditure, including issues related to funding sources and allocation. Some are concerned that UBI may lead to fiscal deficits and inflation, as funds need to be reallocated 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 may weaken people's motivation to work, leading to more reliance on welfare and reduced willingness to work.
Inequality issues: The implementation of UBI may exacerbate wealth and income inequality. Some are concerned that UBI may provide more income to the wealthy while offering relatively less help to the poor. Additionally, UBI may not address other social issues such as unequal access to education and healthcare resources.
Social impact: The implementation of UBI may have profound social implications. Some are concerned that UBI may 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.
With this in mind, it can be concluded that the concept and practice of UBI have not been widely accepted and implemented. Even in developed countries, its practice is based on the social context of the pandemic. Once the pandemic is over, the Federal Reserve decisively combats inflation to restore genuine socio-economic growth.
However, blockchain is a natural fit for UBI, especially from the perspective of DAO. Global collaboration, division of labor matching, smart contract and voting system management can play an important role in promoting UBI. Taking PermaDAO as an example, let's consider how the future UBI model should operate.
Future Development Direction of UBI
Blockchain technology will change the operational mode of UBI.
With the continuous advancement of technologies such as AI, Web3, and DID, UBI will undergo a paradigm shift from a technological perspective.
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 previously unsustainable practices.
AI will introduce machines into all aspects of human life for the first time. According to Altman, 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, based on algorithms, follows complete rationality, and what humans need is to ensure that their work 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 flow, 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 receive donations. Once the funding chain breaks, the UBI model will quickly collapse. Web3 will treat the workloads of any population equally, regardless of 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 on a large scale.
PermaDAO, which started in the Arweave ecosystem to promote data growth and applications, has gradually formed its own economic internal and external circulation system in long-term practice. We have rethought the future goals of PermaDAO, hoping to provide participants with economic incentives that are not inferior to full-time work.
In the current classification of PermaDAO, it can be considered as a whole or as the underlying infrastructure for other DAOs. For example, it can be divided into multiple internal guilds such as content guild, development guild, and PR guild, and can also be provided as DAO as a service (DAAS) to other organizations. Both parties share data and profits, and can operate separately or promote synchronously, demonstrating strong flexibility.
Gradual implementation of decentralized plans: PermaDAO will adopt a gradual on-chain implementation strategy to gradually expand the scope of the ecosystem and incentive amounts. This will reduce fiscal pressure and promote continuous innovation in DAOs.
Mechanism adjustments and fiscal reforms: The implementation of UBI by PermaDAO is not a one-time event and requires gradual fiscal adjustments and mechanism reforms. For example, providing services to other DAOs, the latest case being the collaboration with the cross-chain protocol MAP to create MAPDAO, to increase potential sources of income and reallocate fiscal resources.
Integration of economic incentive systems: In the practice of PermaDAO, multiple proposals have been formed, involving content, PR, and other aspects. Different from the simple role division within a DAO organization, PermaDAO encourages DAO members to establish closer cooperation with the outside world and provide appropriate economic incentives, rather than being limited to internal circulation within the DAO.
User and training system development: The workload of PermaDAO is closely linked to member contributions, so members need to have a good understanding of the rules. Therefore, PermaDAO has developed a complete process from user onboarding, workload accumulation to incentive distribution, with corresponding tools developed for onboarding and incentive distribution, with the potential to become public goods.
Establishment of monitoring and evaluation mechanisms: To ensure the effective implementation and operation of the UBI mechanism, PermaDAO has established monitoring and evaluation mechanisms. This will help to promptly identify issues and take appropriate measures to ensure the long-term sustainability of UBI. For example, for content text, a continuous correction mechanism will be open, and incentive and penalty mechanisms will be established, creating a long-term monitoring system.
In the vision of PermaDAO, the ideal situation in the future is that people can achieve the same level of economic income as traditional positions within a DAO, while maintaining their independence and the ability to join or leave at any time.
We can illustrate PermaDAO's economic incentive distribution model with a case study. Alice wants to contribute to the promotion of Arweave, so she can choose any administrator to complete her onboarding and register her everPay wallet address.
Subsequently, Alice discovers that she can take on the task of translating articles for the Translation Guild. After successfully claiming an article, Alice completes her first workload. Bob will review the accuracy and fluency of Alice's translation and provide improvement suggestions. Alice will then make the necessary revisions, and Bob will review them until both parties are satisfied.
Finally, the workload for the article is recorded, and Alice will automatically receive the corresponding incentive after the settlement period.
It can be observed that the entire process is fully transparent and traceable, no longer operating as a black box of centralized institutions, but rather focusing on how to promote the faster and more efficient completion of corresponding workloads.
Conclusion
The development of UBI and the concept of a unified world in the East, as well as the utopian ideas in the West, share a fundamental consistency. After being incorporated into serious philosophical discussions and evolving into a practical economic proposition, part of its ideology has been absorbed into the welfare system and widely recognized.
However, the operational model of UBI 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, free from the charity of the wealthy or developed countries.
Under the influence of the pandemic, the quantitative easing policies in Europe and the United States have stimulated the emergence of AGI (Artificial General Intelligence) such as OpenAI. For the first time, there is a possibility of a reversal in the comparison between humans and machines. If AI can perform most of the work that humans do, where should human value be sought?
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 to achieve.
Especially in the practice of PermaDAO, although it has not yet completely freed itself from external economic support, its hidden economic potential should not be overlooked. Compared to traditional corporate structures, PermaDAO is flatter and more efficient, especially as it begins to externally export completed DAO tools. It can also be considered as part of a service agreement, generating sustained positive externalities.
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