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Guy Verhofstadt on Universal Basic Income

Guy Verhofstadt, former Belgian PM and European Parliament Representative who spoke for universal basic income

5 Questions on universal basic income as answered by Guy Verhofstadt, former Belgian PM and European Parliamentary Representative.

"What is your definition of universal basic income?"

Well, it guarantees that all the citizens of a community of a country and a continent, Europe, for example, get a basic income. This can be an amount that is given to every citizen, and that can replace some parts of the actual social security. Universal basic income will make things easier as a social policy than the current way of handling social security benefits. What I think that is absolutely key is that in our future society such a basic universal basic income can be more effective than the actual social security benefits that we have today.

"What do you mean by more effective?"

More effective is that today you need to respond to several conditions before you can have some benefits of social security. In a universal basic income that's not the case, that means that in my opinion poverty can be better tackled with the universal basic income than with a complex range of benefits belonging to social security. It doesn't mean that the universal basic income can replace all social security benefits, for example, everything that concerns health and hospitals that will continue to exist. But, I think that there are today many people who live in poverty and will finally have no access to social security benefits because of the conditions of these benefits require. So, I think that with a universal basic income, you can better tackle poverty, and these people today in most cases have to live with nothing at all. Secondly, I think that also in our society in the future it makes more sense to have a universal basic income because we will live in a digital world with more robots, maybe? In such a society, I think enormous profits will be generated by these digital instruments by these robots. So, I think a universal basic income is a good way to create a flow of income of these profits towards the ordinary citizens so that that not only the wealthy people who increase their revenue and their income.

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"What are the main obstacles blocking the Universal Basic Income from being Implemented today?"

Well, first of all, because many politicians are used to social security as it works now. They are very conservative, and they are not so keen to go into the direction of a universal basic income. Partly because they don't know it, so they still stick to what they know. You know what social security currently is. I have experienced that myself because it's already more than 30 years ago that I proposed a universal basic income in Belgium politics. But this was a long time ago, the name that I gave it was a negative income tax. So, the idea was: you pay your taxes, but when you have an income that is below a certain level, then you don't pay taxes. Then, you receive subsidies from the state. That was the idea, negative income tax so, instead of paying taxes, you receive them. It was not a big success when we started to discuss that in Belgian politics maybe also because of the name that was used: Negative Income Tax. People were saying, laughing to me and say yeah we already paid ordinary income taxes. Why you have to create negative income taxes? Taxes are already negative. So the wording was certainly not perfect, but it was an idea that was discussed already 30 years ago. At that moment the idea was: 'Is this not a more simple way to do so?'

I still have, here in my office maybe but certainly at home, hundreds and hundreds of pages about that. Also, a whole document that we published. I was a young leader for the liberal party at that moment, but you see that it comes back. Now, there is a discussion. Maybe there is more reason for introducing a universal basic income today than it was, for example, 30 years ago. The fact that a country like Finland now is experimenting with that. As well as also some individual states in the US are experimenting with that. It's proof of the fact that a breakthrough maybe is possible.

"Do you think it should be distributed in just normal capital or as a form of consumer credit, for example also possible that you can only spend it on certain categories?"

No, I would do it as an income that you receive monthly or something like that. When we talk about capital, I think that's another story. That's not universal basic income what you need besides universal basic income is certainly also to popularize more venture capital or, maybe the public authorities have also to play a role in this. To transfer some public money as venture capital to starting companies, smaller companies. But that's, in my opinion, a different story than the story of a universal basic income.

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"Would you give people a fixed amount of money? Because, you could also say like you establish a form of universal basic income by saying you get x euros of consumer credits to buy food, electricity and something else and then I mean this is a basic just a general idea but what do you think?"

What they are experimenting with this for the moment in Finland, I think, is an amount that people received to spend on these consumer goods that you're mentioning. I think the amount is around 600 euros. The first results are positive. Because people say, when you introduce universal basic income, it will make people will no longer look for work. They didn't find real evidence of that in the first results of their of the universal basic income in Finland and on the contrary, there is it gives a possibility for people young people, older people to organize their lives differently. Not only concentrate only on work but also focused on other creative activities. That normally would not happen if you don't have a universal basic income. So, I think it's it will be still necessary for everybody to work. But, I think it makes more sense in a society with a lot of robotization and digitalization to use us a bigger part of or for time for other creative activities than only work.

"So basically, it's about making sure that people can buy food, preferably healthy food, can buy electricity, and then they can spend the rest of their time doing more value-add and creative activities?"

Exactly, and on the other hand, I think it's like I said at the beginning of the interview a good instrument to tackle poverty. If you look to social security today, you can see that it has still what we call a Mattheus effect. What it means is that the rich people become richer because of social security, and people who live in poverty don't receive enough from social security. That's we call the Mattheus effect, and that's still a problem, many wealthy people receive social security benefits, and it's are not necessary for them. People who live in poverty and who don't know how to deal with it don't receive anything. So universal basic income is a way to tackle that problem as well. It's not only a way to look to the new society that will establish in the coming decades with maybe less work and more time for creativity it's also a way to tackle injustice in our society.

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