A Solution For Inequality? Free Money For All
One sign global inequality is reaching crisis proportions: In mainstream economic circles, the once-radical idea of free money for all is gaining currency.
The concept, formally known as "universal basic income," was a hot topic at this year's annual meeting of the World Economic Forum annual meeting in Davos, Switzerland. And while not a new idea, it is now being taken seriously, said Guy Standing, an economist at SOAS University of London.
"For 30 years I've been working on basic income, and for the first 20 years I was regarded as mad, bad and dangerous to know," Standing told CBS News. But in the last two years the idea has garnered vocal support from mainstream economists, business leaders and labor groups alike. "A lot of people one might not have expected have indeed come out in favor," he said.
The economic arguments in favor of basic income are rooted in data that show the planet's population is on track to outpace the number of jobs by several hundred million. Giving people enough income to meet their basic needs, such as affording food and housing, would help preserve social cohesion and make it easier for them to take risks, such as starting businesses or leaving abusive relationships.
In the U.S., proponents of basic income also argue that it could defuse some of the growing political discontent at a time of rising economic security for most Americans and surging wealth for a fortunate few.
Basic income could even spur broader economic growth by giving people money to spend, a recent study concluded. That conclusion is bolstered by evidence from social welfare programs, like food stamps, whose recipients overwhelmingly work and spend their public benefits on necessities.
Back in 2011, Standing expressed concern that inequality would create a populist "political monster." And those fears have largely been realized, with the U.S., U.K. and many regions in Europe turning towards populism. Now, he said, creating an income floor is a "political imperative."
"We are seeing populists emerging around the world, playing on people's fears," Standing said. "If we don't do something about the income distribution system, we're going to see a drift toward a neo-fascist populism in the near future."
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