UBI Won’t Decrease Poverty, Universal Basic Education Will

UBI is only a temporary solution, while education is the right long-term solution.

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We live in a world where wealth inequalities remain glaring. While the poorest are seeing their standard of living increase, the pace is far too slow, while the richest are seeing their fortunes literally explode.

This has become even more apparent to the general public since March 2020.

The COVID-19 pandemic that has taken over the world rapidly and unexpectedly has forced the central banks of the world's major economic powers to adopt ultra-aggressive monetary policies.

Many people think that UBI is a solution to the problems of poverty in the world

In an attempt to counter the effects of the COVID-19 pandemic on the global economy, trillions of dollars were printed out of thin air and injected into the global monetary and financial system.

Unfortunately, as the Cantillon Effect theory has been teaching us for centuries, all this money injected into the system will take far too long to reach the poorest. The richest will have taken advantage of it to get richer and richer.

Faced with the challenges of poverty, more and more people are putting forward a plan called Universal Basic Income (UBI).

In a world of UBI, every citizen would be paid a basic universal wage by the government whether or not they work. This notion is being talked about more and more in political circles. As you might expect, this notion is extremely popular.

Indeed, everyone loves the idea of free money. However, in life, nothing is ever really free.

While easy money is attractive, we can't afford UBI

As the world's debt reached $277T at the end of 2020, the first problem with UBI becomes clear: we clearly can't afford it.

In addition to the fact that we cannot afford such a strategy, an article by David Freedman in the MIT Technology Review has already confirmed the ineffectiveness of UBI in reducing poverty. In his article, he explains that an annual payment of $10,000 to each adult American “would be at least twice as expensive as current antipoverty benefits and overhead, adding between one and two trillion dollars to the federal budget”.

For David Freedman, what exists, while imperfect, already does a better job than UBI:

“Existing safety-net programs could be expanded and tuned to eliminate poverty about as effectively but much less expensively, and they could continue to focus on providing jobs and the incentives to take them.”

There are four major problems with UBI that make it an unsustainable solution in the long run

While everyone seems excited about the idea of free money, there are four additional problems to its already prohibitive cost:

• Inflation that would rise sharply.

• Taxes that would have to rise.

• Long-term economic development could be stifled.

• Society could fracture.

Thus, the UBI could plunge economies into rampant inflation, while causing an increase in taxes, as well as an exodus of businesses. At the economic level, it would be feared that stagnation would be added to a fracturing of society between different individuals.

A feeling of injustice could even arise, which makes UBI a de facto non-viable solution in my eyes.

If UBI is not the answer, Universal Basic Education is

Since UBI is not able to solve the problem of poverty in a sustainable way, we have to focus on other solutions. One solution that I think is much more relevant is what I will call Universal Basic Education or UBE.

To lift as many people as possible out of poverty, it is necessary to invest heavily in educational programs. Knowledge is the key to changing the lives of hundreds of millions of people. Of course, this solution is less dreamy than UBI.

It requires money, but also effort on the part of those who will participate in these UBE programs.

Those who can make these efforts, however, can truly change their lives forever. They will not feel dependent on the solidarity of others and will be able to change their future on their own. This will prove to be more rewarding, but more importantly, more relevant in the long run.

The next time someone tells you about the merits of UBI, remember to explain that another alternative is possible with UBE: Universal Basic Education. It's not as sexy at first, but it will be much more effective in the long run.