eBay Founder Financially Backs Free Income Experiment

As both developing and developed nations alike continue losing jobs to automated systems, machineries, and artificial intelligences, there is a real and present risk of an increasing population of permanent unemployment threatening to sweep the globe. One prospective policy posited to tackle the problem of robots taking jobs traditionally fulfilled by humans is for a state to guarantee its citizens a yearly stipend of money, just enough to cover living expenses, independent of any employment. Everyone of adult age – whether employed, unemployed, chronically ill, or disabled – would be entitled to the same payment, no strings attached.

The concept is known as Universal Basic Income (UBI), and the idea has gained increasing traction in recent years. UBI means citizens would not have to rely on a fluctuating employment market in order to survive and would gain greater stability to deal with professional or personal changes. It even has the potential to stabilise economies by guaranteeing a pool of money constantly flowing through the machinery of the market. UBI has the backing of many in Silicon Valley, including Elon Musk, and now eBay founder Pierre Omidyar is putting a large sum of money into testing the concept.

Philanthropic investment firm the Omidyar Network is funding a $500K experiment in Kenya to see if UBI is a viable solution to tackle the shrinking job market. 6,000 Kenyans will receive regular UBI payments over twelve years, while economists from Princeton and MIT will apply the appropriate scientific rigour to generate data on the outcome.

“There is very little research and empirical evidence on how and when UBI could best be used,” Mike Kubzansky and Tracy Williams of the Omidar Network write. “Even though we know that cash transfers in developing countries help reduce poverty and improve outcomes for families, these have not been tested on a long-term basis or with a universal beneficiary pool. And in the developed world, related concepts like negative income tax have been well studied, but not UBI itself. The existing evidence comes from several small-scale pilots, but no study to date has been conducted with sufficient size, rigor, timescale, or universality to truly test the impact of a full-fledged UBI program.”

While the experiment will take twelve years to complete, the Omidar Network thinks it will have significant data to work from within “the first few years.”