What is UBI?

Universal Basic Income (UBI) is a periodic cash payment unconditionally delivered to all citizens (or permanent residents) of a defined geographic area – typically a country. Key characteristics distinguish it from existing welfare programs:

• Universal: Everyone receives it, regardless of income, work status, or any other criteria.
• Basic: The amount is intended to cover essential living expenses, though definitions of “basic” vary widely. It’s usually not enough for a luxurious lifestyle.
• Unconditional: There are no requirements to work, search for jobs, or participate in training programs to receive the payment.
• Regular: Payments are distributed on a consistent schedule (e.g., monthly).
• Cash-based: Recipients have freedom to spend the money as they see fit.

UBI as a human right

The most harsh criticism against UBI is based on moral hazard. Critics argue that it’s unfair to provide money to people who aren’t contributing to society. This argument often centers on concepts of deservingness and is extremely prevalent in China. We Chinese are taught from a young age that those who don’t work will not be given food.

I would, on the contrary, argue that UBI has become a human right, drawing upon John Locke’s proof. According to him and his social contract theory, people enter a societal state from the natural state with the goal of preserving their property. By property, he means life, freedom, and possessions (or money). Although in the natural state, people can obtain goods from nature, those goods can easily be taken by those who are physically stronger. By entering a society governed by rule of law, the fruits of their labor are protected.

Now things get tricky in modern society. Big corporations have monopolized the majority of resources and capital worldwide through mergers and acquisitions. Top 1% of people possess 43% of global wealth. Elon Musk is poised to become the world’s first trillionaire (I just realized that trillionaire isn’t a standard dictionary entry).

Beyond the monopoly, AI and automation are replacing human workers. The wealthy can use AI to displace labor and deploy robots to defend themselves against potential unrest. They could entirely eliminate much of the population and become self-sufficient. In other words, in the eyes of the wealthy, a significant portion of the population may no longer have the right to exist. In this regard, the wealthy have essentially become modern Greek Gods.

Therefore, even though people’s fruits of labor are still protected by law, their means of using that labor have been taken from them by those more cunning than they are, and they can no longer preserve their life, let alone freedom. Hence, their human rights are violated within a society governed by rule of law. It is thus not that they are not contributing to society; it is that they are being exploited by the society.

Ideally, we should have prevented monopolies and unchecked technological advancement, but our short-sighted and corrupt politicians have failed to do so. Thus, now the only way to restore human rights is UBI, which unconditionally provides people with a basic income to cover living expenses. People left the natural state and entered the societal state; similarly, today, people should consider leaving the current societal structure and entering a system supported by UBI.

UBI is a natural consequence of mass education Beyond the fact that UBI has become a human right, I would also argue that now is an opportune time to transition to a UBI system, given generations of well-educated young people.

Whether in China or the United States, for decades children have been told by their parents they need to study hard in school to secure well-paying jobs in the future. For instance, when I was a child, my parents warned me that if I didn’t study diligently, I would be forced to recycle plastic bottles on the street to make a living as an adult.

We are now facing the absurd reality of a well-educated young generation experiencing unemployment immediately after graduation. The promise that effort yields reward is broken – we have been misled! To rectify this, we need UBI.

Not only does the disillusioned young generation need UBI, but the state also needs it to retain talent and remain competitive in the 21st century. Big tech companies like Google hire young people every year, even when they lack immediate work for them. They hire regardless, paying well simply to allow recruits freedom to pursue their interests. Google understands that retaining this pool of young talent allows them to overcome future challenges. If Google didn’t do this, Microsoft and other companies would, and Google would lose its competitive edge in the next technological revolution. States can achieve a similar outcome with UBI.

If states fail to implement UBI, talent risks being lost – either through despair or by turning to destructive paths. My recent investigation in China reveals that a significant percentage of young men have become involved in gangstalking and young women in prostitution (in various forms). The proliferation of scam centers in Myanmar and Cambodia corroborates my findings.

A few years ago, a young Chinese woman brazenly stated online that she felt compelled to marry a wealthy man; otherwise, all the virtues and merits she had cultivated through years of hard work would be wasted. She was labeled as a gold digger at the time, but in hindsight, her words resonate powerfully. Without UBI, young women face a stark choice: 1) marrying a rich, parasitic, violent, and callous capitalist and attempting to tame him, or 2) marrying a poor, stressed young man and gradually sacrificing their virtues and passions simply to make ends meet.

To prevent such a dystopia, let the state act as a benefactor for the young generation before exploitative actors recruit them.

Will UBI make people stop working?

No. I argue that working is an intrinsic need for most people, and furthermore, that UBI can enable people to work better.

I once met a French illustrator who passionately showed me her illustrations and proudly told me that drawing is a need for her. From her face, I observed a trace of solitude as well as the sacred dignity of navigating life’s hardships. After this experience, I discovered that I am also such a person – to live is to create.

A reality show once launched a challenge: participants could win money if they managed to spend 7 days in a small room doing nothing. Guess what? None succeeded. It was simply too boring; people would rather be occupied than bored.

The human brain is built in such a way that it desperately seeks meaningful activity. Providing UBI will allow people to work not because they have to, but because they want to.

Confucius once said that those passively working hard are inferior to those actively pursuing a project, and those actively pursuing a project are inferior to those enjoying the craft itself.

Many great figures became known thanks to financial support from nobles, states, or friends. Without Engels, Karl Marx would likely never have finished his works. With UBI, we can expect more individuals like Marx – people with untapped potential.

UBI does not stop people from working—it releases their potential!

Will UBI encourage drug use?

No. People do not get addicted to drugs because they have money. During a recent interview with sex workers in Germany, one worker revealed that she entered the profession only to afford drugs. Conversely, many Chinese sex workers become affluent and never become drug users. These examples prove that a person is more likely to develop an addiction if they live in poverty.

Therefore, people use drugs not because they have money; they use them to cope with despair and absurdity. Just as someone might cut themselves to mask psychological pain with physical pain, so too does a person use drugs to obscure feelings of meaninglessness with illusions.

To reduce drug use, the best approach is to reduce despair, and UBI is the most efficient way to give people hope. With these regular payments, people’s lives become reasonable. They realize they are no longer vulnerable individuals at the mercy of powerful forces. Their lives matter. They can begin to pursue projects – UBI empowers them. (Note: microcredit once played a similar role, but nowadays it has often become a debt trap.)

How to finance UBI?

After arguing for UBI in the previous section, we inevitably reach the unavoidable question: how to finance it?

My expertise and experience as a solution expert teach me that if a goal is right, there will always be (correct) ways to achieve it. In mathematical terms, a solution exists. Here, I will outline four potential financial sources.

Meaningless Infrastructural Projects. The Keynesian school teaches governments that when the economy stagnates and unemployment rises, they can launch infrastructural projects (often through debt financing) to stimulate demand, then use increased future tax revenue to repay public debt. This once-efficient solution now faces three challenges: 1) Today, we have fewer and fewer profitable infrastructural projects; these projects suffer from diminishing returns. 2) Many infrastructural projects (e.g., repeatedly digging the same road) are detrimental to the environment. 3) Governments are often inefficient and prone to corruption. Chinese local governments, in particular, frequently favor such projects. Skipping these fruitless endeavors and giving that money directly to people avoids these three problems.

Unemployment Benefit. UBI could entirely replace unemployment benefit, which is a strictly inferior mechanism. Unemployment benefit can actually reduce people’s willingness to find legal employment. I have met many unemployed young people in the UK who have turned to illicit activities. By engaging in this underground work, they supplement their unemployment benefits with untaxed income. This lifestyle can be so lucrative that they can afford both drugs and prostitutes.

Billionaire Tax. I propose heavily taxing extremely wealthy individuals on both income and wealth. Indeed, I believe it is fair to raise the tax rate until it can fully fund UBI, and this does not infringe upon the right to property. The right to property should only encompass an amount of fortune sufficient to cover a person’s entire life expenses. Any money beyond that threshold doesn’t constitute a right, as it cannot be reasonably used. As Thomas Hobbes argued, a person’s natural rights shouldn’t extend to the point of harming another person’s natural rights. Therefore, billionaires’ rights to property should not reach the point of pushing others into starvation.

Central Bank. If billionaires are unwilling to comply, as a last resort, the central bank can directly finance UBI. This practice may cause inflation, but not necessarily in a harmful way. I will discuss this issue in a later section.

Billionaire tax

There are two practical concerns about a billionaire tax, and I will address them in this section.

The first concern is that a billionaire tax may discourage these high achievers and make them less likely to pursue ambitious goals. This concern is groundless. If they are truly high achievers, then they work hard for self-realization, not solely for money. In reality, we observe that most billionaires have no productive use for their extra wealth. Instead of financing projects like a Martian colony, they invest in Epstein island. If their ambition is not the Milky Way but underage girls’ secret way, I do not see the point of allowing them to retain so much money.

The second concern is that billionaires may move to low-tax jurisdictions. This concern is valid, but not as severe as some believe. To simplify the analysis, let us consider a world with only two countries – one developed and peaceful (Country A), and the other developing but turbulent (Country B). Country A can tax its billionaires at a rate of, say, 50%, and impose a one-time exit tax (to increase the friction of changing tax residence). Once these billionaires pay the exit tax and move their fortune to Country B, that country will soon discover the opportunity to implement its own version of a billionaire tax, albeit with a lower rate, say, 45%. Some billionaires will regret this decision and move back to Country A. Eventually, an equilibrium will be reached: billionaires will be dispersed and well-taxed around the world.

Last but not least, the departure of billionaires may not be a bad thing. Their leaving may cause deflation, which would make it cheaper (and thus more lucrative) for the government to finance public projects (including UBI). The government can use the revenue acquired through the exit tax to mitigate the short-term pain of deflation and simultaneously restructure their economy.

Will UBI cause inflation?

When UBI is correctly implemented, it should not cause inflation—or, at least, not harmful inflation. I will break this down into two scenarios.

Let us first consider the advantageous scenario: where UBI is fully funded by a billionaire tax, and central banks do not intervene. Since the total money supply does not change, our analysis becomes very simple.

With UBI, people who cannot afford food this year can now afford it, returning to last year’s situation. Thus, total demand does not vary, and there is no inflation.

Without UBI, on the other hand, those people who cannot afford food this year will die, and billionaires are unlikely to spend all the money they gain from these unfortunate people. Thus, total demand decreases, leading to deflation.

To counter deflation, either the government will increase spending, or the central bank will implement quantitative easing (QE). In either case, this trickle-down economics exacerbates societal polarization—making rich people richer and poor people poorer. Furthermore, it may overshoot its goal and cause inflation.

Therefore, in this scenario, UBI not only avoids causing inflation itself but also prevents both deflation and potential inflation.

Now let us consider the disadvantageous scenario: where billionaires are unwilling to pay the tax, and the central bank fully funds the UBI. In this case, the central bank intentionally triggers deliberate inflation with the intention of depreciating the wealth of affluent individuals.

The main concern regarding inflation is that poor people may no longer be able to afford food due to rising prices. However, here the central bank directly works with those receiving UBI to ensure they can afford it, so inflation is less of a concern. Just ensure that the UBI is inflation-adjusted.

How to distribute UBI?

UBI should be anchored to a person’s level of reason, defined here as education level. Individuals with higher levels of reason should receive higher UBI amounts, as they are more likely to spend it responsibly. This arrangement incentivizes the pursuit of higher education, which is foundational to a functioning democracy.

The following details outline the scheme:

• Children are not considered persons with reason (though they are reason-able, cf. Thomas Hobbes). Therefore, they will not receive any UBI.

• Upon turning 18 and passing a graduation exam (e.g., the Baccalauréat in France), individuals become “persons with basic reason” and qualify for Level 1 UBI, equivalent to covering living expenses.

• Those who achieve high scores on the graduation exam and those admitted to university receive Level 2 UBI for four years (followed by Level 1 afterwards), an amount equal to university tuition fees. This funding can be used for university study or alternative endeavors like starting a business.

• Individuals who successfully earn bachelor’s degrees are designated “persons with advanced reason” and qualify for Level 2 UBI for life.

• Those graduating with excellent grades and those admitted to a master’s program receive Level 3 UBI for three years (followed by Level 2 afterwards), an amount equal to master tuition fees. This funding can be used for graduate study or entrepreneurial pursuits.

• Successful completion of a master’s degree designates individuals as “persons with expert reason” and qualifies them for Level 3 UBI for life. They can use this funding for doctoral studies or launching an ambitious business venture.

• All levels of UBI cease at a certain age, such as 60, to facilitate expense prediction and mitigate potential ageism within society.

Note 1: Former President Joe Biden’s tuition fee waivers can be seen as a precursor to this type of UBI scheme.

Note 2: Countries with only nine years of compulsory education (e.g., China) can adapt the scheme accordingly.

Note 3: In cities where housing costs significantly outweigh other expenses, UBI may not sufficiently replace existing housing subsidies.

This UBI scheme offers several additional advantages:

• By requiring graduation exam completion before receiving any UBI, it discourages a large population with limited education (cf. the “welfare queen” stereotype).

• Without UBI, teenagers are less vulnerable to exploitation by drug dealers and unscrupulous businesses.

• With UBI, students can choose their preferred school and field of study rather than being pressured by parents or dictated by market trends.

Some may criticize the age limit as harsh towards older individuals. However, people often fear death due to spending most of their lives in a (modern) form of servitude; they only begin to truly live after retirement. This UBI scheme fundamentally alters that equation by empowering individuals to fully enjoy their youth. Therefore, by age 50, a person should have lived a fulfilling life with no regrets about dying. If an individual is deemed worthy of continued support beyond 60, it’s assumed they will have saved enough funds to cover their remaining expenses.

Why would UBI work?

UBI is, at its core, a wealth transfer directly from wealthier individuals to those with fewer resources. Instead of allowing wealthy individuals to use capital to start new businesses, it provides that capital to people with limited means, empowering them to do so. While the former represents a trickle-down economy, the latter, characterized by UBI, embodies a bottom-up approach. To understand why UBI could be effective in the future, it’s helpful to examine why trickle-down economics has been successful in the past.

Historically, most people lacked access to quality education, and only the wealthy had such opportunities. They possessed the technology and expertise to manage companies, employing those less educated and teaching them valuable skills. Consequently, society prospered.

Today, the situation is often reversed. Many descendants of wealthy families lack direction or practical skill. For example, Wang Sicong, arguably the most well-educated heir among China’s wealthiest families, has bankrupted every business he’s launched and hence has to continually seek new relationships to bolster his self-esteem.

Conversely, with the rise of the Internet and open-source software, a single mobile app can revolutionize lifestyles, and an individual can amass millions of followers. Examples include Tinder, TikTok, and Alipay for apps, and Derek Muller, Li Ziqi, and Pan Piano for influencers. In other words, innovation is now more likely to originate from those with fewer resources than from wealthy families.

These well-educated young people from less privileged backgrounds not only possess a strong intrinsic motivation to improve the world but also understand its challenges – qualities often lacking in their wealthier peers.

If you were given the power to allocate funds, would you invest in Prince Andrew to support his personal indulgences or in Derek to advance scientific and technological understanding?

Investing capital in a small number of wealthy individuals increases the likelihood it will be spent on frivolous pursuits rather than productive endeavors like space exploration. However, investing that same capital in billions of people with limited means unlocks billions of possibilities – each representing an opportunity to improve the world.

UBI as economic democracy

We can compare trickle-down economics to economic aristocracy; consequently, UBI, with its bottom-up nature, becomes a form of economic democracy. Instead of voting with ballots in political systems, with UBI people vote with money.

If you support an influencer, you can donate a percentage of your UBI to them. If you no longer approve of their content, you can stop the donation. And if you believe they have defrauded you, you can sue them for fraud.

You could also use your UBI to kickstart a startup with like-minded individuals—perhaps a spiritual successor to Castlevania, a Linux phone, or a company producing RAM exclusively for consumers.

Fraud will inevitably occur, but it’s likely to be less prevalent given the scrutiny of many eyes compared to situations viewed only by a small group of profit-hungry private equity investors.

Some of these businesses will fail—as is natural—while others will endure and become Noah’s Ark, carrying humanity forward into the next epoch.

Is Elon Musk sincere about UBI?

No, I don’t believe him. Elon Musk recently claimed that there was no point in saving money because Universal High Income would be implemented in the future. His words are dubious, and I highly doubt it. One thing is certain: He is planning something.

As a rule of thumb, people should spend as little as possible (mimicking Grandet) until UBI becomes a reality.

Challenge for specific states

With the end of United States hegemony, countries are once again competing for world leadership. I predict that the first country to complete UBI reform will become a global leader.

Nonetheless, this opportunity does not come without challenges. UBI requires consensus from its citizenry, which can be difficult in demographically diverse states. Local populations may resist providing UBI to immigrants. The following is an analysis for specific countries.

United States

The biggest challenge facing the United States is that it is not a nation-state. According to Joe Biden, the United States is the only country in the world not built around a race, but on an ideal—everyone is equal.

If this is truly the case, it will have no difficulty implementing UBI. However, if some people are more equal than others, this demographically diverse country will meet harsh opposition to UBI.

China

China is, in theory, the most suitable country to implement UBI given its communist lineage and socialist background. However, the Chinese Communist Party is arguably the least likely party to implement UBI for its people. During the pandemic, many other countries distributed funds directly to their citizens, while the CCP did not spend a penny on such initiatives!

Japan

Japan has historically been a closely-knit nation-state. Statistics indicate that Japan has the lowest percentage of Nobel laureates relocating abroad. With the rise of Sanae Takaichi and her anti-immigrant stance, Japan is removing a significant obstacle to UBI. I personally believe Japan is most likely the first nation to complete UBI reform.

United Kingdom

If I were Keir Starmer, I would rigorously enforce the deportation of individuals who have entered the country illegally or are seeking asylum. I would strongly challenge the assertions of human rights organizations that oppose such actions. These organizations often appear to overlook severe human rights abuses in countries like China while focusing on picking low-hanging fruit in Europe.

Let us be honest: those organizations do not genuinely care about human rights—human rights are merely a business for them—they are loud and noisy only because they don’t want to lose their jobs. Their actions remind me of officials who enforced China’s one-child policy, continuing to control reproductive choices despite a shrinking and aging population.

Also, the UK system differs from that of the US: a right-wing party is not necessarily required to initiate deportation proceedings—the monarch can do so. According to John Locke, a monarch possesses a “federative power,” which entails “the power of war and peace, leagues and alliances.” In the same vein, the monarch should have a say in immigration policies. All Starmer needs to do is return this power to King Charles III.

If the king controls the undivided power to decide on immigration policy, it has the advantage of removing immigrants as a bargaining chip for political parties. This not only makes parliamentary debate more focused on other important issues but also shows greater respect for immigrants.

References

• Leviathan by Thomas Hobbes
• Two Treatises of Civil Government by John Locke Written by Lee Keun-Yong, Illustrated by Ju Kyung-Hun
• 该给老百姓发钱吗？全民基本收入UBI政策问答 by 公民伯里克利 & MHYYYY

P.S. For 20 months, I have been wanting to write this article. However, ongoing harassment by international organized crime has prevented me from completing this long-overdue work. I apologize for the delay.