When, in the 1980s, we embarked on our binge of free trade agreements, we were assured by their political and business promoters that they would benefit all of us. By making things good for global corporations, they would prosper and their prosperity would trickle down to the rest of us. It would maintain the post-war experience of a rising tide raising all boats.

Well, the resulting tide certainly raised the boats of the rich, very generously indeed, but the boats of the rest of us never got off the beach. Very little trickled down.

Perhaps it’s time to try trickle up. A recent study published in the environmental journal
Cell Reports Sustainability suggests that may be a much more productive course. The study “Utilizing basic income to create a sustainable, poverty-free tomorrow,” examined the results of giving a regular cash payment (basic income) to the entire world population or at least to that portion living under the poverty line. The research was supported by the Social Sciences and Humanities Research Council of Canada, the Canada Research Chairs Programme and the University Killam Professors Programme.

The study found that basic income had the potential to raise the global gross domestic product (GDP) by 130 percent. The benefit arises from what economists call the Multiplier Effect. If you spend ten dollars for a cup of coffee, the coffee shop owner may spend three dollars of that on savings and taxes, the other seven to buy supplies and pay staff. Thus your ten dollar expenditure contributes 17 dollars to the economy and more as long as the effect continues. It trickles through society multiplying the effect of the original expenditure.

The authors determined that providing the entire world population of 186 nations with a basic income would cost 33 percent of global GDP, for a reward to cost ratio of four. And where would this fabulous sum come from? Well, that introduces a second benefit.

The authors estimated that just taxing CO2 emitters could generate about $2.3 trillion a year, more than enough to provide a basic income for all people living below the poverty line in less developed countries. The authors suggested a variety of other sources: a plastic pollution tax or redirecting harmful oil, gas, agriculture, and fisheries subsidies to funding the program. Basic income funded by environmental levies could not only alleviate world poverty, it would reduce environmental degradation. Two birds, as they say.

There are a number of examples of basic income programs throughout the world including here in Canada. The authors report that the programs “have correlated with improved sanitation, nutrition, expanded educational access, diminished hospitalizations, and reduced poverty-related crimes as well as substance abuse among beneficiaries.” Programs in undeveloped countries have also contributed to environmental conservation, with marked declines in deforestation and illegal hunting.

Critics of basic income suggest it weakens incentives to work, and may also increase inflation. Evidence from actual schemes does not support these criticisms. It does not encourage sloth and inflation effects are marginal.

The Alaska Permanent Fund, which has been providing an annual cash dividend to all residents of the state since 1982, has not had an effect on employment and actually increased part-time work. Many Alaskans save their children’s dividends or use them to set up college funds or pay down debt. Basic income can, in fact, have positive effects on employment by, for example, using the cash to acquire new skills or allowing people to try out new business ventures.

In summary, a universal basic income offers the potential to simultaneously make serious progress on the two leading problems facing humanity today—global warming and inequality—with little to lose.

Getting the world’s nations on board would be a formidable challenge. They are, however, slowly getting together to deal with climate change. The rich nations are even meeting their goal of providing $100 billion US annually to help poorer countries combat and adapt to climate change. With trickle down proving such a miserable failure, trickle up may get a well-deserved look.

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