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Private Sponsorship of Universal Basic Income


This paper investigates how Universal Basic Income could be funded through the private
free market in the United States. Welfare programs provided by the government are
concluded to be costly and difficult to navigate with the large and fragmented number of
programs. Such dependency has created little decrease in rates of poverty and instead
provides unnecessary labor and spending when the programs could be supplied by one
annual value of a Universal Basic Income. Critics of UBI wonder where the finances
could be supplied. This paper looks at past studies, current projects, and previous
theoretical implications to investigate the funding of Universal Basic Income using the
free market to assist in the funding, which would potentially reduce the responsibilities of

What is Universal Basic Income?

Universal Basic Income, otherwise known as guaranteed income, in this paper represents
a total sum of money that every adult citizen would receive from an external source not
of their own earnings. Other scholars refer to the concept as a minimum value of financial
aid that would cover basic needs such as food, clothing, and shelter regardless of ones
work status or current financial earnings (Sheahen, 17).

Traditionally, Universal Basic Income has been considered a monetary funding supplied
by government, but in this paper, I explore the possibility that Universal Basic Income
could be supplied by private interest and that government responsibility of all entitlement
programs such as welfare, food stamps, family aid with dependent children, and more
could be eliminated to reduce unnecessary complexities of government responsibility and
conform to the principles of the free market.

Universal Basic Income -- Federal or Private Industry Support?

Economists and theoretical scholars of Universal Basic Income surprisingly come from
diverse and conflicting areas of economic policy and thinking. Libertarian and Free
Market scholars like Milton Friedman have found agreement on economic issues with
David Frum in that simplification of welfare programs is needed and that Universal Basic
Income would be an efficient possibility (Gordon, Friedman).

With mixed support, Universal Basic Income seems to be a plausible and efficient, if not
basic common sense, to be used in place of welfare programs. Proponents of UBI argue
in favor of it in dispelling myths that it would reduce labor productivity and instead
increase citizen motivation to pursue more innovative solutions resulting in a holistic
benefit for the economy and personal spending decisions, and essentially a better way of
life (AttacD).
While theorists and many citizens and even political parties argue in favor of it, the
practicalities of implementing Universal Basic Income is more challenging and often
varying in agreement. Friedman proposed that Universal Basic Income be supplied
through Negative Income Tax, in which individuals that make an annual income below
the UBI minimum would file for donations for a government subsidy (Friedman, 349;
Investopedia). However, Friedman rejected the private industry voluntary concept of
providing Universal Basic Income on the basis of positive externalities, resulting the
unrealistic reliable form of financial funding through voluntary funding of private
citizens (Friedman, Capitalism and Freedom; Zwolinski). Therefore, he resorts back to
the government to supply UBI, creating the need for a negative tax income.

While Friedman looked for ways within the government to allot financial assistance, he
did not theorize these concepts in the modern age of internet economics. In todays
modern time, forms of Basic Income are supplied through donations merely for fandom
or sympathy through the expertise of marketing, sympathy, and the culture of fandom.
Examples like this fall in the Kickstarter, GoFundMe, and Patreon accounts, where
individual citizens may ask for money for a specific cause, project, or way of life
(typically that consists of artists, human rights activists, or other professions where
monetary supply is low). Individuals are already thinking how to supply their own
financial aid since the federal welfare programs would not cater to them. These
individuals use their existence funds and innovative expertise, which will be discussed
later in the article, to fund more income (Santens).

In fact, the empirical evidence that suggests individuals would not lose interest in
working reveals the falsehood of the myth. Individuals taken as subjects in Iran and
Kenya reveal that work productivity increases in the opportunity of free income, even in
individual business expansion, while any decrease in work productivity were possibly
explained by other factors unrelated to the testing variables of provided income at hand
(Kundu; Esipisu & Goering). When given free money, it seems, there are multiple cases
that show that people will choose rational purchasing decisions in purchasing food or
creating solutions that would result in even more monetary benefits in their name, thus
creating a wealth of economic prosperity that increases independence of the consumer
and citizen (Matthews; Murphy). Mass UBI test projects are beginning to take underway
in other countries, including Ontario, Canada, where the goal is to alleviate federal
dependency programs (Samuels). An average of $1,000-$3,000 seems to be the preferred
allowance in various projects, theories, and tests in Friedmans examples, Ontarios
project, and even a project done in 1979 in Dauphin, Manitoba, where more than 1,000
participants were said to have benefitted from the experiments concept of Universal
Basic Income (Mason). These small experiments already show behavior that is
considerably opposing to UBIs critics (Coplan). In fact, decades of welfare creations
have led to increased welfare programs to keep up with the poors needs. The list of
programs have unfortunately turned into a long list of 80 programs that cater to just one
demographic of the single mother (Single Mother Guide).
Cash Assistance resulted in $148 Billion for its entire subsidy in 2012 according to this
source (Single Mother Guide). And according to the report it seems to be that a third of
Americas population already consumes what would be ideally allotted for the entire
population in the amount of $9,000.00 annually per average citizen. Libertarian scholars
have taken to this idea and purport negative criticisms of the existing forms of welfare
programs, combining federal, state, and local government spending to aid the poor in an
average sum of $20,610 per person needing aid. (Zwolinski). This is due to the fact that
this many individuals depend on at least one welfare program, which could be eliminated
by a mass private supply of Universal Basic Income. More reports show that citizens
spend at least $520 billion on dependency-based aid such as welfare due to the
unemployment rates in recent recessions (Luhby).

The fact that 80 programs exist to cater to all the diverse needs simultaneously and
individualistically is inevitably unending and creates an insinuating dependency on
government to consistently be updated with needs of its citizens. By pardoning an
allowance for the citizens, citizens through each generation are left to begin their
economic decisions with a challenge of handling money and maintaining afloat to prosper
long term, which leads one to determine how one can make this money turn into more
money as the above studies show.

The Private Supply Possibilities of Universal Basic Income

But does the federal government need to use the negative income tax strategies as
Friedman suggests? Or do federal resources must be the solution by reprioritizing money
from other industry sources such as healthcare and taxes? How might the government
work alongside in a way that enhances the profitable outcomes of the free market to
provide the UBI relief? What if a private partnership program could alleviate the fear of
critics of handing out free money through government funds?

This idea is inherently more Libertarian than most, but does not necessarily reduce the
role of the government holistically as citizens see fit. It merely reduces a subsect of
government responsibilities so that the federal responsibilities may be expanded or
unburdened to shift to more developed focuses of immediate bureaucratic need, such as
foreign policy or National Security.

Private funding examples are illustrated by the internet campaigns mentioned earlier in
this article, and one man has even discovered how to do it. He supplies his own form of
Universal Basic Income by using the inventions that exist simply because of the
individual opportunities of internet involvement using a growing follower base combined
with Patreon (or money donation websites to artists and thinkers) to supply it (Santens).
In sum, he crowdfunds his income. (Santens).
However, since all citizens cannot have the time or skills to individually fund their own
income. And these individuals without the time or educational resources are precisely the
core demographic government programs target. The poor, single mother and father
homes with children, rely on welfare stamps and must keep a minimum of wage and
poverty in order to qualify. Selectively choose which needs are important to allot for
money to the citizen, inherently creating an authority-based dependency plan for citizens
to continuously rely on government for financial support in desperate times.

Similarly, immigrants and those in medical need rely on specifically funded programs,
and so the money caters to an emergency-type treatment plan similar to the emergency
healthcare mentality of providing for its citizens. UBI would help the individual
recognize that the individual has economic power and leave the spending up to the
choosing of the individual based on his/her individualistic needs. This also does not
undermine or depreciate the power of the individuals ability to critically analyze his/her
given priorities. The responsibility, then, is left to the consumer, and the responsibility is
lifted from the government which then reduces the number of responsibilities of the
government for the government, then, to focus on truly emergency and large-scale plans
like foreign affairs and policy.

The fear of new program implementation and the practicalities of orchestrating a

universal program housed in one government can be solved by collectively resourcing the
private industry in a way similar to the conceptual principles and movements of Fair
Trade economy and capitalism. Social welfare already exists in B corporations where
philanthropic causes are paid in a portion of corporate profits. These would be subsumed
under the general business license that supports UBI. Every company would participate
and not just those inclined to do so. A practical solution from the private industry could
replace existing private industry taxation specifically set for Universal Basic Income in
scale with the size of the business via a business license fee, in which license fees are
used so that the aggregate level of business income is at least as much as the total
Universal Basic Income. Some may call it a tax but it could also be viewed as a license
fee. (Luhby). In order for an individual to start a business, then, the individual would be
required in proportion with the company earnings to contribute back to the Universal
Basic Income movement. If the government mandate is there, a private company, then,
could manage this process in a similar way that consulting or accounting companies aid
in company tax and leadership performance.

Other measures call for taxing land ownership and other forms proposed by the average
citizen that are otherwise left untouched by traditional economists (Vinik; Agnos).

The complex system of welfare programs and the costs that go in hand with determining
eligibility, paperwork, bureaucratic criteria in discussion and control of these programs,
and not to mention the manpower and labor behind them, could be eradicated through the
simple distribution of a monthly allowance. The manpower and labor, then used by
government employees to manage these welfare programs could be applied to more
grander issues that have the safety and prosperity in the holistic needs of citizens in mind
like Security, Education, and more innovative approaches to economic flourishing.
Universal Basic Income is inherently a more efficient way of providing for individuals
needs, but also not undermining the autonomy of the individual. With Universal Basic
Income, the individual is left to be liable for the spending and responsibility of the money
which reduces the necessity of the government to consistently monitor the eligibility and
behavior of the recipients of welfare, food stamp programs.

Sustainable income can be inherently embedded and matching within capitalist and
logical principles, managed outside of a government or authoritys control. The capitalist
dollar votes for the services and people of employment, by utilizing choice, the
community may ultimately care for the community.

Frum argues for a government enhanced Universal basic income solution, in which the
cost would cost $2.14 trillion. Heavy reliance on government dependency for the
responsibility of all of the nations citizens puts too much responsibility on one single
entity (Gordon).


Individuals who would be against Universal Basic Income come from the perspective that
it is essentially free money and would reduce the work drive of the population. This is a
false misconception about Universal Basic Income and has been backed up by several
theorists and experiments taking place in other countries and here in the United States.

When considering budgetary requirements of UBI, government and its opponents argue
about its expense and the practicality of those expenses. Government is fraught with
budgeting concerns and fragmented, unorganized financial priority.

Agnos, Chris. How to Fund a Universal Basic Income Fairly.

Retrieved from <>

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Coplan, Simon. (2017). What if the state provided everyone with a universal basic
income? BBC. <

Esipisu, Isaiah & Goering, Laurie. (2015). Cash aid feeds business surge in northeast.
Reuters. <>

Friedman, Milton. Bright Promises, Dismal Performance.

Friedman, Milton. Capitalism and Freedom.

Gordon, Noah. (Aug. 2014). The Conservative Case for A Guaranteed Basic Income.
The Atlantic. <

Investopedia. Negative Income Tax - NIT.


Kundu, Tadit. (May 2017). Universal Basic Income doesnt make the poor lazy, Iranian
experience shows. LiveMint.

Luhby, Tami. (2012). Unemployment benefits cost: $520 billion.


Mason, Gregory. (2017). Revisiting Manitobas basic-income experiment. Winnipeg

Free Press. <

Matthews, Dylan. (June 2014). Mexico tried giving poor people cash instead of food. It
worked. Vox. <

Murphy, Tom. (2016). Poor people dont spend ash transfers on booze and cigarettes,
studies show.
Samuels, Gabriel. (Nov. 2016). Canadian province to give every citizen $1,320 income
boost to overcome poverty. Independent.

Santens, Scott. Basic Income and Soylent.


Sheahen, Allan. (1983). Guaranteed Income: The Right to Economic Security. GAIN

Single Mother Guide. (2014).

Vinik, Danny. (2013). Heres How The Government Could Make Sure That Everyone
Gets At Least $500 Per Month. Business Insider.

Zwolinski, Matt. (2013). The Libertarian Case for a Basic Income.