What If Everyone Got a Monthly Check From the Government?
In an audacious experiment, Finland is giving some residents a “basic income” of $16,000 for two years, no strings attached. Here’s what two of them did with the money.
One afternoon in the final days of 2016, Steffie Eronen got a phone call from her husband, Juha. The Eronens had spent Christmas with relatives in Savonlinna, Finland, and Juha had just made the two-hour drive home so he could return to his job as an electrician. The couple live with their 5-year-old daughter in a cozy, two-bedroom apartment in Mikkeli, a quiet, midsize city in the southeastern part of the country. Juha was calling to let his wife know he was home safe, and oh, by the way, an important-looking letter had arrived for her from the Social Insurance Institution of Finland—or, as everyone calls it, Kela.
“Open it,” Steffie said.
There was a pause as Juha tore into the envelope. Then he laughed.
“You got it!” he exclaimed.
Earlier that year, Finland had announced an unprecedented socio-economic experiment. Two thousand residents would receive €560 a month (about $670) for two years, with no strings attached, and the government would study how the money affected their lives. Specifically, Finland wanted to know if the payments, called basic income, freed up people to take part-time or freelance work as they looked for something permanent—stopgap measures that the country’s existing benefits system tends to discourage. To that end, it selected participants who were unemployed and poor.
Steffie, 38, was both of those things, and for months she and her husband had joked that she might make the cut. Chances were slim; the names were being drawn from a pool of about 177,000 people.
“Ha-ha, very funny,” she told Juha over the phone.
No, really, he said.
The couple have been together for seven years and married for four, and they have the kind of affectionately antagonistic banter that develops when two people are raising a small child in a small apartment. They went on like this, Juha insisting and Steffie telling him to stop it, until Juha finally cried “Oh, for f—’s sake!” and hung up. A few days later, Steffie came home and read the letter herself. Over the next two years, Finland was going to give her €13,440 (about $16,000). With it, she could do whatever she pleased.
Basic income is, as the name implies, simple and earnest in its intentions. It assumes that a society thrives when its members are cared for and so seeks to provide them with the means to care for themselves. A robust economy—with jobs, yes, but also the freedom to advance and innovate—allows most people to prosper on their own. But skills become obsolete. People are laid off or get sick. Basic income furnishes a regular stipend so their fundamental needs will be met no matter what.
In its truest form, universal basic income, or UBI, money would be given to everyone. Warren Buffett would get it. LeBron James would get it. So would drug addicts and convicts and people who create Instagram hashtags for their dogs. Technically, Finland’s experiment wasn’t universal, but if the government liked the results, the hope was for the system it eventually implemented to be so.
Historically, the idea of basic income crops up when people want to right an economic wrong. It’s there in Thomas More’s 1516 book Utopia, which describes a society that has no crime because it can “provide everyone with some means of livelihood so that nobody is under the frightful necessity of becoming … a thief.” There it is again, in a 1796 pamphlet by American political theorist Thomas Paine, who argued for the creation of a “national fund” out of which “every person, rich or poor” would receive £15 once he or she turned 21 and £10 every year thereafter. Earth’s resources were supposed to be available to everyone, Paine argued, so people deserved “compensation in part for … the system of landed property.”
Read more: Bloomberg Business