SINGAPORE (Jan 28): In 1942, British economist and social reformer William Beveridge issued an epoch-defining report that established a model for welfare states in the post-war era. He recognised that the old social protection system had broken down and that it was “time for revolutions, not for patching”. The challenge, Beveridge said, was to slay five giants: disease, idleness, ignorance, squalor and want.

Today, it is the post-1945 income distribution system that has broken down irretrievably, threatening economic failure and jeopardising what economist Klaus Schwab calls “Globalization 4.0”. Today, we must fight eight new giants. To do so, we urgently need a 21st-century income distribution system in which a basic income plays a central role. Such a system might not slay today’s eight giants, but it would significantly weaken them.

The first giant is inequality — the huge growth in income and wealth disparities within countries that goes well beyond what is captured by measures such as the Gini coefficient. An increasing share of total income is being captured as rent by owners of physical, financial and so-called intellectual property. Meanwhile, real wages have either stagnated or fallen, and ever more people are falling through widening holes in the social safety net. Traditional redistributive tools such as direct taxes, collective bargaining and labour regulations cannot reverse these structural shifts, however much those on the left might wish.

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