Basic Income

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Introduction

A Basic Income is a monetary sum allocated unconditionally to citizens of a government. Guaranteed Minimum Income requires more than citizenship as it is provisional and may require a means test or contribution to community service.

Basic Income can be compatible with Peer-to-Peer philosophy by providing a sense of economic equality that suites the voluntary nature of peer networks. A secured standard of living can help develop even richer economic foundations for existing and as yet developed peer networks.

Material below may relate loosely with the two political economic conceptions of Basic Income and Guaranteed Minimum Income, including the many shades thereof.

See also: http://en.wikipedia.org/wiki/Basic_Income_Guarantee



Definitions

Basic Income Guarantee

Allan Sheahen:

"A Basic Income Guarantee (BIG) is a government-ensured guarantee that all citizens will receive an unconditional income on an individual basis, without means test or work requirement – enough for food, shelter, and basic necessities." (http://www.usbig.net/papers/144-Sheahen-RefundableTaxCredit.pdf)


Citizen's Dividend

"Citizen's dividend or citizen's income is a proposed state policy based upon the principle that the natural world is the common property of all persons (see Georgism). It is proposed that all citizens receive regular payments (dividends) from revenue raised by the state through leasing or selling natural resources for private use. In the United States, the idea can be traced back to Thomas Paine's essay, Agrarian Justice, which is also considered one of the earliest proposals for a social security system in the United States. Thomas Paine best summarized his view by stating that "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

This concept is a form of basic income, where the Citizen's Dividend depends upon the value of natural resources or what could be titled as "common goods" like seignorage, the electro-magnetic spectrum, the industrial use of air (CO2 production), etc.

The State of Alaska dispenses a form of citizen's dividend in its Permanent Fund Dividend, which holds investments initially seeded by the state's revenue from mineral resources, particularly petroleum. In 2005, every eligible Alaskan resident (including their children) received a check for $845.76. Over the 24-year history of the fund, it has paid out a total of $24,775.45 to every resident." (http://en.wikipedia.org/wiki/Citizen%27s_dividend Wikipedia)

Negative Income Tax

"In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government. Such a system has been discussed by economists but never fully implemented. It was developed by Juliet Rhys-Williams in the 1940s and later by United States economist Milton Friedman in 1962 in Capitalism and Freedom. Negative income taxes can implement a basic income or supplement a guaranteed minimum income system.

In a negative income tax system, people earning a certain income level would owe no taxes; those earning more than that would pay a proportion of their income above that level; and those below that level would receive a payment of a proportion of their shortfall, which is the amount their income falls below that level.

Typically, this is proposed to be implemented as a flat tax combined with a fixed government payment. For example, if the flat tax rate is 25% and a government payment of $10,000, then:

  • A person earning $40,000 per year would be at the break-even point. They pay no taxes, because their tax payment equals their government payment.
  • A person earning $1,000,000 would pay close to the full 25% tax, as the government payment would be negligible compared to the $250,000 in tax payments.
  • A person earning only $4000 per year would pay $1000 in taxes but receive $10,000 in payment, for a net income of $13,000, or $9,000 in net government payments. The net payment is 25% of the difference between their income and the break-even income."

(http://en.wikipedia.org/wiki/Negative_income_tax Wikipedia)


Asset-Based Egalitarianism

"Asset-based egalitarianism is a form of egalitarianism which theorises that equality is possible by a redistribution of resources, usually in the form of a capital grant provided at the age of majority. Names for the implementation of this theory in policy include universal basic capital, basic capital and stakeholding, and all are generally synonymous within the equal opportunity egalitarian framework." (http://en.wikipedia.org/wiki/Asset-based_egalitarianism Wikipedia)


Typology

Livable vs Non-Livable Basic Income

by Shannon Ikebe:

"Considering the fundamentally different political implications, a basic income above and below the level of a livable income should be treated as different proposals. We could call them a livable basic income (LBI) and a non-livable basic income (NLBI).

Could an NLBI still be a significant improvement over the status quo, even if it is not as transformative as an LBI? It entirely depends on the source of its funding and other associated measures.

If the money for an NLBI comes from taxing the 1 percent or cutting prison or military expenditures, it is clearly positive. For example, Matt Bruenig and Elizabeth Stoker Bruenig call for a $3,000-a-year basic income that would be financed by raising taxes on the rich and reducing the “submerged welfare state for the affluent” — a robust redistributive measure even if it doesn’t lead to a radical post-work transformation of society.

But it should not escape our attention that an NLBI is very similar to the negative income tax (NIT) favored by libertarian economists, including Milton Friedman. An NIT simply means that those who make less than a certain income threshold receive money back from the government instead of paying any income taxes. Friedman argued that after instating an NIT, you could eliminate all other existing welfare programs, reducing bureaucracy and market interference.

More recently, the libertarian political scientist Charles Murray has proposed an annual unconditional grant of $10,000 for every adult and scrapping the rest of the welfare state, including Social Security and Medicare.

Even if a basic income is not introduced as a libertarian scheme, financing it by eviscerating other social policy or public investment programs (or through non-progressive taxes) would likely have a negative redistributive effect, without increasing the scope of freedom.

In a political context in which the Left is on the defensive, such an outcome is not unlikely. The Swiss proposal advocates for a considerably higher and livable 2,500 francs per month — and its proposed text for the constitutional amendment states a basic income should “enable a dignified existence” for the entire population — but the vast majority of parliamentary members bitterly oppose the social movement–led plan. In Finland, it’s a center-right government that’s proposing the multiple options up for consideration, with different levels of income and funding sources, containing both progressive and reactionary possibilities.

Even if the Left had sufficient political power to win a progressive NLBI, it is far from clear it should be our primary demand. We still need better-funded and free higher education, massive investment in green infrastructures and energy sources, and the restoration and expansion of decimated social policy programs, just to name a few priorities.

A basic income’s universalism and lack of means testing is certainly significant, as van Parijs emphasizes. He argues we should aim for a “basic income at the highest level that is economically and ecologically sustainable,” whether it’s a livable amount or not. On the other hand, a basic income may not be fiscally compatible with an expansive welfare state under the conditions of capitalism.

For feminist economist Barbara Bergmann, even a below-livable basic income would undermine a Swedish-style welfare state — the kind of welfare state that may contribute more to social and gender justice because of its targeted focus on socializing social reproduction. While a basic income would compensate those who spend countless hours doing unpaid reproductive labor, men who don’t engage in reproductive labor would receive the same amount.

The fundamental dilemma of a basic income is that the more achievable version — in which basic needs go unmet without supplementary paid employment — leaves out what makes it potentially emancipatory in the first place. Indeed, many commentaries cite basic income experiments to argue it does not significantly reduce work incentives.

This contradiction is directly tied to the fact that a basic income only addresses the question of distribution, while ignoring that of production. The kind of freedom from work — or freedom through work, which becomes “life’s prime want” — that an LBI envisions is, in all likelihood, not compatible with capitalism’s requirements of profitability.

The dramatic strengthening of working-class power under a robust LBI would sooner or later lead to capital disinvestment and flight, since capital can only make profits through exploitation and won’t invest unless it can make a profit. But slowing production would undermine the material basis of an LBI.

The only way out is to continue producing even if one can’t make a profit. Thus, an LBI would sooner or later force onto the stage the age-old question of the ownership of means of production.

Despite all these shortcomings, a basic income remains one of the few concrete proposals with emancipatory potential that is gaining mainstream attention and support. Especially in a period of left weakness, we should not dismiss it or disengage from discussions about it simply because a UBI throws up numerous challenges.

It is most politically powerful as a demand — a demand that exposes the irrationality of an economic system in which productivity increases seem to bring more unemployment and misery instead of the expansion of freedom they make possible.

In addition, it is not inconceivable that even an NLBI could constitute a first step in a longer-term strategy toward an LBI, forming an institutional infrastructure that could be expanded when the balance of class forces is more favorable. And the very presence of a basic income could help highlight the arbitrary link between “work” and income.

But when it comes to basic income proposals, the details matter. Supporting any plan that seems politically attainable and bears the name “basic income” isn’t a strategy for winning radical change. In the end, there is no feasible way to achieve a free society, or even one close to it, without challenging the power of private capital." (https://www.jacobinmag.com/2016/01/universal-basic-income-switzerland-finland-milton-friedman-kathi-weeks/)


Taxation vs. Capital-Based Funding Mechanisms

Yanis Varoufakis:

"How should society be compensated? (for everything that capital gets from society)

Taxation is the wrong answer. Corporations pay taxes in exchange for services the state provides them, not for capital injections that must yield dividends. There is thus a strong case that the commons have a right to a share of the capital stock, and associated dividends, reflecting society’s investment in corporations’ capital. And, because it is impossible to calculate the size of state and social capital crystalized in any firm, we can decide how much of its capital stock the public should own only by means of a political mechanism.

A simple policy would be to enact legislation requiring that a percentage of capital stock (shares) from every initial public offering (IPO) be channeled into a Commons Capital Depository, with the associated dividends funding a universal basic dividend (UBD). This UBD should, and can be, entirely independent of welfare payments, unemployment insurance, and so forth, thus ameliorating the concern that it would replace the welfare state, which embodies the concept of reciprocity between waged workers and the unemployed. Fear of machines that can liberate us from drudgery is a symptom of a timid and divided society. The Luddites are among the most misunderstood historical actors. Their vandalism of machinery was a protest not against automation, but against social arrangements that deprived them of life prospects in the face of technological innovation. Our societies must embrace the rise of the machines, but ensure that they contribute to shared prosperity by granting every citizen property rights over them, yielding a UBD.

A universal basic income allows for new understandings of liberty and equality that bridge hitherto irreconcilable political blocs, while stabilizing society and reinvigorating the notion of shared prosperity in the face of otherwise destabilizing technological innovation. Disagreements of course will continue; but they will be about issues such as the proportion of company shares that should go to the Depository, how much welfare support and unemployment insurance should be layered on top of the UBD, and the content of labor contracts." (https://www.project-syndicate.org/commentary/basic-income-funded-by-capital-income-by-yanis-varoufakis-2016-10)

History

A Brief History of Basic Income in the United States

* 1964-1996

"In 1964, President Lyndon Johnson declared a “War on Poverty” in America. He said we have a moral responsibility to end poverty. Four decades later, that war has yet to be won.

In 1969, a Presidential Commission recommended that America adopt a Guaranteed Income – often called a Negative Income Tax – with no mandatory work requirements, for all citizens in need. The idea was endorsed by Martin Luther King, the National Council of Churches, the California Democratic Council, the Republican Ripon Society, the 1972 Democratic Party platform, and several Nobel-prize-winning economists.

In his 1972 Presidential campaign, Senator George McGovern proposed giving $1000 to every needy American. During the 1970s, Congress debated four guaranteed income bills, but none of them passed.

However, some good things came out of these struggles. In 1974, Congress passed Supplemental Security Income, a negative income tax for people over age 65. In 1976, Congress adopted the Earned Income Tax Credit, which gives money to low-income workers.

In the 1980s and 1990s, the trend turned to cutting social programs. Homeless people reappeared for the first time since the Depression. Food banks and soup kitchens sprang up. This trend culminated in the 1996 welfare reform bill.

The new law was sold as a way to get people off welfare, and it did. Welfare rolls in the United States are down more than 50 percent from 1996. But it didn’t reduce poverty. That’s because welfare reform dumped many recipients into low-paying jobs – with no benefits or ability to move up.

A better strategy is available. In 1980, the state of Alaska began distributing revenues from state oil revenues to every resident. The Alaska Permanent Fund gives about $1000 to every man, woman and child in the state each year. There are no work requirements. It is not enough to eliminate poverty, but it is a model on which to build a simpler and more effective system of social protection."

(Allan Sheahen, It’s Time to Think BIG! How to Simplify the Tax Code and Provide Every American with a Basic Income Guarantee)


* The Tax Cut for the Rest of Us Act of 2006

"On May 2, 2006, the first-ever Basic Income Guarantee bill, written by USBIG members Karl Widerquist and Al Sheahen, was introduced in the U.S. Congress by California Congressman Bob Filner."

"If we think USBIG should just stick to our annual conferences and remain nothing more than a discussion group, okay. We can all just write papers and schmooz with each other every year. If we think promoting a bill in Congress is too much for our little group, we should admit that to ourselves and I should probably tell Filner to forget about it; that we’re just too small to be effective.

But if we think we should keep at it and try to use the bill to advance what we are spending a good deal of our time on, then I feel each one of us has to do something to help out. A couple of us can’t do this alone. We need each one of us to somehow persuade our respective legislators to sign on as co-sponsors of the bill (which will be given a new number in the 110th Congress). Or we should write some op-ed pieces. Or write a letter to the editor. Or get on talk radio. Or give a talk to the Rotary Club or Lions Club and have them write their legislators. Or do something that we can take back to Filner to show him we’re not dead in the water. Otherwise, it is a certainty this will be our last shot and our credibility will be zero.

And it won’t be easy. The House of Representatives adopted a pay-go budget rule on January 5. Under this rule, a bill cannot be considered on the House floor if it changes tax and entitlement programs in a manner that increases the deficit. In other words, any entitlement spending increase must be offset by either tax increases or entitlement spending cuts of the same or greater magnitude.

Our bill has no such pay-go in it. It will cost $186 billion a year. I’ve been saying: “Well, we can pay for it by reversing the Bush tax cuts of 2001-03.” (Those cuts amounted to a $224 billion, according to Citizens for Tax Justice.) But that’s about as vague as you can get.

What we need is for a legislator to co-sponsor the bill just because he/she feels it’s the right thing to do, and the cost be damned; that it’s an investment in America, not just an expense." (Al Sheahen [1] The Rise and Fall of a Basic Income Guarantee Bill in the United States Congress)

The bill, considered a small BIG rather than a big BIG, provides $2,000 for each legal adult and $1,000 for others per year. See Text of H.R. 5257: Tax Cut for the Rest of Us Act of 2006 for details in finely woven governmental prose.


Contemporary Thought in favor of the Basic Income

by Shannon Ikebe:

"While the idea of a basic income as an egalitarian reform can be traced back to Thomas Paine, interest in the policy has picked up in the last few decades. Belgian philosopher and economist Philippe van Parijs, for example, sees in the basic income the possibility for a “capitalist road to communism” — a strategy for leaping over socialism (understood as collective workers’ ownership of the means of production) and moving directly to communism (“from each according to her abilities to each according to her needs”).

In recent years, a UBI has been embraced in particular by the post-productivist left, which carries a strong feminist and ecological bent and rejects the traditional left’s valorization of labor and the working class.

For example, feminist theorist Kathi Weeks identifies a basic income as the linchpin of a “postwork political project,” which regards the minimization of work as the key to an emancipatory society. Her case for a UBI comes from the perspective of social reproduction feminism. In capitalism, socially reproductive labor within households is largely uncompensated, and still overwhelmingly performed by women; by severing the connection between income and activities designated as “work,” Weeks writes, a basic income “highlights the arbitrariness of which practices are waged and which are not.” (https://www.jacobinmag.com/2016/01/universal-basic-income-switzerland-finland-milton-friedman-kathi-weeks/)


Status

2017, year of the pilots

Guy Standing:

"This interest has prompted the launch of several basic income pilots around the world. One started on 1 January in Finland with others planned in Ontario, Canada, Oakland, California, Aquitaine and Catalonia, and discussions are ongoing in Fife and Glasgow. A US NGO, GiveDirectly, is raising $30m for a 12-year experiment in Kenya.

It is important to stress that pilots can only test certain behavioural aspects of paying a basic income and seeing what people do differently, whereas its proponents rest their case on more fundamental justifications – social justice, freedom and economic security. None of these can be tested by pilots, which by definition are short-term and involve relatively small numbers of people.

Most pilots do not conform to a universal basic income system, in which everyone in a given community receives it, so these benefits cannot be tested. And if only a few people are given a basic income, recipients may soon find themselves under pressure from relatives and neighbours to share it.


For these reasons, some see pilots simply as a way of avoiding other important policy decisions. But once results start to come in, they may help to “win the argument”, as John McDonnell, Labour’s shadow chancellor has put it, by showing that basic income is both feasible and does not have the negative behavioural effects commonly attributed to it.

At the moment, Finland’s pilot is receiving global attention. It is not a true basic income experiment, which is not to imply it will have no value. Instead, 2,000 randomly selected unemployed people aged between 25 and 58 have started to receive €560 (£475) as a tax-free monthly unconditional benefit, paid for two years. It will not be reduced if they earn income, and they will not be obliged to search for jobs.

The reasoning behind the experiment is that the Finnish social security system, designed for an industrial society, has become dysfunctional. As in the UK, it is overcomplex and has created severe poverty traps. A basic income removes onerous benefit conditions to seek and take employment, yet increases the incentive to take low-wage jobs because it is not withdrawn as income rises. Thus the pilot’s designers pose the question: could a basic income simplify the social security system and increase employment?


A well-known experiment in the Canadian town of Dauphin in the 1970s showed that recipients of the basic income suffered less from ill-health and mental stress. In negative income tax experiments in the US in the 1970s, children from recipient families were less likely to drop out of high school.

And in an “accidental” basic income pilot in North Carolina, where a longitudinal study of child development coincided with the decision of a Cherokee community to distribute casino profits to all tribal members, children in recipient families had fewer behavioural disorders, performed better in school, and were less likely to drift into crime. This was attributed to more economic security and better family relations, partly because parents spent less time arguing about money and more time with their children. Alcohol and drug abuse also fell.

In developing countries, experiments coming closest to a test of basic income have been conducted in Namibia and, on a larger scale, in India. In the largest Indian pilot, about 6,000 men people in eight villages received a small basic income for 18 months, and their experience was compared with what happened in 12 similar villages where nobody received the basic income.

Four positive effects were observed: First, there were benefits to welfare – improved nutrition, better health, improved schooling. Second, there were positive equity effects; the basic income helped the disabled more than others, women more than men, and scheduled caste households more than high-caste ones. Third, there were positive economic effects; having a basic income led to more work and labour, raised productivity and output, and reduced inequality. In particular, there was a growth in secondary, self- employed work.

Later this month, the Indian government is due to publish its annual economic report, which will include a chapter on the feasibility of rolling out a basic income across India. It may be cautious and noncommittal but the fact that a major country is even considering the introduction of a basic income testifies to a growing legitimacy.

One unanticipated result was that the emancipatory value of the basic income, in terms of transforming people’s lives, was greater than the very modest monetary value. I would argue that this emancipatory effect would apply wherever a basic income system was instigated, whereas most other forms of benefit, by being selective, conditional and inefficient, have an emancipatory value less than the monetary value." (https://www.theguardian.com/commentisfree/2017/jan/12/universal-basic-income-finland-uk)


Discussions

  • Frase, Peter. Do they owe us a living? Activist. 2010 Feb 3.

Available from: http://theactivist.org/blog/do-they-owe-us-a-living. Accessed 2012 Jun 2. Archived by WebCite at http://www.webcitation.org/687MnKT6y. [anchor]

"Frase advocates a guaranteed minimum income, also called Universal Basic Income (UBI), as a “non-reformist reform”, implementable under capitalism but setting the stage for further radical transformation of society. Both UBI and the general concept of non-reformist reforms are associated with the Marxist theorist André Gorz. Even a small UBI has the potential to reduce the dependence of individuals on the labor market for survival. UBI is often criticized on the ground that if no one needs to work in order to live, certain unpleasant but essential types of work will not be done at all, even for high wages. Frase responds that only a minority of socially useful types of work will fall into this category, and such cases can be addressed with ad hoc solutions as they arise. Much socially useful work needs little or no “material incentive”. Other forms of work that are common in capitalist societies are socially harmful, and removal of their incentives would actually be beneficial. UBI minimizes the need for top-down micro-management of decisions about the social usefulness of work. It also helps to dispel the illusion that all forms of work are socially beneficial, which tends to be common in a capitalist system without UBI, because without UBI any job helps someone to survive." (http://dedicto.com/wordpress1/bib/)


It can be done

Excerpts from various proposals demonstrate the ability to redistribute financial wealth.

Allan Sheahen, It’s Time to Think BIG!:

"In 1997, Irwin Garfinkel of Columbia University and Chien-Chung Huang of Rutgers University produced a comprehensive paper which became the foundation of Leonard Greene’s 1998 book: The National Tax Rebate. Using 1994 government data, Garfinkel and Huang calculated that the U.S. could afford an annual BIG of $4000 per adult, $2175 per child, and $8000 per senior by eliminating 115 federal welfare programs, abolishing the income tax personal exemption, and taxing BIG benefits.

In 2004, Charles Clark of St. John’s University estimated the U.S. could afford a BIG at the 2002 poverty level of $9359 for an adult and $3500 for a child by eliminating some federal welfare programs and by replacing the individual income tax rates with a flat tax of 35%.

Those studies followed on previous work done by Michael Murray of Drake University, in his 1997 book: …And Economic Justice for All. Murray judged that a 35% flat tax could pay for a mid-ranged BIG of $6000 per adult and $2000 per child."


Critiques of the Basic Income from the left

Summary: Risks of UBI and possible responses

Ursula Huws:

"Risks of UBI

    • Driving down wages:
    • If a UBI is not to exacerbate this state of affairs, it is imperative that it is linked to a high minimum wage and one, moreover, that can be linked to systems where workers are paid by the task, not just to hourly rates.
    • Undermining collective bargaining for employer-provided benefits: To avoid this risk, it is therefore important that the introduction of UBI should be accompanied by measures that support trade unions’ abilities to bargain with employers at company and sector levels for benefits for their members, by protection for existing company pensions schemes and by other measures that ensure that employers continue to contribute their share of the cost, for instance through employers’ contributions to National Insurance.
    • Undermining collectively-provided public services: It is therefore imperative that the introduction of a UBI should be embedded with policies that protect the scope and quality of public services and their collective and universal character.
    • Creating racist definitions of citizenship: The introduction of UBI must therefore be integrated with humane and well-thought-out policies on immigration and citizenship, perhaps by linking entitlement to the place of residence, rather than nationality."

(https://t.co/2fygpVTKyY)


Against

* 1. Ackerman, Seth. The work of anti-work: a response to Peter Frase [Internet]. Jacobin. 2012 May 22.

Available from: http://jacobinmag.com/blog/2012/05/the-work-of-anti-work-a-response-to-peter-frase/. Accessed 2012 May 23. Archived by WebCite at http://www.webcitation.org/67suffmKj.

"Ackerman responds to Peter Frase’s “Category errors” with a defense of full employment as an important goal for the Left and a critique of Frase’s project of destigmatizing unemployment. According to Ackerman, the stigma attached to unemployment is not an arbitrary prejudice or a manifestation of a simplistic work ethic that holds labor to be intrinsically desirable; it is a consequence of the Left’s fundamental concern with equality. Fairness demands equal sharing of the burdens (including labor), as well as the rewards, of the collective social enterprise of production. The Communist Manifesto had called for “equal liability of all to work.” Even privileged elites throughout history have recognized that evasion of work is ethically questionable, and have freely chosen to work in the absence of economic necessity, or have tried to justify refusal of work by claiming that they offer other benefits to society. Normalization of unemployment with a guaranteed income, if possible at all, will embitter and divide the working class. The ultimate elimination of wage labor for all remains a fundamental goal of the Left, but can only be achieved through gradual reduction of working hours under conditions of full employment." (http://dedicto.com/wordpress1/bib/)


2. Francine Mestrum:

"why is the BI not on the agenda of the left if it is so interesting? If the advantages are so clear and irrefutable, and if it even can erode capitalism, why not organize a huge campaign in order to promote it? Why not support the citizens’ initiative?

A first doubt emerges because neoliberals are among the advocates of the BI. The Belgian example of the political party Vivant is clear in that respect. The BI is not a leftwing project. What is the neoliberal objective? To lower labour costs? To eradicate poverty? To give everyone a minimum income with which one can survive?

It is within this liberal framework that many countries already have a ‘negative income tax’: when your income falls below a certain level, the state will pay you the missing amount. Of course, this is different from what the advocates of the BI defend today, but one should never forget that a minimum income is perfectly acceptable in a neoliberal context, whereas a minimum wage is refused for distorting markets.

A second doubt arises concerning the freedom to participate or not in labour markets. Assuming that all people want to give meaning to their life with some form of work or activity, it is perfectly possible nevertheless that some people prefer to do nothing. We have to wonder then who will be prepared to do the burdensome and difficult tasks that remain to be done when there is no serious wage to compensate for it? Or, put differently, do we accept a right to laziness? Or do we think that all socially necessary and useful work has to be distributed fairly and that no one should be allowed to escape? From working in mines to picking fruit or garbage collection, there are some tasks that no one will be prepared to do willingly, out of conviction and with enthusiasm.

The BI exempts the State from doing anything for people above and next to the BI. Even if today’s social protection systems are not meant to fight inequality, they do rise peoples’ incomes and limit inequality. The best tool in the fight against inequality is a fair tax system and this can be maintained when a BI system is introduced. But the responsibility of the State stops when the minimum floor of BI is reached. Social progress through higher incomes stops to be a task of governments and income inequalities can rise.

Questions can also be put concerning the feasibility and the desirability of unconditionality. The freedom given to people is very important, but what if the BI is used for gambling or drinking? Is the State responsible for people who fall off the wayside of minimal protection? And if so, how are governments to justify this help to those who behave ‘correctly’? If not, is it possible to let people just die from hunger? Can conditionality not also be seen as reciprocity? It would mean that people have to behave correctly if they do not want their BI be withdrawn, whereas public authorities are committed to provide people with good quality social services. Or a decent labour market policy. Benefits rarely are totally unconditional and this is probably a good thing. Citizenship is based on a relationship between citizens and the state. It is an implicit agreement on rights and duties for all.

By eliminating non wage labour costs, labour will become far more cheaper for employers. The advantage for them is much more important than for workers who still will have to fight for decent labour conditions. In whatever way the BI is being financed, it will always be some kind of tax to be paid by everyone. And that means that labour costs which are now paid by workers and employers as part of the wage cost, will have to be paid by the whole of society, possibly through a higher VAT rate. It thus comes down to a shift from labour costs to costs for society. It is obvious that trade unions are not very keen on such a system. It will become much more difficult to negotiate good labour conditions, certainly when the BI is not high enough to live on. If workers do not only want to survive, but also want a car or a holiday abroad, it will become difficult to put pressure on employers. It is clear that trade unions will lose much of their power. The freedom not to work is very relative and is only valid when one is satisfied with a life in relative poverty. Chances are real that wages above the BI will remain very limited. An unconditional income outside of the labour market cannot influence that labour market. Contrary to the thesis that capitalism is being eroded, it is possible that one ends up with a capitalism without a labour market and that employers pass on as many costs as possible to the whole of society.

Finally the main questions concern the amount of the BI.

How much? How to finance?

In Vivant Europe’s proposal[4] the idea is to have a BI amounting to 50 % of the guaranteed minimum wage. Children up to 18 years old would receive 25 % of this amount, young people between 18 and 25 years old would receive 75 %, whereas aged people above 65 years would receive 150%.

For Belgium this would mean 700 Euro per month and the system would cost around 24 % of GDP. This is more or less the share now taken by social expenditures.

Pensions, unemployment benefits, family allowances and costs for sabbaticals would disappear. Huge savings are possible on defence, police and cultural policies (because non wage labour costs disappear). The costs for health care would be halved because doctors would not to have pay social security costs.

Vivant also proposes a lowering of company taxes to 15 %, whereas all incomes beneath 1500 Euro per month would be exempted from income tax. Above 1500 Euro per month the tax rate would be 50 %.

The BI is financed through the savings on the current social expenditures and a substantial rise of VAT. The idea is that net wages would remain unchanged.

Apart from the clearly liberal ideology behind Vivant’s proposal – speaking about ‘taxes’ on labour instead of social contributions as being part of wages and on a ‘society of welfare recipients’, this proposal gives rise to serious doubts.

This contribution cannot analyse the detailed amounts, but a first look at the proposals does raise questions about their feasibility and adequacy. It is very improbable that net wages would remain unchanged. It would mean that workers would really gain with these proposals and pensioners would seriously loose.

It is clear that a ‘decent life’ is not possible with 700 Euro per month. Those who work can raise their income. But is it possible to chose not to work if it means you have to live with 700 Euro a month? Is it possible for an aged person to live with 1050 Euro a month, let alone to enjoy your old age?

Many of the arguments in favour of the BI disappear rapidly when translated into concrete amounts. In the European citizens’ initiative it is stated one wants to shift from a ‘compensatory’ system towards an ‘emancipatory’ system, but 700 Euro a month can hardly be said to be sufficient to achieve this.

The amounts for other countries are not any better. In Bulgaria the BI would only cost 5,45 % of GDP but the amount would not rise above 37 Euro per month. Bulgarians will not be too happy.

The current proposals for Germany, Spain and Finland all mention amounts around this same floor as in Belgium[5]. No one proposes an amount up to the poverty line (for Belgium: 1000 Euro per month). Apparently this is too optimistic and this means the BI would not be sufficient to really eradicate poverty." (http://www.globalsocialjustice.eu/index.php?option=com_content&view=article&id=491:the-unconditional-basic-income-a-solution&catid=10:research&Itemid=13)

UBI as Hyperinflationary

By Alexander Kolokotronis and Sam Nakayama:

"Economist Pavlina Tcherneva has argued there could be disastrous results from wide-scale implementation of UBI.

In a paper from 2006, Tcherneva argues that solely implementing UBI would lead to "stagflation," i.e., "low employment and high prices."


She writes:

- In order to coax [UBI] recipients back into the labour market, employers will need to offer higher wages (which, at first approximation, is a desirable result). However, soon thereafter, these same employers will also raise prices, to cover the increases in wage costs. As a consequence, rising prices will erode the purchasing power of the [UBI] payment, which will affect particularly those recipients who did not return to the labour market. To maintain the objective of the universal guarantee and provide just levels of standard living, there will be pressure to revise the [UBI] benefit upward. If this happens it will further induce some exit from the labour market, drop in output, a compensatory rise in wages and prices and further drop in [UBI] purchasing power. This vicious cycle renders the income guarantee self-defeating. Note that, if the benefit is continually increased -- the income guarantee becomes not just inflationary, but hyperinflationary." (http://www.truth-out.org/op-ed/item/40022-why-socialist-job-guarantees-are-better-than-universal-basic-income)

Defense of Basic Income from the Left

Kathy Weeks (in an interview by Georg Souvlis):

"Ιn your study, The Problem with Work, you put forward a strong argument for Guaranteed and Universal Basic Income. Now there seems to be a growing number of left-wing essays and thinkpieces claiming that Basic Income projects are not inherently leftist and are actually consistent with neoliberal logic and restructuring (basically throwing cash at a problem instead of providing any kind of infrastructural solution). Do you have any further thoughts regarding the Guaranteed and Universal Basic Income, particularly in light of these new left-wing critiques and the concept’s surge in popularity amongst conservatives?

I interpret the growing interest in a Basic Income across the political spectrum as a positive development. Here is how I see it: the demand for a Basic Income is, depending on the terms of the demand, a left-wing demand; however, the politics of the demand are not by any measure straightforward. Whether or not it can improve the lives of a broad crosssection of workers depends on several specifics, most important, on the level of the income that is provided. If it is too low, it risks further subsidizing low wage employers by offering their workers a wage supplement. The demand I support is for a miminal livable income that, insofar as it enables workers to opt out of waged work even temporarily, would force such empoyers to offer better wages and conditions. That said, the politics around this are tricky at best, as it is not unlikely that once won, a Basic Income will be first instituted at a low level. The struggle to then raise the level of income will require additional efforts.

But even if or when it is secured in the form of a minimal livable income, it should be clear that a demand for Basic Income is not a proposal to replace the wage system, but only to loosen its grip on us a bit by providing income for those now shut out of or rendered precarious in relation to waged work, and for those whose contributions to social (re)production that are not now remunerated with wages. It would also give individuals a stronger position from which to negotiate more favorable employment contracts and better enable us to make choices about what kinds of households and intimate relationships we might want to form. While these are not insubstantial benefits, they do not add up to some revolutionary postcapitalist vision.

On the contrary, I think a Basic Income is likely to be the only way capitalism will be able to sustain itself materially and ideologically in the near future as the wage system and family model continue to reveal themselves inadequate to the task of distributing income and organizing productive cooperation. Instead, what a Basic Income could provide is material support for the time and effort necessary to fight for additional reforms and a conceptual opening to think more critically about work and nonwork and more imaginatively about how they might be further transformed. It is in that sense a rather modest demand, but one that I think will enable further political thinking and action." (http://politicalcritique.org/world/2017/souvlis-weeks-feminism-marxism-work-interview/)


Support of Modern Monetary Theory for Basic Income

Rebecca Rojer:

"Bill Mitchell warns that giving away money is more inflationary than purchasing labor; a basic income would have to be balanced by more vigilant taxation for its value to not be rapidly inflated away. He also believes that a job guarantee is more transformative in expanding our notions of “work” and political participation. While the implementation of such a program will no doubt be messy and imperfect, excessive fears of “make work” suggest a lack of imagination. If we run out of trees to plant and day cares to staff, everyone can just work fewer hours.

Job and income guarantees are complementary policies. One ensures that those who want to participate in society can do so and be formally recognized and compensated for their contribution. The other ensures that no one is compelled to work if they don’t want to. MMT sees the former as the most direct path to both full employment and price stability, but the programs are by no means mutually exclusive." (http://thenewinquiry.com/essays/the-world-according-to-modern-monetary-theory/)

For

* 1. Frase, Peter. Category errors [Internet]. Jacobin. 2012 May 22.

Available from: http://jacobinmag.com/blog/2012/05/category-errors/. Accessed 2012 May 23. Archived by WebCite at http://www.webcitation.org/67syocvw8. [anchor]

"Frase cites socioeconomic research showing that the psychological stress resulting from unemployment is considerably reduced when the unemployed are socially recategorized as “retired”. He infers that the unhappiness of the unemployed is largely due to the social stigma attached to their condition, and that the Left should make it a high priority to “combat the ideology that equates working for wages with contributing to society.” Frase also advocates the adoption of a “Basic Income” or UBI policy that guarantees everyone a minimum income independently of work:

- 'In the short term, job creation may be a necessary response to our immediate crisis. But the longer term project is to disconnect waged work from its associations with material well-being and with social prestige'." (http://dedicto.com/wordpress1/bib/)


2. Francime Mestrum:

"The proposal to give all citizens, irrespective of their status, income or job a certain amount of money is rather old. It is based on the idea that all have a right to an ‘adequate standard of living’ as is stated in the International Pact for Economic, Social and Cultural Rights, and the fact that States have to guarantee it.

In Belgium, the idea was promoted by the philosopher Philippe Van Parijs[2] in order to promote social justice and given the fact that ‘equality of opportunity’ cannot really be achieved. Today, the idea is promoted by the political party Vivant and some greens. More recently, the idea was strongly promoted by Guy Standing in his book on ‘the precariat’[3]..

There are convincing arguments to defend a system of BI.

The first one relates to citizenship, this is the idea that all human beings are equal and have equal rights. It is unacceptable to make distinctions in function of job or status. All citizens of a national community should in the same way be able to share in nationally produced wealth. In this way, the BI creates a kind of real freedom instead of the formal freedom of an abstract citizenship.

This is directly linked to the idea of universalism. Our systems of social security are, in theory, also universal but far from it in practice. By treating everyone in the same way and giving equal rights, one can work towards an effective social integration. Targeted and selective allowances should not exist. This will make an end to stigmatization, the frequent manifestations of clientelism, the biased assessments and the high administrative costs linked to the management of granting benefits and detecting possible fraud.

The BI is unconditional, which means that huge targeting and management costs can indeed be avoided. The amount can differ in function of age – children and youth on the one hand, aged people on the other hand will receive lower or higher amounts. This is the only criterion to be taken into account.

In the proposal of the Finnish Left Alliance it is stated that such a BI gives all people the possibility to work on the labour market or not. Those who prefer to dedicate their time to artistic activities or to social and/or political work, can do so. No one is obliged to go and look for a job, which can only have an emancipating and liberating impact. No one can be put on pressure to participate in the labour market.

The BI also makes an end to ‘the precariat’, people who today have no rights and therefore no interest in defending the rights of social security. Migrants and refugees can now participate in the labour market precisely because they do not respect the social rules and can offer their labour force at a much lower price. By eliminating labour costs above the net paid wages, the BI can make an end to the ‘black’ or ‘informal’ labour market which is based on competition.

By also eliminating the pressure to look for a job or to create jobs, it would no longer be necessary to subsidize companies.

With a BI system, people would be free to participate or not in the labour market. Labour would become much cheaper, not only because non wage labour costs would disappear but also because employers would not be willing to continue to pay the same net wage above the BI. A labour income certainly would help to raise the living standards above the BI and workers will be able to exert more pressure on employers since they are not obliged to stay on the labour market. Employers would thus be stimulated to offer attractive labour conditions so as to attract sufficient workers.

Contrary to our social security systems the BI cannot be made responsible for the high labour costs or for distorting labour markets. BI is indeed a distribution of incomes but outside the market for labour and goods. It is not a simple distribution from rich to poor, since the rich would also receive the same amount of money.

Finally, the BI is an effective tool to eradicate poverty, at least if the amount is high enough. The BI gives freedom to the poor who are now constantly harassed in order to receive their conditional benefits and have to give evidence of their willingness to work and to justify their expenses.

These advantages are very important and can advance a real systemic, progressive and ecological change. It could mean the end of capitalist labour relations by giving workers their freedom. Workers would indeed no longer be obliged to sell their labour force in order to survive. Labour relations can be based on free contracts that can be terminated if labour circumstances become unsatisfactory." (http://www.globalsocialjustice.eu/index.php?option=com_content&view=article&id=491:the-unconditional-basic-income-a-solution&catid=10:research&Itemid=13)

Examples

The basic income and the Commons sphere

Vasilis Kostakis, from http://www.re-public.gr/en/?p=418

"The need of adopting a new environmental policy is imperative, but there is a common understanding that whatever we do, we can’t eliminate pollution. It is a part of the system’s entropy that, fortunately or unfortunately, will always exist. The reduction of the level of environmental pollution to a viable frame is our responsibility. In addition, whether they pollute the environment or not, many financial activities use our common wealth for producing services and goods and making profit (while this profit is not re-distributed back to society-even a part of it-and it is accumulated by a few people, despite the fact that for its creation a part of the field of the Commons was used as a means of production). The radio station uses air frequencies for its operation, whereas hydroelectric companies use water wealth for electric energy production, which will be later sold to consumers. Coming back to one of the questions of this special issue, I will try to answer tentatively how can environmental policy become connected to the fight against world poverty.

Based on all the above hypotheses, I argue that a new environmental policy that will include the institutionalization of the field of the Commons, can contribute to the fight against local and world poverty, through the establishment of a universal income. Enterprises, states, and even individuals, that pollute the environment through various ways (waste, nuclear tests, etc.) or television stations and telephone companies that use the air (the air consists a means of production for them) for the transmission of their signals, will pay a large amount of money to a Commons fund, as they use or affect, directly or indirectly, part of our common wealth. The money that will be raised through this process, will create a reserve fund, which will support the distribution of the basic universal income targeting poorer social groups. An example of environmental protection (it has to do with the reduction of carbon dioxide emissions) and, at the same time, of fundraising for the universal income is the cap and dividend system, that is being developed by the Onthecommons Organization. The idea behind this method is relatively simple: a limited number of pollution licences is issued (according to official reduction objectives), and then sold through auction to the pollutants through, while the money raised are not spent by governments, but distributed equally to all citizens. As the poorer social groups are those who pollute less, they benefit more by such a policy measure, according to Barnes. In a few words, the cap and dividend system is a way for reducing carbon dioxide emissions and protecting household incomes with one stroke. The pillar of this system is the creation of a trust that can be run either by the government, or by a non-profit company. This trust will issue pollution licences and will distribute the money raised through their auction to all citizens."


By Country

Belgium

Belgium: Debate on the Basic Income

"On the occasion of the publication of "L'allocation universelle", an introductory book on basic income by Philippe Van Parijs and Yannick Vanderborght (see NewsFlash 32), the Belgian media seem to be paying renewed attention to the idea, at least in the French-speaking part of the country. On Sunday June 12, 2005, both authors were invited to talk for one hour about basic income in a live broadcast of the public radio RTBF. On June 22, 2005, one of the main Francophone daily newspapers, "La Libre Belgique", published a double-page debate on the topic.

Van Parijs and Vanderborght restated some of the arguments presented in their essay, and tried to show their relevance in the Belgian context. Three intellectuals were asked to give their opinion on the feasibility and desirability of the proposal. Claudine Leleux (University of Brussels) argued in favour of basic income and explained why she feels most attracted by a version of the idea defended by Jean-Marc Ferry, a French but Brussels-based philosopher. The two others were much more skeptical. Jean-Marie Harribey (University of Bordeaux IV and member of the Scientific Council of ATTAC) criticized the idea of disconnecting work and income, arguing that the left should rather go for full employment. Paul Palsterman (scientific council of Belgium's main trade-union CSC-ACV) argued that basic income proponents were too skeptical about the remaining possibilities of collective action in the field of welfare.

Finally, on July 9, 2005, the picture of the front cover of the popular weekly "Télé Moustique" featured a typical manager in his three-piece suit, lounging on the beach. It ran as a title: "Tomorrow, paid to do nothing?" While in a long piece a journalist presented the basic income idea and the international debate, including a reference to the Alaskan Permanent Fund Dividend, in a short interview unionist Paul Palsterman restated again some of his main objections. "The BI proponents", he said, "might be good science-fiction authors, but they are bad philosophers."

Source: http://bien.org


Netherlands

Basic Income in the Netherlands, see https://en.wikipedia.org/wiki/Basic_income_in_the_Netherlands

More Information

Resources in English

Articles

Article by Andrea Fumagalli (not available online yet): http://multitudes.samizdat.net/Basic-Income-Sustainability-and.html

Books

1.

  • WIDERQUIST, Karl, LEWIS, Michael Anthony & PRESSMAN, Steven (2005). The Ethics and Economics of the Basic Income Guarantee. Aldershot: Ashgate, ISBN (Hardback).

"Governments in the US, the UK and other nations around the world routinely consider and, in some cases, experiment with reforms of their income support systems. The basic income guarantee, a universal unconditional income grant, has received increasing attention from scholars as an alternative to the kinds of reforms that have been implemented. This book explores the political, sociological, economic, and philosophical issues of the basic income guarantee.Tracing the history of the idea, from its origins in the late eighteenth century through its political vogue in the 1970s, when the Family Assistance Plan narrowly missed passage in the US Congress, it also examines the philosophical debate over the issue. The book is designed to foster a climate of ideas amongst those specifically interested in the income support policies and more widely for those concerned with public, welfare and labour economics. Its coverage will enable readers to obtain an in depth grounding in the topic, regardless of their position in the debate." Publisher's website: http://www.ashgate.com/


2.

RAVENTOS, Daniel (2007), Basic Income: The Material Conditions of Freedom, London: Pluto Press, 240pp., ISBN: 9780745326290 (Paperback), ISBN: 9780745326306 (Hardback), http://www.plutobooks.com/

Basic Income is a policy idea that could help us revolutionise the way we organise society, Daniel Raventós argues. Raventós is chair of the Spanish Basic Income Network, and Professor at the University of Barecelona. His book is a first-class introduction to basic income - what it is, how we can organise it, and how it can benefit the majority in different spheres of their lives. Basic Income is simply the idea that everyone in a given society has a right to a minimal income. This is paid by the state out of taxation. Unconditionally set at a subsistence level, it would take the place of unemployment and other conditional benefits, and enhance effective freedom. This would bring profound social changes, Raventos argues. The campaign in favour of basic income is growing and governments are beginning to take notice. This is a clear, concise guide to the principles and practicalities of this revolutionary idea.

According to Philip Pettit, L.S. Rockefeller University Professor of Politics and Human Values, Princeton University, Raventos' book is 'The best introduction. It offers a first rate history of the idea, develops a powerful case in its support, and explores all its implications'. In his endorsement, Philippe Van Parijs, Professor of Economic and Social Ethics at the Université Catholique de Louvain and Visiting Professor of Philosophy at Harvard University indicates that "in several countries, no one has contributed more to the public emergence of [basic income] than Daniel Raventós.'


3.


Three books based on American movements are listed here at http://www.progress.org/dividend/cdbooks.html

Also:

  • Arneson, Fred Block, Harry Brighouse, Michael Burawoy, Joshua Cohen, Nancy Folbre , Andrew Levine, Mieke Meurs, Louis Putterman, Joel Rogers, Debra Satz, Julius Sensat, William H. Simon, Frank Thompson, Thomas E. Weisskopf, Erik Olin Wright. Edited and introduced by Erik Olin Wright (Volume II, Real Utopias Project Series, London: Verso, 1996)
  • Redesigning Distribution: basic income and stakeholder grants as cornerstones of a more egalitarian capitalism, by Bruce Ackerman, Ann Alstott and Philippe van Parijs, with contributions by Barbara Bergmann, Irv Garfinkle, Chien-Chung Huang , Wendy Naidich, Julian LeGrand, Carole Pateman, Guy Standing, Stuart White, and Erik Olin Wright (Volume V of the Real Utopias Project Series, London: Verso, in press 2005)

Reviews

Documents

Two documents from Eric Olin Wright:

A 35-page summary from Philippe Van Parijs

Journal

Basic Income Studies (BIS)

(the website below doesn't exist anymore, description left for reference)

Basic Income Studies: An International Journal of Basic Income Research (BIS) is a new international journal devoted to the critical discussion of and research into universal basic income and related policy proposals. BIS is published twice a year by an international team of scholars, with support from Red Renta Basica, the Basic Income Earth Network and the U.S. Basic Income Guarantee Network.

The inaugural issue of BIS will appear in 2006 with articles by Joel Handler, Stuart White and Yannick Vanderborght, and a retrospective on Robert van der Veen and Philippe Van Parijs's seminal article on "A Capitalist Road to Communism". The retrospective includes a reprint of the original article and a set of specially written comments by Gerald Cohen, Erik Olin Wright, Doris Schroeder, Catriona McKinnon, Harry Dahms, Gijs van Donselaar and Andrew Williams.

BIS is currently inviting contributions from academic scholars, researchers, policy-makers and welfare advocates on a wide variety of topics pertaining to the universal welfare debate. The editors are interested in publishing research articles, book reviews, and short, accessible commentaries discussing aspects of basic income or a closely related topic. BIS accepts research from all main academic disciplines, and welcomes research that pushes the debate into previously uncharted areas. BIS aims to promote the research of young scholars as well as seasoned researchers, and the editors particularly welcome contributions from non-Western countries.

For more information, please visit our website at www.basicincomestudies.org or contact the editors, Jurgen De Wispelaere and Karl Widerquist. Scholars who want to have their books considered for review or who would like to review a book for BIS should contact Sandra Gonzalez-Bailon.


Organizations

Basic Income Earth Network is a global resource.

The U.S. Basic Income Guarantee Network (The USBIG Network) is an informal network promoting discussion of the basic income guarantee in the United States.

The Citizen Policies Institute is a Basic Income advocacy group in the United States.


Basic Income Advocacy Organisations

http://www.usbig.net/ : website of the U.S. Basic Income Guarantee Network.

http://www.basicincome.org/bien/ : website of the Basic Income Earth Network.

www.citizensincome.org : website of the Citizen's Income Trust, U.K.

www.basicincome.qut.edu.au : website of Basic Income Guarantee Australia

www1.doshisha.ac.jp/~tyamamor/bijnenglish.html : website of the Basic Income Japanese Network

www.ingresociudadano.org. : website of Red Argentina de Ingreso Ciudadano

http://www.icu.org.mx/ : website of Red Mexicana Ingreso Ciudadano Universal

http://www.redrentabasica.org/ : website of Red Renta Basica, Spain

http://www.bin-italia.org/ : website of Basic Income Network Italy

http://www.grundeinkommen.at/ : website of Netzwerk Grundeinkommen und sozialer Zusammenhalt, Austria

http://www.grundeinkommen.de/ : website of Netzwerk Grundeinkommen, Germany

http://www.borgerloen.dk/ : website of Borgerlønsbevægelsen, Denmark

http://www.basisinkomen.nl/ : website of Vereniging Basisinkomen, Netherlands

http://www.globalincome.org/ : website of the Global Basic Income Foundation