Universal Allocation

* Book: - L'Allocation Universelle. Y. Vanderborght et P. Van Parijs. La Decouverte,

URL = https://www.editionsladecouverte.fr/l_allocation_universelle-9782707145260

Summary

From the reading notes of Michel Bauwens, 2006:

The universal allocation is a income given by a political community to all its members, on a individual basis and without any control or demand for reciprocity.

Chapter 1: History

It was mentioned for the first ime in Thomas Moore's Utopia in 1516

J. Vives, in Louvain, outlined the very first detailed plan, for the Bruges' city council, but his proposal demanded work in exchange and was the inspiration for the poor laws and the workhouses in the UK

In 1883, Bismarck, the German Chancellor, generalized social insurance, inspired by a proposal from Condorcet (1795). It excluded the non-salaried however, and distinguished assistance from insurance. However, it is the start of what would become the 'social state' or the 'welfare state'.

Beveridge, in a report from 1942, re-introduces the idea of assistance, in the form of a minimum wage for households, which will be implemented by the National Assistance Act of 1948. It will be followed in Europe (Belgium, 1974). But, these measures are conditional (they include the control of resources, family conditions, willingness to work).

It would crop up regularly in the 19th cy and was taken up by John Stuart mill. But it was not really debated until after 1918 (by Bertrand Russell f.e.), pushed by Labou in 1920. But Beveridge's social insurance plan, followed throughout Europe, would settle the debaete for decennia The debate would restart in the US in the 1960s.

It came in different flavors:

- 1) the negative tax proposal by Milton Friedman. It's overt aim was to simplify social transfers ('Capitalism and Freedom, 1962) (x part of the taxes, in a flax tax regime would not have to be paid, favoring the poorest)

- 2) Robert Theobald's 'Ad Hoc Committee on the Triple Revolution: a minimum income to insure consumption in the context of ongoing automation

- 3) James Tobin, in 1965, proposes a minimum income that is higher than current transfers, to reduce poverty. This was expressed by the 'demogrant', a cash outlay incorporated in the McGovern platform of 1972.

McGovern would lose these elections and a alternative negative tax proposal by Nixon was derailed by Watergate.

The debate mostly continued in Canada, with many reports on a 'annual guaranteed revenue'. The topic again disappears until the 1980s.

The new debate was especially strong in the Netherlands, where both a party (De Radicalen) and a union (Food union, the 'Voedingsbond') supported it. In Germany, the Greens take the lead. In France, it is the intellectuals such as A. Gorz and J.M. Ferry. They see it as a means to develop a socially useful quarternary sector. The BIEN would be instrumental in federating these hitherto isolated efforts, and rapidly evolved from a Belgian ('Collectif Charles Fourier') to a European, to a world network. In 1982, Alaska launched its Permanent Fund (A.P.E.C.), with oil revenue used for paying out a national dividend to all its 6-month plus residents.

Chapter 2: A Pluralist Idea

The basic income exists in a number of variants:

1. As an income

- A. It can exist as cash, "in nature", or in a number of different combinations. It is most often conceived as a complement, and not as a substitute for other transfers, or for other services (education, etc..)

- B. Periodicity. It can be given one time only as a capital allocation, or every month, 3 months , or annually as in Alaska

- C. How much ? The debate is often: should it be more or less than the poverty limit ? For reasons of realism, many proposals start at the lower end (EUR 200 to 500), but aim to eventually cover basic needs (estimated at 750 EUR in France). Just as important is its financing. If it replaces other transfers, it may make the poor worse off.

2. Given by a political community

The resources must be publicly controlled, are most often associated with a nation-state, but not necessarily (Alaska). It could be a sub-national or supra-national entity. There are various proposals to extend it to a global scale.

- A. How to finance it?

           - From the general state budget ?
           - From direct or indirect (VAT) taxes ?
           - Real estate tax or tax on the use of energy and/or natural resources

The idea here is that if private parties are allowed to use public resources, they should pay and everybody should get a part of the rent. This is called 'distribution' rather than redistribution of public funds.

3. To all its members on a individual basis.

- A. to citizens or residents ?

           - This depends on political vs. economic (combating poverty f.e.) motivations
           - What categories should be excluded ? (prisoners)
 
     

- B. Modulation by age

       - Should one start at adulthood, or at birth, eventually with growing amounts according to age.
       

- C. Individual or household ?

       - The authors reject the idea of differentiation by household as incompatible with the philosophy of unconditional basic income.

4. Without control of resources

- A. A priori transfer or a posteriori ?

       - Because minimum wage provisions take into account household revenue, and only want to fund the 'gap' or difference, they are 'a posteriori' funding mechanisms.
       - The basic income by contrast is a priori. If the financing is exterior (oil fund), everyone benefits. If financing is internal through income tax or expenditure tax ( 
VAT), the richest finance not only their own BI but also that of others.
       

- B. Difference between basic income and negative income tax

       - This is the opposite of a positive tax, as in this case, it is the fiscal authorities who pay the money out. Mostly, the scheme works as a 'credit', from which the due 
taxes are deducted, and it involves a ceiling, from which taxable income is counted. Anyone earning less will therefore receive a variable sum.
       - This credit can only be given after a fiscal calculation, unlike the basic income. There are other differences as well. It is also different from various other tax 
credit schemes. These are not 'variable', but when juxtaposed to minimum revenue, they can be interpreted as signposts to a basic income.

5. Without any conditions (no counterpart)

Conditional schemes do not satisfy the requirements. But some schemes, asking social participation with minimal control, may come close.

In Conclusion: There are therefore 3 basic schemes that society can choose from:

       - 1) social insurance based schemes that are given in exchange for contributions
       - 2) aid to the poor, in the form of conditional minimum income schemes
       - 3) unconditional basic income proposals

Chapter 3: A Just Idea ?

What are the justifications for a basic income:

The most common are as measures against poverty and unemployment; i.e. they are economic arguments; But these are always also embedded in a conception of a just society,ie. moral arguments.