Basic income

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It has been suggested that this article be merged into Basic income guarantee . (Discuss) Proposed since March 2013.

Basic income or citizen’s income is a proposed system[1] of social security that regularly provides each citizen with a sum of money unconditionally. In contrast to income redistribution between nations themselves, the phrase basic income defines payments to individuals rather than households,[2] groups, or nations, in order to provide for individual basic human needs. Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test or impact as a result of other income; the richest as well as the poorest citizens would receive it.

Basic income is related to the concept of a social dividend, and is one of the proposed means for distributing the surplus value or economic profits created by socially owned enterprises in a hypothetical socialist economy.[3]

Basic income is not to be confused with Guaranteed minimum income, a similar concept but where the income that is received may be conditional upon participating in government enforced labor or other conditional means testing. Basic income is distinct in that the only requirement for receiving it is to be a citizen of the country.

In everyday usage, the phrase basic income is often inaccurately conflated with means tested guaranteed minimum income alternatives such as a negative income tax. A basic income of any amount less than the social minimum is referred to as a partial basic income.

Similar proposals for "capital grants provided at the age of majority" date to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism.

Contents

Aggressive distinction with Minimum income or Basic Income guarantee[edit]

Some proponents of basic income speak aggressively against minimum income[4] This wiki page's history used to forward to Basic income guarantee, and that page has an excellent list of example implementations, and other sources, but unfortunately repeatedly conflates basic and minimum income. The core basis for opposing minimum income is its effect on work disincentives as per this example:

A Guaranteed or minimum income of $15000 means that every eligible recipient receives a socially funded cheque equal to ONLY the difference between their other income sources and $15000. So, they receive nothing if their income is $15k or more, receive $1k if their other income is $14k, and receive $15k if they have no other income.

To understand why basic income and guaranteed income are drastically different, in the context of work:

  • Basic income (of $10k) is identical to giving every full time (40 hour/week) worker a $5/hour raise, and every half-time worker a $10/hour raise.
  • Guaranteed income (of $15k) reduces every full time worker wages by at least $7.50/hour, and every half-time worker wages by at least $15/hour. In exchange for a $15k payment.

The other main criticism of guaranteed income is that it sounds very good as a political slogan if no one considers affordability. It reflects well on the compassion of the proposer. Guaranteed income offers greater promises than basic income to organized labour and those that refuse to work, but it has no funding predictability, and no basis for sustainable economic stability[2] due to the fact that the impact of refusal to work rates cannot be predicted.

Basic income avoids all work disincentives by not basing the benefit on income level, and has predictable funding costs.

Arguments for basic income[edit]

naturalfinance.net describes several benefits from basic income[3]:

  • The benefits of technology and automation make work less necessary, and are only possible if people can afford the outputs of technology and automation.
  • wealth redistribution is the best possible economic development program because the wealthy don't spend as great a portion of their income as the poor do.
  • wealth redistribution does not harm the wealthy, because all money is spent until it ends up with a saver. So, taxes paid eventually return to the tax payer.
  • basic income is the most efficient possible form of wealth redistribution because there is no bureaucratic overhead needed to filter recipients, or find and punish abusers.
  • basic income as an alternative to public retirement pensions (such as social security in the US) is the only possible prevention of generational theft that will occur if the funding sustainability of future retiree pensions and care is threatened
  • Reduced crime as a result of lower levels of desperation. If loss of income is a consequence of crime, it may in turn create more crime.
  • Balanced power in the labour market as a result of not needing work out of desperation, and better competitive position of workers if some people choose not to work.
  • Better work opportunities as a result of people better able to afford an education or business start up.
  • Smaller government made possible and attractive by the alternative of increased basic income to offset any program cost reduction. Viewed this way, the cost of every government program is paid for equally by each citizen, even if the source of government revenue is progressive income taxation.
  • Social justice is achieved efficiently and automatically, with less requirement on charity and welfare.
  • It's easier for volunteer home owners to help the poor and secluded through group homes by being able to rely on their certain income. Its possible and easier for the disadvantaged to group up and help themselves in the same manner.
  • Natural finance's definition of social dividends (variable basic income: tax revenue surplus over social program expenses) essentially allows the level of basic income paid to citizens to rise with economic, productivity, and automation growth. The affordability of basic income adjusts automatically to the performance of the economy.

Affordability[edit]

Affordability of a basic income proposal is a function of the social/government services it replaces, any tax increases, and the less tangible positive effects on spending and tax receipts associated with wealth redistribution towards the poor, and any social savings as a result of less crime, or fewer incarcerable offenses.

Specific, though informal, measurements were made by Pascal J. for Canada.[5] A 2004 taxable basic income benefit of $7800 per adult could be afforded without any tax increases by replacing welfare, unemployment, and core Old age services. (Canada has supplemental poverty old age programs and pension system). The number excludes any intangible benefits of tax revenue increases due to lower spending and any savings on criminal enforcement.

To estimate affordability of basic income in the US, the starting point of 265M adult citizens and $6.3 Trillion in estimated federal, state, and local government spending[6] means that replacing all US government spending can provide nearly $25k per citizen in basic income.

Naturalfinance.net estimates that by cutting the $1.85T spent on social security and welfare in the US, $9905 can be given to each adult American citizen as a taxable basic income benefit.[7]

From the same paper[7], it is noted that basic income can also be funded through monetary policy. Instead of printing money for direct bank funding, money is printed to give directly to citizens who then spend it in the economy and fund banks indirectly through deposits. Monetary policy has never been used in this manner, but the paper claims there is no underlying economic reason it cannot be used as a partial or full basis for funding basic income.

The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits.,[8] and BIEN has made several fully financed proposals.[9]

Origins[edit]

One of the world's outspoken advocates of a basic income system is the Belgian philosopher and political economist Philippe van Parijs.[10] Other advocates include Gunnar Adler-Karlsson (Sweden), Götz Werner (Germany), Saar Boerlage (Netherlands),[11] Herwig Büchele (Austria), fr:Yoland Bresson, André Gorz (France),[12] Michael Hardt and Antonio Negri,[13] Charles Murray[14] (USA), Keith Rankin (New Zealand),[15] es:Daniel Raventós (Spain),[16] Osmo Soininvaara (Finland),[17] Guy Standing (UK),[18][19] Eduardo Suplicy (Brazil)[20] and Walter van Trier (Belgium).[21]

Advocacy by socialists[edit]

Many socialists have advocated a form of basic income or a social dividend as a means for distributing the economic profits of publicly owned and state-owned enterprises. These include economists Oskar Lange, Abba Lerner, John Roemer, James Yunker and James Meade.

Erik Olin Wright characterizes basic income as a socialist project and a further reform to capitalism that establishes the basis of a social economy by empowering labor in relation to capital.[22]

In his final book Full employment regained? James Meade states that a return to full employment can be achieved only if, among other things, workers offer their services at a low enough price, that the required wage for unskilled labour would be too low to generate a socially desirable distribution of income, and that therefore a citizen's income would be necessary.[23] James Meade advocated for a social dividend scheme funded on the returns of publicly owned productive assets.[24]

In 1918, philosopher Bertrand Russell argues for a basic income in Roads to Freedom.[25]

Advocacy by Libertarians[edit]

Basic income has been promoted by people associated with political views that are generally opposed to the public provision of welfare services, such as Libertarianism, Economic liberalism, and anarcho-capitalism. These people support basic income as a strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems, as well as acting as a form of compensation for fiat currency inflation. Notable libertarian-capitalist proponents of basic income guarantees include Milton Friedman (in the form of negative income tax),[26] Robert Anton Wilson,[27] Gary Johnson (In the form of the fair tax "prebate") and Charles Murray.[28]

It is clear, however, that Friedrich Hayek did not advocate that any modern nation act to implement a minimum income. This was a concept that he attributed to his "Great Society," which was his Utopian liberal society, in the classical sense. Hayek emphasized a minimum income in the far future, and stated clearly that no wealthy countries such as the United States should guarantee any income not available to all around the world, as it would attract mass immigration and overwhelm the procedure:

"It is obvious that for a long time to come it will be wholly impossible to secure an adequate and uniform minimum standard for all human beings everywhere, or at least that the wealthier countries would not be content to secure for their citizens no higher standards than can be secured for all men. But to confine to the citizens of particular countries provisions for a minimum standard higher than that universally applied makes it a privilege and necessitates certain limitations on the free movement of men across frontiers... we must face the fact that we here encounter a limit to the universal application of those liberal principles of policy which the existing facts of the present world make unavoidable." [29]

Many of the people mentioned above have united in the Basic Income Earth Network, which recognizes numerous national advocacy groups. A breakdown of all partisans of basic income is available on the Basic Income Guarantee page.

Funding[edit]

Several sources of funding have been proposed for hypothetical socialist (public or common ownership of the means of production) economic systems:

Many different sources of funding have been suggested for a guaranteed minimum income for non-socialist economic structures:

Criticisms[edit]

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Criticism can concern the level of basic income. If it is too low, it can fail to satisfy some people's comfort levels in expensive urban centers. The solution is to work, or have room mates, or petition government to eliminate other programs so as to be able to increase basic income levels. It is also possible for cities, provinces or states to supplement national basic income.

It is possible that basic income level is set too high, requiring tax rates that discourage work too much, or comfort levels from basic income alone high enough for too many to refuse work. For any society, a sustainable (high) level of basic income is based on its citizens dispositions towards ambition and work, the level of automation and productivity and thus need for work, and the actual economic activity occurring in society at any one time.

Further reading[edit]

See also[edit]

References[edit]

  1. ^ http://www.basicincome.org/bien/aboutbasicincome.html#history History of Basic Income], Basic Income Earth Network (BIEN), retrieved on 18 June 2009
  2. ^ "About Basic Income," BIEN (Basic Income Earth Network)
  3. ^ Social Dividend versus Basic Income Guarantee in Market Socialism, by Marangos, John. 2004. International Journal of Political Economy, vol. 34, no. 3, Fall 2004.
  4. ^ "Basic Income - Real definition, and leftist justification," www.naturalfinance.net (Tuesday, March 5, 2013).
  5. ^ "Canadian basic income vs guaranteed income," naturalgovernance.blogspot.ca (Friday, January 14, 2011).
  6. ^ [1]
  7. ^ a b "Democratic monetary policy - Novel proposals," naturalfinance.net (Tuesday, November 13, 2012).
  8. ^ *BIEN: frequently asked questions
  9. ^ Basic Income Studies: How it could be organised, Different Suggestions
  10. ^ Philippe van Parijs (ed.), "Arguing for Basic Income: Ethical Foundations for a Radical Reform", London: Verso, 1992
  11. ^ Saar Boerlage: "Het basisinkomen stimuleert op een positieve manier de inzet van het individu in de samenleving" (Basic income stimulates in a positive way the input of the individual into the society), interview, Vereniging Basisinkomen: Nieuwsbrief Basisinkomen 48, 2007
  12. ^ "Critique of Economic Reason", André Gorz, in: Peter Waterman, Ronaldo Munck, "Labour Worldwide in the Era of Globalisation: Alternative Union Models in the New World Order", Macmillan, London, 1999
  13. ^ Empire PDF Michael Hardt – Antonio Negri, "Empire", Harvard University Press, 2000
  14. ^ Book review by Conall Boyle, Feb 2007: In our hands: A plan to replace the welfare state by Charles Murray, Washington DC, 2006
  15. ^ "Universal Basic Income: its Core and Essence", Keith Rankin, New Zealand, 1998
  16. ^ "Basic Income: The Material Conditions of Freedom", Daniel Raventós, Pluto Press, London, 2007
  17. ^ Osmo Soininvaara, "Hyvinvointivaltion eloonjäämisoppi" (A survival doctrine for the welfare state), Juva, WSOY, 1994, 298 p, ISBN 951-0-20100-6
  18. ^ Guy Standing and Michael Samson (eds.), "A Basic Income Grant for South Africa", University of Cape Town Press, Cape Town, 2003
  19. ^ Guy Standing (ed.), "Promoting Income Security as a Right: Europe and North America", Anthem Press, London, 2005
  20. ^ "Citizen's Basic Income: The Answer is Blowing in Wind" Nuvola-inspired File Icons for MediaWiki-fileicon-doc.pngDOC, Eduardo Matarazzo Suplicy, USBIG 5th Congress, 2006
  21. ^ Walter van Trier, "Everyone a King. An Investigation into the Meaning and Significance of the Debate on Basic Incomes with Special Reference to Three Episodes from the British Inter-War Experience", Katholieke Universiteit Leuven: Fakulteit politieke en sociale wetenschappen, PhD thesis, 1995
  22. ^ Erik Olin Wright, "Basic Income as a Socialist Project," paper presented at the annual US-BIG Congress, March 4–6, 2005 (University of Wisconsin, March 2005).
  23. ^ James Edward Meade, "Full Employment Regained?", Cambridge University Press, 1995, ISBN 0-521-55697-X
  24. ^ "Basic Income". Media Hell. Retrieved 9 December 2012. 
  25. ^ Bertrand Russell, Roads to Freedom. Socialism, Anarchism and Syndicalism, London: Unwin Books (1918), pp. 80-81 and 127
  26. ^ Robert H. Frank, "The Other Milton Friedman: A Conservative With a Social Welfare Program," The New York Times (November 23, 2006).
  27. ^ "A basic income guarantee," RAWIllumination.net: A window into the writings of Robert Anton Wilson (Tuesday, August 9, 2011).
  28. ^ [dead link] http://bostonreview.net/BR31.5/conley.php
  29. ^ Hayek, Friedrich A. Von. The Political Order of a Free People. Chicago: University of Chicago, 1979. 56. Print.
  30. ^ A Future for Socialism, by Roemer, John. 1994. Harvard University Press: "Stock prices are quoted not in currency but in coupons, issued to citizens on attaining their majority, not convertible to cash, and reverting to the treasury at death."
  31. ^ On the Economic Theory of Socialism, by Lange, Oskar. 1936. The Review of Economic Studies, Vol. 4, No. 1: "It seems, therefore, convenient to regard the income of consumers as being composed of two parts: one part being the receipts for the labour services performed and the other part being a social dividend constituting the individual's share in the income derived from the capital and the natural resources owned by society."

External links[edit]

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