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A basic income (also called basic income guarantee, unconditional basic income, universal basic income, universal demogrant, or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution. This is distinct from the concept of a guaranteed minimum income, which may be conditional upon participation in the labor force or some other means testing. A basic income of any amount less than the social minimum is sometimes referred to as a 'partial basic income'.
Basic income systems financed on returns to publicly-owned enterprises are major components in many proposals for market socialism. Basic income schemes have also been promoted within the context of capitalist systems, which would be financed through taxation or a negative income tax.
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. The phrase social dividend was commonly used as a synonym for basic income in the English-speaking world before 1986, after which the phrase basic income gained widespread currency.
- 1 Properties
- 2 Advocacy
- 3 Worldwide
- 3.1 North America
- 3.2 Basic Income Movement in Europe
- 3.3 India
- 3.4 Japan
- 3.5 Middle East
- 3.6 Elsewhere in the world
- 4 See also
- 5 References
- 6 Further reading
- 7 External links
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Incentives to work
One claimed advantage of basic income is that it removes existing disincentives to work. Where basic income is not present in some case, people on benefits who begin work lose benefits at around the same rate that their income rises (a form of poverty trap where the marginal tax rate is 100%). With basic income this does not happen-the rate of increase is positive at all incomes.
Disincentive to work
One critical view of Basic Income theorizes that it would have a negative effect on work incentive and labor supply. It might be expected that the degree of the disincentive would depend on how generous the basic income were to be. Many basic incomes are proposed to be set at a level that would only just be liveable, so that people would want to supplement it.
In one study, even when the benefits are not permanent, the hours worked—by the recipients of the benefit—are observed to decline by 5%, a decrease of 2 hours in a typical 40 hour work week:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level.
However, in studies of the Mincome experiment in rural Manitoba, the only two groups who worked less in a significant way were new mothers, and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was the Namibian pilot project implemented in 2008 and 2009 in the Omitara village; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power.
Finally, it is worth noting that from the point of view of refusal of work, any disincentive towards work would actually be a welcome development. From that viewpoint, if Basic Income is ever shown to actually reduce the incidence of salaried employment contracts in society, that would be an argument for the adoption of Basic Income, not against it.
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A frequent objection to basic income is the lack of reciprocity, since the basic income is unconditional.
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, and they have put forth proposals for implementation they claim to be financially viable.
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. 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 higher spending and lower personal savings, and any expenditure savings on criminal enforcement.
Several sources of funding have been proposed for hypothetical socialist economic systems on the basis of social ownership of the means of production and/or natural resources:
- Collective resource ownership
- Universal stock ownership
- Profits generated by publicly owned enterprises
- A National Mutual Fund
Many different sources of funding have been suggested for a guaranteed minimum income for non-socialist economic systems (where wealth-producing assets are owned privately):
- Negative income tax
- Income taxes
- Income tax threshold
- Sales taxes
- Capital gains taxes
- Fiat money
- Inheritance taxes
- Wealth taxes, e.g. property tax
- Luxury taxes
- Elimination of current income support programs and tax deductions
- Repayment of the grant at death or retirement
- Land and natural resource taxes (Georgism)
- Pollution taxes
- Fees from government-created monopolies (such as the broadcast spectrum and utilities)
- Money creation or seignorage
- Tariffs, the lottery, or sin taxes
- Technology taxes
- Tobin tax
- Value added tax or other Consumption taxes
Difference from guaranteed income
Basic income and traditional welfare systems both share goals of achieving some level of economic equity. Guaranteed income typically operates by 'topping up' deficient wages - which itself typically relies on the assumption of some level of participation in the labour force - whereas basic income is paid to all irrespective of income or other eligibility criteria.
In many countries, there are advocates for a basic income. Several have proposed a negative income tax, which is means tested, rather than a basic income. Despite their differences in administration and effect, the two proposals are usually conflated.
One of the world's outspoken advocates of a basic income system is Philippe van Parijs, from Belgium. Other advocates include Götz Werner (Germany), Saar Boerlage (Netherlands), André Gorz (France), Michael Hardt and Antonio Negri, Charles Murray (USA), Keith Rankin and Gareth Morgan (New Zealand), Osmo Soininvaara (Finland), Guy Standing (UK), and Eduardo Suplicy (Brazil).
Many socialists have advocated a form of basic income as a means for distributing the economic profits of publicly-owned enterprises amongst population (also referred to as a Social dividend). These systems would be directly financed out of returns on publicly-owned assets, and are a featured as major components of many models of market socialism.
In his final book Full employment regained? James Meade states that a return to full employment can only be achieved 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. Meade concludes that a citizen's income is thus necessary to achieve full employment without suffering stagnant or negative growth in wages. James Meade advocated for a social dividend scheme to be funded by publicly-owned productive assets.
Sociologist and democratic socialist Frances Fox Piven argues that an income guarantee would benefit all workers by liberating them from the anxiety that results from the "tyranny of wage slavery" and provide opportunities for people to pursue different occupations and develop untapped potentials for creativity.
The French social theorist Andre Gorz advocated a basic income system as a means to overcome alienation and as an adaptation to increasing automation of work, which would lead to an increase in the amount of leisure time available to individuals through a re-distribution of the workload in society.
Geolibertarians seek to synthesize propertarian libertarianism and a geoist (or Georgist) philosophy of land as commonly and equally owned by all people, citing the classical distinction between unimproved land and private property. The rental value of land is produced by the labors of the community and, as such, rightly belongs to the community at large and not solely to the landholder. A land value tax (LVT) is levied as an annual fee for exclusive access to a section of earth, which is collected and redistributed to the community either through public goods, such as public security or a court system, or in the form of a basic guaranteed income called a citizen's dividend. Geolibertarians view the LVT as a single tax to replace all other methods of taxation, which are deemed unjust violations of the non-aggression principle.
Basic income has been promoted by people associated with political views that are generally opposed to the public provision of welfare services, such as right-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 include Milton Friedman (in the form of negative income tax), Gary Johnson (In the form of the fair tax "prebate") and Charles Murray.
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 :"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."
Attempts at implementing some forms of basic income have occurred in United States, Namibia, Iran, Brazil, India and Canada. Many of the advocates of basic income have united in the Basic Income Earth Network, which recognizes numerous national advocacy groups. Here is a breakdown of all partisans of basic income, listed by region or country.
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.
In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was very similar to a basic income. In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income (ISBN 978-0-394-46354-4) in which he advocated for the Basic Income and discussed Richard Nixon's GAI proposal.
Mike Gravel, a former US congressman and presidential candidate, advocates a tax rebate paid in a monthly check from the government to all citizens as part of a transition away from income taxes and toward a pre-bated national sales tax (the FairTax).
Winners of the Nobel Memorial Prize in Economic Sciences who fully support a basic income include Herbert A. Simon, Friedrich Hayek, James Meade, Robert Solow, and Milton Friedman.
Richard Parncutt argues that income tax is effectively progressive when basic income is combined with flat income tax. The combination would simplify the tax-welfare system.
Ben Wallace argues, in The Common Purpose Manifesto, that a shared base income, incorporating an unconditional basic income with a flat 50% tax rate, is necessary to correct the inevitable income inequalities that arise in free and open markets.
In Oregon, Tax and Conversation is a member-owned organization working to end all tax exceptions via a ballot measure (the initiative process requires 50% of voters plus 1 person to vote yes for it to become law) for 2014. 66% of all dollars from current tax expenditures go to only 20 out of every 100 people with the most money (paid tax on income after exceptions is regressive), and that money would instead be paid unconditionally: each full-year taxfiler will get $700 each month. The total expenditure amount would be slightly less than the current expenditure amount of $24 billion each year, because core government services will get more funding.
The Green Party of the United States 2010 platform advocated for "a universal basic income (sometimes called a guaranteed income, negative income tax, citizen's income, or citizen dividend). This would go to every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people's lives."
The U.S. has an earned income tax credit for low-income taxpayers. In 2006 a bill written by members of the advocacy organization USBIG to transform the credit into a partial basic income was introduced in the US Congress but did not pass.
The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues, although this amount, $878.00 for the whole of 2012, is far from enough to live on. The Alaska basic income is subject to income tax on the federal level. That way the "basic income" works like a negative income tax but with a "prebate" instead of a "rebate" (as far as state finances are concerned).
Eastern Band of Cherokee Indians
Members of the Eastern Band of Cherokee Indians, based in North Carolina, receive payments of several thousand dollars twice a year. These payments are dividends from the profits of the Harrah's Cherokee casino, and have been distributed since 1996. A study of the payments' effects on the children of the community found significant declines in poverty, behavioral problems, crime, substance abuse and psychiatric problems, and increases in on-time graduation. The effects were primarily found among those who were youngest when the payments began, and among those who were lifted out of poverty rather than those who were already well-off.
William Aberhart, Premier of Alberta, was inspired by Major C. H. Douglas Social Credit theory and tried to implement a basic income for Albertans during the 1930s. However he was thwarted in his attempts by the Federal Government of the time
As of 2014, the Liberal Party of Canada, the Green Party of Canada, the Pirate Party of Canada, provincial party Québec Solidaire and conservative senator Hugh Segal advocate for basic income in Canada. Mike Redmond, leader of the New Democratic Party of Prince Edward Island, supports a basic income pilot project on Prince Edward Island.
Basic Income Movement in Europe
The Basic Income Earth Network, first called "Basic income European Network" (BIEN) until 2004, was the first international organization trying to promote basic income internationally. It gathered essentially a group of researchers and economists working on the topic. BIEN recognizes numerous national advocacy groups, and coordinates international communication through its newsletter and a biannual congress.
Following a number of meetings in different cities in Europe (Vienna 2005, Basel 2007, Berlin 2008, Herzogenrath 2009, and Vienna 2011), several organizations such as the German Round-table for basic income have decided to work together for promoting basic income at the European level. In Vienna (2011) they agreed on the preparation of a European Citizens' Initiative.
On 14 January 2013, the European citizens' initiative registration was accepted by the EU commission, thus triggering a 12 months aiming at collecting more than one million signatures in the European Union. On November 28, a group of 26 members of the European Parliament issued a joint call for support for this initiative.
Historically in Belgium, the most active group promoting basic income is the movement Vivant and the philosopher Philippe Van Parijs - who founded the Basic Income European network (BIEN) in 1987. A Belgian basic income network affiliated to the BIEN was founded in 2012 in Brussels
The first bigger discussion on universal basic income in the Czech Republic was initiated by philosophers and social scientists Marek Hrubec and Martin Brabec. Later, they published with Philippe Van Parijs a book "Všeobecný základní příjem. Právo na lenost, nebo na přežití?" ("Universal Basic Income. Right to Laziness, or Right to Survival?"). In 2013, activists and social scientists joined the European Citizens' Initiative for Unconditional Basic Income, and have created a campaign to support unconditional basic income. In the Czech Republic, unconditional basic income is supported by many individuals, NGOs (Alternativa zdola, ProAlt, Levá perspektiva, for example), and political parties. It in the program of the Green Party, the Communist Party, the Pirate Party, and the Party of Democratic Socialism. It is supported also by many Social Democrats.
In France, the first prominent defender of basic income is Yoland Bresson. In 1985, he founded the "Association pour l'Instauration d'un revenu d'existence" with Henri Guitton (fr) for promoting basic income in France, and co-founded the BIEN the year after. Another prominent advocate of basic income is the philosopher André Gorz, who finally endorsed the idea after having been an opponent for years.
On the political side, the Christian democrat Christine Boutin, the former prime-minister Dominique de Villepin, are the most well-known politicians claiming for basic income, along with some MPs like Karima Delli, Jean Desessard and Yves Cochet.
The very influential think tank Centre des Jeunes Dirigeants (CJD) ("Young policymakers trust") also call for a basic income of 400 euros per citizen. The CJD's and Christine Boutin's basic income proposals are based on Marc de Basquiat financing model, which demonstrates a way of financing a basic income of 400 euros for every adult and 200 per child, while other advocates such as Baptiste Mylondo and Jacques Marseille promote a "high enough" basic income, around 750 euros. However, unlike Mylondo and Marseille, De Basquiat's model doesn't reduce any pension, housing or unemployment benefits.
In 2012 a group of citizens launched a transpartisan network in an attempt to join forces for raising awareness about basic income in France. This network aim at participating to the European citizens initiative that is set to be launched in 2013.
One of the most prominent proponents of basic income in Germany is Götz Werner, the former CEO of the store brand DM Drogeriemarkt, and one of the richest men in Germany. He also teaches economics at the Karlsruhe Institute of Technology.
The generalization of workfare policies known as "Hartz reforms" have encouraged a broader movement for basic income in Germany.
In 2008, a petition launched by Susanne Wiest was supported by more than 52,973 citizens, thus offering the German activist a hearing at the Bundestag, which helped to enlarge the public debate on the idea.
The German Pirate Party has officially endorsed basic income since 2011. Inside the Christian Democratic Union, Dieter Althaus proposes a basic income model. A group led by Katja Kipping also promotes basic income inside the leftist party Die Linke. In addition, inside the Social Democratic Party of Germany, the Rhein-Erft-group favors basic income since 2010. Within The Greens there are also a large number of advocates.
Though the idea of basic income is not well known in Greece, several economists have worked on the topic. In 2010, the liberal party Drasi supported a proposal for a basic pension scheme, aiming at simplifying the hundreds of pension schemes in a country being hurt by the debt crisis and pressured by the troika to balance its public budget. Manos Matsaganis and Chrysa Leventi co-authored a study that demonstrate the feasibility of such a proposal.
Other heterodox proposals suggest that a Greek exit from the eurozone could be an opportunity to implement a "monetary dividend" for every Greek citizen as a way to manage the financial collapse of the country.
The issue of the basic income gained prominence on the political agenda in Netherlands between the mid-1970s and mid-1990s but it has disappeared from the political agenda over the last fifteen years.
Since 2001, the Red Renta Básica is the national network affiliated to the BIEN. It gathers researchers and activists for basic income. From 2011 to 2012, the 15-M Movement also contributed a lot in spreading the idea among the Spanish society.
The association BIEN-Switzerland (affiliated to the Basic Income Earth Network) promotes basic income in the francophone part of Switzerland. In the German-speaking part of Switzerland a group called "Initiative Grundeinkommen" is very active in promoting basic income.
In 2008, Daniel Häni and Enno Schmidt produced The Basic income, a cultural impulse, a movie that explains and praises the idea of a basic income. With more than 400,000 views, the movie went viral and contributed a lot in spreading the idea among French and German speaking countries.
In September 2013, the initiative achieved the collection of about 126,000 signatures and handed them over to the government on October 4 thereby triggering a nationwide popular referendum, which would be the first of its kind on this issue, anywhere in the world. The trade union Syna brought its support for this initiative.
Co-founder of the Basic Income Earth Network, the professor Guy Standing is a famous advocate of the unconditional basic income. In his book The Precariat - the new dangerous class, he blames globalization for having plunged more and more people into the precariat, which he analyses as a new emerging social class. He concludes on the necessity for "governments to provide basic security as a right" - through a basic income.
Basic income - called Feltétel Nélküli Alapjövedelem (FNA) in Hungarian (unconditional basic income) is supported by the FNA Group, which held its first active-team-meeting in Hungary/Budaörs, on May 31, 2011. Basic income is also endorsed by the Hungarian Pirate Party.
||It has been suggested that Basic income in India be merged into this section. (Discuss) Proposed since August 2013.|
Two basic income pilot projects have been underway in India since January 2011. According to the first communication of the pilot projects, positive results have been found. Villages spent more on food and healthcare, children's school performance improved in 68 percent of families, time spent in school nearly tripled, personal savings tripled, and new business startups doubled.
In 2011, Iran implemented a basic income grant in order to compensate risen prices of basic goods such as petrol and food. A first assessment of the experiences in Iran is provided by H. Talabani (2011).
Elsewhere in the world
Basic income has been discussed in modern Brazil at least since the 1980s. In 2001 a law was introduced by Senator Eduardo Suplicy of the Brazilian Workers Party which mandated the progressive institution of such a welfare system. By this move Brazil became the first country in the world to pass such a law. Suplicy had previously introduced a bill to create a Negative Income Tax, but that bill failed to pass. The new bill called for a national and universal basic income to be instituted, beginning with those most in need. The bill was approved by the Senate in 2002 and by the Chamber of Deputies in 2003. President Lula da Silva signed it into law in 2004, and according to the bill it is the president´s responsibility to gradually implement the reform. Since then Brasil has started to implement the bill through the Bolsa Família-program, which was a centerpiece of President Luiz Inácio Lula da Silva's social policy, and is reputed to have played a role in his victory in the Brazilian presidential election, 2006.
An independent and privately funded pilot project is currently in place in Brazil. It provides R$30 monthly which is 4.4% of the minimum salary in 2013 (as defined by the federal government) and is not enough to meet basic needs.
From January 2008 to December 2009, a pilot project with a basic income grant was implemented in the Namibian village of Omitara (or Otjivero-Omitara) by the Namibian Basic Income Grant Coalition. It was mainly funded by a German Protestant church, by individual contributions of German and Namibian citizens and by contributions of the German Ministry for Cooperation. The amount paid out per head was N$ 100 (around US$ 12).
Six months after the launch, the project has been found to significantly reduce child malnutrition and increase school attendance. It was also found to increase the community's income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities. The project team states that this increase in economic activity contradicts critics' claims that a basic income would lead to laziness and dependency.
After the conclusion of the pilot project phase, a monthly bridging-allowance of N$ 80 (around US$ 10) to all who participated in the pilot was paid regularly until March 2012. One of the conclusions of the project was that, even with the restriction that only residents of the village for over a year since the pilot's start could benefit from the grant, there was a significant migration towards Otjivero-Omitara, despite the fact that the migrants wouldn't receive the grant. The project concluded that this phenomenon reveals the need to introduce such basic income systems as a universal national grant, in order to avoid migration to particular regions, towns or households. Another finding of the project was that after the introduction of the pilot, overall crime rates fell by 42%, and specifically stock theft fell by 43% and other theft by nearly 20%.
The above-mentioned conclusions about the effects of the project in Omitara have been derived from two empirical studies conducted by the Basic Income Grant Coalition: one study that covers the first 6 months of the project and a second study about the first 12 months of the project. No further empirical studies or project assessments have been published.
There is no public access to the project database. In a Namibian daily, the project representatives confirmed the lack of public access to their data and justified it.
The design of the project and the conduct of the empirical studies have been criticized by some authors for intransparent procedure and inappropriate methods.
The Government of the Republic of Namibia has repeatedly argued against the introduction of a Basic Income Grant and has not changed its mind during and after the pilot project.
In May 2012, the community leader of Otjivero-Omitara, Ernst Gariseb, told a journalist of a Namibian newspaper: "Since two decades we are sitting here without work, development and perspectives." The journalist concluded: "Despite the support of the BIG there is not any development to be seen in Otjivero."
- Asset-based egalitarianism (variant of basic income)
- Cash transfers
- Citizen's dividend
- FairTax: Monthly tax rebate
- Global basic income
- Libertarian socialism
- List of basic income models
- Market socialism
- Negative income tax
- Old Age Security
- Refusal of work
- Social credit
- Social dividend
- Social welfare provision
- Speenhamland system
- Universal Credit
- Welfare capitalism
- Work–life balance
- Working time
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- For example: K. Shangula, The Proposed BIG: What are the Facts?, in: The Namibian, 5 February 2011; R. Osterkamp, BIG deserves a fair chance, yes: By doing serious research about it, in: New Era, 21 May 2010.
- Both quotations from Allgemeine Zeitung, 7 May 2012.
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- Lord, Clive; Kennet, Miriam (2012). Green Economics and The Citizens Income, published by The Green Economics Institute
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