A basic income, also called basic income guarantee, universal basic income (UBI), basic living stipend (BLS), or universal demogrant, is a type of program in which citizens (or permanent residents) of a country may receive a regular sum of money from a source such as the government. A pure or unconditional basic income has no means test, but unlike Social Security in the United States it is distributed automatically to all citizens without a requirement to notify changes in the citizen's financial status. Basic income can be implemented nationally, regionally or locally.
An unconditional income that is sufficient to meet a person's basic needs (at or above the poverty line), is called full basic income, while if it is less than that amount, it is called partial.
Some welfare systems are related to basic income but have certain conditions. As these are not universal, they are more often referred to as guaranteed minimum income systems. For example, Bolsa Família in Brazil is restricted to poor families and the children are obligated to attend school.
A related welfare system is negative income tax, in which the government stipend is gradually reduced with higher labor income.
- 1 History
- 2 Perspectives in the basic income debate
- 2.1 Transparency and administrative efficiency
- 2.2 Poverty reduction
- 2.3 Freedom
- 2.4 Gender equality
- 2.5 Arguments from different ideologies
- 2.6 Employment
- 2.7 Bad behavior
- 2.8 Reduction of medical costs
- 2.9 Wage slavery and alienation
- 2.10 Economic growth
- 2.11 Automation
- 2.12 Economic critique
- 2.13 Basic income as a part of a post-capitalistic economic system
- 3 National debates (a few examples)
- 4 Existing basic income and related systems
- 5 Prominent advocates
- 6 Petitions, polls and referenda
- 7 See also
- 8 References
- 9 Further reading
- 10 External links
The idea of a state-run basic income dates back to the early 16th century, when Sir Thomas More argued in Utopia that every person should receive a guaranteed income, and to the late 18th century when English radical Thomas Spence and American revolutionary Thomas Paine both declared their support for a welfare system in which all citizens were guaranteed a certain income. In the 19th century and until the 1960s the debate on basic income was limited, but in the 1960s and 1970s the United States and Canada conducted several experiments with negative income taxation, a related welfare system. From the 1980s and onwards the debate in Europe took off more broadly and since then it has expanded to many countries around the world. A few countries have implemented large-scale welfare systems that are related to basic income, such as Bolsa Família in Brazil. From 2008 and onwards there have also been several experiments with basic income and related systems. Especially in countries with an existing welfare state a part of the funding assumably comes from replacing the current welfare arrangements, or a part of it, such as different grants for unemployed people. Apart from that there are several ideas and proposals regarding the rest of the financing, as well as different ideas about the level and other aspects.
The idea of an unconditional basic income, given to all citizens in a state (or all adult citizens), was first presented near the middle of the 19th century. But long before that there were ideas of a so-called minimum income, the idea of a one-off grant and the idea of a social insurance (which still is a key feature of all modern welfare states, with insurances for and against unemployment, sickness, parenthood, accidents, old age and so forth).
The minimum income, the idea to eradicate poverty by targeting the poor, is in contradiction with basic income given "to all", but nevertheless share some underlying ideas about the state's or the city's welfare responsibilities towards its citizens. Johannes Ludovicus Vives (1492–1540), for example, proposed that the municipal government should be responsible for securing a subsistence minimum to all its residents, "not on grounds of justice but for the sake of a more effective exercise of morally required charity". However, to be entitled to poor relief the person’s poverty must not, he argued, be undeserved, but he or she must "deserve the help he or she gets by proving his or her willingness to work."
The first to develop the idea of a social insurance was Marquis de Condorcet (1743–1794). After playing a prominent role in the French Revolution, he was imprisoned and sentenced to death. While in prison, he wrote the Esquisse d’un tableau historique des progrès de l’esprit humain (published posthumously by his widow in 1795), whose last chapter described his vision of a social insurance and how it could reduce inequality, insecurity and poverty. Condorcet mentioned, very briefly, the idea of a benefit to all children old enough to start working by themselves and to start up a family of their own. He is not known to have said or written anything else on this proposal, but his close friend and fellow member of the Convention Thomas Paine (1737–1809) developed the idea much further, a couple of years after Condorcet’s death.
- Bertrand Russell (1872–1970) argued for a new social model that combined the advantages of socialism and anarchism, and that basic income should be a vital component in that new society.
- Dennis and Mabel Milner, a Quaker married couple in the Labour Party, published a short pamphlet entitled “Scheme for a State Bonus” (1918). There they argued for the "introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom". They considered it a moral right for everyone to have the means to subsistence, and thus it should not be conditional on work or willingness to work.
- Clifford H. Douglas was an engineer who became concerned that most British citizens could not afford to buy the goods that were produced, despite the rising productivity in British industry. His solution to this paradox was a new social system called "social credit", a combination of monetary reform and basic income.
In 1944 and 1945, the Beveridge Committee, led by the British economist William Beveridge, developed a proposal for a comprehensive new welfare system of social insurance and selective grants. Committee member Lady Rhys-Williams argued for basic income. She was also the first to develop the negative income tax model.
In the 1960s and 1970s, some welfare debates in the United States and Canada included discussions of basic income. Six pilot projects were also conducted with negative income tax. Then US president Richard Nixon once even proposed a negative income tax in a bill to the US Congress—but Congress eventually only approved a guaranteed income for the elderly and the disabled, not for all citizens.
In the late 1970s and the 1980s, basic income was more or less forgotten in the United States, but on the other hand it started to gain some attraction in Europe. Basic Income European Network, later renamed to Basic Income Earth Network, was founded in 1986 and started to arrange international conferences every two years. From the 1980s, some people outside party politics and universities took interest. In West Germany, groups of unemployed people took a stance for the reform.
From 2005–2010 and onwards, basic income again became an active topic in many countries. Basic income is currently discussed from a variety of perspectives—including in the context of ongoing automation and robotisation, often with the argument that these trends mean less paid work in the future, which would create a need for a new welfare model. Several countries are planning for local or regional experiments with basic income or related welfare systems. Experiments in India, Finland, and Canada, for example, have received international media attention. Several countries have used polls to investigate public support for basic income. In 2016, 76.9% of Swiss voters in a national referendum rejected a basic income proposal.
Perspectives in the basic income debate
Transparency and administrative efficiency
Basic income is potentially a much simpler and more transparent welfare system than welfare states currently use. Instead of separate welfare programs (including unemployment insurance, child support, pensions, disability, housing support) it could be one income, or it could be a basic payment that welfare programs could add to. This could require less paperwork and bureaucracy to check eligibility. The lack of means test or similar bureaucracy would allow for saving on social welfare, which could be put towards the grant. The Basic Income Earth Network (BIEN) claims that basic income costs less than current means-tested social welfare benefits, and has proposed an implementation that it claims to be financially viable.
However, other proponents argue for adding basic income to existing welfare grants, rather than replacing them.
Philippe Van Parijs has argued that basic income at the highest sustainable level is needed to support real freedom, or the freedom to do whatever one "might want to do". By this, Van Parijs means that all people should be free to use the resources of the Earth and the "external assets" people make out of them to do whatever they want. Money is like an access ticket to use those resources, and so to make people equally free to do what they want with world assets, the government should give each individual as many such access tickets as possible—that is, the highest sustainable basic income.
Karl Widerquist and others have proposed a theory of freedom in which basic income is needed to protect the power to refuse work. The theory goes like this:
If some other group of people controls resources necessary to an individual's survival, that individual has no reasonable choice other than to do whatever the resource-controlling group demands. Before the establishment of governments and landlords, individuals had direct access to the resources they needed to survive. But today, resources necessary to the production of food, shelter, and clothing have been privatized in such a way that some have gotten a share and others have not. Therefore, this argument goes, the owners of those resources owe compensation back to non-owners, sufficient at least for them to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because people can consider themselves free only if they are not forced to spend all their time doing the bidding of others simply to provide basic necessities to themselves and their families. Under this argument, personal, political, and religious freedom are worth little without the power to say no. In this view, basic income provides an economic freedom, which—combined with political freedom, freedom of belief, and personal freedom—establish each individual's status as a free person.
The Scottish economist Ailsa McKay argued that basic income is a way to promote gender equality. She noted in 2001 that "social policy reform should take account of all gender inequalities and not just those relating to the traditional labor market" and that "the citizens' basic income model can be a tool for promoting gender-neutral social citizenship rights."
Arguments from different ideologies
- Georgist views: Geolibertarians seek to synthesize propertarian libertarianism and a geoist (or Georgist) philosophy of land as unowned commons or equally owned by all people, citing the classical economic 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.
- Right-wing views: Support for basic income has been expressed by several people associated with right-wing political views. While adherents of such views generally favor minimization or abolition of the public provision of welfare services, some have cited basic income as a viable strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems. Others have contended that it could also act as a form of compensation for fiat currency inflation.
- Feminist views: Feminists' views on the basic income are loosely divided into two opposing views: one that supports basic income as a means of guaranteeing minimum financial independence for women, and one based on recognizing women's unpaid work in the home. Conversely, a second Feminist view opposes basic income as something that might discourage women from participation in the workforce—reinforcing traditional gender roles of women belonging in the private area and men in the public area.
One argument against basic income is that if people have free and unconditional money, they will "get lazy" and not work as much. Less work means less tax revenue, argue critics, and hence less money for the state and cities to fund public projects. The degree of any disincentive to employment because of basic income would likely depend on how generous the basic income was.
Some studies have looked at employment levels during the experiments with basic income and negative income tax, and similar systems. In the negative income tax-experiments in United States in the 1970s, for example, there was a five percent decline in the hours worked. The work reduction was largest for second earners in two-earner households and weakest for the main earner. The reduction in hours was higher when the benefit was higher. Participants in these experiments, however, knew that the experiment was limited in time.
In the Mincome experiment in rural Dauphin, Manitoba, also in the 1970s, there were also slight reductions in hours worked during the experiment. However, the only two groups who worked significantly less 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 a pilot project implemented in 2008 and 2009 in the Namibian village of Omitara; 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. However, the residents of Omitara were described as suffering "dehumanising levels of poverty" before the introduction of the pilot, and as such the project's relevance to potential implementations in developed economies is unknown.
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 labor would be too low to generate a socially desirable distribution of income. He therefore concludes that a "citizen's income" is necessary to achieve full employment without suffering stagnant or negative growth in wages.
If there is a disincentive to employment because of basic income, the magnitude of such a disincentive may depend on how generous the basic income was. Some campaigners in Switzerland have suggested a level that would be only just liveable, arguing that people would want to supplement it.
Tim Worstall, a writer, blogger and Senior Fellow of the Adam Smith Institute, has argued that traditional welfare schemes create a disincentive to work because such schemes typically cause people to lose benefits at around the same rate that their income rises (a form of welfare trap where the marginal tax rate is 100 percent). He has asserted that this particular disincentive is not a property shared by basic income since the rate of increase is positive at all incomes.
There are concerns that some people will spend their basic income on alcohol and other drugs. However, studies of the impact of direct cash transfer programs provide evidence to the contrary. A 2014 World Bank review of 30 scientific studies concludes that "concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded".
Reduction of medical costs
Paul Mason, a British journalist, has stated that universal basic income would probably reduce the high medical costs associated with diseases of poverty. The stress, diseases like high blood pressure, type II diabetes etc. would according to Mason probably become less common.
Wage slavery and alienation
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. André Gorz saw basic income as a necessary adaptation to the increasing automation of work, yet basic income also enables workers to overcome the alienation in work and life and to increase the amount of leisure time.
Some proponents have argued that basic income can increase economic growth because it would sustain people while they invest in education to get interesting and well-paid jobs. However, there is also a discussion of basic income within the degrowth movement, which argues against economic growth.
The debates about basic income and automation are closely linked. For example, Mark Zuckerberg argues that the increase in automation creates a greater need for basic income. Concerns about automation have prompted many in the high-technology industry to argue for basic income as an implication of their business models.
Many technologists believe that automation (among other things) is creating technological unemployment. Journalist Nathan Schneider first highlighted the turn of the "tech elite" to these ideas with an article in Vice magazine, which cited Marc Andreessen, Sam Altman, Peter Diamandis, and others. Some studies about automation and jobs validate these concerns. The US White House, in a report to the US Congress, estimated that a worker earning less than $20 an hour in 2010 will eventually lose their job to a machine with 83% probability. Even workers earning as much as $40 an hour faced a probability of 31%. With a rising unemployment rate, poor communities will become more impoverished worldwide. Proponents of universal basic income argue that it could solve many world problems like high work stress and could create more opportunities and efficient and effective work. This claim is supported by some studies. In a study in Dauphin, Manitoba, only 13% of labor decreased from a much higher expected number. In a study in several Indian villages, basic income in the region raised the education rate of young people by 25%.
Besides technological unemployment, some tech-industry experts worry that automation will destabilize the labor market or increase economic inequality. One example is Chris Hughes, co-founder of both Facebook and Economic Security Project. Automation has been happening for hundreds of years; it has not permanently reduced the employment rate but has constantly caused employment instability. It displaces workers who spend their lives learning skills that become outmoded and forces them into unskilled labor. Paul Vallée, a Canadian tech-entrepreneur and CEO of Pythian, argues that automation is at least as likely to increase poverty and reduce social mobility than it is to create ever-increasing unemployment rate. At the 2016 North American Basic Income Guarantee Congress in Winnipeg, Vallée examined slavery as a historical example of a period in which capital (African slaves) could do the same things that human labor (poor whites) could do. He found that slavery did not cause massive unemployment among poor whites, but instead increased economic inequality and lowered social mobility.
Daron Acemoglu, Professor in economics at MIT, has expressed doubts about basic income with the following statement: "Current US status quo is horrible. A more efficient and generous social safety net is needed. But UBI is expensive and not generous enough." Eric Maskin has stated that "a minimum income makes sense, but not at the cost of eliminating Social Security and Medicare".
Basic income as a part of a post-capitalistic economic system
Harry Shutt proposed basic income and other measures to make all or most enterprises collective rather than private. These measures would create a post-capitalist economic system.
Erik Olin Wright characterizes basic income as a project for reforming capitalism into an economic system by empowering labor in relation to capital, granting labor greater bargaining power with employers in labor markets, which can gradually de-commodify labor by decoupling work from income. This would allow for an expansion in scope of the "social economy", by granting citizens greater means to pursue activities (such as the pursuit of art) that do not yield strong financial returns.
James Meade advocated for a social dividend scheme to be funded by publicly owned productive assets. Russell argued for a basic income alongside public ownership as a means of shortening the average working day and achieving full employment.
Economists and sociologists have advocated for a form of basic income as a way to distribute economic profits of publicly owned enterprises to benefit the entire population (also referred to as a social dividend), where the basic income payment represents the return to each citizen on the capital owned by society. These systems would be directly financed from returns on publicly owned assets and are featured as major components of many models of market socialism.
Guy Standing has proposed financing a social dividend from a democratically-accountable sovereign wealth fund built up primarily from the proceeds of a levy on rentier income derived from ownership or control of assets - physical, financial and intellectual.
Herman Daly, considered as one of the founders of ecologism, argued primarily for a zero growth economy within the ecological limits of the planet. But to have such a green and sustainable economy, including basic economic welfare and security to all people, he wrote a lot about the need for structural reforms of the capitalistic system, including basic income, monetary reform, land value tax, trade reforms and higher eco-taxes (taxes on pollution and CO2). For him, basic income was thus part of a larger structural change of the economic system, towards a more green and sustainable system.
National debates (a few examples)
A commission of the German parliament discussed basic income in 2013 and concluded that it is "unrealizable" because:
- it would cause a significant decrease in the motivation to work among citizens, with unpredictable consequences for the national economy
- it would require a complete restructuring of the taxation, social insurance and pension systems, which will cost a significant amount of money
- the current system of social help in Germany is regarded as more effective because it is more personalized: the amount of help provided depends on the financial situation of the recipient; for some socially vulnerable groups, the basic income could be insufficient
- it would cause a vast increase in immigration
- it would cause a rise in the shadow economy
- the corresponding rise of taxes would cause more inequality: higher taxes would cause higher prices of everyday products, harming the finances of poor people
- no viable way to finance basic income in Germany was found
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India has been considering basic income in India. On January 31, 2017, the Economic Survey of India included a 40-page chapter on UBI that outlined the 3 components of the proposed program: 1) universality, 2) unconditionality, 3) agency. The UBI proposal in India is framed with the intent of providing every citizen "a basic income to cover their needs," which is encompassed by the "universality" component. "Unconditionality" points to the accessibility of all to the basic income, without any means tests. The third component, "agency," refers to the lens through which the Indian government views the poor. According to the Survey, by treating the poor as agents rather than subjects, UBI "liberates citizens from paternalistic and clientelistic relationships with the state."
The Permanent Fund of Alaska in the United States provides a kind of basic income, based on the oil and gas revenues of the state, to (nearly) all state residents. During her 2016 presidential campaign, former U.S. Secretary of State Hillary Clinton, along with her husband, considered including a policy similar to the Alaska Permanent Fund called "Alaska for America" as part of their platform after reading Peter Barnes book on the subject With Liberty and Dividends for All. Ultimately, the Clintons decided not to, with Hillary stating in her 2016 election memoir What Happened, "Unfortunately, we couldn't make the numbers work." However, in retrospect Clinton also said, "I wonder now whether we should have thrown caution to the wind and embraced 'Alaska for America' as a long-term goal and figured out the details later", considering that former Republican U.S. Treasury Secretaries James Baker and Henry Paulson have also proposed a similar nationwide policy.
Bolsa Família is a big social welfare program in Brazil that provides money to many poor families in the country. The system is related to basic income, but also has some differences. Brazilian Senator Eduardo Suplicy championed a law, ultimately passed in 2004, that declared Bolsa Família to be a first step towards a national basic income. However, the program has not yet been expanded in that direction.
Nimses is a concept that offers universal basic income to every member of its system. The idea of Nimses consists of time-based currency called Nim. 1 nim = 1 minute of life. Every person in Nimses receives nims that can be spent on different goods and services. This concept was initially adopted in Eastern Europe.
There are also several smaller experiments, which have been labeled as "basic income pilots". The best known are:
- Experiments with negative income tax in United States and Canada in the 1960s and 1970s.
- A town in Manitoba, Canada, experimented with Mincome, a basic guaranteed income in the 1970s.
- The Basic Income Grant (BIG) in Namibia, launched in 2008 and ended in 2009.
- An independent pilot implemented in São Paulo, Brazil.
- Several villages in India participated in basic income trial, while the government has proposed a guaranteed basic income for all citizens.
- The GiveDirectly experiment in Nairobi, Kenya, which is the biggest and longest basic income pilot as of 2017.
- The city of Utrecht in the Netherlands launched an experiment in early 2017 that is testing different rates of aid.
- In Canada, the Ontario provincial government launched a three-year basic income pilot in the cities of Hamilton, Thunder Bay, and Lindsay in July 2017. Initial reports indicated difficulties in finding and receiving applications from eligible individuals and households, and as of November 2017, the Ontarian government was still seeking more applicants. The pilot project was cancelled on July 31, 2018 by the newly elected Progressive Conservative government under Ontario Premier Doug Ford, with his Minister of Children, Community and Social Services Lisa MacLeod stating simply it was 'unsustainable' without citing data.
- The Finnish government began a two-year pilot in January 2017 involving 2,000 subjects. In April 2018, the Finnish government rejected a request for funds to extend and expand the program from Kela (Finland's social security agency).
- Eight, a nonprofit organization, launched a project in a village in Fort Portal, Uganda, in January 2017, providing income for 56 adults and 88 children through mobile money.
Andrew Yang, a Democratic presidential candidate for 2020, is using Universal Basic Income as his primary running platform |url = https://www.yang2020.com/meet-andrew/ |
Petitions, polls and referenda
- 2008: an official petition for basic income was started in Germany by Susanne Wiest. The petition was accepted and Susanne Wiest was invited for a hearing at the German parliament's Commission of Petitions. After the hearing, the petition was closed as "unrealizable".
- 2015: a citizen's initiative in Spain received 185,000 signatures, short of the required amount for the proposal to be discussed in parliament.
- 2016: The world's first universal basic income referendum in Switzerland on 5 June 2016 was rejected with a 76.9 percent majority. Also in 2016 a poll showed that 58 percent of the European people are aware of basic income and 65 percent would vote in favor of the idea.
- 2017: POLITICO/Morning Consult asked 1994 Americans about their opinions on several political issues. One question addressed attitudes towards a national basic income in the United States. 43 percent either ‘strongly supported’ or ‘somewhat supported’ the idea.
- Automation and the Future of Jobs
- Basic income around the world
- Basic income pilots
- Cash transfers
- Citizen's dividend
- Economic, social and cultural rights
- Equality of outcome
- FairTax: Monthly tax rebate
- Global basic income
- Guaranteed minimum income
- Involuntary unemployment
- List of basic income models
- Living wage
- Minimum wage
- Negative income tax
- New Cuban Economy
- Old Age Security
- Quatinga Velho
- Post-scarcity economy
- Redistribution of income and wealth
- Refusal of work
- Right to adequate standard of living
- Social dividend
- Social safety net
- Speenhamland system
- The Triple Revolution
- Unemployment benefits
- Universal Credit
- Welfare capitalism
- Working time
- Work–life balance
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