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Money, Basic Income

A basic income for all: crazy or essential?

Shouldn’t society provide a safety net for all in modern society? The radical idea of ensuring a regular stream of cash payments to all members of society, irrespective of their willingness to work, has attracted increasing attention in recent years. Following the mobilization of a citizens’ initiative, the world’s first national referendum on basic income was held in Switzerland in 2016. While the outcome was a clear ‘no’ verdict, the debate contributed greatly to spread public awareness and discussion of the idea worldwide. Different proposals for unconditional income support have been advanced by politicians from all across the left-right spectrum. Benoît Hamon, the candidate of the socialist party in France’s 2017 presidential election, embraced basic income as one of his central proposals in the recent primaries. Finland’s centre-right government launched an ambitious two-year basic income experiment —the first of its kind in Europe— in January. There are currently plans for many other pilot projects around the world to examine the effects of unconditional forms of income support, including experiments in Canada, the Netherlands, and Kenya. Basic income is even widely supported by many libertarians as an alternative to the current welfare system in the United States.

Why? Growing socio-economic inequalities, automatization, and the precarization of labour markets, with a larger proportion of workers depending on more temporary and insecure forms of employment have provided fertile soil for basic income initiatives. In the context of mature welfare states, a universal basic income offers a potential solution to many problems—including bureaucracy traps, the exclusion of many vulnerable persons from traditional safety nets, as well as behavioural conditions and confiscatory marginal tax rates in social assistance programs that create obstacles for productive participation (in the labour market and elsewhere). By providing a firm economic foundation to which incomes from other sources can be freely added, a basic income may be particularly suitable for supporting entrepreneurship and facilitating transitions in an economy where self-employment is common, and where people are expected to be able to move in and out of jobs in flexible ways. Extending eligibility for basic income security to all, thereby avoiding any procedures or conditions that may be perceived as intrusive or stigmatizing, is a straightforward strategy to reach all persons in need and consistently prevent exploitable dependency.

The basic income proposal has a long history, with Thomas Paine’s proposal for a basic unconditional endowment in 1797 as an important forerunner to contemporary debates. However, while earlier explorations of this idea were often individual and disconnected initiatives, the growing continuity and coordination of scholarly debates on the topic have recently paved the way for a more cumulative, international research effort to shed light on this proposal. There is every reason to pay close attention to these developments. When people lack a secure foundation for independence in relation to employers, partners, or other citizens, they are vulnerable to poverty and abuse. The absence of a robust exit option makes it hard to articulate or express one’s own views with strength and confidence; it can become impossible to reject poor work conditions, protect one’s interests in personal relationships and, more broadly, interact as an equal citizen in political life.

Basic Income Demonstration
Basic Income Performance in Bern, Oct 2013 by Stefan N Bohrer. Public Domain via Wikimedia Commons.

Yet, basic income remains a controversial idea. Moral objections about free-riding and exploitation are legitimate political and philosophical concerns. Isn’t it unfair to provide people with something for nothing, even when they are capable of working and may be able to support themselves?

While this debate is far from settled, one of the most important replies is based on the idea that people’s life prospects should not depend fundamentally on circumstances that are entirely (or mostly) beyond their control, such as their place of birth, family background, or social connections. Following Philippe Van Parijs’s important work on this topic, the problem about the growing concentration of wealth in the hands of a few is not, perhaps, that people receive assets without any clear or deep connection to what they have done or plan to do. Rather, the problem is that these undeserved “gifts” – such as the value of natural resources, inherited capital, and, more broadly, the economic returns to the social and technological infrastructure passed on from past generations – are distributed so very unequally. From this point of view, the basic income must not be seen as an exploitative redistribution of some people’s hard-earned work income. Instead, it is a way to address the unfair distribution of resources that nobody has done anything to deserve, and to prevent that only some are allowed to reap the massive productivity gains of society’s technical progress.

Still, even if the intentions behind basic income may be justified as an effort to support equality, and provide all with their fair share, there are other important questions and objections that are more practically oriented. Is such a reform economically affordable and politically sustainable? Does it work in practice? There is an egalitarian concern that it may fail to boost the prospects of the least advantaged and, instead, erode the power of vulnerable groups and long-term political support for an ambitious welfare state. Such reservations are particularly relevant when a low basic income is advanced as a replacement (rather than a foundation) for earnings-related social insurance and measures to support the collective voice and bargaining power of disadvantaged groups. Indeed, an objective among some basic income advocates is to offer a lean, non-bureaucratic alternative to the welfare state that would allow de-regulated, competitive labour markets where state intervention and unions would play a much more limited role. However, as exemplified by Hamon’s presidential candidacy and union veteran Andy Stern’s widely discussed book Raising the Floor (2016), there has also been an increasing enthusiasm for basic income in the wider Left and labour unions lately. It seems clear that the potential of such a policy to sustainably reduce inequalities over time depends greatly on how basic income and collective strategies for empowering vulnerable workers may be fruitfully combined.

At the same time, the current wave of basic income experiments represents an empirical turn in basic income research, with a shift of emphasis from philosophical justification to concrete issues of policy design and practical evaluation. While the outcome of this maturing discussion is uncertain, any compelling response to the question of how welfare states should advance freedom and security in our rapidly changing labour markets needs to take a close look at the basic income proposal.

Featured image credit: Bank Note Euro Bills by martaposemucke. Public Domain via Pixabay.

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