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UNITED KINGDOM: David Piachaud Calls Basic Income a Wasteful Distraction from Other Methods of Tackling Poverty

David Piachaud, Emeritus Professor of Social Policy at the London School of Economics and an associate of The Centre for the Analysis of Social Exclusion (CASE), published a discussion paper on Citizens’ Income (CI) in December of last year.

Abstract:

A Citizen’s Income, or a Basic Income, is not a new idea but it has been receiving
increasing attention. There is confusion about the idea and an attempt is made to
distinguish different concepts. Then a full Citizen’s Income is examined in relation to four key criteria: the justice of an unconditional benefit; the possibility and fairness of a simple individual benefit; economic efficiency; and political feasibility. On all four criteria, Citizen’s Income fails. It is concluded that Citizen’s Income is a wasteful distraction from more practical methods of tackling poverty and inequality and ensuring all have a right to an adequate income.

 

Summary

Piachaud first acknowledges that a CI, or a basic income, is attractive in its simplicity, and he cites article 25 of the UN Declaration of Human Rights of 1948: “Everyone has a right to a standard of living adequate for the health and well-being of himself and his family.”

Piachaud states, “A Citizen’s Income could ensure that right was achieved.”

 

He then describes four different concepts of a Citizen’s Income (CI):

  1. Bonus CI (a basic income based on a dividend)
  2. Partial CI (a basic income for particular groups only)
  3. Supplemental CI (additional income alongside a social security system)
  4. Full CI (an unconditional basic income adequate to live on to all citizens)

 

In the rest of his paper, Piachaud examines a full CI (which in his definition is not based on dividend but fully financed out of taxation) in relation to four key criteria. Through his analysis, he concludes that Citizens’ Income fails all four of these tests:

 

  1. The justice of an unconditional benefit

Piachaud discusses Philippe Van Parijs’s paper “Why Surfers Should be Fed: The Liberal Case for an Unconditional Basic Income” and argues that it is unfair (and therefore unjust) for healthy people to live off the labor of others.

 

  1. The possibility and fairness of a simple individual benefit

A full CI is intended to ensure (in a simple manner) that needs are met, but not everyone has the same needs. Piachaud gives examples related to disability, diversity in housing costs, and diversity in living arrangements (people living alone or with others). Basing a CI on individuals and assuming their needs are identical, is therefore unjust, Piachaud argues. “The social security and in some ways the tax system attempt to take these factors into account, however inadequately.”

 

  1. Economic efficiency

Piachaud defines a full CI as an unconditional income fully financed out of taxation. With respect to the economic efficiency, he argues:

“A full CI goes to everyone unconditionally, whereas social security is targeted at certain groups who in the absence of social security would be most likely to be poor. In consequence, a full CI that replaces social security is far more costly than social security, and this has to be paid for from higher taxes on all incomes with far-reaching economic consequences. The inevitable conclusion is, therefore, that a targeted social security system was, is, and will be more efficient and equitable than a full CI.”

 

  1. Political feasibility

Piachaud finds it very unlikely any political party will adopt an unconditional CI as a policy proposal either in the full or supplemental forms

 

After this analysis, David Piachaud concludes, “Citizen’s Income is a wasteful distraction from more practical methods of tackling poverty and inequality and ensuring all have a right to an adequate income.”

 

Info and links

The full paper can be found here.

 


Special thanks to Josh Martin and Danny Pearlberg for reviewing this article

Photo: diversity by Nabeelah Is, january 2012, CC-BY-SA 2.0

About Hilde Latour

Hilde Latour has written 12 articles.

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7 comments

  • Scott Simpson

    He doesn’t address the issue of growing automation and there being many fewer jobs than the people to fill them.

    • David Piachaud

      My paper does not discuss growing automation in any detail but it does state that: “The future distribution of employment is as important an economomic and social issue as any on the horizon…”. It also endorses the proposal of Tony Atkinson that: “The government should adopt an explicit target for preventing and reducing unemployment and underpin this ambition by offering guaranteed public employment at the minimum wage to those who seek it.”

  • Eli Levine

    1. It can be made conditional in some respects, but the idea is to improve everyone’s lot while leaving the room open for further innovation and enterprise. I don’t believe in caps on income, but I do believe in keeping the upper earners proportional to the lower earners through law and enforcement. It keeps the political systems balanced in favor of the masses (who will otherwise fight wars against the domineering economic/political groups), and it ensures demand can be met and extended as far out as human satiation can potentially go, plus maybe a little extra for harder times. All of this, without affecting supply or supply potential.

    2. The idea is to give everyone a level floor on which to stand economically, and to rise that floor together, with all of humanity on board. Remember, individuals are beaten by small groups, small groups are beaten by larger groups, larger groups are beaten by better organized groups. I don’t think the CI assumes peoples’ tastes at all, in fact, it allows people to have greater economic independence and ability to pursue life to their own ends.

    3. Economic efficiency is a touchy subject, since its definition is changing with new findings from the empirical literature (Google Scholar it). In the neoliberal sense of it, it’s kind of an inane definition, and a questionable thing to desire.

    4. That’s the sticking point, isn’t it? This can change though, if the first experimenters do it well early on. Watch Finland, Utrecht, and Ontario. We can try it in the US with randomly assigned cities to treatment and control, expanding the research as it goes.

    • David Piachaud

      Two comments on Eli Levine’s comments on my paper.
      First, the comment that: ” It [basic income] can be made conditional in some respects.” This is of course true, but then it ceases to be an unconditional basic income, which is what many appear to favour. I hope the categorisation in my paper of different conceptions of what a basic income is will help reduce confusion.
      Second, the comment that: “The idea is to give everyone a level floor on which to stand economically.” The goal seems entirely right but an unconditional basic income does not achieve this. Someone already in a well paid job needs no assistance, indeed is already way above any conceivable floor level. Someone with a serious disability needs far more than a basic income could provide to reach a level floor. Thus distinguishing according to personal circumstances is essential if any degree of equality and social justice is to be achieved – and a universal, unconditional basic income does not do this.

  • R Jones

    Piachaud’s Citizens’s Income plan seems to be not as refined as Guy Standing’s UBI. Many of the objections to the idea of UBI have been well studied already and much has been proved out using this method. It’s not about concerns for supply and demand or national or strategic balance. All nations and
    people need to develop to their highest potential. So called developing nations need housing and resources. These populations need to reduce the strain of bare neccesity, hunger and both physical and mental health to achieve greater levels of development. A Basic Income gives all the opportunity to do more without being labeled as individuals of little worth or in many cases – the homeless and destitute.
    I believe the majority of people want to do more for this world but, also one man can afford a $10 parking ticket but to another that can mean a family will not eat today. That can be the case in both the E.U or the U.S

  • Jim Farms

    Piachaud sounds like a Guardian editorial – condemning from the start. Firstly, he selects his own artificial criteria: Criterion 1: where is the justice in a system where 8 men have as much wealth as 3.6 billion? Criterion 2 Did not social security produce the bedroom tax? Criterion 3 This conclusion is not a conclusion, merely an assumption. Criterion 4. Certainly it is a very bold step but one which the French Socialist Presidential candidate took BEFORE he was selected.
    so now we wait & see how he gets on.

  • David Piachaud

    I am not sure whether it is good or bad to be accused of sounding like a Guardian editorial.
    Certainly I selected criteria by which to judge basic income – social justice, simplicity,economic efficiency and political feasibility.
    Jim Farms suggest different criteria. He asks “where is the justice in a system where 8 men have as much wealth as 3.6 billion?” – a very good question but one with little relevance to basic income which would do nothing about the inequality of global wealth.
    He also asks “Did not social security produce the bedroom tax? ” It is important not to forget that it did but it is also important to remember that it produced old age, disability, unemployment and child benefits.
    It will be interesting to see how the French Socialist Presidential candidate gets on but many factors will determine the result. I will not regard the result as a clear test of the political feasibility of an unconditional basic income.

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