European Basic Income: A post-COVID recovery strategy

European Basic Income: A post-COVID recovery strategy

Valerija Korošec

The proposal for European universal basic income & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy

V. KORO EC, a social policy analyst from Slovenia, suggested that the European Commission examine the idea of a European Universal Basic Income. The UBI would be paid directly from the ECB’s “helicopter money.” The suggestion was made within the debate of the European Social Pillar Action Plan. The proposal stems from the observed shortcomings of the current social security systems related to the COVID-19 crisis, the efforts of the United States, India and many other countries made in this direction and the research done by OECD, IMF, ILO, UNICEF, European and Slovenian experts. This proposal is not the same as the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EU“, for which signatures were collected starting on 25 September 2020. However, this proposal does take a similar direction as the European Citizens’ Initiative. One day Europeans will receive a local, national, European and global basic income to safeguard and foster democracy and ecological-economic development.

The proposal for European UBI & European Social Pillar Action Plan & long-term post-COVID-19 recovery strategy. 

On 7th of September 2020 Mr Nicolas Schmit took part in a videoconference ‘roadshow’ to consult with Slovenian social partners and stakeholders on the upcoming Action Plan to further implement the European Pillar of Social Rights.  V. KORO EC, a social policy analyst from Slovenia suggested introduction of a European universal basic income, which would be paid directly from the ECB’s “helicopter money” as proposed by Mencinger (2017), because none of the 20 principles of the European Social Pillar address the COVID-19 crisis adequately. 

The current solutions in the European Social pillar, the 13th principle (unemployment benefits) and the 14th principle (minimum income), make the safety net conditional on incentives to reintegrate into the labour market. This is obviously not the right solution in the case of COVID-19, where work is not allowed. When people are not allowed to work (as in the case of COVID-19), it does not matter how educated they are, what the agreement on the minimum wage is, how good the social and economic dialogue is and so forth. In such a case is the most important social security system, a safety net that guarantees the minimum income as a kind of ‘universal insurance system’ that helps everyone, including people on the labour market, to be compensated for loss of earnings and to receive reimbursement for lost investment etc. 

On the other hand, the 12th principle (social protection) and 20th principle (access to essential services) are combined with the prerogative to satisfy the conditions “to be in need and not to be able to work”. To prove this is such a demanding administrative task that is obviously not suitable in times of emergency such as COVID-19 when there is no time or resources.  We have already seen in 2008 that the current system is not suitable in time of national emergency, but that is only good for ‘normal’ situations – which is exactly the opposite of what people expect from national social security systems. The COVID-19 situation also made it clear – again – that the current national social security system is good for some workers in ‘standard employment’ and not for workers in ‘non-standard’ jobs.

In the policy brief “Supporting livelihoods during the COVID-19 crisis: Closing the gaps in safety nets“, the OECD starts with a similar finding: the COVID-19 crisis has exposed the pre-existing gaps in social protection provisions (2020: p. 2). It continues with the recognition of the effectiveness of universal unconditional cash transfers (2002: pp. 13-17): “In a crisis situation, universal cash payments, made to everyone, can maximise coverage and, depending on the size of the payment, help the entire population to make ends meet. Universal transfers can be rolled out quickly as they do not depend upon the income, assets, or prior contributions of the recipient avoiding costly and time-consuming means tests. The appeal of this simplicity has led a number of OECD countries to announce plans for such schemes during the COVID-19 pandemic.” (OECD 2020: pp. 16-17, Box 4)

The same applies to emerging and developing economies, where the development of universal social protection is supported and guided by several recent key international initiatives: ILO Recommendation 202 on Social Protection Floors, and the “Leave No One Behind” agenda as an integral part of the 2030 Agenda for Sustainable Development. SDG goal 1.3 calls for “implementing nationally appropriate social protection systems and measures for all, including floors, and substantially increasing coverage of the poor and vulnerable”, while goal 3.8 calls for universal health coverage including financial risk protection. Health coverage is an important part of living, people need to know that they are being protected in case they get ill. Covid has shown just how many people are vulnerable to what is out there, that is why there are Final expense insurance policies and policies similar that are available to those who want to be prepared in case they do get ill. Health coverage can only go so far, but life insurance can help after a loved one has died. 

In 2018, the High-Level Panel at the European Development Days discussed how to address inequalities and “Leave no one behind” agenda in the EU. As described in the report Addressing inequalities: A seminar of workshops (EC 2019) three experts out of four spoke about income inequality. Two of them, Fratzser (pp. 32-37) and Raitano (pp. 55) suggested that the EU should start thinking about a universal basic income, while the third, Callan, suggested that social policy should be based on facts and results of microsimulations (pp. 75). 

Prior to COVID-19, the OECD, IMF, ILO and UNICEF had already studied the idea of universal basic income (UBI) in detail. There is an important history of research on the sustainability of UBI funding and its implications for income distribution based on microsimulations, e.g. OECD (2017) and IMF (2018). The findings of the above-mentioned papers were also confirmed in a paper based on microsimulations (KORO EC 2019),  which was presented in 2019 at the International Conference on Universal Child Grants organised by ILO and UNICEF to explore the conditions and possibilities of introducing UBI for children.  The microsimulations proved that in developed countries UBI can be introduced at a level just above the current Guaranteed Minimum Income scheme (GMI) within the same fiscal envelope (i.e. budget-neutral). 

Some Europeans mistakenly assume that the idea of universal basic income is not the right solution for the EU. They think that the EU is the part of the most developed world with the best social security systems. They seem to have overlooked the fact that because of automatisation and digitalisation, the most developed countries have the biggest problem with ‘non-standard’ employment. It is no surprise that Japan and Korea were the two countries, besides the United States, that introduced ‘new universal transfers’ (OECD 2020: p. 4). They also seem to overlook the fact that the EU is heterogeneous. The EU Member States have different social security systems. There are also major divergences in the effectiveness of national administrations in the use of ‘EU money’. Different success in using the ‘Covid-19 money’ will only foster additional divergences in Member States, which can easily turn into political divergences. 

As stated at the Bled Strategic Forum (31 August 2020) by some Eastern EU countries, they are ready to follow their own path, as they do not wish to be the ‘second tier’ of the EU.  These are the political reasons for the proposal that the EU should distribute the ‘ECB helicopter money’ as a European universal unconditional cash transfer directly to EU citizens. There is also an economic reason: to effectively stimulate aggregate demand in Europe (EP 2016). This has been proposed a number of times since 2008. In Slovenia, we have two papers by an eminent economist on this subject (Mencinger 2015 and Mencinger 2017). 

This proposal is not the same as the European Citizens’ Initiative “Start Unconditional Basic Incomes (UBI) throughout the EUalthough it goes in the same direction. 

EU citizens expect the EU Commission to take into consideration the facts about a universal uniform unconditional individual cash transfer that are based on data and microsimulations. It could be called a European UBI. This transfer should be financed by the ECB.  The same for all Europeans, to foster social convergence. This is the main difference with the current EU approach in the domain of the European Social Pillar and post-Covid-19 recovery plan with country specific measures that foster further divergence. Hopefully, the new European Citizens’ Initiative for UBI in the EU will be an additional, democratic sign for the European Commission and the European Parliament of what EU citizens want and expect from them in the area of social security: the Universal Basic Income. The European UBI could be the first step towards a world in which all people will eventually receive a local, national, European and global basic income in order to safeguard and foster democracy and ecological-economic development.

Sources: 

Bruegel (2020) The fiscal response to the economic fallout from the coronavirus Source: https://www.bruegel.org/publications/datasets/covid-national-dataset/

EC 2019. Addressing inequalities: A seminar of workshops. Source: https://op.europa.eu/en/publication-detail/-/publication/d10809c5-4478-11e9-a8ed-01aa75ed71a1 

EP 2016. Helicopter money: A cure for what ails the euro area? https://www.europarl.europa.eu/RegData/etudes/BRIE/2016/581970/EPRS_BRI(2016)581970_EN.pdf 

IMF 2018. Universal Basic Income: Debate and Impact Assessment. WP/18/273. Source: https://www.imf.org/en/Publications/WP/Issues/2018/12/10/Universal-Basic-Income-Debate-and-Impact-Assessment-46441 

KORO EC 2019. Unconditional Basic Individual Universal Child Grant for Belgium following the Slovenian approach.  Source: https://basicincome.org/wp-content/uploads/2020/01/Paper_SI_UBI_UCG_BE-KORO EC-2019-for-India.pdf 

Mencinger 2015. The Revenue Side of a Universal Basic Income in the EU and Euro Area. Source: https://www.eaco.eu/wp-content/uploads/2015/09/mencinger-2.pdf  

Mencinger 2017. Universal Basic Income and Helicopter Money. Basic Income Studies, Volume 12, Issue 2, 20160021, eISSN 1932-0183 Source: https://doi.org/10.1515/bis-2016-0021.

OECD 2017. Basic Income Policy Option. Background Technical Notes. Source: https://www.oecd.org/els/soc/Basic-Income-Policy-Option-2017-Brackground-Technical-Note.pdf

OECD 2020.  Supporting livelihoods during the COVID-19 crisis: Closing the gaps in safety nets. Source: http://cnt.be/DOSSIERS/Covid-19/OESO-OCDE-2020-05-20-Supporting-livelihoods-EN.pdf

UNICEF 2019. The International Conference on Universal Child Grants organised by ILO and UNICEF. Source: https://www.odi.org/events/4580-international-conference-universal-child-benefits

National Assembly in France decides to explore ‘Socle Citoyen’

Editor’s note: The use of the term ‘basic income’ or ‘universal income’ here does not correspond to BIEN’s definition of basic income, since the payments each month will fluctuate with income. ‘Socle citoyen’ corresponds more closely to a Negative Income Tax, adjusted on a monthly basis.

Interview with Marc de Basquiat, originally appeared on Atlantico.fr

On November 26 2020, the National Assembly voted on the resolution tabled by the group Agir Ensemble launching a public debate on the creation of a universal income called “Socle citoyen.” Why do you welcome this vote?

Marc de Basquiat: This vote is historic for three reasons. First of all, it was very broad, bringing together the votes of deputies belonging to five political groups close to the centre of the political spectrum: LREM, Agir Ensemble, MoDem, Libertés et Territoires, Socialists and related parties. Credit for this result goes to Valérie Petit, a northern representative, who launched and led an informal working group on the Socle citoyen project based on the platform we published in the Observateur on May 4 with the support of 80 co-signatories, including 50 parliamentarians. In-depth work was carried out, with a series of remote (because of Covid) meetings. The 48 deputies who tabled the resolution voted on November 26th really know the stakes and the key principles of the technical solution that we propose to study.

The second reason to applaud is the strong support of the La République En Marche deputies. Seventy of them voted in favour of the Agir Ensemble group’s resolution. At a time when many people have doubts about representative democracy, we can salute here the joint search for consensual solutions for our country by representatives from diverse groups, including the governing party. Let us recall that at its creation in 1988 the Revenu Minimum d’Insertion in 1988 received the deputies almost unanimous support. Yes, a reform as ambitious as the one proposed by this resolution aims to achieve consensus from all parties of the National Assembly. This is the process that Brigitte Bourguignon, Minister Delegate for Autonomy, supported with her speech.

The third reason to celebrate this advance is the fiscal nature of the Socle citoyen proposal that it is to be studied. Let us quote from the enacted text:

“The Socle citoyen is unprecedented in that it combines tax reform and improvements in social benefits. First of all, we propose to establish the universality of income tax: every French person, from the first euro of income, is taxed proportionally. This very fact constitutes being a part of and being responsible to the national community. It links one to the collective destiny and at the same time ensures assistance and solidarity.

With the mechanism of the Socle citoyen, the universal income becomes an individual tax credit, negative or positive. Thanks to tax withholding at the source, calculation and payment are now possible in almost real time. This is one of the great social benefits of this major tax reform: it makes it possible to calculate and automatically pay out the Socle citoyen, based on the universal tax, at the same time the reform achieves universality.

The fact that universal income is approached from a tax perspective revolutionizes the question of its economic feasibility. It is not a question of creating an nth social benefit that is painfully financed, but, first of all, of ensuring that all citizens are involved, in their own way, in the financing of public services. The same “right for all” is possible because, beforehand, we ensure the same “fiscal duty for all.”

Is this a sign that something is changing, at the parliamentary level and elsewhere, with regard to universal basic income?

Despite the trauma of the 2017 presidential campaign and the failure of Benoît Hamon’s project for a Universal Existence Income, many—of all political stripes, I can attest to that—grasped the importance of a transfer mechanism that would automatically guarantee a minimum of resources to everyone, regardless of the vagaries of life. But until recently, we hesitated to talk about it for fear of being suspected of providing a caution for the Hamonist party, Generation-S.

I believe that with the Covid-19 crisis, we all understand that the issues we are facing go far beyond political posturing and partisan arrangements. I am happy that the only Hamonist deputy in the Assembly, Régis Juanico, has lent his voice to the resolution drafted by Liberal deputy Valérie Petit. It is by working together that our elected officials will be able to re-inspire politics!

On the other hand, I am disappointed that no Les Républicains representatives dared to break with a conservative voting directive. The speech of LR deputy Stéphane Viry started well, but its conclusion is saddening:

“The group Les Républicains salutes the willingness of the National Assembly, the most essential forum for public debate, to address this major issue, since it touches on the fight against poverty, for work, and social cohesion. These are all foundations on which to build a social project, national cohesion, dynamism for our country. As part of our efforts, we must constantly, all together, open up new horizons. (…) You are right to put this debate on the table, and our group is very much in favour of a frank reflection on work, on activity for all, on social protection, on the fight against poverty. However, as it stands, as formulated, we will not follow your proposal.”

In 2016, the Senate had carried out a mission of information on basic income, in which all the political movements, from the right to the communists, took part, leading to the formulation of a consensual report that illuminated the way forward. Let us hope that the 11 deputies who voted against the resolution on November 26 will discover, moving forward, that the Socle citoyen has no other ambition than to strengthen cohesion, economic dynamism and fraternity in our country.

What are the liberal arguments to defend the proposal of a universal basic income and what form does it take in this framework?

What seems to me to be common to all liberals—whether one feels on the right or on the left for that matter—is the importance one places on individual choice. A Socle citoyen can be formulated as follows: everyone pools the same share of their income (around 30%) and benefits from the same individual transfer (around 500 euros per month). With this single rule, which is easy to implement using the mechanism of withholding tax, everyone is in the same boat and knows exactly how the income tax they pay or the assistance they receive will evolve according to the events in their lives: change of job or loss of work, marriage or divorce, etc. the impact is always easy to calculate.

Such a proposal is not really a revolution. In fact, for tax households that are subject to the 30% marginal rate, my proposal is just a reformulation of the current tax calculation, with an identical result. For 2020 income, taxpayers in this bracket pay a tax whose monthly calculation is 30% of the taxable income of the previous month, minus €498.52 per tax share (let’s say €500 for a single person and €1,000 for a couple). This would not change much.

The Socle citoyen amounts to applying the tax calculation formula for wealthy taxpayers to everyone! A single person without income who currently lives with an RSA of €497.01 plus a housing allowance would receive €500 and still receive the same housing allowance. No change in his or her case. On the other hand, all other cases of poor and low-income households would be winners, to what extent, depending on what they have today.

You have been defending universal basic income for several years, as president of the Association pour l’Instauration d’un Revenu d’Existence (AIRE) and as a Free Generation expert. Do you think that the coronavirus crisis can bring about a change in opinion?

In March, with the crisis, millions of people discovered unemployment. In restaurants, transport, household services, construction, shops… All these jobs where you work hard, where you get up early. The State has multiplied measures, first by taking over from employers to pay more than half of the wages! We can see that a hazard can bring the bravest of workers to their knees, making them dependent on the community to ensure their subsistence.

This invites everyone to question the solidity of their inclusion in society. Am I in this position only because I deserve it? Do I owe nothing to anyone? How could the country have endured a “laissez-faire” logic, where everyone was left to fend for themselves in order to make a living despite the fear of catching a virus—whose danger was not really understood at the time?

Today, everyone knows they are vulnerable. Everyone has also experienced their own docility! During the first confinement, we were happy to cheer from the windows, it gave us a recreation and a semblance of social interaction. But deep down, we really understood that we are vulnerable and that we have a vital need of others. This is why the ” Socle citoyen ” project speaks to everyone: we contribute as citizens—through taxes—to ensuring a vital base for everyone. In these circumstances, no one is spreading foolish rhetoric about handouts?

Is the Socle citoyen universel an effective response to the economic crisis that is looming with the coronavirus?

No one knows how the crisis will evolve. In the second quarter of 2020, China is the only G20 country whose GDP has grown. Germany posted -12%, France -18%, India -24%. The second wave caused us to fall back, less sharply, but global economic balances will take time to readjust. Public debt is exploding. Even if it is relatively painless in the short term, no one can predict what interest rates will be in 10 years. Our accumulated debts may weigh very heavily, preventing governments from playing their role as buffers against social shocks. At that time, we will be happy to have established a Socle citoyen, the universal distribution of part of the income among all, so that no one will be in total destitution.

We can also venture the hypothesis that our country will regain the growth necessary to adapt and face the planetary challenges. Here again, the egalitarian sharing of a portion of the fruits of growth will be a tremendous driving force for national unity, a multiplier of energies.

Translation from the original French: Pierre Madden

Reprinted with the kind permission of Atlantico.fr

More information on the Socle citoyen can be found here

Cost of Living: An interview with basic income documentarians

Cost of Living: An interview with basic income documentarians

A new film is hoping to answer the question of whether life itself should be subsidized. Directors Sean Blacknell and Wayne Walsh have produced a new documentary “The Cost of Living” which discusses the mental and physical burden placed on those with unstable incomes and whether basic income is the right remedy.

The film interviews many prominent basic income scholars, such as Guy Standing and Barb Jacobson. It is focused on the issues specifically facing the United Kingdom, where there are “3.5 million people in ‘in-work poverty.’” With the arrival of COVID-19, the film-makers argue the discussion about basic income is even more pertinent than ever. 

The filmmakers expressed that many of the current programs in the UK are failing to rise to the moment with extreme distress around the country, such as the universal credit which they called “dehumanizing.” 

“You have to prove you are deserving,” Blacknell said. 

Steve Botrill, the deputy chief executive of Urban Outreach Bolton, is interviewed in the documentary. He said that much of the current stress on the poor in the UK is due to reductions in benefits and more stringent conditions placed on social services.

As a result, Botrill said that this is a cause for the “astronomical” growth of food banks in the UK in recent years.

In the documentary, it is argued that much of a person’s wealth is dependent on luck, such as where a person is born. 

Initially, the film was going to take a broad look at social programs, but narrowed to basic income as they moved forward. In the long-run, the filmmakers noted that this discussion around basic income will continue to be important because of the changing economic and technology trends around the world. 

However, the filmmakers emphasized that after interviewing many scholars they do not believe basic income is a “panacea” on its own. By interviewing a wide range of viewpoints, they hoped to create a “more nuanced take” on basic income.

With new spikes of COVID-19 around the world, Wayne and Blacknell hope the film can reach a wider audience to facilitate this debate. It is now available on Amazon Prime for streaming.

Universal Basic Income, an opportunity for rural Chile

Universal Basic Income, an opportunity for rural Chile

A spanish version can be found here.

A silent division between the rural and the urban has been rapidly deepening in recent decades in our country. The recovery of the rural world as a space for full and dignified life has been postponed for too long. Since the times of the Agrarian Reform, there has not been a project in Chile to take the countryside out of its deterioration as the country’s “backyard” at the service of the export-oriented agro-industry, energy production and reception of waste from the city, a role to which it has unfortunately been relegated.

Non-urban areas offer the possibility of facing the great challenges of our time: those who inhabit them can take care of the biodiversity of their territories, defend them from damaging extractive projects and dedicate themselves seriously to developing projects of food sovereignty.

But all this is possible only with a minimum level of economic security. This key element would allow, for example, to break the dependence on agribusiness or industries as harmful as salmon farming in the southern coasts of our country. This model has disrupted populations that had had little previous access to money, entramping them in precarious and dangerous forms of work. A Universal Basic Income could be a first step to strengthen the position and possibilities of rural inhabitants to make other life projects a reality.

A practical way in which the implementation of a Universal Basic Income could recognize this historical debt and urgent transformation project would be by prioritizing provinces or regions with a high proportion of rurality for its roll-out. This would allow an early evaluation of the effects of this policy in revitalizing local economic circuits that in many cases are completely depressed, as well as encouraging a return to the countryside of people who perhaps cut off their relationship with their ancestral territories due to the need to have cash. but they still have the tools, the possibilities and the desire to make life outside the city something meaningful.

It would be an opportunity for the flourishing and recovery of activities such as eco and small-scale agrotourism, non-invasive grazing, or the cultivation of grains, fruits or vegetables that have been lost because they do not fit with the agro-exporting model, but that strengthen and enrich our bio-food heritage. It could also stop the urgency of deforestation by increasing the arable areas for commodities such as forest plantations in the south of the country. It could, in short, break with vicious circles that have undermined the social-ecological foundation of much of the Chilean territory due to the urgency of having income (often very low) on a day-to-day basis.

Having a resilient countryside is essential for a society that is entering the period of most important ecological transformations since the emergence of the modern human species. Challenges as important as increasing drought and desertification can be better faced if those who inhabit these territories in crisis have a guaranteed income.

In sum, leaving an urban-centric perspective makes the potential positive effects of having a UBI in Chile even more evident, and its implementation more urgent.

Certain Conditions Apply: Canada’s Child Benefit is a  ‘Basic Income’

Certain Conditions Apply: Canada’s Child Benefit is a ‘Basic Income’

In Canada, certain conditions apply to the unconditional and not everyone qualifies for universal benefits.  [version française]

The Basic Income Earth Network (BIEN) defines a Basic Income as a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.

I do not think this idea will ever be fully implemented in Canada nor anywhere else in the world. This causes me little concern because UBI will forever exhibit the traces of its origins in the very imperfect social safety net we have today and have always had. Human institutions evolve from common ancestors: two very different policies are still linked by evolutionary history. A horse’s leg corresponds to the bones in our middle toe, not the same function at all, yet equivalent from an evolutionary point of view.

There are no social programs in Canada that are universal. Some condition always applies to reduce the amount and eventually eliminate the benefit completely. This is quite apart from any discussion of whether the program is sufficient, necessary, feasible or even appropriate. 

When Canada implemented income tax in 1917 one of the features of this temporary program was the personal exemption: $1,500 for singles and $3,000 for others, $24,500 and $50,000, in today’s dollars. While this benefit was cash, it was hardly a transfer, since you just got to keep some of the money you already had. It was individual, a couple getting twice the benefit of an individual. It was unconditional in the sense that there were no strings attached, no work requirement, no declaration of any means (property or possessions) other than income. It was universal, except that the amount depended on revenue. The 4% of earnings on the first $1,500 dwindled to nothing if you had no income.

Fast forward 99 years to when the Canada Child Benefit (CCB) was introduced in 2016. Today we distinguish between reimbursable tax deductions and non-reimbursable tax deductions. The personal exemption is one of the later. Benefits only pay down your tax burden. You get no benefit if you pay no income tax. The Canada Child Benefit is one of the former and is a bona fide Basic Income, even if certain conditions apply.

The Canada Child Benefit (CCB)

The Canada Child Benefit is paid out even if no income tax is due. It is clearly a cash transfer.

Is the CCB universal? It’s paid to all families with children. Or is that all children with families? Of course you can’t send a monthly cheque to a toddler. The caregiver receives the money with no strings attached. When Universal Basic Income is distributed to all adults, its universality is never questioned in proposals such as BIEN’s or Andrew Yang. Is restricting the benefit to children less legitimate because they are dependants? In fact, children “without families,” that is “maintained by an agency” also receive the benefit. The amounts are identical; just the name of the program changes. I think that this settles the question: it is a benefit for children, not a benefit for families with children.

Is the CCB individual? If you consider that it’s paid to families, then no. If, however, as I argue, it benefits individual children and is just turned over to their caregivers, then yes.

Is the CCB unconditional? All social programs have some condition which excludes some recipients or reduces benefits. Universality and unconditionality are inextricably linked.

Both arise from a desire to allocate or distribute ostensibly scarce resources according to the opposing principles of fairness and efficiency. The issue is presented as a trade-off: Either the quantities are sufficient to fulfill the needs of the recipients and not everyone receives the benefit or everybody receives a diminished allocation and no one has enough.

The application of such conditions which eliminate recipients or slash benefits is what is referred to as means-testing. This exists in Canada. The welfare system is the classic example. Benefits are cut dollar for dollar if your earnings exceed a paltry threshold. For example, in Quebec, welfare provides $690 per month: 29.6% of what it takes to avoid poverty. Any earning above $200 is deducted 100% from your cheque. The welfare system intrudes into your private life: a couple receives 29% less than two individuals, so undeclared roommates are committing fraud, as far as the authorities are concerned.

Another way of distributing scarce resources is what is known in Canada as income testing. Benefits depend on how much revenue you declare on your income tax returns, which brings us back to the personal exemption of 1917.

You may not agree that this taxation feature qualifies as an embryonic social program and find it far-fetched to call it a cash transfer. Identity of form and function is not required to establish evolutionary kinship.

Means-Testing vs. Income-Testing

Means-testing and income-testing certainly have the same ancestor: the need for a fair and efficient distribution of putative scarce resources. In form they are virtually identical yet in the Canadian context, their function could not be more different.

Means-testing is a human activity whereby a bureaucrat gathers information on helpless and vulnerable people to determine how little they deserve. It is directed specifically at lower-earning people to make sure that they don’t receive more than they deserve. It is an evil system in which, if you are not destitute enough, requires that you divest of your property or savings regardless of your interests. Means-testing is a social policy tool reserved for those living in poverty and designed to punish them for their condition.

Income-testing is an algorithm which applies in the same way to everyone based on tax returns. The testing part of income-testing is achieved through tax self-reporting. Canadians don’t consider filing your income tax as an invasion of their private life. In any case, the government already knows how much tax you’ve paid because your employer turns over your tax deductions to the authorities every month and has been doing so since 1943. Revenue Canada doesn’t know or care what you do with your take-home pay nor tell you how to spend it. Unlike with means-testing, there is no stigma attached to phasing out benefits for the rich.

No one questions the practice of taxing back from the rich funds equivalent to the Canada Child Benefit from which they derive no important advantage and thereby recover some of the cost of a program which is immensely useful for everybody else. Conscientious objectors to means-testing will insist that even when this clawback is done specifically for the purpose of recouping UBI payments, it does not infringe on the principle of universality because it is done in separate operations, the right hand not knowing what the left hand is doing. In Canada, we tend to view this as an elaborate and unnecessary fiction. Covering up the mechanism does little to hide the process, which serves no other purpose than to claw back UBI from the rich.

In the FAQS page of BIEN, under the caption: “WHY PAY MONEY TO THE RICH WHEN THEY DON’T NEED IT?” we read:

“It is efficient to pay the same level of income to everybody of the same age and then tax it back from those who don’t need it. The alternative is to means-test incomes so that only those who are poor receive them: but that results in complexity, stigma, errors, fraud, and intrusive bureaucratic interference in people’s lives.”

First of all, “those who don’t need it” is a very unfortunate choice of words. There is no more reason to ask the rich than the poor to justify their needs, as means-testing does. Only the poor bear the brunt of the evils of means-testing. “Taxing back,” never questions your needs. That is all that “income-testing” is.

This distinction between means-testing and income testing is not hotly debated within BIEN: Most mainstream member philosophers and economists dismiss it out of hand, considering both concepts violations of the principles of universality and unconditionality. I can’t accept this argument because it is based on concepts which aren’t actually found in the real world. At least not in Canada!

UBI vs. NIT

Another thorny issue in the Basic Income community which may seem quibbling to the un-initiated is the distinction between Universal Basic Income and the Negative Income Tax. Every party to the debate agrees that in terms of net income in the pocket of the beneficiary, these measures are identical.   Also, their net cost to the state is also the same. Finally, both programs can be engineered so that the beneficiary is unable to tell the difference. Doesn’t that make all discussion of their relative merits moot? Perhaps I am missing something. Let me quote Davide Tondani in full:

From the distributive point of view, the constraint of equal spending leads to distributive outcomes where NIT is effective at the bottom of the distribution, while UBI also distributes income to the middle incomes. This seems to suggest that in NIT, a minority of “poor” citizens are financed by people with middle and high pre-tax income. In UBI, a minority of wealthier citizens redistribute part of their income to people with lower incomes. Greater efficiency in fighting poverty by NIT and the presence of high marginal tax rates on low incomes reduces the labour supply formed by the same individuals. On the other hand, in UBI the lower benefits for poor people associated with lower marginal tax rate provide an incentive for low-income people to participate to the labour market. Preference for NIT seems to favour redistribution towards a wider range of low-income people. In the absence of a legal constraint to accept a job offered by the government, no personal effort in terms of a more intensive labour supply is required from these individuals. Opposite to this is a model of “residual welfare,” UBI on the other hand is less efficient in raising low incomes, but is more sensitive to inequality and social inclusion, and supporting labour supply and citizenship.—page 18

Tondani comments further on how identical outcomes can arise from divergent aims:

Although NIT and UBI policies tend to lead to very similar, if not identical, distributive outcomes there is great epistemological difference between the two. Treating them as equal can thus lead to the risk of very real confusion about the real distributive aims of the policy maker.”Tondani page 44

So there is no confusion about outcomes, only the aims of the policy-maker. I don’t see why motivation is relevant when outcomes are identical. If the road to hell is paved with good intentions, it might as well be paved with bad ones.

Shouldn’t good policy even backed by bad intentions be preferred over bad policy supported by good ones?

Scarcity vs. Policy

A final point about scarcity. The paucity of resources is often presented as a fact. It’s actually a policy decision, a choice of priorities.

A frequently heard argument is that if you give resources to those who don’t need them and provide free services for those who can afford to pay for them, you are depriving others who don’t have the resources and can’t afford the services. This argument only works if the resources and the services are scarce. This is not a question of objective fact. Scarcity is a question of political choice, the setting of priorities. For example, public housing could be more abundant if battleships and fighter jets were scarcer.

It is not often that rationing of a resource is unavoidable.

Conclusion

What social programs are, the intentions behind them, and their history is of little importance in comparison to what they do.

I have argued that the Canada Child Benefit is a Canadian-flavoured Basic Income which is as close as it gets to a UBI in the real world. It is universal because all humans go through childhood, it is individual because strictly based on headcount and it is unconditional because you don’t have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. Does it deviate in some way from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?

Some will claim the Child Benefit is not important as a putative example of a UBI or will argue that the Child Benefit is not close enough to being a UBI to qualify as such. How close is close enough? What constitutes important? There is no objective way to decide these questions. The answers are not falsifiable.

Will calling the CCB a Basic Income hurt the brand and confuse people about what a Basic Income really is? The confusion has nothing to do with the shortcomings of the Canada Child Benifit as a Basic Income. Every example helps promote the concept, regardless of deviations from the ideal. And the more familiar the public is with Basic Income, the more likely it will spot the points to improve in existing implementations such as the CCB. It is the scarcity of concrete examples to point to that makes it difficult for people to establish connections. The more examples you find, the better people will understand. Far from confusing people, a consistent terminology with variegated examples will help crystallize the concept in peoples’ minds.

Basic Income is not something that can be summed up in a definition, it is a living thing, constantly adapting to a changing local environment. It is less man-made than responsive to conditions. Certain conditions apply.

A new English translation of Adrienne Goehler’s recent book

A new English translation of Adrienne Goehler’s recent book

Earlier this year we announced the publication of Adrienne Goehler’s new book on Basic Income. The article appears below. An English translation is now available, which can be downloaded here.

This new edition features additional material: an interview with Sarath Davala, and an essay by Julio Linares.


In 2010, Götz Werner and Adrienne Goehler wrote 1000€ für Jeden: Freiheit, Gleichheit, Grundeinkommen (1000€ for everyone: Freedom, Equality, Basic Income). Now Adrienne Goehler has written a new book, Nachhaltigkeit braucht Entschleunigung braucht Grundein/auskommen ermöglicht Entschleunigung ermöglicht Nachhaltigkeit (Sustainability needs Deceleration needs Basic Income | Livelihood allows Deceleration allows Sustainability).

To see further details, click here.

To read an interview with Adrienne Goehler, click here.

Adrienne Goehler has provided the following translation of the website page about the book:

If we had unrestricted basis income for everyone, what would the consequences be? Would it increase freedom and equality and so dim down the ever faster accelerating times? Would it help to save the environment with its restricted resources?

Over the last two years, Adrienne Goehler has been addressing these and other burning questions of our time while working at the “Institut für transformative Nachhaltigkeitsforschung” in Potsdam. In this book that presents the results of her inquiries, she embarks on a journey from research to politics to art. She invited people from the most diverse parts of society to contribute essays, interviews, stories, images, and artistic interventions concerning the relationship of sustainability, deceleration, and basic income. She constellated insights into the financial world with suggestions contributed by experts in agriculture, development policy, climate change, and ecology. Artists address the most important questions of our time: What do we need for a good life and do we have enough of it for all of us? How will “work” look like in the future, and who will be employed? If we learn to think of unpaid and poorly paid social work as equally important as other kinds of work, will that lead to more gender equality? How do we identify meaningful tasks that would fulfill our lives? And last not least: Would implement an unconditional universal basic income as a basic human right be in tune with the seventeen goals of sustainability, as declared by the United Nations? The book offers insights into the possibilities and contradictions of our actions. It presents all the important aspects of contemporary debates concerning universal basic income. A passionate wake-up call: We need to break out of frozen patterns of thinking and acting, strive for knowledge, and move around more freely.

Complaints about acceleration were already associated with industrialization, but in its present extent, its intensification and radicalization, it no longer concerns only working conditions, but the whole of life. Acceleration has totalized itself. The philosopher Byung-Chul Han, author of the book “Fatigue Society”, describes the most important change from capitalism in Marx’s time, when factory owners and workers faced each other in a clearly defined relationship of exploitation, to today’s self-exploitation relationships, in which people became entrepreneurs of themselves, caught in the illusion of self-realization. Thus neo-liberalism formed the oppressed worker into a free entrepreneur who worked incessantly on his self-optimization. We are constantly saving time through faster transportation, fast food, faster information media and tools, and therefore we are packing more and more into the day. Hartmut Rosa calls it, “quantity increase per time unit”. We believe that we have to be available 24/7, as if we were all on call at all times. The present with its unreasonable demands makes us pant, our fantasy lies idle under states of exhaustion and multiple fears. We find ourselves in a hamster wheel whose speed we cannot determine and which many believe we cannot leave. The significantly high increase of depression and burnout are symptoms of this too much, which is at the same time a too little. The time researcher Barbara Adam therefore states: “We need not only an ecological ‘footprint’, but also a ‘timeprint’. I remember with longing “Momo”, the character in Michael Ende’s novel. Momo realized that anyone who has the time of mankind has unlimited power. She brought back time stolen by grey ‘time thieves’ to the people, when she realized that by saving time people had forgotten to live in the now and enjoy the beauty in life. And I am thinking of John Franklin, the polar explorer, whom Stan Nadolny memorialized in his novel “The Discovery of Slowness”, because his perception refused everything fast and superficial and transformed slowness into calm. Time and the feeling of permanent acceleration, breathlessness, is the subject of many interviews. I also feel connected to the idea of deceleration as a further prerequisite for the chance to lead a sustainable life. Hartmut Rosa, who imagines the process of the great transformation as successful only in connection with a different way of dealing with time, is also connected to this idea. And with a basic income.

In addition to the immense challenges outlined above, there is another Herculean task: the comprehensive redefinition of life and work as a result of ongoing digitalization, with which gainful employment will change qualitatively and quantitatively in a variety of ways, some of them very fundamentally. In conjunction with the increasing importance of the service sector, a working society is emerging in which a growing part of the population does not have continuous, let alone lifelong, gainful employment, but instead works independently or on a project-based basis, often accompanied by poorer pay and greater insecurity.

With the start of the digital age in 2002, people were able to store more information digitally than in analogue form for the first time. Another ten years later, the term ‘Work 4.0’ came into circulation to describe the fourth industrial revolution.

Since then, there have been a large number of studies that look at the impact on working life to date. Many of them assume a significant loss of traditional jobs, which will in future be done by machines, and predict radical changes. A frequently quoted – and now also widely criticized – study by the scientists Osborne and Frey from Oxford University assumes that 47 percent of gainful employment in the USA is at high risk of being automated in the coming years. The Davos World Economic Forum estimated in 2016 the number of jobs that will be lost in the next five years in the 15 most important industrial and emerging countries as a result of the “fourth industrial revolution”, 5 million. Women’s jobs were particularly affected. Companies such as Siemens, SAP, Telecom and the big ones in Silicon Valley agreed with these forecasts, which clearly boosted the discussion about an unconditional basic income, because it was strengthened by a rather unexpected side.