by Andrea Fumagalli | Apr 19, 2017 | Opinion
By: Andrea Fumagalli
Introduction: the minimum income
In Italy, the debate surrounding basic income has been ongoing for almost 20 years. It began, in fact, with the August 1997 publication online (on the site ecn.org) of my pamphlet entitled “Ten theses on citizenship income”. The pamphlet saw successful underground circulation, and was re-edited into the book “Tute Bianche“[1]. The pamphlet presents a survey of the Italian debate around the introduction of a basic income, a proposal that had begun to circulate in the neo-workerist environments of the previous 2 years[2].
Twenty years later, it should be acknowledged that the definition of “citizenship income” has created more negative effects than positive: at that time, although starting to increase, the phenomenon of migration had not yet assumed today’s proportions. The term “citizenship” was used without considering the concept of “citizenship” in a way that was not terribly ambiguous. In fact, it could then be used as part of an ethical and philosophical framework for designating that every human being is born already a “world citizen”, regardless of nationality. But increasingly today, the concept of citizenship has to do with the legal-national sphere and then with a grid of limited rights ius soli, and is not extended to those who were born outside a nation’s borders. From this perspective, the idea of a “citizen’s income” can only be misunderstood as a proposal limited to specific nationalities, in contradiction with what is our idea of a ”right to income”. The term “basic income” appears therefore more appropriate and inclusive.
There are now many examples of proposed basic income legislation, in Italy and abroad; policy initiatives and declarations in favor of the introduction of some form of income support independent of employment status.
And just as numerous, and well differentiated, are the various interpretations of such a measure. In the cultural political debate promoted by Bin-Italy[3], which for years has promoted a cultural and socio-political campaign aimed at introducing a guaranteed minimum income (basic income), it is necessary to define certain parameters, to reduce the interpretive confusion that has now reached a critical level that makes unclear what actually a “citizen’s income”, “minimum income” or “a dignity income” are (to use the most common names).
To actually talk about “basic minimum income” (we use this term in a broad sense and provisionally), we believe that at least 5 criteria have to be met:
- Individuality: the minimum income must be paid at the individual level and not at the level of the family. Following this, there can then be a discussion as to whether children under 18 years of age will have the right or not.
- Residence: the minimum wage must be paid to all people who, residing in a given territory, live, rejoice, suffer and participate in production and social cooperation regardless of their marital status, gender, ethnicity, religious belief, etc.
- Maximum extension of unconditionality: the minimum income must be provided by minimizing any form of compensation and/or obligation and be as free an individual choice as possible.
- Access: the minimum income is paid in its initial phase of experimentation to all who have an income below a certain threshold. This threshold may, however, be greater than the relative poverty line and converge toward the median level of the personal distribution of existing income. Moreover, this level of income must be expressed in relative terms, not absolute, so that increasing the minimum threshold (as a result of the initial introduction of the measure) the range of beneficiaries will increase continuously until it hasrisen to graded levels of universality.
- Funding and transparency: the modalities of financing the minimum income must always be set out on the basis of economic viability studies, detailing where resources are obtained based on an estimate of cost when necessary. These resources have to fall on general taxation and not on other assets of origin (such as, for example, social security contributions, sale of public assets, privatization proceeds, etc.).
The criteria 1, 2, 5 should not be amendable, while criteria 3 and 4, are expressed in relative terms, may be subject to additional definitions depending on the context, but within the principle directives we have just outlined.
When basic income is the primary income it is therefore unconditional
That basic income is good and necessary, is a claim inspired by the composition of labor and the modalities of accumulation and exploitation which are today dominate.
In this regard, it is necessary to propose a cultural leap before political steps are taken, and to affirm that Basic Income is a primary distribution variable: the basic income must intervene, in fact, directly in the income distribution of productive factors: such as salary, which remunerates certified labor time as such, or profit, that rewards the business entity or rent, which derives from a property right. Being a primary distribution variable means that it is not a re-distributive variable: it directly occurs at the level of the balance of power and social relations within a certain process of accumulation. Despite this, a redistribution of income, which occurs at a later stage, is the outcome of a second level of indirect distribution, an extra market level, thanks to appropriate discretionary economic policies.
If a basic income is remuneration, the question that naturally follows is what it is that it pays. To answer, it is necessary first to analyze what in contemporary capitalism the main sources of exploitation/valorization are. More and more studies and case studies confirm that today life itself, in every daily event, is the productive factor par excellence.[4] If we take into account the many acts of daily life that characterize our existence, they can be categorized into four types: labor, work, leisure, entertainment. More and more today no only labor is to be the basis of added value but also the time spent in creation (opus/work), the otium/leisure time, and entertainment time: all are included in a growing and continuous enhancement mechanism. The classic dichotomy of the Fordist paradigm between labor and non-labor time, between production and consumption, between production and reproduction are now partially obsolete. It is the result of a historic process of structural changes in manufacturing processes and labor organization, which marked the transition from a material Fordist capitalism to a bio-cognitive and financialized capitalism.
Today, wealth production derives, at the same time, from absolute surplus value and relative surplus value extraction, where for absolute surplus value there is intended a sort of primitive accumulation, in capitalist organization based on capital employment and on private property. The result is the change of the relationship between productive and unproductive labor. What in the material Fordist capitalism was considered unproductive (i.e. no production of surplus value and therefore not remunerable), has now become productive, while the remuneration remained anchored to that of Fordist era (the crisis of salarization, for example). As a result, we are facing new kinds of valorization such as “dispossesion” (Harvey[5]) and “extraction”, to which no remuneration is applied, according to the dominant rules (legal, industrial relations, uses and so on).
It is no coincidence that unpaid labor is sharply increasing, as it is from those sectors that more has been invested by the transformation of enhancement methods and the adoption of the new linguistic-communicative technological paradigms (new cognitve-relational activities).
Against this background, one proposal could be advanced to counter this phenomenon of unpaid labor (i.e., basically “slavery” with another name, even though for most it is not perceived as such) is to proceed with its salarization. But, we might ask: is this possible? If the answer is yes, no longer necessary is a basic income.
The vagueness of labor time
This question opens a second theoretical problem – political and, at the same time, methodological. When technological and organizational transformations favor the spread of increasingly intangible productions with a high degree of non-measurability, when value is created by a whole range of life activities, from learning processes, to social reproduction[6] and networks of relationships, there arises the problem of “measure.”
The theme of measure is linked to the calculation/quantification of labor productivity. Unlike in the past, where this calculation was possible because employee labor activity could be measured in hours and by an equally measurable amount of production on an individual basis, productivity today has changed shape: it depends on the increasing use of new forms of scale economies: learning and network economies). These are scale economies no longer static but dynamic, because it is the flow (continuously) of time that allows for growth and learning of social skills as well as social reproduction and thus increased productivity, whose effects can be seen no more on individual basis but on the social one. Both learning and networking, in fact, need a social context and social cooperation. Productivity in bio-cognitive capitalism is therefore primarily social productivity or, with reference to the role of knowledge, general intellect.
Learning economies are based on the generation and dissemination of knowledge. Knowledge is not a scarce resource, such as material goods, but abundant: the more you swap, the more it spreads, the more it grows, a highly productive cumulative mechanism: cumulativeness requires relationships and social networks. Learning and networking are two sides of the same coin: if knowledge is not spread through relationships, individual processes are not economically productive. Only if you develop social cooperation and general intellect do you become productive.
We’re not talking about the traditional sense of the term co-operation, that is, “join forces” but co-operation, namely the interaction of individual operations that only achieve synergy in the common processes of accumulation and thus of surplus value creation. These relational activities often hide forms of hierarchy and exploitation, whose value is difficult to measure, not only on individual bases but collective ones, too. If the traditional factory productivity was based on precise technical mechanisms that allow you to measure individual productivity in the labor places today, the productivity of social cooperation cannot be measured in terms of individual productivity.
Not just individual productivity but also the same product of social cooperation is not measurable. When you are producing symbols, languages, ideas, forms of communication, social control, what kind of measurement we can take? Every relationship between output value, its production time (measured in hours) and its remuneration (measured in wages) becomes almost impossible or very difficult and subjective.
The crisis of the labor theory of value derives from the fact that not only the individual contribution today is not measurable but also the output tends to escape a unit of measurement, the more the more the production tends to become immaterial. And this takes place in a context in which the measure of value is no longer constrained by a scarcity factor. As was pointed out earlier, learning (knowledge) and network (space) are as abundant, and theoretically unlimited (especially if we consider the virtual space), as human nature. A theory of value based on the principle of scarcity, such as the one implicit in the theory of free market founded on the law of supply and demand, today has no longer any economic and social relevance. It is only artificially perpetuated in market dynamics where are continuously defined by power relationships. Paradoxically, the only theory of value that appears adequate to contemporary bio-cognitive capitalism, the labor theory of value, is not able to provide any measure.
How measure social cooperation and general intellect?
One possible aspect to consider has to do with the sphere of financialization: the pervasive and central role of financial markets, such as investment financing tools, privatization of social welfare and the partial compensation of knowledge labor, has affected not only the sphere of realization but also that of production. In capital gains, the speculative activity partially derives from the value produced by the cognitive-relational living labor. It is in financial markets that we can roughly see the implementation of the process of expropriation of social cooperation and of general intellect.
This process is not immediate and direct. It is often handled by the dominant bio-power management and the hierarchical relationships that continually redefine the property structure and market structure.
From this point of view, basic income, as a primary income, becomes even more a tool of direct re-appropriation of the wealth that is generated by the common life time put to labor.
The inadequacy of wages: body and mind
The order of discourse leads us to say that the traditional salary structure is no longer adequate, it does not fully capture the transformations in the valorization process. The classic wage structure can still be useful in those parts of the overall production cycle in which there is a measure of the value of labor in terms of time. But it cannot be generalized. From a theoretical point of view, this issue leads to the need to review, rethink and redefine the Marxian labor theory of value.
The inadequacy of the wage form as remuneration for all the productive aspects of life, leads to say that we need another way of remuneration (in addition to the wage forms where these are measurable). From this point of view, a basic income is something structurally different from a salary (though potentially, in the future, convergent): it cannot simply be understood as an extension of the wage form, because it is necessary to take into account the quantitative and qualitative change that new technologies have generated.
In particular, I’d like to stress the relationship between human and machine.
In the sixties, the relationship between human beings (with his body, his nerves, his muscles, his brain, his heart, his eros) and the machine was a relationship between separate domains: on the one hand, the human being, living labor, on the other hand, the machine, dead labor. The relationship between life and death was clear, physically traceable. From the point of view of human inner, the machine was something external and tangible, separate from himself.
Since the nineties to the present, such a separation is no longer so clear. The machine loses some of its materiality: the old Tayloristic machine becomes increasingly linguistic and relational. In presence of linguistic-communication technologies (ICT), only the support is material (hardware) but the core depends more and more on cognitive-relational human faculties processes. The use of language as the main tool of the operation changes the relationship of interdependence between human and machine typical of Taylorist technologies.
What kind of direction does this hybrid between man and machine take? And is it ‘the machine that is humanized or rather the human becoming mechanical?’ Are we witnessing the becoming human of the machine, or rather the becoming machine of humans? That’s the challenge of bio-robotics.
Consider the web 2.0 and the recent spread of social media. “The profit of advertising agencies, just like the profit of all firms web 2.0, [is] almost entirely depend on the ability to develop [and] control technologies.” Social control is then presented as the only way to innovate, develop in the future. But what is checked, exactly, today? Our identities and how they change. “The profiling algorithms of digital technologies feed on human biodiversity that it is itself channeled and integrated “in a Panopticon space, completely transparent, where we are called to act publicly.” See Google Pagerank, for instance.
Control of the body-mind becomes today (in agreement with the unpaid labor) the new enhancement border. Even if such activities could be salarized or simply paid otherwise (which is not the case), our freedom of choice would be conditioned.
An unconditional basic income is also a tool not only to recognize that our life is an active part (though often not aware) of contemporary exploitation but also able to exercise the right of choice, that is towards an individual and social self-determination: the right to choose our destiny as far as social participation is concerned, and also the right to refuse bad and indecent labor conditions. And this cannot be allowed, otherwise there is the risk of breaking the fragile balance of social control and supine conditions of subordination. From this point of view an unconditional income is subversive and that is the political struggle.
Andrea Fumagalli
(Università di Pavia – BIN Italia)
Andrea Fumagalli note for the conference: “Future of Work” Zurich 4 May 2016
Notes:
[1] A. Fumagalli, M. Lazzarato (eds), Tute Bianche, Derive-Approdi, Roma, 1999
[2] M. Bascetta, G. Bronzini (eds), La democrazia del reddito universale, Manifestolibri, 1997. Il tema di un reddito sganciato dal lavoro, etichettato con il termine salario sociale era già stato patrimonio del dibattito degli anni Settanta a parte dalla formulazione del rifiuto del lavoro (salariato).
[3] See www.bin-italy.org
[4] A. Fumagalli, C. Morini, “Life put to work: towards a theory of life-value”, in Ephemera, vol. 10, 2011, p. 234-252
[5] D. Harvey, “The new imperialism. The accumulation by dispossession”, in Socialist Register, 2004
[6] C. Morini, “Riproduzione sociale” in C. Morini, P. Vignola (eds), Piccola Enciclopedia Precaria, Milano X, Milano, 2015
Reviewed by Cameron McLeod
by Furui Cheng | Apr 18, 2017 | Opinion
Furui Cheng
In the discourse of global basic income debates, China provides the most recent example of a social dividend-style basic income, similar to the Alaskan model. In discussions surrounding Nixon’s welfare reform in the 1970s, which was a quasi-basic income proposal, four different anti-poverty paradigms competed for influence. None of them can well explain today’s social dividend examples. We need a new paradigm in the current round of worldwide basic income debates.
China’s new facts
In November of last year I introduced the Huaidi case from China, in which villagers cooperated in urbanization and received high levels of welfare from their collectively owned land. This is not the only such case in China, however. The Chinese Famous Villages Influence Ranking was published in 2016, and 300 villages were selected from thousands in a joint effort by the Working Committee of Chinese Village Development Association, the Modern Village and Town Development Research Center of Tongji University, the Chinese Council of APCRD (the Chinese Association for Rural Community Development) and the Chinese Reputation Center (CPPC). The evaluation of the influence of Chinese villages in 2016 was mainly based on the comprehensive evaluation of the following factors: the village development index, people’s livelihood index, management index, charm index, green index and reputation index. In this way, the evaluation depends not only on per capita GDP or income, but also on living conditions, security conditions and interpersonal relationships, as well as the temperament of the villagers, including their mental state, sense of ownership and so on. This evaluation incorporates the well-being of the people and promotes the comprehensive development of further villages. The Zhejiang province has 37 villages in the ranking list, the most of all the provinces. Huaidi is one of the Hebei province’s 15 ranking villages, which ranks 77th of the total 300.
In addition to the regional welfare from land, China’s fiscal contribution by national state-owned enterprises (SOEs) has increased in recent years. In the past, Chinese SOEs only paid tax to the budget, but kept all their after tax profits. Since 2007, SOEs have increasingly paid part of their net profits to the national budget. This proportion will rise to 30% of total profits in 2020. There are four different categories of SOEs. The first type includes tobacco, petroleum and petrochemical, electricity production, telecommunications, coal and other resource monopoly industries and enterprises, which pay 20% of their net profits to the state. The second type includes steel, transportation, electronics, trade, construction and others in the competitive industries, paying a proportion of 15%. The third category includes the military and scientific research institutes, contributing 10%. The fourth category encompasses policy companies, including the Chinese Grain Reserves Corporation and the Chinese Cotton Reserves Corporation, which are exempt from turning over their net profits. Of interest, the proportion of the China National Tobacco Corporation’s net profits to be paid to the state has increased to 25%, singling the corporation out as a fifth category of its own. Part of the revenue from SOEs’ profits has been injected into the national social security system to benefit the majority.
Regardless of the origin of the social dividend – whether public land or SOEs – it is similar to Alaska’s Permanent Fund Dividend (PFD) model.
A new paradigm?
What are the key elements in the current global discussions about basic income? Is it simply an anti-poverty strategy, just like any other kind of social assistance program in operation? Or is it a comprehensive overhaul of the welfare system, like the New Deal transformation was in the 1930s, which came to form the very basis of the current social security system? The most controversial elements of debates surrounding present public welfare systems and basic income proposals include work ethic, fiscal affordability, a culture of desert and civil rights, among other aspects. The latter has been reviewed in detail in recent history, especially since Nixon’s Family Assistance Plan (FAP) legislation. The main characteristic of FAP is that people can receive the benefit without work requirement, and independently of their family structure. This is very similar to today’s unconditional basic income definition, although FAP is not universal.
At the outset of the Nixon administration, proponents of four fundamentally different anti-poverty paradigms, each of which contained a different causal story, competed for influence. Three of these paradigms supported Guaranteed Annual Income (GAI) plans. Proponents of an economic citizenship paradigm identified the economic system, especially structural unemployment and the wage structure, as the source of poverty. For proponents of this view, the objective of GAI policy was to alleviate poverty and provide citizens with basic income security.
The family stability paradigm identified the social system, especially changing family structures within poor, typically black communities, as the source of poverty. Proponents of this view hoped that GAI policies would decrease poverty by providing additional support for maintaining two-parent families, since rates of marital breakup appeared to be correlated with poverty rates.
The laissez-faire paradigm, which GAI supporters with a libertarian orientation invoked, identified the welfare system and its alleged perverse incentives against work as the root of the problem. Laissez-faire proponents felt that GAI plans would rationalize the welfare system by creating stronger incentives for labor market participation while also granting the poor greater freedom.
The main opposition to GAI proposals within the administration came from officials who saw the behavior of the poor themselves as the primary cause of poverty and believed that welfare reform should rehabilitate the poor by exposing them to the discipline of the labor market. This rehabilitation paradigm argued that limiting eligibility for social provisions and requiring recipients of government benefits to work would be the best path to eliminating poverty.
Is Alaska’s PFD or China’s current social policy context embedded in any of the above paradigms? I don’t think so. At least, that is to say, the four paradigms that undergirded this decade-long debate half a century ago are not sufficient to underpin a new round of worldwide debates on basic income. For example, many countries are considering levying a tax on various kinds of resources, including land, minerals, oil and gas, internet infrastructure, etc. (1). But if we want to justify these different kinds of taxes for financing basic income, the world need a new paradigm. As Philippe Van Parijs says: “It needs to recognize fully that the bulk of our real incomes is not the fruit of the efforts of today’s workers (let alone of the abstinence of today’s capitalists), but a gift from nature increasingly combined with capital accumulation, technological innovation and institutional improvements inherited from the past.”
Notes:
(1) Karl Widerquist and Michael W. Howard (edited), “Exporting the Alaska Model: Adapting the Permanent Fund Dividend for Reform around the World”, Palgrave Macmillan, 2012
More information at:
Furui Cheng, “Cooperative Society and Basic Income: A Case from China”, Basic Income News, November 10th 2016
Brian Steensland, “The Failed Welfare Revolution: America’s Struggle over Guaranteed Income Policy”, Princeton University Press, September 2007
Philippe Van Parijs, “Basic Income and Social Democracy”, Social Europe, April 11th 2016
[in Chinese]
The editor, “The Chinese Famous Villages Influence Ranking”, The Orientation News, December 16th 2016
HEB101, “Famous Villages in Hebei Province”, Hebei News, December 14th 2016
About the author: Cheng Furui is undertaking a post-doctoral program in the Institute of American Studies of the Chinese Academy of Social Sciences. She got her PhD from Tsinghua University and her research interest is public policy. “Social Assistance and Poverty Alleviation Divergence: A Capability Approach” is her first published book based on her doctoral dissertation, which explores the Chinese social safety net in detail. She is now a voluntary news editor of BIEN, and also one of the organizers of China Social Dividend/Basic Income Network: bienchina.com.
Article reviewed by André Coelho and
by Citizens' Income Trust | Apr 14, 2017 | Opinion
Philippe Van Parijs and Yannick Vanderborght, Basic Income: A radical proposal for a free society and a sane economy, Harvard University Press, 2017, 384 pp, 0 6740 5228 4, hbk, $29.95
This book revolves around two focal points: freedom, and Basic Income; and it might best be understood as a meditation on the relationship between them.
The introductory first chapter outlines what a Basic Income is and how it would tackle poverty, unemployment, and the quality of employment, and how it would enhance an individual’s freedom: freedom within the household, freedom in the employment market, freedom from bureaucratic intrusion… The relationship between ‘universal’ and ‘unconditional’ needs more work, and a Basic Income that varied across a country would not achieve the kind of redistribution that the authors would like to see achieved across Europe in chapter 8, as it would be conditional and therefore not a Basic Income, and would pose considerable practical difficulties: but otherwise this chapter offers a reliable discussion. Persistence with the significant amount of detail will reward the reader.
Chapter 2 discusses such alternatives as Negative Income Tax, Earned Income Tax Credits, and wage subsidies, all of which fare badly in a variety of respects when compared to Basic Income. Basic Income is preferred to a Basic Endowment because it protects our lifelong freedom against freedom badly exercised in our youth; and a reduced working week is criticised on the grounds that it would control the number of hours of paid employment that we were permitted to work, whereas a Basic Income would enhance our freedom at the same time as offering the possibility of a shorter working week. A Participation Income ought to have been tackled here as an undesirable alternative to Basic Income rather than later in the book as a feasible step on the way to Basic Income.
The following two chapters contain some of the relevant history: chapter 3 the history of social insurance and means-tested benefits, and chapter 4 the history of the Basic Income debate. Then chapter 5 argues that a Basic Income would be both ethical and just, with both of those criteria focused on the notion of individual freedom, and in particular on the freedom not to seek paid employment. Among the dialogue partners are John Rawls, Ronald Dworkin, Amartya Sen, Brian Barry, and Karl Marx. This is a chapter that the ‘philosophically inclined’ (p.113) reader will greatly enjoy, although whether the unphilosphically inclined will find that it satisfactorily answers the objections to Basic Income listed at the beginning of the chapter is an interesting question. Rather more likely to do that would be the fact that the lower marginal deduction rates that a Basic Income would deliver would make it more likely that someone would seek paid employment, not less. More practical considerations are permitted to intrude when a land value tax is found to be impractical; and the reader is plausibly counselled to seek a more just society rather than a happier one.
In chapter 6, on funding, experiments, and transitions, there is a usefully detailed discussion of the different marginal deduction rates that would be experienced by individuals at different points on the earnings spectrum if income tax rates were raised to pay for a Basic Income. The discussion suggests that such increases need to be kept to a minimum. A variety of natural and constructed experiments are discussed, and the difficulty of employing their results in debate on Basic Income is well argued. There is an equally useful discussion on the difficulty of transferring labour market models and empirical results from contexts within current tax and benefits systems to the context of the Basic Income debate. A number of taxation options are discussed: taxes on capital, on land, on other natural resources, on financial transactions, and on consumption. When the authors turn to implementation options, they correctly recognise that a ‘partial Basic Income’ (which ought in relation to their original definition of Basic Income to have been called a ‘small Basic Income’) would need to be the first step. They then consider options for how such a Basic Income might be implemented, and suggest that implementing it first for a single age cohort would create unfairness between cohorts (p.160). However, if the Basic Income replaced income tax personal allowances and other benefits then members of the relevant cohort would not necessarily receive any immediate financial advantage, and any perceived unfairness relating to a Basic Income’s various advantages over existing benefits systems would result in pressure to extend the Basic Income to neighbouring cohorts. This implementation method has more to be said for it than the authors realise.
Chapter 7 tackles political achievability. A survey of opinion poll results finds the public broadly in favour, except for Swiss, most of whom voted against the referendum resolution on Basic Income because they were not convinced that it would be possible to pay for the high Basic Income recommended by the campaigners. The chapter goes on to find growing understanding of the advantages of Basic Income among trades unionists ( – the UK’s Unite receives an honourable mention). The complexity of feminist, socialist and Green Basic Income debates is well understood. Somewhat incongruously the UK’s Liberal Democrats and Charles Murray are located together in a section titled ‘Liberals’. Separate sections on ‘Liberals’ and ‘Neoliberals’ would have made more sense. Similarly, the section entitled ‘Christians’ should have been two sections: ‘Christian Democrats’ and ‘Christians’. Social movements such as Occupy and the movement that promoted the European Citizens’ Initiative on Basic Income are correctly seen as significant locations for future debate on Basic Income.
The latter half of chapter 7 evaluates social policies that the authors believe would be useful steps on the way to a Basic Income. They recognise that a Participation Income (an income conditional on the recipient’s ‘participation’ in society) would face administrative challenges, and believe that these would result in the participation condition being phased out. They would not. The participation-testing of the entire population would be so unpopular that the Participation Income would soon be abolished along with any thought of it becoming a Basic Income. A Negative Income Tax, which the authors also believe could be a step towards a Basic Income, could suffer the same fate. As the authors recognise at the end of the chapter, the only viable first step on the way to a Basic Income would be a Basic Income paid at an easily fundable level to a single or multiple cohorts. Unfortunately, the last line returns to the possibility of ‘participation’ conditions. The temptation to suggest this should be resisted.
Both chapters 6 and 7 contain material on implementation routes. To have brought this material together into a single chapter titled ‘roads to Basic Income’ would have been helpful. As it is, issues relating to implementation look as if they are of secondary significance. They are not. They are where the debate is now going.
Chapter 8 ponders the difficulties that globalisation, immigration and emigration could pose for a Basic Income in a single country, and the authors speculate about the possibility of a global Basic Income. They suggest that a Europe-wide Basic Income funded by a financial transactions tax or a carbon tax would reduce the economic pressures that give rise to migration within Europe, and would therefore reduce levels of migration, and make it more likely that freedom of movement would survive. Such a Basic Income would also help to preserve the Euro’s viability.
This book is a triumph, and will remain the definitive liberal argument for a Basic Income for many years. At its heart is a utopia in which every individual experiences the maximum possible freedom, and Basic Income as a means to that end. ‘Equality’, ‘inequality’ and ‘social cohesion’ are missing from the index, and Basic Income’s promise of a more equal and more cohesive society might have been given a little more attention alongside the ubiquitous emphasis on individual freedom: but readers from a wide variety of ideological commitments will still find this book useful. It is well written, well referenced, and generally well organised, and it tackles many of the issues central to the current debate.
There will be a lot more books on Basic Income, as there should be given the increasingly diverse and widespread debate. Some of those books will be from the same standpoint as this one, others will be from a different ideological standpoint, and some will be from a more pragmatic point of view. Whatever standpoint they come from, they will find it difficult to exceed the intellectual quality of Basic Income: A radical proposal for a free society and a sane economy.
by Guest Contributor | Apr 5, 2017 | Opinion
Written by: Rahul Basu
A Universal Basic Income (UBI) is a periodic cash payment unconditionally delivered to all on an individual basis, without mean-test or work requirement. A Universal Minimum Income (UMI) would be a UBI set at a level to ensure everyone has at least a minimum income sufficient to keep body and soul together. This would engender personal freedom. If we add to this public health & education, and other targeted benefits for the disabled for example, it would be a wonderful situation. What would it take?
The math is simple. If we have to pay out a UBI at X% of average income, then it will cost at least the same X% of GDP. The proportionality is clear.
| Population x Average income |
= Total income of country (GDP) |
| Population x UBI of X% of Average income |
= X% of total income of country |
We must first establish what should be the target level of Minimum Income. A simplistic definition would be to take a percentage of average income. The idea here is that if on average citizens are earning a certain amount, then a percentage of that average could represent the poverty line. Let’s assume we set the poverty line at 60% of the average income, and target a UMI at that level.
In practical terms, the US average family income in 2015 was $92,673. A UBI of 10% would be $9,267 per family, clearly not sufficient to create personal freedom. Similarly in India, per capita income in 2016 was Rs. 93,231. A UBI at 10% would be a meager Rs. 9,323.
It could be argued that, if average income is calculated by simply dividing GDP by total population, growing inequality and robotisation will distort that average by sequestering income in the hands of the very rich, swelling the perceived average income by increasing GDP while the actual income of an average citizen remains much lower. In order to deal with this issue, the Organisation for Economic Co-operation and Development (OECD) defines relative poverty for developed nations as 60% of the median income level. To calculate the median, we first list every person in ascending order of income. We then find the midpoint, and the income associated with it. Finally, we calculate 60% of this income to work out the relative poverty level.
The US median family income in 2015 was $70,697, or 76% of the average income of $92,673. The relative poverty line is 60% of the median income or $42,418. This works out to 45.8% of GDP (60% * 76%). It is still completely utopian to imagine the US could pay out nearly half its GDP as a UBI.
Suppose we use the World Bank definition of extreme poverty, $1.90 per day. By simple multiplication, for the US to provide a UMI at this level would require $57 per person each month. Not quite enough to survive on, but it would still cost the US government $221bn each year (pop of 318.9 million). In the Indian context, the World Bank’s poverty line is Rs. 28.71 (at PPP exchange rate of 15.11). A UMI would pay out Rs. 10,478 per person per year, for a total of Rs. 13,119 billion a year. This is more than 10% of India’s GDP, and is 61% of India’s entire 2017 Union Budget of Rs. 21,470 billion.
The essential proportionality of a UBI as a percentage of per capita income, requiring the same percentage of GDP to finance it, creates the dilemma facing UMI. If we wish to achieve a minimum income level, then targeting seems unavoidable. We may decide to keep goal of universality (everyone receives UBI) while giving up the goal of minimum income (the amount is enough to live on). Even then, it is clear that for any meaningful level of UBI, there needs to be substantive discussion of the financing source. Even a UBI of 1% of per capita income, a small amount for most individuals, would require 1% of GDP to finance, a very significant amount for any government. A UBI of 10% of GDP would likely require an entirely new financing mechanism.
In view of this simple mathematical challenge, the Basic Income movement would be well advised to pay closer attention to the funding mechanism. The success of UBI depends on the practical and political feasibility of the funding mechanism. And if such a mechanism is found, we would still have to explain why universality is preferable to targeting. It is likely that the only successful UBIs will be those where universality is a logical, political or legal necessity. This has been the case with the two most significant examples of UBI, Alaska’s Permanent Fund Dividend and Iran’s UBI in lieu of fuel subsidies.
About the author: Rahul Basu is a member of the Goenchi Mati Movement, which asks for minerals to be treated as a shared inheritance. Mining is the sale of the family gold. For fair mining, there must be zero loss mining, saving all mineral money in a permanent fund, and distribute the real income only as Citizens’ Dividend.
by Guest Contributor | Mar 31, 2017 | News
Photo: Hôtel du Parlement du Québec, CC BY-SA 3.0 Jeangagnon
Quebec hints at basic income1 in recent budget, aims to bypass testing
By Roderick Benns
The Quebec Liberal government has hinted strongly in its recent budget that some form of basic income guarantee is imminent – but likely only for a portion of the province, at least to begin with.
Of note in the announcement is that Quebec will bypass any testing of the program, unlike Ontario with its commitment to a pilot project, and instead will begin a restrained roll-out of a minimum income program aimed at lifting the most vulnerable out of poverty.
After Quebec Premier Philippe Couillard put Francois Blais in charge of the Ministry of Employment and Social Solidarity in January of 2016, it was clear there was interest in the Quebec government for some kind of basic income guarantee program. Blais wrote a book about the topic in 2002, called Ending Poverty: A Basic Income for All Canadians.
A committee was also established in 2016 by the government to examine ways to improve the current income support system.
In the recent budget, more about the plan “to fight poverty and social exclusion” will be unveiled in a few months by Blais.
“For the first time, this plan will be aimed at lifting over 100,000 persons out of poverty, particularly single persons and couples without children,” states the budget.
“Increasing available income will be the focus of the approach taken,” reads the budget, suggesting a gradual implementation of some kind of minimum income program.
There are other poverty reduction measures mentioned, including increasing the available income of social assistance recipients who make an effort to work, provisions to ease their entry into the labour market, and “measures to foster participation by individuals and families in community life.”
The government states in its budget that in preparing their plan they will evaluate the recommendations made in the coming months “by the expert committee on the guaranteed minimum income.”
In neighbouring Ontario, the Province recently released its summary of the survey completed by 34,000 people. The province is looking to create a pilot that would test how a basic income might benefit people living in a variety of low income situations, including those who are currently working.
Minister of Poverty Reduction, Chris Ballard, like his Quebec counterpart, is also concerned with the sea change Ontario has experienced in its job market. He told the Precarious Work Chronicle that this insecurity seen goes hand in hand with a basic income.
“Everybody is very sensitive with the changing nature of work. It’s not the same world, where you work in the same place for 30 years. We worked so hard as a society to get out of poverty, and then suddenly we’re fearful we might slide back in. Basic Income might provide a fantastic safety net,” he says, to help reduce anxiety.
However, unlike Quebec, which appears to be edging toward a gradual implementation, Ontario will test these assumptions with a pilot project with more details announced in the weeks to come.
1 Editor’s note: In Canada, it is common to use the term ‘basic income’ to refer to guaranteed minimum income programs (including programs on which the incomes of low earners are “topped up” to some minimum threshold). This is a broader usage than that employed by BIEN insofar as it does not require that the subsidy be “paid to all, without means test”. It may also be a narrower usage insofar as the minimum income guarantee is generally stipulated to be high enough to lift recipients out of poverty, whereas BIEN’s definition of ‘basic income’ does not constrain the size of the payment.
Roderick Benns is the author of Basic Income: How a Canadian Movement Could Change the World.
He is also the publisher of the Precarious Work Chronicle, a social purpose news site designed to shine a spotlight on precarious work and the need for basic income.
