Götz Werner: "You never have to work for what you need." Martin Heimann
[Michael Millar]
SUMMARY: The entrepreneur and owner of German drugstore DM, Götz Werner, talks about his wish for an unconditional basic income.
Language: German
Enita Vogel and Armin Müller, “Wirtschaft ist eine Kulturveranstaltung [Economy is a cultural event]”, Handels Zeitung, February 26 2014.
What did I learn from this splendidly organized gathering of academic and activists from over thirty countries? As usual, many things. About people and about things. About facts and about dreams. I discovered, for example, that Götz Werner was perhaps even better at reciting Goethe than Eduardo Suplicy at singing Dylan. I also admired how much progress had been made in the sophistication of the study of small-scale basic income experiments. Long gone is the time when all that seemed to be needed was to hand out some cash and enthusiastically report that all recipients were delighted to get it and that at least some made laudable use of it. Serious assessments of the effects of duly specified basic income schemes require control groups of similarly situated communities who do not receive anything, or who receive the same total amount but distributed according to different rules. And even the best assessment of this sort cannot claim to tell us what a real-life basic income scheme would bring about, if only because the funding side tends to be left out, or because of the recipients’ awareness that the experiment is limited in time, or because the political packaging of a real-life reform is most likely to affect individual responses. Nonetheless, these experiments are instructive in all sorts of ways and are well worth the hard work they require: conducting laborious interviews and processing recalcitrant statistics, sometimes even in flooded villages, as reported by Guy Standing, with water above the waist and the laptop above the water.
Ecological sustainability and basic income: three links
In these brief remarks, however, I shall concentrate on two points that struck me particularly because of they ran through several of the workshops I attended. The first one is the link between basic income and ecological sustainability, which featured was central in many presentations and the subsequent exchanges. On reflection, however, there is not one but there are three such links, logically independent and profoundly different from each other.
The first link is connected to the theme full employment. In good Keynesian fashion, an unconditional basic income is sometimes defended on the ground that it boosts economic growth and thereby employment. Like any other minimum income scheme, it redistributes from the rich, who save more, to the poor, who spend more, and it thereby helps sustain effective demand and business confidence. More often, however, and in contrast to many other schemes, an unconditional basic income is defended instead on the ground that it provides an alternative to the pursuit of full employment through economic growth: Freiheit statt Vollbeschäftigung. The underlying idea is that we must manage to tackle involuntary unemployment in a way that does not rely on a growth of production that constantly outpaces the growth of productivity, indeed — as discussed in a fascinating session of our congress — in a way that is consistent with de-growth. This way consists in transforming both some involuntary employment and some involuntary unemployment into voluntary unemployment. Or, to put it differently, some people make themselves sick by working too much and must be enabled to work less, while others get sick because of being excluded from work and must be enabled to access the jobs freed by those working too much. There is one simple way of achieving this: an unconditional basic income. This is a conclusion reached in the early eighties by some of the earliest basic income advocates in the context of the first signs of awareness of the “limits to growth”. It is also, fundamentally, the view now held by Baptiste Mylongo and the décroissants. The recognition of the right to idleness is here meant as the supply-side, anti-Keynesian, earth-friendly solution to the problem of unemployment
The second link passes through the price mechanism. Prices are a handy tool for guiding both consumption and production. They condense in a single figure millions of data about the preferences of consumers and the scarcity of factors of production. But they can go badly wrong because they do not spontaneously incorporate either the damage inflicted on the environment or the right of unborn generations to use their share of the resources of the earth. In order to correct this twofold major defect, some prices must be dramatically increased to reflect so-called negative externalities and to protect the legitimate interests of the unborn. One salient example of this is a carbon tax sufficiently high to keep the total of emissions below the ceiling that should not be exceed, or equivalently the sale to the highest bidder of carbon emission permits whose total amounts to this ceiling. In either case, the consumers will ultimately pay the price, but something must be done with the huge proceeds. Whether at the world level or at the European level, there is one simple way, both efficient and fair, of distributing them: an unconditional basic income. The logic is fundamentally analogous to the equal distribution of the rent on land advocated in Thomas Paine’s Agrarian Justice (1796). Three “eco-bonus” proposals along these lines were proposed at one of our sessions, in greatest detail by Ulrich Schachtschneider.
There is, however, yet another quite distinct link between basic income and ecological sustainability. At its core is the role that will need to be given to trans-national transfers. Those who make this third link may share with the décroissants the view that we in the “North” need to reduce our consumption. But they do not conclude that we need to reduce our working time, because there is no good reason to believe that we should reduce our production as well as our consumption. This sounds paradoxical but is easy to understand. No one visiting, for example, the Democratic Republic of the Congo can resist the conclusion that achieving a decent standard of living for all inhabitants of the world through local production within a foreseeable future is simply out of the question. This is so because of a combination of sustained demographic growth, deeply dysfunctioning and under-resourced administrative, judiciary and educational systems, and sheer climatic conditions which, in the absence of unaffordable generalized air conditioning, cannot but keep productivity down in quite a large number of countries. To believe that fair trade or the end of exploitation of the “South” by the “North” would enable these countries to get out of trouble is sheer self-serving wishful thinking. The growth of production in poor countries can and will help, of course, but access to a minimally decent living standard for all within a foreseeable future cannot count on it as its main means. It must also count on a massive dose of one or both of two other means: massive migration to the North and massive transfers to the South.
If the migration of hundreds of millions of Africans to Europe is regarded as undesirable for both the communities they leave and the communities they join, only trans-national transfers are left. And to be sustainable at a high level, such transfers arguably need to be both inter-personal (as opposed to inter-governmental) and universal (as opposed to means-tested), i.e. take the form of something like a universal basic income. As was the case with the first link I mentioned above, sustainability here requires a reduction of consumption in the North and the introduction of a basic income. But in the first case, the basic income was there to help increase the leisure enjoyed in the North, and in the second case to channel wealth to the South. Unlike the former, this latter argument, frankly, has nothing to do with what triggered my interest in basic income thirty years ago. But it is closely related to the argument I used in my contribution to one of the sessions of this congress to explain why the buffering device needed to save the euro needs to take the form of a universal basic income.[1]
Universality and unconditionality: the crucial conjunction
The second point I want to mention emerged particularly clearly from the session that hosted a conversation between Götz Werner, CEO of the large drugstore DM, and Wolfgang Strengmann-Kuhn, member of the Bundestag for the Green Party. A central part of the background of any discussion on social policy in Germany is the dramatic reform of the German welfare state by Gerhard Schröder’s red-green government known as Agenda 2010 or Hartz IV (2005). By reducing the duration of unemployment benefits, lowering the average level of social assistance and increasing the pressure on benefit recipients to seek and accept jobs, it is fair to say that the reform has improved the competitiveness of the German economy. But in a free trade area, making one country more competitive means making the other countries less competitive, and if this free trade area is also a single currency area, this means, for these other countries, deficits in the balance of trade, persistent unemployment and a pressure to restore their competitiveness by similarly scaling down their welfare states. For this reason, Hartz IV is no small factor in the current crisis of the Eurozone.[2]
Nonetheless, it is also fair to say that nothing ever happened in Germany that was better than Hartz IV at triggering a lively basic income debate. To understand why, note, first of all, that about half the recipients of the new social assistance scheme officially called Arbeitslosengeld II (but colloquially called “Hartz IV”) are at work. The reform massively extended the possibility of the Kombilohn, of low earnings combined with benefits. As such, this is not something basic income supporters should object to, as it is inherent in a universal basic income that it would generalize this possibility. But there is a major difference. Gerard Schröder himself complained that Hartz IV was “misused” by employers, as they used it to get workers into lousy jobs, with harsh conditions, no on-the-job training and no prospects of improvement. This is precisely why basic income supporters find unconditionality so important: a benefit granted to (potential) workers irrespective of whether they are willing to accept a job enhances their bargaining power and enables them to turn down poorly paid jobs of no intrinsic interest.
Put differently, the universality of the basic income — its not being means-tested — is what enables a person to say yes to a low-paid job. Its unconditionality — its not being work-tested — is what enables a person to say no to a low-paid job. Universality without unconditionality is a recipe for exploitation, because of the potential misuse of the Kombilohn by employers. Unconditionality without universality is a recipe for exclusion, because of the trap created by means-tested handouts. Instead, the conjunction of universality and unconditionality — so central to the basic income movement since its inception — is a path to emancipation. How emancipatory it can be will of course depend on its level. As stressed by Wolfgang Strengmann-Kuhn, however, the emancipatory effect starts being produced even with a level of basic income far below what would be deemed sufficient to live on for one’s whole life, even in a city, even on one’s own. Even a much lower universal and unconditional basic income broadens life options and thereby empowers its beneficiaries: it can make it realistic, for example, to accept an internship or an apprenticeship, or to combine further education with a part-time job, or to take the risk of becoming self-employed or of starting a cooperative, in situations in which today, in the absence of a basic income, one would be forced to accept a lousy full-time job.
A “partial” basic income, i.e. a low but genuinely universal and unconditional basic income, is therefore one obvious way in which one can move forward. But there are many others, more or less suited to local circumstances, more or less achievable in a particular political context, more or less likely to trigger a sequence of further emancipatory steps rather than unleash a damaging backlash. To move forward, we must dare to be “visionaries”, as emphasized by Götz Werner, while not hesitating to be “opportunists”, as demonstrated by Wolfgang Strengmann-Kuhn. Guided by our vision of a just society and a just world, we must be on the lookout for political opportunities to get closer to it, without denying the size of the challenges ahead — not least those arising from globalization — and without too much optimism about immediate success. Some good surprises are then bound to come our way…
[2] See my response to Gerard Schröder’s defence of Agenda 2010 on the occasion of his visit to Brussels in April 2012 : “L’Agenda 2010: un modèle pour l’Europe?”, downloadable from www.uclouvain.be/8611
1000 Euro for everyone. Freedom. Equality. Basic Income is the title of a new book (€1.000 für Jeden: Freiheit. Gleichheit. Grundeinkommen in the original) by Götz W. Werner and Adrienne Goehler, published in August 2010. According to the Amazon.de website it is currently in place No. 1,563 of all books being sold, but in the category ‘Social Justice’ it is No. 1. It is clearly of considerable significance to find so much interest in a Citizen’s Income in a European country.
An interesting review of this book appears in the January Review of Books in Sp!ked. The first half of the review is factual and informative and is reproduced below (with permission from Sp!ked. You can read the original dated Friday 28 January 2011 at www.spiked-online.com/index.php/site/reviewofbooks_article/10136/ )
The idea that the state should give everyone a basic income has seized the imagination of Germany’s middle class and politicians.
by Johannes Richardt (head of PR and communications at Novo Argumente publishing house)
At the moment, more than €1 trillion flows into the more or less state-controlled German welfare complex every year. Representing one third of German GDP, this vast amount of money covers every social benefit, from child allowance to health insurance. If the economic stats were not striking enough, of the 80 million people living in Germany only 40 per cent earn a wage. So a large proportion of the population is dependent either partially or wholly upon the state.
But the German welfare state does not just provide a financial safety net. It also seeks to regulate the behaviour of benefits claimants through various forms of lifestyle intervention, such as dictating how much claimants should be allowed to spend on cigarettes. In this regard, the so-called Hartz IV legislation, passed in 2005 by the then ruling Green-Social Democrat coalition, is important. Named after its originator, Peter Hartz – then a social democratic trade unionist and manager of part state-owned Volkswagen before being imprisoned for embezzlement in 2007 – Hartz IV effectively revised the status of the unemployed. They were no longer citizens in need of assistance while out of work: they were deemed welfare dependent. They were no longer people fallen on hard times, but fully capable of getting back into work: they were psychologically dependent upon welfare and incapable of getting back into work.
Hartz IV not only produced a new form of state dependency; it also sought to prepare these damaged citizens for work. To this end, a new sector of senseless and unproductive labour for about 1.5 million of the unemployed benefits claimants was created (thus removing them from unemployment statistics). Under the pretext of empowering the unemployed by psychologically preparing them for the labour market, these benefits claimants are forced into absurd and degrading activities run by highly subsidised companies with Orwellian-sounding names like Neue Arbeit [New Work]. One example of this absurd work-for-work’s-sake philosophy is the Toys Company. In more than 60 factories around Germany, the formerly unemployed people work for an extra €1 per hour on top of their out-of-work benefits, recycling second-hand toys for poor children. One task is to check the completeness of second-hand puzzles. ‘The record for completing the 5000-piece puzzle is just 10 days’, explained Toys Company’s manager, ‘although unfortunately we found out that three pieces were missing’. Götz Werner and Adrienne Goehler refer to this example in their new book 1000 € für Jeden. Freiheit. Gleichheit. Grundeinkommen. (€1000 Each. Liberty. Equality. Basic Income.) They argue for a new model of state welfare distribution which would replace the bureaucratic, behaviour-management regime of Hartz IV with one based on a simple premise: the state would pay everyone a basic income.
At first sight their central idea of a basic income for everybody seems quite charming: Every citizen gets €1,000 from the state every month from cradle to grave. As Werner, the billionaire founder of a drugstore chain, and Goehler, president of the Hamburg Art Academy, note, €1000 represents more than just a living wage. They argue that it also enables people to participate in the cultural life of society.
Because this would be an amount that every person would be legally entitled to, there would be no more degrading means tests and interventions in the lives of benefits claimants. The welfare bureaucracy as Germans know it would be redundant: the unemployed would be freed from doing compulsory labour promoted by the state, and the rest of society would be freed from the imperative of wage labour provided by the market. Income would be separated from work. As one would not need to sell one’s labour in order to guarantee an income, the authors argue, people could choose their line of work, for whom they want to work and for how long. This would lead to a new society in which self-realisation, creativity and compassion replace the existential fears created by the current rat race.
The German political class is partially sympathetic to the idea of a basic income. Hence, with the exception of the Social Democratic Party (plus trade unions), all parties represented in parliament have been discussing various models of basic income at some point in the past few years. For instance, in its party programme, the liberal Free Democratic Party calls for a Bürgergeld (Citizen’s Income), an amount paid out whenever necessary but low enough to maintain the incentive to work. Elsewhere, the Greens call for a Bedarfsorientiere Grundsicherung (needs-based basic provision), and even within the conservative Christian Democrat Party there is support for a Solidiarisches Bürgergeld (solidarity citizen’s income).
… Support for the idea [also] comes from the German middle class. Campaign groups with names like ‘Freedom Instead of Full Employment’ and ‘Federal Agency of Income’ have emerged, advertising their ideas on various websites, in films and at events and demonstrations. It is important to note that support for a basic income does not come from unemployed and poorly educated low-wage employees. It comes from privileged and educated young professionals with middle-class backgrounds who, working in poorly-paid, insecure positions in the media and cultural sector, hope for an unconditional basic income to make their lives that little bit more secure. This is no struggle for abundance for all. For these metropolitan types, a basic income promises security, opportunities for self-realisation and psychological well-being.
It is to the fears and prejudices of this post-material milieu that the book €1000 Each speaks. In this way, the book exemplifies the rampant social pessimism so prominent in contemporary Western societies. The authors describe the insecure working conditions of the ‘creative class’, surviving on short-term contracts and project work, as the future for a society that has given up on the goal of well-paid and meaningful work for everyone. According to the authors, only a minority of people will earn their money in secure, long-term work. The rest of us will be left to the fate currently endured by the creative class, the ‘vanguard of precarious conditions’.
Referring to American sociologist Jeremy Rifkin’s 1995 book The End of Work, Werner and Goehler argue that the advance of globalisation, automation and rationalisation has led to a post-industrial society in which production can no longer serve as the basis of societal wealth. Economic growth, they assert, ‘is a dead duck’. Instead, Werner and Goehler urge us to focus on creativity as ‘the only remaining, sustainably exploitable resource of the twenty-first century’. This is why they argue for a basic income. Because to tap into this resource of creativity, while avoiding the social unrest that will come with the shortage of constant, paid work, requires everyone to be accorded a level of material security.
This is where the first half of the review ends. The second half of the review is highly critical of the whole idea of a Citizen’s Income: ‘Basic income, low aspiration: The idea that the state should give everyone a basic income has seized the imagination of Germany’s middle class and politicians. Their enthusiasm is testament only to the poverty of their ambition’ is the full title of the review. In the next issue of the Citizen’s Income Newsletter these anti-CI views will be reproduced and critically examined.
South Korea has a new basic income network. According to BIEN, the idea of a basic income took off in Korea only a few years ago, when Koreans with connections in Paris and Berlin discovered and reported back home that the leftist Italian philosopher Toni Negri and the wealthy German businessman Gotz Werner both defended an unconditional basic income. Google soon entered into action, and by 2006 the ramifications of BIEN’s network were being explored, and BIS articles downloaded. In 2006, Kwack No-Wan, a left-wing philosopher at the University of Seoul published an article in which he critically discussed the international theoretical literature on basic income and formulated a proposal for its implementation in South Korea. This spread the idea in Seoul’s left-wing community. The Socialist Party (a left-wing party founded in 1998) took it up, and so did, for example, the University teachers’ Trade Union. A network was formed in February 2009, and several books and pamphlets have now been published, including, most recently, a Korean translation of Redesigning Distribution (by Ackerman, Alstott & Van Parijs).
According to BIEN, hundreds of people gathered on January 27-28 at the heart of the world’s third biggest metropolis for two intense days of lectures and discussions entirely devoted to the proposal of an unconditional basic income. Hosted by Sogang University, the meeting was an impressively organized joint venture of several Seoul-based universities, a number of left-wing associations, and Korea’s small Socialist Party.
The first day (“Basic Income for All!”) was intended primarily for an activist audience. It started with opening addresses by Kang Nam-Hoon (Hanshin University), one of the first Korean scholars to become actively interested in basic income, and Philippe Van Parijs (Louvain & Harvard), chair of BIEN’s international board, and gave the audience an overview of the state of the basic income discussion in Japan (by Toru Yamamori, Doshisha University in Kyoto and coordinator of Japan’s basic income network), Brazil (by Eduardo Suplicy, federal senator and honorary co-chair of BIEN) and Germany (by Ronald Blaschke, parliamentary assistant for the party Die Linke at the Bundestag, and co-founder of Germany’s basic income network), as well as several contributions by Choi Gwang-Eun (representative of the Socialist Party and author of a Master’s thesis on basic income) and others about how basic income could fit into the Korean context.
The second day (“Sustainable Utopia and Basic Income in a Global Era”) was intended primarily for an academic audience. Contributions covered, among other themes, the relations between basic income and conditional guaranteed income schemes (Blaschke), disability pensions (Choi), migration (Van Parijs), single mothers (Yamamori) and investment in human capital (Neantro Saavedra, University of Tsukuba, JP), the “glocal agora” (Kwack No-Wan, University of Seoul), the impact a basic income would have on the distribution of income (Baek Seung-Ho, Catholic University, Seoul) and capital formation (Ahn Hyun-Hyo, Daegu University) in Korea. The conference ended with a very lively panel discussion which Senator Suplicy concluded, as only he can do, by getting the audience to sing “Blowing in the Wind”.
All the papers presented were available in advance in both Korean and English in the form of two hefty volumes (600 pages in all). The conference was also the occasion to present to the press a very eloquent “Seoul Declaration on Basic Income” signed by over six hundred academics and activists. And the foreign speakers (Suplicy, Van Parijs, Blaschke, Yamamori) were dispatched the following day to address seminars, student audiences and activist groups in various places throughout the city (Gyeongsang National University, Seoul National University, Socialist Party, New Progressive Party, Alternative Forum, Academia Communix, etc.).
