by Guest Contributor | Aug 21, 2017 | Opinion
Why do so many leading economists pronounce themselves in favor of a Basic Income? Because of its positive economic effects on the distribution side, for example. Basic Income stabilizes the overall domestic consumption and provides a kind of regulation for the ratio between expenditures and savings. Furthermore, the Basic Income helps up to a certain degree to equalize the “unnecessary” distortions arising from the free play of market forces within the context of automation, digitalization, delocalization and further developments in society. And finally, Basic Income constitutes a lean and just system to provide every single individual with the minimal share of the wealth of nations that he/she is entitled to.
The economist and former head of the Hamburg World Economic Institute Thomas Straubhaar does not put the emphasis on the macroeconomic aspects. In 2006, he was one of the originators of the liberal Basic Income proposal “Solidary Citizens’ income” promoted by Dieter Althaus, member of the center-right party CDU and Thuringia’s prime minister at the time. Straubhaar’s new publication “Radikal gerecht” (radically just) shows some interesting development, while maintaining the core of the arguments in favor of a Basic Income from a liberal perspective.
The principles remain the same: Basic Income is paid unconditionally, to each individual, in addition to existing income and an amount that allows for a dignified living of each person. According to Straubhaar, Basic Income is a liberal concept because it promotes free choice of the individual (including the poor) and abolishes social bureaucracy. And it is a just cause because people with a high income pay more net taxes than those with a low income. While the citizen’s income of 2006 was calculated at €600 per adult per month (Bürgergeld), Straubhaar now speaks of €1,000 per person. He does not insist on this sum, saying that a) the basic needs of the individuals have to be re-evaluated periodically by the responsible office, for instance the federal statistical office, and b) in addition the amount is and will be a function of the political debate. A higher Basic Income requires higher taxes, which is the expression of the political will respectively of the political majorities. “It is obvious that the amount of the Basic Income and the tax rate are the levers of the policy makers and of the population to steer this new social system”, he writes on page 17.
Straubhaar presents the Basic Income as a kind of radical reform of the tax system. He calls it a negative income tax, however. A core element of this tax reform would be a flat rate tax on all kinds of income, not only wages, but also capital revenues and revenues from automats and robots. Here, Straubhaar reacts in a raw form to the fact that in the future, products from fully automated factories are going to have a price as well. Hence these have to be taxed like any other income. This is a major difference to most other models (and specifically the solidary citizen’s income of 2006) which deal mostly or exclusively with revenue taxes, and it is very welcome to see such an adaptation from the liberal side and in a systemic (even if at this moment still rather crude) form.
Concerning the financing, Straubhaar argues that the €960 billion cost of a Basic Income of €1,000 per person per month (80 million x €12’000) is somewhat higher than the actual expenses for the social state in Germany of €880 billion. The actual gross value-added amounts to €2.73 trillion (2015), which means that a flat rate of tax of 40% on this (at the moment it is transformed into income) would provide €1.1 trillion. The rest of the state’s expense would be covered by indirect taxes. At the same time, the contributions for the classical social insurance that actually are deducted from the gross salaries would largely be abolished.
Straubhaar admits this calculation to be very rough and not able to reflect all the possible and dynamic effects of the introduction of a Basic Income scheme, and insists on the flexible elements such an introduction will imply (estimation of cost of living, political process etc.). As with other authors, financing is not the core of this motivation. He sees the Basic Income as the best and most viable solution to adapt the classical system of social insurance of the 19th century to the 21th century. It creates a sort of a “blind” social policy, contrary to the targeted schemes whose advantage all too often is only to maintain a class of social bureaucrats who decide on sums and subjects. Furthermore, it is a core contribution to big issues of our times, namely an ageing population, digitalization/automation, individualization, and so on. Economically, it is not only viable, but it makes sense within the context of globalization and full automation. And he insists on paid labor continuing to be the main source of income but in new, more flexible and open forms, as activities and careers keep changing, as we witness already today. In this context, the existing organizations like trade unions or entrepreneurs’ federations will maintain their significance. The work motivation, which some economists see threatened by a Basic Income, will not decrease, but on the contrary increase thanks to the increased degree of freedom.
Straubhaar’s book is an important step for the liberal promotors of the Basic Income scheme in Germany. He aligns in practice with the other wings (Netzwerk Grundeinkommen, Goetz Werner) by speaking now of a sum of €1,000 per person per month (without being categoric about it). He urges it as a core element for the rebuilding of the social state, an adaptation to the 21th century and a blind social policy with arguments that are widely acknowledged by intelligent people. However, it is not certain that his fellow liberal economist colleagues in Germany are willing to follow his arguments. Many of them are still anchored in the concept of a 19th century social state. On the promotor’s side, some might be tempted to criticize Straubhaar’s concept of a negative income tax. Furthermore, several questions about the additional tasks of the social state remain.
There is one point that cannot be conceived in the way Straubhaar does. On page 98, he writes that every German citizen is part of the Basic Income scheme from birth until death, and those living abroad would have a right to their full claim, independent of their new country of residence. This is a flashback to the 19th century concepts of citizenship and nationality. Today, we speak of resident population and debate the introduction of a Basic Income in the whole world. Thus, if a German citizen would live in France, he would get the French Basic Income without the German Basic Income. But this is a tiny remark and does not impair the substantial progress of “Radikal gerecht”.
Finally, although Straubhaar labels Basic Income as radically just, he does not close the loop from a moral perspective to a legal standpoint, by omitting the step from basic income to basic right. As Thomas Paine wrote in 1796, the whole earth was originally in the possession of the whole human race. Now, on the base of an immensely increased wealth of nations and individuals, Basic Income represents the entitlement of every individual to a minimal (or basic) share of this wealth.
More information at:
(in German)
Thomas Straubhaar, Radikal gerecht [Radically just], Edition Körber-Stiftung, 2017
Written by: Albert Jörimann
Albert Jörimann, was president of BIEN-Switzerland from 2008 until 2013. His main research subject is financing questions of basic income.
Works cited:
Das Solidarische Bürgergeld. Analyse einer Reformidee.» Konrad Adenauer Stiftung, Edited by Michael Burchard, Lucius & Lucius, Stuttgart 2007.
by Kate McFarland | Jul 11, 2017 | News
The municipalities of Groningen, Wageningen, Tilburg, Deventer, and Ten Boer have received permission from the Dutch Ministry of Social Affairs and Employment to proceed with proposed social assistance experiments.
Jetta Klijnsma, CC BY 2.0 Partij van de Arbeid
Jetta Klijnsma, State Secretary of Social Affairs and Employment, signed the authorization of the five municipal experiments on July 3, 2017.
Groningen and Ten Boer will be carrying out their experiments in cooperation with one another.
In each of the experiments, which will run for two years, participants will be randomly selected from a pool of current social assistance beneficiaries (with participation voluntary for those selected), and assigned either to a control group or to one of several treatment groups.
Each experiment has at least three treatment groups, testing the following types of interventions: (1) removing reintegration requirements (e.g. job applications and training programs) on welfare benefits; (2) providing a more intensive form of reintegration service; (3) permitting participants to earn additional income on top of their welfare benefits. Subjects assigned to the third treatment groups will be permitted to retain 50% of additional earned income, up to a maximum of €199 per month, for the duration of the two-year experiment. In contrast, under current policy, welfare recipients are permitted to keep only 25% of additional income, and only for up to six months.
The Groningen / Ten Boer experiment includes a fourth treatment group, in which participants are permitted to choose to join any one of the three preceding groups.
Although international media have referred to these experiments as “basic income experiments”, the description is a bit of a misnomer. In all treatment groups, benefits remain means-tested and household-based, and participation is limited to current welfare recipients. Moreover, legal constraints create an effective demand on participants to seek work (on pain of removal from the experiment); this effective conditionality, unique to the Dutch experiments, is discussed below.
Sjir Hoeijmakers, an econometrician who consulted municipalities in their design of the experiments, prefers to speak of “experiments in the context of the Participation Act” (cf. this Basic Income News article), while others refer to “social assistance experiments”.
The experiments are expected to begin around October 1 of this year.
The Ministry of Social Affairs and Employment is currently reviewing applications from three additional municipalities who also wish to conduct experiments on social benefits: Amsterdam, Nijmegen, and Utrecht. Decisions on these proposals are expected later in the summer.
Update: Shortly after the publication of this article, Nijmegen was granted permission to carry out its experiment, which will commence on December 1. A full report on Nijmegen’s experiment will follow.
Background
The municipalities of Groningen, Tilburg, Wageningen, and Utrecht have been planning social assistance experiments since 2015, following the enactment of the Dutch Participation Act. Originally, these experiments were conceived as trials of unconditional basic income (or at least policy moving in this direction), although political pressures encouraged their proponents not to use the term “basic income” (which is popularly associated in the Netherlands with utopian thinking and celebration of laziness). Under the Participation Act, municipal officials are required to implement obligations and sanctions to encourage recipients of social assistance benefits to seek employment. For example, beneficiaries are generally expected to complete a set number of job applications per week, participate in training programs, and attend group meetings as conditions on receiving their benefits. Skepticism regarding the effectiveness of these conditions was a main motivation of the experiments.
In September 2016, Klijnsma authorized municipalities to perform experiments, up to two years in duration, testing the effects of altering the conditions of the nation’s social assistance benefits. This authorization was granted, however, only under strict terms of compliance with the nation’s Participation Act, which effectively prevent the municipalities from testing an unconditional basic income (despite interest in the idea from researchers and promoters of the experiments). For example, in the case in which an experiment treatment involves the removal of work reintegration requirements, the Ministry mandates that officials assess test subjects after six and twelve months to verify that they have made adequate effort to find employment; those who have not done so are subject to dismissal from the experiment.
The Ministry also capped the amount of earned income that participants are permitted to retain on top of their benefits, and required that any experiment including a treatment group with relaxed conditions on social assistance also include a treatment group with stricter conditions.
In the face of these constraints, researchers were forced to design experiments farther from “basic income experiments” than originally desired.
After announcement of a start date of May 1, 2017, Utrecht saw its proposed experiment put on-hold due to a failure to comply with the terms of the Participation Act. The city has since submitted a revised proposal to the Ministry of Social Affairs and Employment, which is pending evaluation.
Another municipality, Terneuzen, proposed a small-scale study of basic income–providing unconditional cash payments of €933 to 20 test subjects–which was axed by Klijnsma earlier in the year. Terneuzen has not submitted a new proposal to the Ministry of Social Affairs and Employment.
In a recent presentation to the Dutch branch of BIEN, Sjir Hoeijmakers stated that 45 municipalities are considering social assistance experiments.
More Information
“Eerste vijf gemeenten krijgen toestemming voor bijstandsexperimenten” (July 3, 2017). Official press release of the Dutch government.
Charlotte Huisman, “Vier steden mogen experimenteren met soepelere bijstand,” Trouw, July 3, 2017.
“Should the Netherlands test the basic income,” EuroTopics, July 4, 2017.
Previous Basic Income News Coverage
Florie Barnhoorn, “The Netherlands: All that’s left is the action. Where do we stand with the experiments?” (June 2, 2017).
Kate McFarland, “THE NETHERLANDS: Social Assistance Experiments Under Review” (May 9, 2017).
Florie Barnhoorn, “NETHERLANDS: Design of BI Experiments Proposed” (October 26, 2016).
Information provided by Florie Barnhoorn, Hilde Latour, and Ruud Muffels.
Photo (Tilburg) CC BY-NC-ND 2.0 Stephan Ohlsen
by Kate McFarland | May 20, 2017 | News
On Monday, May 22, 2017, the European Business Summit will hold a discussion of the European basic income debate as part of its annual event in Brussels, Belgium.
The hour-long session will feature two cofounders of BIEN–Philippe Van Parijs (Université catholique de Louvain) and Guy Standing (SOAS, University of London)–in addition to Olli Kangas (Kela), who is leading the research team behind Finland’s basic income experiment, and Mark Smith (Grenoble Ecole de Management). It will center on the question “The basic income debate is coming to a head in Europe, but is it really feasible?”
The discussion will be moderated by the Belgian freelance journalist Chris Burns, who has previously interviewed Standing about universal basic income and the precariat.
Now in its 17th year, the European Business Summit draws more than 2000 participants annually– business leaders, policymakers, researchers and academics, and others–to debate economic, social, and political issues facing Europe. This year, the conference will host 150 speakers over the course of two days. A full schedule is available here.
Photo: “European Business Summit” CC BY-NC-ND 2.0 European Wind Energy Association
by Kate McFarland | May 1, 2017 | News
The results of a new survey polling 11,000 individuals shows unprecedentedly high support for basic income across the European Union.
Dalia Research, a Berlin-based market research company, conducted its first survey of Europeans’ attitudes on basic income in March 2016, which yielded the widely publicized result that 64% of Europeans would vote for a basic income referendum if one were immediately held in their country. The company now plans to conduct such a survey annually, and has lately released the results of its second survey, conducted in March 2017.
For its most recent basic income survey, Dalia Research interviewed 11,021 people between the ages of 14 and 65, selected from all 28 EU members states (a slightly larger sample than was used in its 2016 study, which sampled 10,000 from the same age group and geographical regions). The survey was designed to be census representative, meaning that the sample was selected and data weighted to reflect the overall demographic characteristics of the EU as closely as possible, with respect to region, age, gender, education level, and rural/urban status.
The survey has a margin of error of plus or minus 1.1% at a 95% confidence level (that is, the survey was designed such that, if it were conducted repeatedly, then on 95% of occasions the estimated level of popular support for basic income, for example, would lie within 1.1 percentage points of the actual level support among all Europeans).
Survey respondents were first posed the question “How familiar are you with the concept known as basic income?” This question was asked prior to presenting any definition of the term.
In response, 24% claimed to “understand it fully,” with another 39% claiming to “know something about it.” Another 25% of respondents stated that they “have heard just a little about basic income,” and 13% claimed to “know nothing about it.” Comparing these data to the 2016 survey, the percentage of respondents indicated that they know “something about” the idea increased significantly (up from 35%), while the percentage who had “never heard of it” decreased significantly (down from 17%).
Following this preliminary question, survey respondents were presented with a definition of ‘basic income’ to be assumed for the remained of the survey: “A basic income is an income unconditionally paid by the government to every individual regardless of whether they work and irrespective of any other sources of income. It replaces other social security payments and is high enough to cover all basic needs (food, housing etc.).” This is, verbatim, the same definition adopted by Dalia Research for its 2016 survey.
It should be noted that Dalia’s definition differs from BIEN’s and, indeed, is more strict. Unlike the definition used by Dalia, BIEN’s definition does not stipulate that the basic income must be “high enough to cover all basic needs” nor that the basic income must “replace other social security payments.” Thus, any policy that meets the survey’s definition of ‘basic income’ is a policy that BIEN would also count as such; however, the survey does not encompass every policy that BIEN would consider a basic income.
With this definition in place, Dalia Research asked five further questions:
1. “If there would be a referendum on introducing basic income today, how would you vote?”
2. “At what point do you think your country should introduce basic income?”
3. “Which of the arguments FOR basic income do you find convincing?”
4. “Which of the following arguments AGAINST the basic income do you find convincing?”
5. “What could be the most likely effect of basic income on your work choices?”
Support for a Basic Income Referendum
In response to the first question, 68% of respondents said that if a referendum on basic income was introduced now, they would vote for it. In 2016, this number stood at 64%. Thus, taking into account the margin of error, support for basic income appears to have increased slightly across the EU in the past year. Meanwhile, the proportion who said that they would oppose the referendum remained stable, at 24%.
Comparing responses between the six largest European countries, Dalia Research found that support was highest in Italy, where the proportion of respondents willing to vote for a basic income referendum increased by six percentage points since 2016, overtaking the level of support in Spain (which had showed the highest level of support in 2016).
The UK (which saw an increase in support of seven percentage points), Spain, and Germany all stand at around 68-69% support.
When Do Europeans Want Basic Income?
Although 24% of respondents said that they would vote against a basic income referendum held at present, only 8% stated that they think that their country should never introduce a basic income, with an additional 13% not favoring the policy for “anytime in the near future.”
At the same time, 33% supported a basic income “as soon as possible” in their respective countries, with others preferring to wait for successful experiments in their own country (32%) or in other countries (16%).
Arguments For and Against
In the next two questions, respondents were supplied with lists of six reasons that might be given for or against a basic income (respectively) and permitted to select as many as they believed to be “convincing.”
Out of the listed arguments for basic income, the three that were judged convincing by the greatest proportion of survey respondents were: “It reduces anxiety about financing basic needs” (52%), “It creates more equality of opportunity” (42%), and “It encourages financial independence and self-responsibility” (32%).
These were also found to be the three most popular “for” arguments in the 2016 survey, which examined the same list of arguments (both pro and con). However, the proportion of respondents who judged them convincing increased from 40%, 31%, and 23%, respectively. The level of support for the remaining three arguments also increased (from 21%, 21%, and 16%, respectively).
When considering the opposing views, 52% of respondents “found convincing” the argument that a basic income “might encourage people to stop working” [1]. This was also the argument against basic income that appears to have seen the greatest increase in its attraction since the 2016 poll, when 43% of respondents considered it convincing.
The next most persuasive arguments against basic income, out of those tested, were “Foreigners might come to my country and take advantage of the benefit” (39% found convincing, versus 34% in 2016), “Only the people who need it most should get something from the state” (34%, vs 32% in 2016), and “It is impossible to finance” (34%, vs 32% in 2016).
Out of those surveyed, 16% found none of the six given “for” arguments to be convincing (in comparison to 22% in 2016), and 12% found none of the provided “against” arguments to be so (in comparison to 15%).
“What Would You Do…?”
For the final question (“What could be the most likely effect of basic income on your work choices?”), respondents were required to select only one option from a list of responses. Here, 37% of respondents claimed that basic income would not affect their work choices, while 17% claimed that they would spend more time with family. The third most common response was “None of the above.”
One complication to interpreting these data lies in fact that, although selection was exclusive (respondents could choose only one answer), many of the answers describe behaviors that are compatible. To give just one example, a person who choses to “spend more time with family” or “do more volunteering work” would presumably also be likely to “work less” as means of securing this end; however, “work less” was presented a distinct option. It would thus be misleading, for example, to present the results of the question by claiming that “only 11% would stop working or work less,” since other response options are compatible with these choices (and might even presuppose that respondents plan to spend less time in paid work).
Thanks to Anisa Holmes at Dalia Research for providing information and graphics for use in this article, as well as the linked pdf presentation of the results.
[1] We don’t know exactly how respondents interpreted the word ‘convincing’ or its translation in their language. Given that a sizable majority of respondents claimed to be prepared in favor of a basic income, we might assume, based on the responses above, that many did not interpret it to mean ‘decisive’.
That said, however, we might note that Dalia Research did not perform a “post-assessment” of attitudes to determine if respondents’ views on basic income changed after the presentation of the arguments for and against the policy. Indeed, we should not assume that being alerted to these arguments would not cause respondents to change their assessment of the policy proposal through the course of a survey. (In this vein, we might mention that a survey of likely San Francisco voters conducted in April 2016 found that respondents changed their opinion on basic income after more policy specifics were stated, becoming overall less supportive.)
Cover photo CC BY-NC-ND 2.0 myri_bonnie
by Kate McFarland | Apr 14, 2017 | News
BIEN’s European affiliate, Unconditional Basic Income Europe (UBIE), held its latest annual meeting March 24-26, 2017, in London, UK. UBIE elected a new board at the meeting.
UBIE’s annual meeting began on the evening of Friday, March 24, with “Basic Income and the Europe we want”. At this public event, nine representatives from nine different countries — Portugal, Spain, Netherlands, Austria, Germany, the UK, Sweden, and France — shared reports on the current status of the basic income discussion in their respective nations.
Events on Saturday, March 25, featured speakers from the British trade unions GMB (which passed a pro-UBI motion in June 2016), Unite (which passed a pro-UBI motion in July 2016), and Unison (which has been “looking into” UBI over the course of the past year). Participants from UBIE described the event as a “very enriching and inspiring discussion for countries struggling to get in touch with their national unions”.
Later on Saturday, UBIE members met for workshops on topics such as a new European Citizens’ Initiative (ECI) for basic income and lobbying the EU for basic income pilot studies or a a Eurodividend (a partial basic income paid to all Europeans).
The General Assembly, including the annual election of board members, convened on Sunday. As in previous years, UBIE employed an “election without candidates” process to select its board: each member nominated five individuals for the board, and those who obtain the most nominations were asked if they agreed to serve, proceeding down the list until all five spots have been filled. As a result of this process, the following board members were elected in 2017 (see more information about each here):
Chair: Dániel Fehér. Fehér, who now lives in Berlin, Germany, has been a member of UBIE’s board since 2015, and has assisted with its lobbying and publicity efforts since 2013. He was also active with the campaign for the ECI while living in Brussels.
Vice-Chair: Anja Askeland. Askeland served as BIEN’s Secretary from 2014 through 2016, and was a cofounder of BIEN’s Norwegian affiliate, Borgerlønn BIEN Norge, in 2012.
Vice-Chair: Lena Stark. Stark has been a member of UBIE’s board since 2015. She has also recently started a basic income political party in Sweden.
Secretary: Aurélie Hampel. Hampel is the international Coordinator of the French Movement for Basic Income. She is also active in campaigns for an “EU agrarian UBI” in France.
Treasurer: Ulrich Schachtschneider. Schachtschneider is active in German basic income movement and an activist and writer, having published considerably on an ecological approach to basic income.
Left to Right: Aurélie Hampel, Anja Askeland, Ulrich Schachtschneider, Lena Stark, Dániel Fehér
Barb Jacobson stepped down from the board at the meeting, after having served as its Chair since the formation of UBIE in February 2014. She commented, “It’s great to see some fresh faces, and it is time for me to concentrate on some specific UBIE and Basic Income UK projects. It has been a real honour. I’m looking forward to working with the new board and wish them all the best.” Former Secretary Nicole Teke also stepped down, following two years of service.
Following its first meeting, the new board of UBIE stated, “We feel that we are entering a new phase for basic income at the EU level,” calling the latest annual meeting “an opportunity to reaffirm UBIE’s goals” including the investigation of potential EU funding for basic income pilots and further research on the idea of a Eurodividend. The board further remarked, “It was an important moment of transition. UBIE is taking steps to formulate a more structured strategy using methodologies presented during the General Assembly. A wider team of volunteers was built to develop external communication, [and] workshops on a new ECI, the FutureLab exhibition project and basic income parties forming in Europe were also successful.”
Further updates from the new board will be shared in the UBIE newsletter.
Information and photos from Aurélie Hampel.
Post reviewed by Dave Clegg.
