Basic Income Summer Forum

, , 3 Comments

204 Flares Twitter 19 Facebook 185 204 Flares ×

This article originally appeared on Ian Maleney’s Tumblr page, Interstate808.

1On Saturday afternoon I attended the first half of the Basic Income Ireland Summer Forum in Dublin. I went along for the talk by Yannick Vanderborght, a leading campaigner for Basic Income in Europe. He spoke for about forty-five minutes or so, just giving a brief overview of the theoretical and political sides of the argument for and against Basic Income. Unfortunately I couldn’t stick around for the discussion afterwards.

The first part of the talk related to the “theory” side of Basic Income, the justifications for it and challenges to it, and it’s on this part that I would like to focus here. There’s plenty of information available online about the political side, with organisations all over Europe (and further afield) all engaged in pursuing the BI agenda and attempting to raise awareness for it. The Basic Income Earth Network is a good place to start.

Vanderborght outlined three main challenges to the idea of a Basic Income Guarantee.

—The Migration Challenge:

This argument says that any state that enacts Basic Income would instantly become a “welfare magnet”, attracting huge numbers of migrants looking to avail of it. EU law says that each EU state is required to provide social security to any EU citizen resident there. So, if Ireland were to enact BI, any citizen from any EU country could come here to live and the state would have to provide them with the same BI as they would someone born here. The argument suggest that such potentially high inward migration would make the scheme unfeasible.

(Leaving aside the assertion that this argument is remarkably xenophobic and based on pure speculation rather than any actual evidence that social welfare has any great impact on migration patterns,) one potential solution to this, as mentioned by Vanderborght though proposed by another academic, is the idea of a supranational Basic Income. This would encompass all EU states equally, funded by VAT (which can be regulated on an EU wide level, as opposed to something like income tax, which can’t), and would provide around €200/month to every EU citizen.

My primary problem with this idea is that the whole idea, as far as I can tell, of BI is to provide a living wage to people so as to relieve the pressure of the labour market’s diminishing returns. There may be some parts of the EU where €200/month is enough to live on, but that certainly isn’t the case in most places, so the majority who receive this would still be forced to work in whatever jobs they could find. The need to work is the problem, simply because of the balance of power it creates. €200/month is some relief, but not really an income in itself.

My second problem with it is the reform necessary in how VAT is administrated across Europe. As it stands, VAT is a regressive tax that predominantly affects those with lower incomes. There would need to be huge changes in terms of what items are taxed and at what rates, and these changes would have to be consistently implemented across the continent. Following Piketty, the implementation of a European “wealth tax”, increased capital gains taxes, a more discerning income tax regime and other forms of progressive taxation could be worth exploring but seem unrealistic in practice, on a national or supranational level. I’m not saying that this couldn’t happen, but rather I wouldn’t trust the powers that be, particularly at EU level, to make it happen in any kind of satisfactory manner.

—The Human Capital Challenge:

This argument suggests that a Basic Income Guarantee would negatively affect the supply of “human capital” within a state, leading to a lack of innovation, a lack of skills and, ultimately, economic and cultural stagnation. Given a basic income, people would have no desire to study, train or progress at work. This argument is, at base, suggesting that humans are inherently lazy and most will choose to do nothing if they are allowed to.

There is no real “solution” to this “problem”, but I don’t really believe that this is a problem at all. Evidence from the few places where Basic Income has been trialled suggests that people would mostly use the guaranteed income as a means to improve their skills, increase the amount of study they do (over a longer period of time) and change the course of their work for the better. One of the interesting examples brought up by an audience member on Saturday was that of the tenured academic; they are guaranteed an income in exchange for a certain amount of work, but they usually do large amounts of work outside of their job, simply because they can. Vanderborght’s campaigning for Basic Income was the closest example to hand. That so many people, even in straitened economic situations, take up extra study, go back to college, go to night school, start their own business on the side, etc, shows that people are naturally curious and dedicated to pursuing their interests. The assumption that their interests are entirely self-interested is neoliberal ideology at work.

—The Moral Challenge:

Speaking of neoliberal ideology at work, the third and final theoretical challenge presented by Vanderborght is the “moral challenge”. This is the idea that people essentially have a duty to work, an inherent need to work, that work is an instrument to achieving things like self-esteem and social cohesion. Obviously, this is sort of true. What really matters here is how you define Work. What gets thought of as Work and what is “not work” becomes a real bone of contention. In our current society, care work – whether for children, siblings, relatives, friends, strangers – is not considered Work. Housework is not considered Work. Study is not Work. Charity is not Work. Social work is not Work. But all these things are inherent in social cohesion, they are just not valued particularly highly as far as financial reward goes. David Graeber’s theory about the inversion of financial reward to social value has a tendency to hold true far more often than we’d like. If we are to speak of a “moral challenge”, then this redefinition of what constitutes valuable work is the one we need to face.

Vanderborght highlighted here the most common alternative/addendum to Basic Income, which is the job guarantee. Using American academic Philip Harvey as the most vocal proponent of this theory, Vanderborght outlined the idea that, to avail of the income guarantee, one must take up a job as laid out by the state. In this theory, the state becomes a large-scale job creator.

There are a couple of problems with this formulation of the job guarantee. The first is the still necessary redefinition of work as outlined above—this problem doesn’t disappear just because it’s the state creating the jobs rather than the private labour market. The second is that the cost of implementing such a scheme is far higher than a BI scheme, perhaps outweighing the benefit of introducing it in the first place. The third is that it places citizens at the mercy of the state, doing little to shift the power balance that currently exists. (With the state now widely conceived of as a company that should be run for profit, there is increasingly little difference between public and private labour markets and so another redefinition, that of the state itself, would be required.) The fourth problem is that forcing people into jobs they have little or no interest in is a proven way to make them far less productive. If that job happens to be no more than make-work designed for the sole purpose of keeping you busy, then the effect is likely to be multiplied.

As I mentioned earlier, I believe the real power of Basic Income is in its empowering effect; with it, people can refuse work. They can say no (something which must impact on the payment for more “undesirable” jobs). They can define their own lives around something more important than a wage. A job guarantee, in the simplistic terms of “no work, no pay”, defeats this purpose. That said, a potential blend of the two, a guaranteed base-level basic income which is enough to live on, plus a state-run register of available public and charitable work which would entitle one to a higher (but still regulated and consistent) basic income, could work. The downside is the increased cost of administering this, but close integration with existing charities could help offset this greatly. As long as the work is in service of the public good, through charity or otherwise, I see no real issue here. The state simply assumes the role of managing (and hopefully easing) the process of what I imagine people would do anyway; take up more charitable work without recourse to profit.

The important part in all this is that the state is no longer a watchdog over its own people, but rather a means of empowerment. Again, the challenge here is redefinition of the state and of work. It’s something I keep coming back to, but the implementation of a Basic Income Guarantee cannot be successful without wholesale changes in how housing, healthcare and social security function. Without true public control over these key elements of a society, the BIG would simply be absorbed by private capital and potentially lead to massive inflation. As it stands, the state is simply not strong enough to stop this from happening. The Irish state, as Hired Knaves excels at pointing out, is not a truly democratic state; the people have increasingly little power. Without a large, organised grass-roots movement behind genuine social reform, without embedded alternatives to the current political swamp, ideas like Basic Income are nothing more than dreams.

Many questions remain. What impact will Basic Income have on inflation? What impact will Basic Income have on traditional wages? How can the state work effectively with charities? How do we resolve residency and entitlement issues? Is it ethical to implement a Basic Income in a place built on the exploitation of poorer parts of the world (the food we eat, the clothes we wear, the technology we use…)? What obligations does a citizen have in return for a basic income? Only a wide-spread, open-minded discussion can help to resolve these questions.

For now though, even just in theory, these dreams have some power. The very idea of Basic Income forces us to re-evaluate key parts of society like the role of work, the state and money itself. It is a way to think through the current neoliberal end-game, a way of changing the picture. Neoliberal ideology reduces every moment of life to nothing more than a financial transaction. It pleads meritocracy while rigging the game. It pretends to empower the individual while imprisoning the isolated. Basic Income – with its old utopian tools of redistribution of wealth, liberty from wage slavery and equality of social esteem – offers us a real chance of thinking our way through the nets cast for us by state and corporate power.

The following two tabs change content below.

Latest posts by Ian Maleney (see all)

 

3 Responses

  1. Seanán Kerr

    June 11, 2014 12:43 pm

    With regard the xenophobic argument, “but we’ll be in undated with THEM”, there’s three further flaws, firstly the assumption that economic migrants travel thousands of miles risking their lives, do so to merely claim social welfare, this is simply not the case, as best exemplified by the hilarious incident at Heathrow where the first and only migrant from Romania was greeted at the airport, had a job lined up.

    “The situation at airports has been similarly underwhelming. When members of parliament and journalists gathered at Luton airport on New Year’s Day in expectation of greeting the first batch of new arrivals from Bucharest, they found just one man, a bemused car-washer named Victor Spirescu -subsequently dubbed “Romanian Migrant No 1″ by The Sun newspaper – who fitted the bill.

    “My God. Man, I don’t come here to rob your country. I come to work. To make money to go home,” Spirescu said, taking advantage of an early chance to test the English he claimed to have learned watching MTV.”

    Secondly is the money paid out would almost invariably as social welfare payments also do, end up in private hands, poor people don’t save, they spend, work done by Moody analytics in the US, found that ever dollar spent on social welfare equated to $1.61 dollars spent in the economy.

    Thirdly the aging European population means that Europe is going to need migrants anyway.

    As for the rest I agree it’s empowering, but it would also make people much more efficient and productive, not just economically (giving people more freedom to set up business, or charitable bodies who could do the work the state neo-liberalist state can’t be bothered with), but socially too, parents spending more time with children, more equality less crime.

    I don’t get the administration costs, because surely there’s be huge savings that’s half the point?

    Also as an aside it’s worth noting that the Jesus of neo-liberalism Milton Friedman himself also favoured a variation of basic income (via inverse taxation) so there could be broad support for such an initiative across the political spectrum, which would make a nice change for once.

    All in all though a great initiative and idea, one I think will only get more traction in the current climate as the message gets out there more.

  2. Malcolm Henry

    June 11, 2014 6:32 pm

    On first considering the idea of basic income my reaction was similar to those you call the Human Capital and Moral challenges, but then I thought a bit harder.

    The premise is that if you give someone £1,000/month you remove their incentive to work.

    If true, any salary that’s currently paid in excess of £1,000/month is unnecessary.

    If true, there can be no-one in paid employment who also receives £1,000/month of unearned income.

    The premise is clearly nonsense.

    As for the Migration challenge that can be solved if the money for BI is owned in equal share by all citizens of the nation. In this case it isn’t welfare, it’s personal property. When new citizens appear (are born or granted citizenship) they get a gift of a share of the BI money. Until they become citizens it’s the responsibility of government to meet their welfare needs of migrants (per EU law).

    If the BI money is a fund that’s owned by all it can be cycled monthly (distributed, spent and collected) in perpetuity, independently of government tax and spend. This insulates the system from the whim of government, ensuring that the power of BI remains in the hands of the citizens.

    This article outlines a method for cycling the BI money: http://basicincome.org.uk/opinions/2014/02/fund-universal-basic-income-without-scaring-horses/