Basic Income

The Material Conditions of Freedom

By Daniel Raventós, Julie Wark

Pluto Press

Copyright © 2007 Daniel Raventós
All rights reserved.
ISBN: 978-0-7453-2629-0

Contents

List of tables and figures, x,
Introduction and acknowledgements, 1,
1. A provocative but possible proposal, 7,
2. Normative liberal justifications, 25,
3. The normative republican justification, 47,
4. Remunerated work, domestic work and voluntary work, 75,
5. Poverty, 94,
6. The welfare state and Basic Income, 110,
7. Basic Income in comparison with other proposals, 131,
8. Financing, 156,
9. Basic Income and its critics, 177,
Notes, 199,
Bibliography, 215,
Index, 224,

CHAPTER 1

A PROVOCATIVE BUT POSSIBLE PROPOSAL

What is the first object of society? It is to maintain the inviolable rights of man. What is the first of these rights? The right to exist. The first social law is thus that which guarantees to all society’s members the means of existence; all others are subordinated to it.

Maximilien Robespierre (1758-1794), 1792

The Basic Income proposal has been gathering strength in recent years, to an extent that may seem surprising. Moreover, it does not often happen that a social proposal of any magnitude – and this is one such – should bring together such an array of supporters of different political leanings, philosophies and countries. It is not uncommon to find champions of Basic Income among people who would never have even flirted with the idea of thoroughgoing change in the societies in which they live, as well as among feminist activists or members of social movements that are clearly opposed to the status quo. In university circles, too, we find liberals (in the academic rather than the political sense), republicans although speaking of ‘republicans’ and ‘liberals’ in general terms is not very helpful – ecologists and feminists once again, along with many others who are interested in, or in favour of, the Basic Income proposal. Finally, there are supporters in very different countries ranging from the United States to Chile, the Kingdom of Spain to Sweden, from Turkey to Australia and South Africa. I shall not start by speculating about whether this diversity represents a virtue of Basic Income, whether it contributes to the confusion about it, or whether it is simply inevitable. We can leave the matter for the moment. I shall have enough space in this book to state what my position is and, I hope, to defend it clearly and precisely.

1.1 THE DEFINITION

What exactly is Basic Income? Before going into detail about the many aspects of the proposal, I should like to offer an unambiguous account of what it is:

Basic Income is an income paid by the state to each full member or accredited resident of a society, regardless of whether he or she wishes to engage in paid employment, or is rich or poor or, in other words, independently of any other sources of income that person might have, and irrespective of cohabitation arrangements in the domestic sphere.

Although it is somewhat long, this is the definition I prefer because it is clear (and also provocative). The Basic Income Earth Network definition is as follows:

A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in various European countries in three important ways:

• it is being paid to individuals rather than households

• it is paid irrespective of any income from other sources

• it is paid without requiring the performance of any work or the willingness to accept a job if offered.

This is also rather a long definition but I shall proceed with the earlier one, which I confess I favour, because it enables me to clarify some points in greater detail.

‘An income paid by the state’. The word ‘state’ can cover a juridical-political entity that is larger than existing nation-states, such as the European Union, or it might refer to juridical-political spheres that are smaller than the nation-state, for example autonomously governed territories. Hence, Basic Income is paid by one or more institutions in the public sphere.

‘To each full member or resident of a society’. In the different models for financing Basic Income there are variations in the amount paid, according to age, or whether minors are included in the policy or not, and so on. However, in all cases, this is a sum of money that citizens receive as individuals (and not by family groups, for example), and universally (not dependent on, say, predetermined thresholds of poverty).

‘Regardless of whether he or she wishes to engage in paid employment‘. For the present, it is sufficient to note that ‘work’ is all too often understood as ‘paid employment’ or ‘job’. There are good reasons for thinking that the following typology is more appropriate: (1) paid work in the labour market, (2) domestic work, and (3) voluntary work. These distinctions are important, as I shall explain in Chapter 4.

‘Whether he or she … is rich or poor or, in other words, independently of any other sources of income that person might have‘. Unlike means-tested subsidies that depend on defined levels of poverty or types of situation, Basic Income is received by rich and poor alike. If it is conceived as a right of citizenship (as the definition suggests), that excludes any additional condition. Like the right of universal suffrage, the Basic Income proposal does not impose any conditions beyond citizenship (or accredited residence).

‘Irrespective of cohabitation arrangements in the domestic sphere’. Basic Income does not favour or penalise any particular form of cohabitation. It makes no difference whether a heterosexual couple, people from different generations, a group of friends or a homosexual couple live under the same roof. These are all ways of living together that are completely independent of the right to receive a Basic Income.

Basic Income, then, is formally secular, unconditional and universal. It would be received by each and every member of the society irrespective of gender, level of income, religion and sexual orientation. In this distinctive feature of not being conditional upon any requisite other than citizenship or accredited residence, Basic Income is incontrovertibly very different from other proposals, whether they have been applied in practice for years or whether they have never gone beyond the state of ‘theory’. Let us look more closely now at this distinctiveness.

1.2 WHAT BASIC INCOME IS NOT

In making clear what Basic Income is not, it is important to note at this introductory stage some other, supposedly similar measures with which Basic Income should not be confused. This does not mean making any kind of comparative evaluation at this point because I shall do this in Chapter 6. For the moment, I think it is only necessary to offer a very brief account of measures, whether still on the drawing board or already put into practice, which need to be distinguished from Basic Income even though some of them would appear at first sight to be quite similar.

Basic Income is not participation income, a proposal that was made by Anthony Atkinson (1993, 1996) and others. This is the payment of a sum of money to all citizens who are able to work and who are engaged in some kind of activity that is deemed socially useful. This ‘socially useful activity’ might include remunerated employment, voluntary work, domestic labour, studying and so on.

Neither should Basic Income be confused with negative income tax (NIT). This is a uniform, refundable tax that guarantees a minimum income through taxation policy. If this minimum income level is exceeded in the tax declaration, the corresponding taxes must be paid. If the minimum level is not exceeded or there is no income, the state pays the difference in order to make up the minimum stipulated level.

Basic Income is not what is known in Spain as Rentas Mínimas de Inserción (RMI – minimum income support), which is paid (to less than 1 per cent of the population) by most of the country’s 17 (or 19 if we include the enclaves of Ceuta and Melilla in North Africa) autonomous communities. In France, under the name of Revenu Minimum d’Insertion, it is paid by the central government. The aim, according to RMI enthusiasts, is to achieve a coordinated development of activities so as to help people who do not have the economic resources to meet their basic needs, and to prepare them to enter the job market and social life. These activities include making social services available, and providing economic assistance and personal support in their integration into the workplace and society.

Basic Income should not be confused, either, with any kind of temporary unemployment benefit or dole system whereby an individual receives payment from the state as long as she or he is unable to find paid work but, once a job is found, the payment stops.

In brief, Basic Income is not a grant, subsidy or conditioned unemployment benefit of any kind, because the only requisite for receiving it is citizenship or accredited residence.

1.3 IS THERE A BASIC INCOME ANYWHERE IN THE WORLD?

Since 1982, or for the last quarter of a century, anyone legally residing in the State of Alaska for more than six months has been receiving a Basic Income. At present some 700,000 people meet this condition of legal residency. The name most closely associated with this story is that of Jay Hammond, who died in 2005. He was Governor of Alaska for eight years, from 1974 to 1982. The state is rich in oil, the Prudhoe Bay field being the biggest in the United States, and Hammond proposed that this wealth should benefit the population, present and future, by means of a fund, consisting of part of the oil revenue, which would guarantee the continuity of the benefits. The Alaska Permanent Fund was created to this end in 1976.

In the early days of the project, Hammond proposed that a dividend should be paid each year to everyone who met the conditions of residence, with the proviso that the dividend paid should be proportional to the number of years of residence. The Supreme Court of the United States then pronounced that the proposal was incompatible with the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution. The Fourteenth Amendment guarantees equal protection of the law to anyone who may be within the territorial jurisdiction of a state. Its terms imply that equal treatment cannot be denied to anyone on the grounds of how long that person has been within the jurisdiction of the state, and the Supreme Court ruled that residents coming from other states were being discriminated against. Modifications were made to get around this objection, after which a Basic Income was introduced for the first time in 1982. It was a true Basic Income, for all the singularity of the territory where it was introduced.

The Alaska Basic Income is a dividend that corresponds to part of the average performance over the previous five years of the permanent fund that is based on oil revenue. The fund has undergone numerous modifications and presently consists of a portfolio that has been diversified on a worldwide scale. Alaska’s Basic Income represented a total of $2000 for every resident in 2000. If recent decades have seen a steady redistribution of wealth in the United States in favour of the richest members of society (Frank, 1999; Stiglitz, 2003), Alaska continues to move in the opposite direction so that it is ‘the most egalitarian’ of all the states in the USA (Vanderborght and Van Parijs, 2005). Basic Income in Alaska is not provided in the form that I find most satisfactory in theoretical and political terms, especially because of the way it is financed. I believe that a Basic Income should be financed differently, as I shall discuss at length in Chapter 8. However, the Alaskan scheme is the only Basic Income that is functioning in any real terms in the world today.

1.4 HISTORICAL PRECEDENTS

The term ‘Basic Income’ is not unanimously accepted by everyone who has supported, criticised or debated this social initiative. In books and articles, the same proposal is referred to in different ways, among them social dividend, guaranteed universal subsidy and citizenship income. The fact that quite a range of different proposals have also been presented under the name of Basic Income has only increased the confusion.

The historical roots of Basic Income go back quite a long way. Authors of very different intellectual persuasions have contributed proposals, ideas and debates that, while none of them can remotely be described as a proto-Basic Income, do offer precedents that should at least be borne in mind from a historical perspective. A general connection may even be found in Utopia (1516) by Thomas More (1478-1535). This was a long time ago, however, and the relations are tenuous, as are those we might find in the writings of his contemporary, the Catalan thinker Joan Lluis Vives (1492-1540). More recent, and more interesting in my view, though still quite a long time ago, is the case of Thomas Paine (1737-1809). This English revolutionary, son of working-class Quakers, who arrived in Philadelphia at the end of 1774, was an activist in both the American and French revolutions. In 1796 he wrote in his pamphlet Agrarian Justice:

In advocating the case of the persons thus dispossessed, it is a right, and not a charity, that I am pleading for. … To create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property: [a]nd also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age. … It is proposed that the payments, as already stated, be made to every person, rich or poor.

This sounds familiar. Around this time we find authors who have referred to what I shall call, for want of a better expression, a proto-Basic Income. Notable among these are Thomas Spence (1750-1814), Charles Fourier (1772-1837), Herbert Spencer (1820-1903) and Henry George (1839-97). More recent is Bertrand Russell (1872-1970) who wrote:

Stated in more familiar terms, the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income, as much larger as might be warranted by the total amount of commodities produced, should be given to those who are willing to engage in some work which the community recognises as useful.

Some well-known economists, too, have written about what we might also call a proto-Basic Income, among them James Meade (1907-1995) and James Tobin (1918-2002), winners of the Nobel Prize for Economics in 1977 and 1981 respectively.

More recently, in the 1960s, there were a number of developments in the United States that are closely related to Basic Income. One of the most famous neoliberal economists of the 1970s and 1980s, though now in marked decline in terms of any intellectual influence (I refer, of course, to the recently deceased Milton Friedman (1912-2006)), proposed a ‘negative income tax’ (see Section 1.2 above) in his famous book Capitalism and Freedom (1962). In 1965, James Tobin proposed a guaranteed minimum income, this representing an unquestionable improvement over the then-existing welfare programmes in the United States. There is a huge difference in motivation between Friedman and Tobin. If the former aimed to dismantle the welfare state, the latter aspired to improve the conditions of the economically disadvantaged members of society and to bring an end to poverty in his country. Again, the Republican administration of President Richard Nixon drew up reforms that included a guaranteed income in combination with a family assistance plan for workers, the proposals for this taking the form of negative income tax. The plan was debated in the Senate until Nixon resigned from office under threat of impeachment in November 1974 following the resounding Watergate scandal. The initial impetus of negative income tax soon fizzled out. Meanwhile, in Canada too, negative income tax was being considered and interest in the proposal lasted until well into the 1980s.

THE LAST 20 YEARS

In the 1970s and early 1980s, there were several significant advances in Basic Income thinking, though they were largely independent of each other, but 1986 is a particularly significant year. The ‘Charles Fourier Collective’, a group of researchers and trade unionists associated with the University of Louvaine, had presented a paper entitled ‘L’allocation universelle’ (Basic Income) two years previously. A congress, funded by a major Belgian prize that was awarded to this work, was organised at the university in 1986, bringing together a number of researchers from different countries, all of whom had begun to work on the idea of Basic Income. It was at this congress that a decision was made to create the Basic Income European Network (BIEN) and, 20 years later, there can be no doubt as to its importance in the history of Basic Income. BIEN has held ten congresses since then: 1988 (Antwerp, Belgium); 1990 (Florence, Italy); 1992 (Paris, France); 1994 (London, United Kingdom); 1996 (Vienna, Austria); 1998 (Amsterdam, Holland); 2000 (Berlin, Germany); 2002 (Geneva, Switzerland); 2004 (Barcelona, Spain) and 2006 (Cape Town, South Africa).

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