An unconditional basic income (also called basic income, basic income guarantee, universal basic income, universal demogrant, or citizen’s income) is a form of social security system in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere.
A basic income is typically intended to be only enough for a person to survive on, to encourage people to engage in economic activity. A basic income of any amount less than the social minimum is sometimes referred to as a "partial basic income".
Basic income systems financed on returns to publicly owned enterprises are major components in many proposals for market socialism. Basic income schemes have also been promoted within the context of capitalist systems[clarification needed], which would be financed through taxation or a negative income tax.
Similar proposals for "capital grants provided at the age of majority" date to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism. The phrase "social dividend" was commonly used as a synonym for basic income in the English-speaking world before 1986, after which the phrase "basic income" gained widespread currency. Prominent advocates of the concept include Philippe Van Parijs, Ailsa McKay, André Gorz, and Guy Standing.
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The lack of means test or similar administration would allow for some saving on social welfare which could be put towards the grant. Ed Dolan argues that a grant of $5,000 could be afforded just from removing other means of social support and what he terms "middle-class welfare". Other studies say that the administrative savings would be less.
According to writer and blogger Tim Worstall, one property of basic income is that it does not create a certain disincentive to work that some benefits do. In some cases where basic income is not present, he argues that people on benefits who begin work lose benefits at around the same rate that their income rises (a form of poverty trap where the marginal tax rate is 100%). According to Tim Worstall this does not happen with basic income, as the rate of increase is positive at all incomes.
A frequent objection to basic income is the lack of reciprocity, since the basic income is unconditional. Thus, one critical view of basic income theorizes that it would have a negative effect on work incentive and labor supply. It might be expected that the degree of the disincentive would depend on how generous the basic income were to be. Many basic incomes are proposed to be set at a level that would only just be liveable, so that people would want to supplement it.
In one study[which?], even when the benefits are not permanent, the hours worked—by the recipients of the benefit—are observed to decline by 5%, a decrease of 2 hours in a typical 40 hour work week:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level.
However, in studies of the Mincome experiment in rural Dauphin, Manitoba in the 1970s, the only two groups who worked significantly less were new mothers, and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was the Namibian pilot project implemented in 2008 and 2009 in the Omitara village; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power.
Basic income has been criticised for being unaffordable[by whom?], requiring a huge increase in public spending or a tax rate that would never be accepted by the public.
However, the Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits, and they have put forth proposals for implementation they claim to be financially viable.
A common concern with basic income among the public[who?] is the risk of inflation raising prices and thus undoing its effect. Economists Ed Dolan and Karl Wilderquist say that since the funding for basic income would come from reductions in public spending and/or taxation, there would be no inflationary effect.
Several sources of funding have been proposed for hypothetical socialist economic systems on the basis of social ownership of the means of production and/or natural resources:
Many sources of funding have been suggested for a guaranteed minimum income for non-socialist economic systems (where wealth-producing assets are owned privately):
Affordability of a basic income proposal is a function of the social/government services it replaces, any tax increases, and the less tangible positive effects on spending and tax receipts associated with wealth redistribution towards the poor, and any social savings as a result of less crime, or fewer incarcerable offenses.
Specific, though informal, measurements were made by Pascal J. for Canada. A 2004 taxable basic income benefit of $7800 per adult could be afforded without any tax increases by replacing welfare, unemployment, and core Old age services. (Canada has supplemental poverty old age programs and pension system). The number excludes any intangible benefits of tax revenue increases due to higher spending and lower personal savings, and any expenditure savings on criminal enforcement.
An affordability study done in the Republic of Ireland by Social Justice Ireland found that Basic Income would be affordable with a roughly 50% income tax rate. This would lead to an improvement in income for the majority of the population.
Basic income and traditional welfare systems both share goals of achieving some level of economic equity. Guaranteed income typically operates by 'topping up' deficient wages - which itself typically relies on the assumption of some level of participation in the labour force - whereas basic income is paid to all irrespective of income or other eligibility criteria.
In many countries, there are advocates for a basic income. Several have proposed a negative income tax, which is means tested, rather than a basic income. Despite their differences in administration and effect, the two proposals are usually conflated.
One of the world's most outspoken advocates of a basic income system is Belgian philosopher and political economist Philippe van Parijs. Other advocates include feminist economist Ailsa McKay, German drugstore magnate Götz Werner, Dutch political activist Saar Boerlage, French social theorist André Gorz, American political philosopher Michael Hardt and Italian Marxist sociologist Antonio Negri, American libertarian political scientist Charles Murray, New Zealand economist Gareth Morgan, Finnish politician Osmo Soininvaara, University of London economist Guy Standing, Brazilian politician and economist Eduardo Suplicy and Austrian economist Friedrich Hayek.
Many socialist economists have advocated a form of basic income as a means for distributing the economic profits of publicly owned enterprises amongst population (also referred to as a Social dividend). These systems would be directly financed out of returns on publicly owned assets, and are a featured as major components of many models of market socialism.
In his final book Full employment regained? James Meade states that a return to full employment can only be achieved if, among other things, workers offer their services at a low enough price that the required wage for unskilled labour would be too low to generate a socially desirable distribution of income. Meade concludes that a citizen's income is thus necessary to achieve full employment without suffering stagnant or negative growth in wages. James Meade advocated for a social dividend scheme to be funded by publicly owned productive assets.
Sociologist and democratic socialist Frances Fox Piven argues that an income guarantee would benefit all workers by liberating them from the anxiety that results from the "tyranny of wage slavery" and provide opportunities for people to pursue different occupations and develop untapped potentials for creativity.
The French social theorist Andre Gorz advocated a basic income system as a means to overcome alienation and as an adaptation to increasing automation of work, which would lead to an increase in the amount of leisure time available to individuals through a re-distribution of the workload in society.
Economist Harry Shutt advocates a basic income system which would in effect replace all existing state social security and welfare benefits except childcare. This measure would go along with his proposal for public and cooperative ownership of enterprises and the end of capital accumulation as a driving force in the economy for the makeup of a post-capitalist economy.
Geolibertarians seek to synthesize propertarian libertarianism and a geoist (or Georgist) philosophy of land as commonly and equally owned by all people, citing the classical distinction between unimproved land and private property. The rental value of land is produced by the labors of the community and, as such, rightly belongs to the community at large and not solely to the landholder. A land value tax (LVT) is levied as an annual fee for exclusive access to a section of earth, which is collected and redistributed to the community either through public goods, such as public security or a court system, or in the form of a basic guaranteed income called a citizen's dividend. Geolibertarians view the LVT as a single tax to replace all other methods of taxation, which are deemed unjust violations of the non-aggression principle.
Support for basic income has been expressed by several people associated with right-wing political views. While adherents of such views generally favor minimization or abolition of the public provision of welfare services, some have cited basic income as a viable strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems. Others have contended that it could also act as a form of compensation for fiat currency inflation. It is a central element of the economic theory of social credit developed by C.H. Douglas which inspired a number of political movements throughout the British Empire and beyond. The Alberta Social Credit Party attempted to implement such measures to combat the Great Depression, which foundered over constitutional objections and later distributed oil profits to the public as a partial element of this former policy.
Attempts at implementing some forms of basic income have occurred in United States, Namibia, Iran, Brazil, India and Canada. Many of the advocates of basic income have united in the Basic Income Earth Network, which recognizes numerous national advocacy groups. Here is a breakdown of all partisans of basic income, listed by region or country.
From January 2008 to December 2009, a pilot project with a basic income grant was implemented in the Namibian village of Omitara (or Otjivero-Omitara) by the Namibian Basic Income Grant Coalition. It was mainly funded by a German Protestant church, by individual contributions of German and Namibian citizens and by contributions of the German Ministry for Cooperation. The amount paid out per head was N$100 (around US$12).
Six months after the launch, the project has been found to significantly reduce child malnutrition and increase school attendance. It was also found to increase the community's income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities. The project team states that this increase in economic activity contradicts critics' claims that a basic income would lead to laziness and dependency.
After the conclusion of the pilot project phase, a monthly bridging-allowance of N$80 (around US$10) was paid regularly to all who participated in the pilot until March 2012. One of the conclusions of the project was that, even with the restriction that only residents of the village for over a year since the pilot's start could benefit from the grant, there was a significant migration towards Otjivero-Omitara, despite the fact that the migrants wouldn't receive the grant. The project concluded that this phenomenon reveals the need to introduce such basic income systems as a universal national grant, in order to avoid migration to particular regions, towns or households. Another finding of the project was that after the introduction of the pilot, overall crime rates fell by 42%, specifically stock theft, which fell by 43% and other theft by nearly 20%.
The above-mentioned conclusions about the effects of the project in Omitara have been derived from two empirical studies conducted by the Basic Income Grant Coalition: one study that covers the first 6 months of the project and a second study about the first 12 months of the project. No further empirical studies or project assessments have been published.
There is no public access to the project database. In a Namibian daily, the project representatives confirmed the lack of public access to their data and justified it.
The design of the project and the conduct of the empirical studies have been criticized by some authors for intransparent procedure and inappropriate methods.
The Government of the Republic of Namibia has repeatedly argued against the introduction of a Basic Income Grant and has not changed its mind during and after the pilot project.
In May 2012, the community leader of Otjivero-Omitara, Ernst Gariseb, told a journalist of a Namibian newspaper: "Since two decades we are sitting here without work, development and perspectives." The journalist concluded: "Despite the support of the BIG there is not any development to be seen in Otjivero."
||It has been suggested that Basic income in India be merged into this section. (Discuss) Proposed since August 2013.|
Two basic income pilot projects have been underway in India since January 2011. According to the first communication of the pilot projects, positive results have been found. Villages spent more on food and healthcare, children's school performance improved in 68 percent of families, time spent in school nearly tripled, personal savings tripled, and new business startups doubled.
In 2011, Iran implemented a basic income grant in order to compensate for the removal of government subsidies on basic goods such as petrol and food. A first assessment of the experiences in Iran is provided by H. Talabani (2011).
Macau has distributed funds to all residents, permanent and non-permanent, since 2008, as part of the country's Wealth Partaking Scheme. In 2014, the government distributed 9,000 patacas (approx. $1,127 USD) to each permanent resident, and 5,400 patacas ($676) to non-permanent residents.
The Basic Income Earth Network, first called "Basic income European Network" (BIEN) until 2004, was the first international organization which aimed to promote basic income internationally. It gathered essentially a group of researchers and economists working on the topic. BIEN recognizes numerous national advocacy groups, and coordinates international communication through its newsletter and a biannual congress.
Following a number of meetings in different cities in Europe (Vienna 2005, Basel 2007, Berlin 2008, Herzogenrath 2009, and Vienna 2011), several organizations such as the German Round-table for basic income have decided to work together for promoting basic income at the European level. In Vienna (2011) they agreed on the preparation of a European Citizens' Initiative.
On 14 January 2013, the European citizens' initiative registration was accepted by the EU commission, thus beginning a 12-month period to collect more than one million signatures in the European Union. On 28 November, a group of 26 members of the European Parliament issued a joint call for support for this initiative.
Historically in Belgium, the most active group promoting basic income is the movement Vivant and the philosopher Philippe Van Parijs, who founded the Basic Income European network (BIEN) in 1987. A Belgian basic income network affiliated to the BIEN was founded in 2012 in Brussels
In 2013, the Confederation of Independent Trade Unions of Bulgaria supported the European Citizens' Initiative for basic income.
The first bigger discussion on universal basic income in the Czech Republic was initiated by philosophers and social scientists Marek Hrubec and Martin Brabec. Later, they published with Philippe Van Parijs a book "Všeobecný základní příjem. Právo na lenost, nebo na přežití?" ("Universal Basic Income. Right to Laziness, or Right to Survival?"). In 2013, activists and social scientists joined the European Citizens' Initiative for Unconditional Basic Income, and have created a campaign to support unconditional basic income. In the Czech Republic, unconditional basic income is supported by many individuals, NGOs (Alternativa zdola, ProAlt, Levá perspektiva, for example), and political parties. It is the program of the Green Party, the Communist Party, the Pirate Party, and the Party of Democratic Socialism. It is supported also by many Social Democrats.
In France, the first prominent defender of basic income is Yoland Bresson. In 1985, he founded the "Association pour l'Instauration d'un revenu d'existence" with Henri Guitton (fr) for promoting basic income in France, and co-founded the BIEN the year after. Another prominent advocate of basic income is the philosopher André Gorz, who finally endorsed the idea after having been an opponent for years.
On the political side, the Christian democrat Christine Boutin, the former prime-minister Dominique de Villepin, are the most well-known politicians claiming for basic income, along with some MPs like Karima Delli, Jean Desessard and Yves Cochet.
The very influential think tank Centre des Jeunes Dirigeants (CJD) ("Young policymakers trust") also call for a basic income of 400 euros per citizen. The CJD's and Christine Boutin's basic income proposals are based on Marc de Basquiat financing model, which demonstrates a way of financing a basic income of 400 euros for every adult and 200 per child, while other advocates such as Baptiste Mylondo and Jacques Marseille promote a "high enough" basic income, around 750 euros. However, unlike Mylondo and Marseille, De Basquiat's model doesn't reduce any pension, housing or unemployment benefits.
In 2012 a group of citizens launched a transpartisan network in an attempt to join forces for raising awareness about basic income in France. This network aim at participating to the European citizens initiative that is set to be launched in 2013.
Perhaps the most prominent proponent of basic income in Germany is Götz Werner, the former CEO of the retail store chain DM Drogeriemarkt, and among the richest men in Germany. He also teaches economics at the Karlsruhe Institute of Technology.
In 2008, a petition launched by social activist Susanne Wiest was supported by more than 50,000 citizens, thus offering her a hearing at the Bundestag, which helped to broaden the public debate on the idea.
Among the political parties in Germany, the Pirate Party officially endorsed basic income in 2011. Inside the Christian Democratic Union, Dieter Althaus proposes a basic income model. A group led by Katja Kipping also promotes basic income inside the leftist party Die Linke. Also, within the Social Democratic Party of Germany, the Rhein-Erft-group favors basic income since 2010. Within The Greens there are also many advocates.
Though the idea of basic income is not well known in Greece, several economists have worked on the topic. In 2010, the liberal party Drasi supported a proposal for a basic pension scheme, aiming at simplifying the hundreds of pension schemes in a country being hurt by the debt crisis and pressured by the troika to balance its public budget. Manos Matsaganis and Chrysa Leventi co-authored a study that demonstrate the feasibility of such a proposal.
Other heterodox proposals suggest that a Greek exit from the eurozone could be an opportunity to implement a "monetary dividend" for every Greek citizen as a way to manage the financial collapse of the country.
In October 2014 the Icelandic Pirate Party put forth a parliamentary resolution calling on the Minister of Social Affairs and Housing and the Minister of Finance and Economic Affairs to appoint a workgroup to conceive ways to ensure every citizen an unconditional basic income.
Ireland has had six MEPs come out in favour of Basic Income.
Currently the chief advocacy group is Basic Income Ireland, a member of BIEN. Before that, the main advocate was CORI (Conference of Religious of Ireland), one of the social partners. Politically, the Irish Green Party favours a Basic Income.
As part of the agreement with the social partners including CORI, a green paper on Basic Income was published by the government in 2002, but there has been no movement on a government level since then.
The issue of the basic income gained prominence on the political agenda in Netherlands between the mid-1970s and mid-1990s but it has disappeared from the political agenda over the last fifteen years.
Since 2001, the Red Renta Básica is the national network affiliated to the BIEN. It gathers researchers and activists for basic income. From 2011 to 2012, the 15-M Movement also contributed a lot in spreading the idea among the Spanish society, and political party Podemos introduced it as one of its proposals.
The association BIEN-Switzerland (affiliated to the Basic Income Earth Network) promotes basic income in the francophone part of Switzerland. In the German-speaking part of Switzerland a group called "Initiative Grundeinkommen" is very active in promoting basic income.
In 2008, Daniel Häni and Enno Schmidt produced The Basic income, a cultural impulse, a movie that explains and praises the idea of a basic income. With more than 400,000 views, the movie went viral and contributed a lot in spreading the idea among French and German speaking countries.
In September 2013, the initiative achieved the collection of about 126,000 signatures and handed them over to the government on 4 October thereby triggering a nationwide popular referendum, which would be the first of its kind on this issue, anywhere in the world. The trade union Syna brought its support for this initiative.
Co-founder of the Basic Income Earth Network, the professor Guy Standing is a famous advocate of the unconditional basic income. In his book The Precariat - the new dangerous class, he blames globalization for having plunged more and more people into the precariat, which he analyses as a new emerging social class. He concludes on the necessity for "governments to provide basic security as a right" - through a basic income.
The Norwegian Green Party, Norwegian Red Party, Democrats in Norway and the Norwegian Pirate Party endorse basic income in Norway. The Liberal Party of Norway formerly endorsed a basic income guarantee in Norway, but dropped it from the platform before the 2013 election.
Basic income - called Feltétel Nélküli Alapjövedelem (FNA) in Hungarian (unconditional basic income) is supported by the FNA Group, which held its first active-team-meeting in Hungary/Budaörs, on 31 May 2011. Basic income is also endorsed by the Hungarian Pirate Party.
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.
In 1969, Richard Nixon proposed a "Family Assistance Program" which resembled guaranteed income, in that benefits did not rapidly taper with additional earnings by the beneficiaries. Nixon's proposal only applied to families, but extended previous welfare by benefiting more than those without a 'father'. This proposal did not pass the (Democratic) House Finance Committee, after Nixon added work requirements to the measure. In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income (ISBN 978-0-394-46354-4) in which he advocated for the Basic Income and discussed Nixon's proposal.
In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was similar to a basic income.
Mike Gravel, a former US congressman and presidential candidate, advocates a tax rebate paid in a monthly check from the government to all citizens as part of a transition away from income taxes and toward a pre-bated national sales tax (the FairTax).
Notable libertarian proponents of basic income include Milton Friedman (in the form of negative income tax), and Charles Murray, who outlined a basic income proposal in his 2006 book In Our Hands: A Plan To Replace The Welfare State.
Winners of the Nobel Memorial Prize in Economic Sciences who fully support a basic income include Herbert A. Simon, Friedrich Hayek, James Meade, Robert Solow, and Milton Friedman.
Richard Parncutt argues that income tax is effectively progressive when basic income is combined with flat income tax. The combination would simplify the tax-welfare system.
In Oregon, Tax and Conversation is a member-owned organization working to end all tax exceptions via a ballot measure (the initiative process requires 50% of voters plus 1 person to vote yes for it to become law) for 2014. 66% of all dollars from current tax expenditures go to only 20 out of every 100 people with the most money (paid tax on income after exceptions is regressive), and that money would instead be paid unconditionally: each full-year taxfiler will get $700 each month. The total expenditure amount would be slightly less than the current expenditure amount of $24 billion each year, because core government services will get more funding.
The Green Party of the United States 2010 platform advocated for "a universal basic income (sometimes called a guaranteed income, negative income tax, citizen's income, or citizen dividend). This would go to every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people's lives."
The U.S. has an earned income tax credit for low-income taxpayers. In 2006 a bill written by members of the advocacy organization USBIG to transform the credit into a partial basic income was introduced in the US Congress but did not pass.
The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues, although this amount, $878.00 for the whole of 2012, is far from enough to live on. The Alaska basic income is subject to income tax on the federal level. That way the "basic income" works like a negative income tax but with a "prebate" instead of a "rebate" (as far as state finances are concerned).
Members of the Eastern Band of Cherokee Indians, based in North Carolina, receive payments of several thousand dollars twice a year. These payments are dividends from the profits of the Harrah's Cherokee casino, and have been distributed since 1996. A study of the payments' effects on the children of the community found significant declines in poverty, behavioral problems, crime, substance abuse and psychiatric problems, and increases in on-time graduation. The effects were primarily found among those who were youngest when the payments began, and among those who were lifted out of poverty rather than those who were already well-off.
William Aberhart, Premier of Alberta, was inspired by Major C. H. Douglas Social Credit theory and tried to implement a basic income for Albertans during the 1930s. However, he was thwarted in his attempts by the Federal Government of the time.
Starting in 2014, the Liberal Party of Canada, the Green Party of Canada, the Pirate Party of Canada, provincial party Québec Solidaire, and conservative senator Hugh Segal have been advocating for basic income in Canada. Mike Redmond, leader of the New Democratic Party of Prince Edward Island, has supported a basic income pilot project on Prince Edward Island.
Basic Income has gained support from Australian academics such as John Tomlinson, John Wiseman, and Allan MacDonald. The Queensland Greens were the first Australian party to adopt a Guaranteed Adequate Income (GAI) policy in 1999. In 2010, the Democratic Liberal Party announced support of a negative income tax with a 30% flat tax rate and the Pirate Party of Australia announced its support in 2014. Basic Income Guarantee Australia was accepted into the Basic Income Earth Network in 2006 as an affiliate member. In August 2014, ACOSS made a recommendation to simplify the welfare system via a basic income support payment; however, this differs from a universal guaranteed income in that it would still be means-tested.
Basic income has been discussed in modern Brazil at least since the 1980s. In 2001 a law was introduced by Senator Eduardo Suplicy of the Brazilian Workers Party which mandated the progressive institution of such a welfare system. By this move Brazil became the first country in the world to pass such a law. Suplicy had previously introduced a bill to create a Negative Income Tax, but that bill failed to pass. The new bill called for a national and universal basic income to be instituted, beginning with those most in need. The bill was approved by the Senate in 2002 and by the Chamber of Deputies in 2003. President Lula da Silva signed it into law in 2004, and according to the bill it is the president´s responsibility to gradually implement the reform. Since then Brasil has started to implement the bill through the Bolsa Família-program, which was a centerpiece of President Luiz Inácio Lula da Silva's social policy, and is reputed to have played a role in his victory in the Brazilian presidential election, 2006.
An independent and privately funded pilot project is currently in place in Brazil. It provides R$30 monthly which is 4.4% of the minimum salary in 2013 (as defined by the federal government) and is not enough to meet basic needs.
a flat rate payment as of right to all resident citizens over the school leaving age, irrespective of means of employment status...it would in principle replace all existing social-security entitlements with the exception of child benefits.
In no other advanced European welfare state has the BIG [i.e., Basic Income Guarantee] debate been so broad and lively as in the Netherlands. Since 1975, the idea of a basisinkomen has been discussed within many Dutch political parties, trade unions, social organizations, and even at the governmental level.
Het heeft twintig jaar geduurd, twintig jaar van vallen en opstaan, maar anno 1995 is het basisinkomen--een onvoorwaardelijke, niet aan arbeidsprestatie gebonden inkomensgarantie voor iedere burger--een volwassen politiek ideaal geworden. [Trans: It has taken twenty years, twenty years of ups and downs, but in the year 1995 the basic income--an unconditional guaranteed income for every citizen which is not linked to work--has become a mature political ideal.]
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