Basic income guarantee

It has been suggested that Basic income be merged into this article. (Discuss) Proposed since March 2013.

A basic income guarantee (also called basic income or citizen’s income) is a proposed system^[1] of social security that regularly provides each citizen with a sum of money unconditionally.

Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it. The U.S. Basic Income Network^[2] emphasizes this absence of means testing in its precise definition, "The Basic Income Guarantee is an unconditional, government-insured guarantee that all citizens will have enough income to meet their basic needs."

Basic income guarantee is not to be confused with Guaranteed minimum income, a similar concept where the income that is received may be conditional upon participating in government enforced labor or other conditional means testing. Basic income guarantee is distinct in that the only requirement for receiving it is to be a citizen of the country.

In everyday usage, the phrase basic income is often inaccurately conflated with means tested guaranteed minimum income alternatives such as a negative income tax. A basic income of any amount less than the social minimum is referred to as a partial basic income.

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.

Arguments [edit]

One of the arguments for a basic income was articulated by the French economist and philosopher André Gorz:

...The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

From the point where it takes only 1,000 hours per year or 20,000 to 30,000 hours per lifetime to create an amount of wealth equal to or greater than the amount we create at the present time in 1,600 hours per year or 40,000 to 50,000 hours in a working life, we must all be able to obtain a real income equal to or higher than our current salaries in exchange for a greatly reduced quantity of work...

Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: 'the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and work-based society is thrown into crisis...

—André Gorz, Critique of economic Reason, Gallile, 1989

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.,^[3] and BIEN has made several fully financed proposals.^[4]

Examples of implementation [edit]

United States [edit]

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^[5] to transform the credit into a partial basic income was introduced in the US Congress but did not pass.^[6]

Alaska [edit]

The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues,^[7] although this amount, $878.00 for the whole of 2012,^[8] 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).

Negative income tax experiments [edit]

Canada [edit]

The city of Dauphin, Manitoba, Canada took part in an experimental basic income program ("Mincome") between 1974 and 1979.^[9]

Namibia [edit]

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.^[10][11] 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.^[12][13] The project team states that this increase in economic activity contradicts critics' claims that a basic income would lead to laziness and dependency.^[14]

After the conclusion of the pilot project phase, a monthly bridging-allowance of N$ 80 (around US$ 10) to all who participated in the pilot was paid regularly until March 2012.^[14] 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.^[14] Another finding of the project was that after the introduction of the pilot, overall crime rates fell by 42%, and specifically stock theft fell by 43% and other theft by nearly 20%.^[14]

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^[15] and a second study about the first 12 months of the project.^[16] 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.^[17]

The design of the project and the conduct of the empirical studies have been criticized by some authors for intransparent procedure and inappropriate methods.^[18]

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."^[19]

Iran [edit]

In 2011, Iran implemented a basic income grant in order to compensate risen prices of basic goods such as petrol and food.^[20] A first assessment of the experiences in Iran is provided by H. Talabani (2011).^[21]

Brazil [edit]

An independent and privately funded pilot project is currently in place in Brazil.^[22]

India [edit]

Two basic income pilot projects have been underway in India since January 2011.^[23] According to the first communication of the pilot projects, positive results have been found.^[24] 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.^[25]

A Worldwide Movement [edit]

In many countries, there are politicians, academists, philosophers advocating for a basic income. Several of the following advocates have actually proposed a negative income tax, which is means tested, rather than a basic income. Despite their differences in administration and effect,^{[citation needed]} the two proposals are usually conflated.

Origins [edit]

One of the world's outspoken advocates of a basic income system is the Belgian philosopher and political economist Philippe van Parijs.^[26] Other advocates include Gunnar Adler-Karlsson (Sweden), Götz Werner (Germany), Saar Boerlage (Netherlands),^[27] Herwig Büchele (Austria), fr:Yoland Bresson, André Gorz (France),^[28] Michael Hardt and Antonio Negri,^[29] Charles Murray^[30] (USA), Keith Rankin^[31] and Gareth Morgan^[32] (New Zealand), es:Daniel Raventós (Spain),^[33] Osmo Soininvaara (Finland),^[34] Guy Standing (UK),^[35][36] Eduardo Suplicy (Brazil)^[37] and Walter van Trier (Belgium).^[38]

Advocacy by socialists [edit]

Many socialists have advocated a form of basic income or a social dividend as a means for distributing the economic profits of publicly owned and state-owned enterprises. These include economists Oskar Lange, Abba Lerner, John Roemer, James Yunker and James Meade.

Erik Olin Wright characterizes basic income as a socialist project and a further reform to capitalism that establishes the basis of a social economy by empowering labor in relation to capital.^[39]

In his final book Full employment regained? James Meade states that a return to full employment can be achieved only 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, and that therefore a citizen's income would be necessary.^[40] James Meade advocated for a social dividend scheme funded on the returns of publicly owned productive assets.^[41]

In 1918, philosopher Bertrand Russell argues for a basic income in Roads to Freedom.^[42]

Advocacy by Libertarians [edit]

Basic income has been promoted by people associated with political views that are generally opposed to the public provision of welfare services, such as Libertarianism, Economic liberalism, and anarcho-capitalism. These people support basic income as a strategy to reduce the amount of bureaucratic administration that is prevalent in many contemporary welfare systems, as well as acting as a form of compensation for fiat currency inflation. Notable libertarian-capitalist proponents of basic income guarantees include Milton Friedman (in the form of negative income tax),^[43] Robert Anton Wilson,^[44] Gary Johnson (In the form of the fair tax "prebate") and Charles Murray.^[45]

It is clear, however, that Friedrich Hayek did not advocate that any modern nation act to implement a minimum income. This was a concept that he attributed to his "Great Society," which was his Utopian liberal society, in the classical sense. Hayek emphasized a minimum income in the far future, and stated clearly that no wealthy countries such as the United States should guarantee any income not available to all around the world, as it would attract mass immigration and overwhelm the procedure:

"It is obvious that for a long time to come it will be wholly impossible to secure an adequate and uniform minimum standard for all human beings everywhere, or at least that the wealthier countries would not be content to secure for their citizens no higher standards than can be secured for all men. But to confine to the citizens of particular countries provisions for a minimum standard higher than that universally applied makes it a privilege and necessitates certain limitations on the free movement of men across frontiers... we must face the fact that we here encounter a limit to the universal application of those liberal principles of policy which the existing facts of the present world make unavoidable." ^[46]

Many of the people mentioned above 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.

In North America [edit]

United States [edit]

In his last book, Where Do We Go From Here: Chaos or Community?, published in 1967, Martin Luther King, Jr. calls for a guaranteed income.^[47]

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.^[48]

In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was very similar to a basic income. In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income (ISBN 0394463544) in which he advocated for the Basic Income and discussed Richard Nixon's GAI proposal.

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).^[49][50]

Winners of the Nobel Prize in Economics who fully support a basic income include Herbert A. Simon,^[51] Friedrich Hayek,^[52][53] James Meade, Robert Solow,^[54] and Milton Friedman.^[55]

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.^[56]

Ben Wallace argues, in The Common Purpose Manifesto, that a shared base income, incorporating an unconditional basic income with a flat 50% tax rate, is necessary to correct the inevitable income inequalities that arise in free and open markets.^[57]

In Oregon, Tax and Conversation^[58] 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.^[59] 66% of all dollars from current tax expenditures go to only 20 out of every 100 people with the most money^[60] (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.^[61]

Jeremy Rifkin, in his book The End of Work, argued that there may be an increasing need for such measures as automation would reduce the demand for workers in future.^[62]

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."^[63]

Canada [edit]

This section is incomplete. (January 2013)

The Green Party of Canada, the francophone parti Québec Solidaire^[64] and conservative senator Hugh Segal^[65] advocate for basic income in Canada.

Basic Income Movement in Europe [edit]

The Basic Income Earth Network, first called "Basic income European Network" (BIEN) until 2004, was the first international organization trying 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.^[66]

On January 14th 2013, the European citizens' initiative registration was accepted by the EU commission, thus triggering a 12 months aiming at collecting more than one million signatures in the European Union.^[67]

Belgium [edit]

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^[68]

Finland [edit]

BIEN Finland launched a citizens' initiative.^[69]

France [edit]

In France, the first prominent defender of basic income is fr:Yoland Bresson. In 1985, he founded the "Association pour l'Instauration d'un revenu d'existence" with Henri Guitton^[70] 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^[71] after having been an opponent for years.^[72]

Leftist activists such as fr:Baptiste Mylondo, fr:Yann Moulier Boutang,^[73] Toni Negri, Jean-Marc Ferry, Ignacio Ramonet, Jacques Marseille^[74] also favour basic income.

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 fr:Centre des Jeunes Dirigeants (CJD) ("Young policymakers trust") also call for a basic income of 400 euros per citizen.^[75] The CJD's and Christine Boutin's basic income proposals are based on Marc de Basquiat financing model,^[76] 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.^[77] This network aim at participating to the European citizens initiative that is set to be launched in 2013.^[78]

Germany [edit]

One of the most prominent proponents of basic income in Germany is Götz Werner, the CEO of the store brand DM Drogeriemarkt, and one of the richest men in Germany. He also teaches economics at the Karlsruhe Institute of Technology.

The generalization of workfare policies known as "Hartz reforms" have encouraged a broader movement for basic income in Germany.^[79]

In 2008, a petition launched by de:Susanne Wiest was supported by more than 52,973 citizens, thus offering the young German activist a hearing at the Bundestag,^[80] which helped to enlarge the public debate on the idea.

The German Pirate Party has officially endorsed basic income^[81] since 2011. Inside the Christian Democratic Union, Dieter Althaus proposes a basic income model.^[82] A group led by Katja Kipping also promotes basic income inside the leftist party Die Linke.^[83] In addition, inside the Social Democratic Party of Germany, the Rhein-Erft-group favors basic income^[84] since 2010. Within "The Greens" there are also a large number of advocates.

Greece [edit]

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.^[85]

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.^[86]

Netherlands [edit]

Spain [edit]

Since 2001, the es:Red Renta Básica is the national network affiliated to the BIEN. It gathers researchers and activists for basic income.^[87] From 2011 to 2012, the 15-M Movement also contributed a lot in spreading the idea among the Spanish society.^[88]

Famous Spanish advocates of basic income are es:Daniel Raventos, es:David Casassas, José Luis Ley.

Switzerland [edit]

The association BIEN-Switzerland^[89] (affiliated to the BIEN) promotes basic income in the francophone part of Switzerland. In the German speaking part of Switzerland a group called "Grundeinkommen initiative" is very active in promoting basic income.^[90]

In 2006, the sociologist Jean Ziegler considered basic income as "one of the most pressing idea of all".^[91]

In April 2012, both groups launched a popular legislative initiative^[92] aimed at collecting 100,000 signatures.^[93] If successful, the campaign will trigger a referendum in Switzerland. The trade union de:Syna brought its support for this initiative.^[94]

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,^[95] the movie went viral and contributed a lot in spreading the idea among French and German speaking countries.

United Kingdom [edit]

"The Citizen's Income Trust promotes debate on the desirability and feasibility of a Citizen's Income by publishing a newsletter and other publications, maintaining a library of resources, and responding to requests for information."^[96]

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.^[97] He concludes on the necessity for "governments to provide basic security as a right"^[98] - through a basic income.^[99]

Edward Skidelsky and Robert Skidelsky favoured a basic income in their book called "How Much is Enough?".^[100]

Basic income is also defended by the Green Party of England and Wales^[101] and the Scottish Green Party.^[102]

Norway [edit]

The Liberal Party of Norway, Norwegian Green Party and Norwegian Red Party endorse basic income in Norway.^[103]

Hungary [edit]

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 was in Hungary/Budaörs, May 31. 2011.^[104] Basic income is also endorsed by the Hungarian pirate party.^[105]

Basic Income in Developing countries [edit]

Brazil [edit]

Namibia [edit]

Middle East [edit]

Elsewhere in the world [edit]

Japan [edit]

In Japan, New Party Nippon and the Greens Japan support basic income, along with some economists such as Toru Yamamori and Kaori Katada.^[106]

Funding [edit]

Several sources of funding have been proposed for hypothetical socialist (public or common ownership of the means of production) economic systems:

• Collective resource ownership
• Universal stock ownership^[107]
• Profits generated by publicly owned enterprises^[108]
• A National Mutual Fund

Many different sources of funding have been suggested for a guaranteed minimum income for non-socialist economic structures:

• Negative income tax
• Income taxes
• Income tax threshold
• Sales taxes
• Capital gains taxes
• Fiat money
• Inheritance taxes
• Wealth taxes, e.g. property tax
• Luxury taxes
• Elimination of current income support programs and tax deductions
• Repayment of the grant at death or retirement
• Land and natural resource taxes
• Pollution taxes
• Fees from government-created monopolies (such as the broadcast spectrum and utilities)
• Money creation or seignorage
• Tariffs, the lottery, or sin taxes
• Technology taxes
• Tobin tax
• Value added tax or other Consumption taxes
• Demurrage

Criticisms [edit]

One critical view of Basic Income theorizes that it would have a negative effect on work incentive^[109][110] and labor supply. 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, in one study:

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.^[109]

However, in studies of the Mincome experiment in rural Manitoba, the only two groups who worked less in a significant way 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.^[111] 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."^[112]

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.^[14]

Further reading [edit]

• Daniel Raventós and Julie Wark, "Indignation, Basic Income and the First Social Law. Taking It to the Streets in Spain" "Counterpunch", 14 May 2012.
• Daniel Raventós and Julie Wark, "General Strike in the Kingdom of Spain: the Political Economy and Basic Income" "Opendemocracy", 30 March 2012.
• Rubén M. Lo Vuolo, Daniel Raventós and Pablo Yanes, "Basic Income in Times of Economic Crisis: The War Social and Working Rights," Counterpunch (Weekend Edition, November 5–7, 2010).
• Rubén Lo Vuolo and Daniel Raventós (16 July 2009). "Basic Income: good in the boom, essential in the crisis". On Line Opinion (Australia’s e-journal of social and political debate). Retrieved 17 February 2011. 
• "History of Basic Income," BIEN (Basic Income Earth Network).
• Social Contract Revisited publications: Basic Income and Income Support in the Modern Welfare State, The Foundation for Law, Justice and Society (Contributors: Amir Paz-Fuchs, Peter Edelman, Amitai Etzioni, Charles Murray, Michael Opielka, Dalmer Hoskins, Avia Spivak, Frank Bloch). [ Retrieved 17-02-2011 ].

See also [edit]

References [edit]

• Green Economics and The Citizens Income, 2012 by Clive Lord and Miriam Kennet, published by The Green Economics Institute

External links [edit]

• The Basic income, a cultural impulse, German movie (available in more than 20 languages)
• Center for Economic and Social Justice
• Basic income for all by Philippe van Parijs, Boston Review
• Guaranteed Basic Income Studies: How it could be organised, Different Suggestions
• Basic Income Earth Network (BIEN)
• Basic Income Studies: An International Journal of Basic Income Research
• US Basic Income Guarantee Network
• Citizen's Income
• smi2le, a multilingual journal about the basic income guarantee
• Lectures on basic income
• French network for unconditional basic income

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