Money to live10 MAY 2013 LMD
The proponents of a basic minimum income – rather than a wage – think that its time may have come, now that technological progress means paid work is available to fewer people. Get over the initial absurdity of the idea, and it makes a novel sense.
BY MONA CHOLLET
You work and you get paid. Suggest overturning the fundamental logic of that and you will be thought mad: the idea of a guaranteed basic income – a universal regular payment that’s enough to live on, independent of paid employment – seems an aberration. We still believe that our individual subsistence depends on hard work, but reality suggests otherwise.
Many social security benefits already decouple income and work: student grants, maternity and paternity leave, old-age pensions, family allowances, unemployment benefit, French subsidies for part-time workers in entertainment industries. These may be criticised, but they prove that, if a guaranteed basic income is utopian, we already live in Utopia. As Daniel Häni and Enno Schmidt point out in their film Basic Income (1), only 41% of Germans’ income comes directly from work. In France in 2005, 30% came from redistribution via benefits: “Despite all the ideological rhetoric and despite the dismantling of the welfare state, much reviled by neoliberals, the proportion of statutory payments inexorably rose under presidents Mitterrand, Chirac and Sarkozy” (2).
It wouldn’t be impossible to recalibrate the system to protect everyone from need. A basic income would make the problem of unemployment disappear as an issue for society and as a source of anxiety for the individual. The money spent on the official goal of full employment would be saved, and there would be no justification for grants to induce companies to hire workers – the associated costs of corporate tax exemptions and reduced social security contributions rose from €1.9bn ($2.2bn) in 1992 to €30.7bn ($40bn) in 2008 (3). In 1989 the South Korean Daewoo group was given €35m ($46m) to build three factories in Lorraine, which closed in 2002 with the loss of a thousand jobs. Since a basic income would be universal and unconditional – paid to rich and poor alike and recovered from the rich through tax – the cost of administering the benefit system and
Let us define a basic income, since a measure put forward in the 1960s by economists as different as James Tobin – of the financial transactions tax – and the neoliberal Milton Friedman may perplex. (In France, the basic income as promoted by Christine Boutin of the Christian Democrats, is different from the version supported by Yves Cochet of the Greens, or by the Utopia movement, which draws support from Greens and the left.)
Neoliberals believe the basic income should be too low to make it possible to survive without a job, so would it function as a subsidy to business, as part of the dismantling of social protection. This is the rationale of Friedman’s negative income tax (see Deserving and undeserving poor, page 11). For the left, the basic income must be enough to live on – the arguments are over what ‘‘enough’’ means; public services and social security (pensions, unemployment and sickness benefits) as well as certain welfare benefits would be maintained. There is also agreement on the left on other features: it should be paid monthly to individuals rather than households, from cradle to grave (with minors receiving less than adults), without conditions or obligations, and it should be possible to combine it with income from employment.
Everyone would be able to choose what to do with their life: to go on working, enjoy their life on a low level consumption, or combine the two. Periods of unemployment would no longer be seen as suspect, since paid employment would not be the only option. Those who chose to live on the basic income would be able to devote themselves to projects they were passionate about and/or were socially useful, alone or in groups.
In 2004 two researchers at Louvain University tried to work out the effects of a basic income by studying the winners of Belgium’s Win for Life lottery, in which the prize is a monthly income. That prize and the basic income aren’t identical, though, and Baptiste Mylondo picked up something the researchers overlooked: “Whereas the recipient of an unconditional income is surrounded by other recipients, the lottery winner is completely isolated. The value of free time increases in proportion to the number of people with whom you can share it” (5). A guaranteed income would radically alter our relationship to work, time, consumption and other people – and some effects would be transferred to those who opted for paid employment. New modes of socialisation would have to be created, otherwise there might be a rollback, especially for women, who would risk being confined to the home.
The idea of a basic income originated in the post-war US. In 1968 Tobin, with Paul Samuelson, John Kenneth Galbraith and 1,200 other economists, first called for such a measure, and later introduced his “demogrant” project (a grant based purely on demographic factors) into the programme of presidential candidate George McGovern, whose 1972 campaign he advised. After McGovern’s defeat by Richard Nixon, the project was buried.
The full article can be read without a subscription ...
The question of what is enough would need no answer if the level of a basic income was varied to stabilize wages.