Basic Income: A Radical Proposal for a Free Society and a Sane Economy
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we suggest picking an amount on the order of one fourth of its current GDP per capita.
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Fundamental to the concept of a basic income is that it is paid in cash and not in the form of food, shelter, clothes, and other consumer goods.
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Most fundamentally, a priority placed on achieving greater freedom for all carries with it a general presumption in favor of cash distribution, with no restriction as to the object or timing of its spending. This leaves the beneficiary free to decide how to use it, thus allowing individual preferences to prevail among the various options available even with a modest budget.
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For anyone committed to freedom for all, however, direct payment to all individual members of the basic income to which they are entitled can make a big difference insofar as it affects the distribution of power within the household.
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The degressive profile of a household-based scheme creates a loneliness trap: people who decide to live together are penalized through a reduction in benefits.31 Other negative effects follow. The mutual support and sharing of information and networks stemming from cohabitation is weakened. Scarce material resources—space and energy, fridges and washing machines—are underutilized. And the number of housing units for a given population increases, leading to less dense habitats and hence greater mobility challenges. As concern for the strengthening of social bonds and the saving of material ...more
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In order to access benefits targeted at the poor, people who are eligible for them have to take steps that they may fail to take, whether out of ignorance, shyness, or shame. With a means-tested scheme, the information campaign required to achieve the same take-up rate among net beneficiaries that would be achieved by a universal scheme entails considerable human and administrative costs. Even with a scheme that relies on nothing but income as the relevant criterion, decisions to include or exclude leave a lot of room for arbitrariness and clientelism. With a basic income paid automatically to ...more
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Rational avoidance of uncertainty contributes to trapping welfare recipients in situations of unemployment. The risk is compounded by the very nature of many of the jobs the most disadvantaged would qualify for: jobs with precarious contracts, unscrupulous employers, and unpredictable earnings. If they are unsure about how much they will earn when they start working, about whether they will be able to cope, or about how quickly they might lose the work and then have to face more or less complex administrative procedures in order to reestablish their entitlement to benefits, the idea of giving ...more
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One aspect of this is that a basic income helps give all young people access to unpaid or low-paid internships, otherwise monopolized by the privileged whose parents are able and willing to provide them with what amounts to privately funded basic incomes.
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Making an economy more productive (sensibly interpreted) in a sustainable fashion is not best served by obsessively activating people and locking them in jobs that they hate doing and from which they learn nothing.
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For full employment can mean two things: full-time paid work for the entire able-bodied part of the population of working age, or the real possibility of getting meaningful paid work for all those who want it. As an objective, the basic income strategy rejects the former but embraces the latter.59 And it pursues it both by subsidizing low-paid work with low immediate productivity and by making it easier for people to choose to work less at any given point in their lives. At the expense of material consumption? In developed countries, certainly. And deliberately so—because our economy not only ...more
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Freedom, after all, is also the freedom to make mistakes.
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By contrast, according to Foucault, the negative income tax, like the Poor Laws of another age, “distinguishes between the poor and those who are not poor, between those who are receiving assistance and those who are not.”21 What our societies need for the sake of freeing everyone from poverty and unemployment, and what those committed to freedom for all should fight for, is a floor on which all can stand, not just another, more sophisticated policy targeted at the poor.
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It is fair to concede, however, that negative-income-tax schemes may offer significant advantages in terms of political feasibility. First, even when marginal tax rates and net taxation of the various types of households are exactly the same, a negative-income-tax scheme involves a gross volume of taxes and expenditure that is far smaller than the corresponding basic-income scheme. This makes it look much cheaper, and hence more palatable, in the illusion-prone court of public opinion.
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Consequently, as with Edmund Phelps’s wage-subsidy proposal, one needs to assume an intrinsic value of something like “busy-ness,” understood as paid employment, to establish the superiority of a public-employment guarantee over an unconditional basic income.
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basic income is a job-sharing device that makes it easier to cure both those who are sick because they work too much and those who are sick because they cannot find work. It makes it easier for all workers to spread their work as best suits them over longer segments of their adult lives.
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The program was first implemented in 1982. Since then, every official resident of Alaska for at least one year is entitled to an equal annual dividend. Around 637,000 applicants qualified in 2015. This dividend corresponds to some proportion of the average financial return, over the previous five years, of the Alaska Permanent Fund.
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Is it surprising that it should have been introduced by a Republican administration? Not according to its conceiver: “Alaska’s dividend program is, of course, anything but socialistic. Socialism is government taking from a wealthy few to provide what government thinks is best for all. Permanent Fund Dividends do just the opposite. They take from money which, by constitutional mandate, belongs to all and allows each individual to determine how to spend some of his or her share. What could be more capitalistic?”
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Someone can concede that a basic income would provide an effective way of reducing poverty and unemployment while still being fiercely opposed to it on ethical grounds. This objection comes in two main versions. In one version, the “perfectionist” one, the underlying principle is that work is part of the good life and hence that an income granted without some work requirement amounts to rewarding a vice: idleness. In the other version, the “liberal” one, the underlying principle is not about virtue but about fairness. As Jon Elster puts it, an unconditional basic income “goes against a widely ...more
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The first reason for relativizing the accusation resides in the double standards that are generally at work here. If one is serious about denying an income to those able but unwilling to work, this denial should apply to the rich as well as to the poor.
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Bertrand Russell stigmatized this asymmetry: “The idea that the poor should have leisure has always been shocking to the rich.”
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The third way of relativizing the accusation consists of pointing out that, once the basic-income regime is in place, only a tiny minority will take advantage of it in order to do nothing or very little.
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A huge amount of essential, productive work currently goes unpaid, as it is performed at home. As persuasively argued by Nancy Fraser (in 1997) and Carole Pateman (in 2004), if there is massive free riding anywhere, it is within the traditional family structure in the form of men free riding on the unpaid work done by their partners.
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“Current productive power is, in effect, a joint result of current effort and of the social heritage of inventiveness and skill incorporated in the stage of advancement and education reached in the arts of production; and it has always appeared to me only right that all the citizens should share in the yield of this common heritage, and that only the balance of the product after this allocation should be distributed in the form of rewards for, and incentives to, current service in production.”
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The appeal of the conception of distributive justice on which our principled justification of basic income rests depends on our realizing the extent to which our economy functions as a gift-distribution machine, as an arrangement that enables people to tap—very unequally—our common inheritance.
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Worries about the sustainability of a basic income have two main sources. The minor one is the risk of inflation.
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the second main source of concern about the sustainability of a generous basic income: the negative effect it may have, jointly with its funding, on economic incentives.
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The core threat to the sustainability of a basic income that stems from reduced incentives to work resides in a feature that is intrinsic to any shift from a means-tested to a universal minimum-income scheme.
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The contours of the politically feasible are set by our values no less than by our interests; by our moral attractions and repulsions no less than by the balance of power; by arguments about what is right no less than by calculations of what would best satisfy our greed.
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Job seekers, people with short-term or part-time contracts, those enrolled in workfare schemes, the more vulnerable among the self-employed, and more broadly, all those excluded for whatever reason from good jobs that provide material security and positive identification—these are the people commonly gathered under the label “precariat.”45 They include many of the people who stand to gain most, in an immediate sense, from the introduction of a basic income.
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Under practically any imaginable basic-income reform, women would benefit far more than men, whether in terms of income or in terms of life options. The reason for this is simple. Since women currently participate to a lesser extent in the labor market and since their average hourly wage is below that of men, a strictly individual basic income is bound to be of greater financial benefit to them, other things remaining equal, whether it is financed through direct or indirect taxation.
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In one of the negative-income-tax experiments discussed in chapter 6, entitling each member of poor households to a benefit seems to have increased the divorce rate. A follow-up analysis surmised that the “certainty that income will be available during the difficult transition period after a marital dissolution lessens the financial dependence on the marriage of the financially more dependent spouse—the wife, in most cases. Increased independence presumably allows some persons to leave unsatisfactory, perhaps even brutalizing, marriage.”
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From a feminist standpoint, the problem is rather the impact on women’s participation in labor markets. For a number of mutually-reinforcing reasons—from unashamed discrimination and oppressive gender-specific expectations to the widespread and persistent fact that women tend to be younger than their partners—the female in most couples earns less per hour than the male. If at some point a couple regards it as desirable to reduce its total number of hours of paid work in order to make more time for childcare or other domestic tasks, it is therefore in most cases less costly if the woman stops ...more
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In any event, we very much doubt that a generous unconditional basic income will ever be introduced anywhere as a result of a big triumphal revolution. It is more likely to enter through the back door.157 Certainly it will start with a modest level, and perhaps with some participation condition. Perhaps it will also make its way to reality via a negative income tax, so as to reduce the impact on political feasibility of two powerful yet illusory impressions created by a basic income paid upfront.
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But can one still think about social justice at the level of a particular society taken in isolation? Whether or not our particular conception of social justice is adopted, should one not instead view mankind as a whole as the appropriate community among whose members resources need to be distributed fairly?
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Egalitarian social justice must apply on a global scale.
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The more open the borders of a country with generous and unconditional schemes, the more it will be under pressure to make them less generous and more conditional, in order to stem the selective migration of likely net beneficiaries.
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Even in the absence of any transnational migration of people, the transnational mobility of capital already presents a threat, especially in combination with the transnational mobility of products.
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Once human capital is thought to be sufficiently mobile, firms will consider settling in places where, for a given cost, they can offer a higher take-home pay. Whether or not these workers and firms actually do move, the fear that they might will lead governments to reduce the rate of taxation on high incomes or to tie benefits more closely to contributions paid, and hence reduce the level or tighten the conditions of genuine redistribution.
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they are torn between sustainable generosity towards their “own poor folks” and generous hospitality to all those “strangers” knocking at the door.13 This tension is particularly disturbing for basic-income supporters, as the joint appeal of equality and freedom that endears basic income to them should also make them firm supporters of free migration. Surely, the real freedom to choose the way to spend one’s life should encompass the freedom to choose where to spend it, and this freedom should not be restricted to those who happen to be born in a privileged part of the planet.
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There are at least two possibilities. One consists of imposing a waiting period.
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A second possibility consists of restricting entitlement to citizens of the country concerned in the strict legal sense of the term.
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If the scheme takes the form of a refundable tax credit, it will have the bizarre consequence that the take-home pay of workers legally performing the same job will differ significantly depending on their length of residence or citizenship status.
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One strong reason is that the right to emigrate is systematically regarded as a fundamental human right, whereas the right to immigrate is not.25 There is some hypocrisy in this asymmetry, as people’s right to get out is meaningless if there is no country willing to let them in.
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What creates a threat to the sustainability of a generous noncontributory scheme is not that some net contributors leave, but that they leave because of the higher net return on their human capital they can expect to find abroad.
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In particular, if in the relevant region of the world the languages spoken are different and difficult for non-native speakers to learn—and if, moreover, the associated cultures are distinctive and hard to integrate into—then generous, genuine redistribution will be easier to sustain. Both potential net beneficiaries and current net contributors will balk at the prospect of heavy investments in language learning and cultural adjustment.
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It must be conceded, however, that the very process of globalization tends to erode this protective shield, for two reasons. First, the linguistic obstacles to the immigration of potential net beneficiaries are being eroded by the growth of diasporas that retain their original language and hence provide microenvironments into which newcomers can smoothly integrate. Second, the linguistic obstacles to the emigration of net contributors are being eroded by the spreading of English as a lingua franca,
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It will need to take the crude form of benefits to be accessed under very simple conditions, easy to enforce in a homogeneous way. Second, if an interpersonal supranational transfer system is ever to come into being, it should preferably be designed so as not to create a dependency trap for the countries concerned—that is, an incentive to perpetuate poverty so as to keep transfers flowing. It should therefore provide a floor rather than a net.
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The best way of realizing worldwide “climate justice” so conceived consists of three steps. First, determine, albeit approximately, the threshold which global carbon emissions cannot exceed without creating serious damage. Second, sell to the highest bidders the emission rights that match this threshold for a given period. The uniform equilibrium price that is determined through an auction of this type will percolate into the prices of all goods worldwide in proportion to their direct and indirect carbon content, and accordingly affect consumption and production patterns, including traveling ...more
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By contributing to security in old age, it will arguably foster the transition to lower birthrates in those countries in which that transition has not yet happened, as the insurance motive for having children will be structurally weakened. Further, by making the aggregate benefit dependent on the number of people who reach an advanced age, this strategy should strengthen government incentives to improve public health, education, and other determinants of longevity.
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There is nothing ethically special about carbon emissions as regards global justice. What the latter demands is a fair and sustainable distribution of real freedom among all members of mankind.
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