books social justice

Basic Income: and how we can make it happen, by Guy Standing

I forget where it was that I first came across the Basic Income, but it seemed obscure at the time. There was almost no debate about it in mainstream media outlets. The idea has a rich history and it clearly had supporters, but the organisations campaigning for it had websites that looked niche and out of date. It has been intriguing to watch its rise since. Driven by the financial crisis, the ongoing frustrations of the welfare system, and the success of direct cash transfers in developing countries, the Basic Income is back.

“The legitimacy of basic income as an idea may thus be greater than at any time in the past” says Guy Standing in this timely book, Basic Income: And how we can make it happen.

What is a Basic Income? It’s “a modest amount of money paid unconditionally to individuals on a regular basis”. There are many ways to frame it, but we’re essentially talking about a national dividend, a rightful share in the nation’s wealth paid out to everybody, with no conditions on who gets it and what they do with it.

Why would you want such a thing? There are a variety of reasons, and Standing begins with social justice, freedom, and economic security. Social justice is the most important, because much of the wealth we enjoy today is wealth that we did not create ourselves. It may be the work of previous generations, or the use of things that nobody created, such as land or natural resources. It is right that this kind of wealth is shared more evenly, and some places do this already in various forms.

The basic income enhances freedom by allowing people to carry out unpaid work, such as care, or work shorter hours and enjoy more leisure. It also gives people the freedom to reject underpaid work, or to take time off work to retrain, or to start their own business. For those on lower incomes, it would also mean freedom from the intrusive bureaucracy of welfare.

Economic security is another key reason for the basic income. Standing is clear that it wouldn’t end poverty, and neither could it completely replace all forms of welfare, as more libertarian supporters argue. But it would provide basic security for everyone. It would also do away with the poverty trap. Current welfare systems, Britain’s included, often disincentivise work. The moment a claimant takes employment, benefits are cut off. Once they have paid for everything that was previously paid for by benefits, disposable income may not be any higher than it was without the job. So why bother? A basic income would remove that obstacle. Rather than encouraging laziness, as some opponents suggest, a basic income “would increase the incentive to take relatively low wage jobs, or undertake inherently risky own-account economic activity.”

Guy Standing explains all of this clearly, chapter by chapter. Once the main arguments for it are dealt with, he turns to the common objections – how to you pay for it? Why should the rich get it too? Would it depress wages? How would it work in developing countries? It is a policy idea that raises a lot of questions, and these deserve full consideration. Whether you are a supporter of the BI or still sceptical, it’s worth reading these counter-arguments and caveats. If you’re not on board, it will show that BI isn’t naive or utopian. And if you are, it will avoid over-promising on what the BI can achieve, and help navigate some of the framing issues that hold the issue back.

Towards the end, the book takes us on a tour of pilot programmes, past experiments, and places where a basic income is planned or promised. It’s a surprisingly long list, including places such as Namibia, Canada, Finland, Kashmir, and Mexico City. After centuries of debate, we are closer to implementation than ever before. It’s an idea to keep an eye on, and Guy Standing’s book is the best guide to it I’ve come across so far.

19 comments

    1. As I have not read the book, I am unable to join into the why not. I say yes, nothing has worked yet the poor are poorer, middle class is no more, why not try this.

      I am an independent Capitalist- not a communist – two different animals, the first used to make vile communism sound kind. It’s unfortunate but politics are included.

  1. Wealth isn’t income and income isn’t wealth.

    I’m afraid this still falls down on the affordability issue. Within the current levels of acceptable taxation the UBI would be too small to be effective. Cutting ill-defined ‘subsidies’ is rather woolly and taxing ‘rents’ rather is problematic (why do authors never want to tax copy-write while railing against patents?). Especially as under Standing’s plan we are still left with the costly to administer panoply of other welfare.

    UBI will always just be a thought experiment to compare other systems against.

    1. That’s too easy as an objection – it’s all about how much we’re talking about, and what else we reconfigure to make it work. Here’s an Economist piece calculating how much every country in the OECD could afford to pay as a basic income:
      http://www.economist.com/blogs/graphicdetail/2016/06/daily-chart-1

      The variety of places piloting the idea, or applying limited basic incomes in specific regions, would suggest that it is not just a thought experiment.

      1. That Economist table just underlines the point that UBI only works if you replace ALL transfers but to suggest that you should cut disability living allowance to pay to able bodied 30 year olds creates a major inequity. So either you hurt the most vulnerable or, as Standing suggests, you have to keep most existing benefits at which point the money to pay for the UBI disappears. I know with the launch of Labour’s manifesto it is the time to wish for 6 impossible things before breakfast but you really can only spend money once.

        1. The table is simplified to demonstrate that it is affordable, it’s not a blueprint for delivery. Obviously you’d need to negotiate the differences – pay slightly less a month, keep disability living allowance. Add a carbon tax. Cut a subsidy. Different countries have different options, but there are 101 ways to square a UBI.

          1. The devil is in the details which you just wave away. You will find loads of things you will want to keep. Disability benefits are about 9% of social spending. Housing benefit is another thing we would probably want to keep. So we are looking at 20% of the social security budget already gone. So what was on 2012 £3274 per person goes down already to £2576.

            I got a great idea. Universal basic healthcare. We stop funding the NHS and give each person £3000 worth of health insurance per year. Your medical bills are more than that you have to stump up the difference. Great for healthy young idealists, not so good for the sick and elderly; but it’s fair!

  2. I’m not waving away the details. I just don’t think that you and I are going to do a better job in the comments section of a blog than others have done in serious feasibility studies.

    If you want a longer list of potential savings and income sources, read Standing’s book, where there’s a whole chapter on affordability. Or go and look at how the RSA model it, or Compass.

    If you don’t like them, read the IEA or Adam Smith Institute on the topic. Both of them are more open to the idea than you appear to be.

    1. I have considered the idea of a UBI with a open mind so please don’t try to imply I am closed minded compared to you. My personal judgement is that for many reasons it won’t work. It is very fashionable just now but that doesn’t make it the right solution.

      1. I’m responding here to your specific claims that a) it’s unaffordable, and b) it’s only a thought experiment. Neither of those arguments are particularly robust objections: since you can set the payment at any level you like, and there are all sorts of savings involved, it’s not unaffordable. Plenty of people have demonstrated that. And if it’s already being done in various forms around the world, then it’s clearly not just a thought experiment.

    1. A fair question, and I think much depends on how it is framed. If campaigners talk about ‘money for nothing’, then maybe it reduces our motivation. If it’s framed as a fair dividend from our shared wealth and resources, then it’s empowering.

      One advantage is that the ‘money for nothing’ approach isn’t politically credible, so it’s never going to get implemented on that basis.

  3. com/pulse/universal-basic-income-we-ready-simon-lofthouse
    UBI will always just be a thought experiment to compare other systems against.

  4. If you want a longer list of potential savings and income sources, read Standing’s book, where there’s a whole chapter on affordability. That Economist table just underlines the point that UBI only works if you replace ALL transfers but to suggest that you should cut disability living allowance to pay to able bodied 30 year olds creates a major inequity.

  5. So either you hurt the most vulnerable or, as Standing suggests, you have to keep most existing benefits at which point the money to pay for the UBI disappears.
    One advantage is that the ‘money for nothing’ approach isn’t politically credible, so it’s never going to get implemented on that basis.

    1. It’s not money for nothing, it’s a share in our common wealth. There are multiple ways to pay for it, including abolishing many benefits. And the fact that so many countries are trialing it right now suggests it isn’t as politically incredible as all that.

  6. And if it’s already being done in various forms around the world, then it’s clearly not just a thought experiment. Apparently not, since it’s being applied in a number of places at this very moment.

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