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Why Basic Income Can Never Be A Progressive Solution

by Francine Mestrum, for Social Europe, April 14, 2016

Most advocates of basic income only answer the arguments of the right – mainly concerning the willingness to work – and never imagine there can be valid arguments for the left to resist their proposals.

In that sense we have to be grateful to Philippe van Parijs that he addresses social democracy specifically in his defence of basic income.  However, his answers are not very satisfactory.

Let me start with the easy point on which we fully agree: social assistance needs fundamental changes.  First of all, because poverty should not exist in our wealthy societies and because the current means-testing and control mechanisms are humiliating and do not contribute to the empowerment of poor people.  In spite of all academic and economic blah on the ‘multidimensionality’ of poverty, we should never forget that poor people need, in the very first place, an income if we want them to escape poverty.  If other problems remain – health, education, housing, debt… – after income security has been guaranteed, then social workers should be available to and ready help.

A guaranteed minimum income for poor people should be introduced, urgently.  This should indeed be an individual right.  Since it would be for poor people alone it does imply means-testing, but this can easily be done without intervening in people’s private life.  We have all the information technology available, from tax administration to social security, in order to grant people what they can rightly claim.

What about the non-poor?

Why should we give a basic income also to the non-poor?  I never heard a convincing argument.  For keeping the system ‘simple’, it is said.  Well, if we can eradicate poverty for, let us say around €2bn – which would be the case in Belgium if the guaranteed income is put at the poverty level – then why would we spend more than €130bn extra just for ‘keeping it simple’?  That is a very high price.

Basic income should be universal, is another argument.  The right to a decent income, or as is said in the Universal Declaration of Human Rights, the right to an adequate standard of living is universal. Rights are universal, not the allowances, not the money.  If non-poor people have an adequate standard of living, do they have a right to more?

Non-poor people will pay back through taxes, anyway, is the next point.  This sounds like an additional reason for not giving them the money. What can the rationale be for giving people money that they then have to give back?  And more seriously, will the rich really pay back?  The recent Panama Papers have shown once again that the rich pay no taxes or do everything to avoid paying them.

There is another problem with means-testing.  As has been said, this can happen in a non-humiliating way.  Moreover, most advocates of basic income are now in favour of additional ‘earnings-related social insurance’. Even social assistance cannot be expected to disappear, says van Parijs.  The ‘basic income will not enable us to dispense with means-tested top ups for people in specific circumstances’ …

In sum, I see no arguments at all for giving money to the non-poor.

Social security and solidarity

Van Parijs admits that some parts of social security and even social assistance will have to remain.  He does not explain how this should be funded, but we know he’s not thinking of any allowance up to the poverty level.  But even at half of this amount – €500 for Belgium – the basic income invoice would amount to around €70bn.  Add to this the remaining costs for social policies. All this is much more than the cost of current social protection, around €80bn.  Up to what percentage of GDP are we willing to pay?  This key financial question remains unanswered.

There are further problems.  At this low rate of allowance, people will still have to go out and work on the labour market.  The basic income then becomes very rapidly a simple wage subsidy or an open door to ‘mini jobs’.  Can this be a progressive solution?

A last point on which van Parijs does not touch but one that is very important, is that our current social protection, however imperfect, is based on a horizontal structural solidarity of all with all.  To each according to his/her needs, from each according to his/her means. Social security was not meant to promote equality – we have a tax system for this – but it does reduce inequality all the same.  With a basic income, giving the same amount to everyone, irrespective of income or resources, means that inequality remains unchanged.

A union response

As for changing labour relationships and the growing precariat, it sounds rather cynical to me to accept this state of affairs and try to solve it with a basic income.  What the workers’ movement has done in the past is organize the struggle for decent wages and working conditions.  Progressives can never be happy with the current state of affairs and the dismantlement of social and economic rights.

After the Second World War, the ILO was able to issue its ‘Declaration of Philadelphia’.  In it, member states declared that ‘labour is not a commodity’.  And indeed, thanks to social struggles and the then emerging welfare states, the power relations between labour and capital changed.  Sure, the existence of the socialist threat in Eastern Europe helped.  But there is no reason why we should accept the further weakening of rights and of workers’ movements.

Our social protection systems surely have to be adapted to the needs of people in the 21st century.  We should not believe we can carry on as before.  The advocates of basic income rightly point to the many problems we are faced with.  But there is more than one answer and I do not think basic income is the best, since it depoliticizes social protection.  Or the only one.  We should be able to re-think social protection, strengthen and broaden it, and most of all, involve all people and not just workers.

The division between social security and social assistance should be abandoned, the dichotomy between re-productive and productive work should disappear.  Our rights are individual and universal, whereas we should be able to also protect our societies.  I want to plead for social ‘commons’, a democratic and participatory system in which people can become, once again, social and political actors, emancipated people who know what they are fighting for.

If people want to introduce a system to share the world’s wealth, which seems to be van Parijs’ objective, they can try to do so.  But it is wrong to see this as an alternative to social protection.  Tens of thousands of people have been marching in France these past weeks to defend their labour rights.  Progressives should listen to them.


Francine Mestrum has a PhD in social sciences.  She is a researcher and activist on social development, and coordinates the network of Global Social Justice.  She has worked at different European institutions and at the universities of Brussels (ULB), Antwerp and Ghent.

 

 

 

 

23 Comments

  1. I am not sure about the author’s arguments. Obviously it’s a good discussion to have. I have long felt that a guaranteed annual income is a good idea. It certainly is if everyone is going to support it. That makes it a solution, however imperfect, we don’t have at present. At present, we have poverty. And as Murray Dobbin notes, that translates into political weakness. The economically poor are also the politically poor, especially in the voter suppression region of the US.

    Maybe we could propose that politicians implement a guaranteed income scheme, means tested and not universal, but that take a kind of politician you rarely see. Afterall, the system is essentially organized crime. Don’t take my word for it. Give Matt Taibbi’s “Griftopia” a read. Griftopia, mafia capitalism – same thing. Peter Dale Scott makes the oint as well in “Deep Politics And The Death Of JFK.” Chomsky and others state clearly that the only capitalism happening is neoliberal capitalism. What is neoliberalism about? Inequality, something that gangster politicians, conveniently, like. That’s also why so many of them are neocons. Neocons (loons) are down with inequality, conflict and slavery. Neoliberalism is their cup of tea. In the political realm, gangster politicians, as Chomsky notes, follow mafia principles (specifically in the area of foreign policy). In other words, Our benefactors in power are of no benefit to us, the law-abiding 99%. But there they are, helping themselves and their friends to rob us via socialism for the rich (taxes for powerful special interesrs like the miic) and very unfair taxation. Expecting them to care enough to honestly administer a non universal, means-tested guaranteed annual income might be expecting too much.

    My understanding is that activists support universal both because it would be fair (which they are wrong about) and, most importantly, it would not be politically saleable otherwise. Actally, with gangster politicians in charge, they are right. Activists choosing to pretend that the wild beast is a mild beast aren’t helping. We need what we can’t have while the wild beast of corporatocracy lives, namely political leaders who are actually in solidarity with the law-abiding and the 99%. Until then, anything we get will better than nothing I suppose.

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  2. Jen says

    I think the issues behind Mestrum’s argument that we have missed iare how a universal basic income in a single country will be funded, in a way that discourages or prevents the rich from shoving unearned income into tax havens, and whether having a UBI will eliminate social and economic inequalities, and encourage industrial democracy within workplaces.

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  3. Had the writer seriously checked the arguments of the groups which proposes and supports basic-income? Obviously not. Instead, the writer shifts the focus on how social-security and work within it, putting in a lot ifs and whens said groups already had answered and explained. Since Ms. Mostrum is a PhD I doubt her to be really uninformed and, instead, I suggest she purposedly puts the focus where it would support the actual situation of social-security, with all those social-workers, sticking to the current status-quo; or in short: supporting exactly the opposite of any progressive approach.

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  4. To worry about the rich getting a basic income is to trivialise the idea. The idea is to stimulate economies. Only by making sure people have money to spend can our economies function effectively. Whether the rich have an extra couple of hundred quid to spend each month really makes no difference, as they don’t form a big enough proportion of the population to make any real difference. One thing is certain, they’re not going to spend any extra income on buying an extra couple of hundred loaves of bread each month, and it’s things like bread that makes basic economies function, not overpriced antiques, vintage champagne and Rolls Royces. The more stuff sold, the more jobs created. This becomes even more important with the robotisation of all industries, as robots don’t spend money. But the products robots make do have to sell, which can’t happen unless people have money.

    The problem is that most people can’t get their heads around the massive structural changes that will be required for the future. A basic income maybe not be a panacea for all the ills that are about to come down on heads, but it is a good example of the new ways of thinking that are urgently needed to prevent the global economy being sucked into the giant black hole just around the corner.

    As far as the rich are concerned, much-needed higher taxation would nullify any gains made by them receiving a basic income. But we need to go much futher than that. The best way to stop the massive seepage of cash from the global economy simply to waste away in off-shore accounts is to allow the practice to continue, while imposing one condition. Once the money has been removed from the global economy it must never be allowed back. In effect, it will lose any value it had simply because there are only so many things you can buy in a fiscal paradise. Mountain ranges of cash become meaningless if there’s nothing to spend them on. Such a simple move will allow the issuing of currency against that has been removed, which amounts to trillions.

    Money has no value in itself; it only oils the economy machine. As with real machinery, without enough ‘oil’ seizure occurs. That is precisely the point we are at now, economies are seizing up because of lack of real investment by an tiny elite of extremely wealthy and extremely mean hoarders. But there is one major difference between oil and money, money only has value if we believe in it; something the rich are very well aware of. The reason they’re investing so heavily in property and other hard assets is that they no longer believe in money. We have to act now. Basic income for all will help for a time, though, ultimately, we have to think of completely new ways of creating healthy economies for the benefit of all.

    Liked by 1 person

  5. Much better socially and economically to have a government jobs guarantee.

    Full employment should be the goal.

    UBI solves no problems and creates many.

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    • bevin says

      I’m not sure that full employment is the answer. It is certainly better than the current neo-liberalism but it would need to be re defined in terms of a shorter work week.
      The truth is that work is often a very bad thing and an evil only tolerated because the alternative is humiliation if not starvation. We should embrace the possibilities that liberating millions from useless alienated toil and allowing their minds and energies full play would open up.

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      • Society is based on the notion of reciprocity. Also, people want to work.

        Just look at how people perceive the unemployed now. And that’s paying them barely subsistence level income.

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        • bevin says

          I know that people, generally want to work, which is why many would love to be liberated from the mindless time wasting that most ‘jobs’ involve. Then they could get down to real work, and society would benefit enormously as stockbrokers and security guards became smallholders and naturalists, PR men went straight and propagandists taught yoga.

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  6. Jen says

    I should think that in Belgium where Francine Mestrum works, there is already a system of welfare based on universality : it would be the system of health care provided by the state, usually in a combination of publicly owned and funded and privately owned and funded medical clinics, hospitals and other related services.

    Of course as in most other Western countries, the government would be tinkering with the details of the system, usually in ways to cut costs and at the same time shoving most people into private health insurance and using private health providers. Over time, gradually privatising the whole system will reduce the quality of health care and most people’s access to it. But the basic principles of public health provision – and above all, making public healthcare available to everyone, not just the needy (because by including the very wealthy as well as the very poor, the quality of service can be maintained) – are still worthwhile, otherwise people wouldn’t fight for them.

    Public education at primary and secondary level is also an example of a form of welfare based on universality. Again, most Western countries have a mix of private and public schools, and again governments are attempting to privatise more of the public education sector for the same reasons they are trying to privatise the public health sector. But it is arguable that countries might benefit more if all primary and secondary education were 100% public or close. This is the situation in Finland and that nation’s education system has become the envy of much of the Western world because of its recent PISA results in reading, science and mathematics. Likewise most school students in Japan attend public schools and no-one complains about mediocre standards in Japanese education.

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  7. What a load of bollocks article – Francine Mestrum clearly doesn’t understand universality.

    The point of giving benefits to everybody is that it presents a feeling of unity within the people of a nation.

    reciving a financial bonus from the government, even if it’s small feels good, right? Would wouldn’t like a cheque for 100 quid coming through the door, right? Well that’s what benefits for the non-poor are.

    Well, you could say, why don’t you just charge them £100 less tax. Simple because people think that money that they get to keep is money that they earned, if you reduce their tax burden they won’t say “oh thank you government” will they, they say “too bloody right, it’s my money”

    However a cheque for a few 100 quid feels good, it makes you feel conected to a system that cares from a government and it reminds you that should anything happen to you like you lose your job or have a terrible accident then someone is there to help you – you know there is a safely net and you get on with your life and enjoy yourself.

    See, even if you don’t need the money everyone benefits. Everyone Benefits – UNIVERSAL BENEFIT. It promotes a sense of community a sense of fair play and a sense of kindness. And it worked extremely well in Britain and Holland and Finland and Scandinavia for many many years.

    And that is why the very first benefit David Cameron removed was child benefit, he did it first by stirring up resentment in the poor by saying to them, why should Mrs Ponsonby-Smyth get child benefit which she spends of Lattes when you need it for food. And then once he’s removed it from middle and high owners he said to them why should she at the bottom get it when you don’t – you’re paying for that. He broke the social contract that feeling of peace and togetherness and so the seeds of a great resentment which now is dragging the country under. Why did he do that? Because he has resentment in his heart as do most of these foul elite types. Why? Because resentment is beaten on to them at their top schools, it’s a constant cycle of abuse – and we won’t stop it until those schools are closed down.

    If Francine Mestrum can’t get her head around that then she has fallen victim to the neoliberal class divide that David Cameron is so good at amplifying.

    Liked by 2 people

    • David Cameron’s (or Hillary Clinton’s or Warren Buffet’s) receiving a Basic Income will foster “a feeling of unity within the people of a nation”?

      I think that expectation greatly underestimates the intelligence of the majority of people within any nation….

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      • Providing Healthcare free at the point of delivery irrespective of income doesn’t foster “a feeling of unity within the people of a nation”? Do you really think the intelligence of the majority of people within any nation is insulted by the fact that David Cameron is entitled to NHS provision? Unity is fostered by the people you live with, work with, play with, travel with – means testing will merely divide those people into the deserving and undeserving poor.

        Liked by 1 person

        • What? Both you and Vaska seem to be completely wrapped up in your own anger towards a very bad politician who happens to be in power at the moment. David Cameron broke the social contract – that’s why you hate him. As for the intelligence of the nation, sorry but most people don’t think about politics the way you and I do, I

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          • O Lucky Man! says

            Shatnersrug, you’ve misread reallyoldhippy, he is disagreeing with Vaska and agreeing with you – all part of the fun and games of comment section soundbites….

            I would agree with you as well about this – stated clearly just to avoid the same fate 😉

            The last thing elite groups want in society is the freedom the ordinary man would be granted by this universality. Just to mention one possibility, student (or just young adult) life could make steps back towards some kind of semblance of how it used to be, a real opportunity to explore and open up to the wider world of ideas, rather than the current rat-run of meaningless part-time jobs and debt burden that shunts you spirit-neutered into the land of career/system/empire conformity. This relative freedom was an aspect of society that allowed new social and cultural (to name just two) ideas to blossom and challenge the status quo.

            I’m not putting rose tinted glasses on here, it’s no panacea, but it frees people up at a certain level entirely in my view, and yes universality is key, it is easily observable that hierarchy does simply act to divide and stir resentment. In a wider sense the whole money system is of course corrupt beyond repair. This kind of change would simply be a small step towards something much bigger that needs to be done to take apart the whole scam that it has become. It’s not a solution, but a move in the right direction that would help to start creating conditions to seed change.

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            • I have the worst stinking cold and a wisdom tooth coming through, so apologies for getting confused and grumpy.

              I’d like to say that I totally admire and respect Vaska for all she does in setting up and running this site btw even if we don’t agree on this subject

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      • Yours and my anger towards members of the elite who break the social contract is besides the point the point of universality is to propagate the social contract and which is why no politician would ever go near it until th Etonians got in.

        Class resentment, mistrust fear and loathing are tools of social control.

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      • I’m sorry Vaska, but you’re wrong on that, Britain worked extremely well with a universal benefits system coupled with extremely high taxation for the mega rich it meant that those at the top could never get that far away from those at the bottom, and with that we all shared things like free health care, unemployment benefits etc it was a workable system, and frankly no ones come up with a better one.

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      • bevin says

        It will make life easier for them when they are out of work and their wealth subjected to a proper tax. I don’t begrudge it them at all.

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    • The rightwing idea of fairness is screwy. Say your a father with two young children. One has a cold. Do you treat them both the same and do nothing to address the symptoms of the child with the cold? Or do you give them both cold medecine or extra care? Or do you keep the sick child home from school for a few days, make sure she’s warm and gets lots of rest? Which response is fair?

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