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Citizen's
Income Newsletter,
issue
2,
2001
Contents
Editorial
Main article:
Why does Basic Income thrill the Finns, but not the Swedes?
Jan Otto Andersson
News
Reviews
Events
Citizen's Income Newsletter
ISSN 1464-7354
Citizen's Income Trust
P.O. Box 26586
London SE3 7WY
Tel: +44 (0) 20 8305 1222
Fax: +44 (0) 20 8305 1802
Email: citizens-income@lse.ac.uk
Website: www.citizensincome.org
Director: Malcolm Torry
This issue of the newsletter edited by Duncan Burbidge and Malcolm
Torry
Evelyn McEwen
We are sorry to have to announce the death of Evelyn McEwen, Chair
of Trustees of the Citizen's Income Trust. An obituary will appear
in the next edition of the newsletter.
Apologies:
In April of this year the Citizens Income Trust sent a number
of invoices to people and organizations to which they should not
have been sent. The Trust would like to apologise for this mistake.
It would also appear that some people and organizations who have
paid subscriptions have not received the first edition of the
newsletter for 2001. If you have paid a subscription and have
not received your copy then please let us know.
Editorial
The world is changing.
In an article titled "Whatever happens, the process will
be painful" (The Guardian, Monday 2nd July 2001), Larry Elliott
discusses whether or not we should regard the technological changes
we have seen this century as constituting a fifth 'Kondratiev
wave', and precisely where we might be within that wave. He concludes
that "as far as organizational changes - to work patterns,
to politics, to institutions, to ways of thinking about problems
- are concerned, we have yet to make a start. That, more than
anything else, is the reason the birth-pangs of the fifth Kondratiev
wave look like being long and painful."
The political world is changing.
For the first time, we have a Labour government with a second
full term ahead of it. This offers the possibility, though by
no means the certainty, that the government will take the opportunity
to seek radical solutions to long-standing problems - solutions
which draw on a variety of elements within the party's heritage.
And regular readers will realize from the side panel that a few
things have changed at the Citizen's Income Trust. Stuart Duffin,
Carolyn Armstrong and Duncan Burbidge have all left the Trust's
employment, and we would like to thank them for the work they
have done for the Trust - in Carolyn Armstrong's case, for over
ten years; and the office at the London School of Economics has
closed (though the email address remains the same for the time
being). The Joseph Rowntree Charitable Trust has been funding
the Trust for nearly ten years, and we would like to thank them
for their generosity. That funding has now come to an end.
Malcolm Torry (who was Director of the Trust in the early 1990s)
has been appointed the new Director, the office has relocated,
and a draft strategy for the next five years is being discussed
(further details in the next issue).
What has not changed is the definition of a Citizen's Income:
it is an unconditional, non-withdrawable income payable to each
individual as a right of citizenship. And what has not changed
is the Citizen's Income Trust's commitment to the promotion of
debate on the feasibility of a citizen's income.
Main article
Why does Basic Income thrill the Finns, but not the Swedes?
By Jan Otto Andersson
Basic income is a fascinating idea. People tend to react strongly,
either looking upon it as a pivotal liberating device or showing
open disregard for it. In two of the Scandinavian countries -
Denmark and Finland - the idea of an unconditional basic income
has received much attention. However, in Sweden and Norway it
has almost been a non-issue. To compare the theoretical and political
debates in Finland and Sweden is therefore a means to look at
the differences between these two closely related societies.
The term most widely used in the Scandinavian countries is 'citizen's
wage' (medborgarlön, kansalaispalkka). In Finland the terms
'basic income' (grundinkomst, perustulo) and 'citizen's income'
(medborgarinkomst, kansalaistulo) have also received a wide circulation.
To use the term 'citizen's wage' adds to the provocation. How
can you speak of a 'wage' when you automatically receive a sum
of money even though you do not work or even do not pretend to
work! The reason given by the supporters - like Erik Christensen
from Denmark in a recent fascinating study (the title in English
would be "Citizen's Wage. Stories about a Political Idea")
- is that they want to alter the dominant work concept. A citizen's
wage can be viewed as a compensation for all the unpaid but socially
necessary activities contributed by citizens.
In a speech to the unemployed a similar view was expressed by
the then Archbishop of Finland, John Vikström:
"A basic income would send every citizen the following encouraging
and motivating message: You are important. You are not a burden,
but a resource. You are important by being a human being for others.
Whatever work you do, in whatever situations, whether or not you
are paid to do it, you still contribute to building our society."
The provocative term has also made it possible for the opponents
to use it in a derogatory way: "Work or Citizen's Wage?"
is the title of a report presented by the Confederation of Finnish
Industry and Employers, although it did not relate to any genuine
proposal for a basic income.
The differences between Swedish and Finnish basic income debates
can be seen both in the intellectual debates and in the activities
of the political parties. Another telling difference is that at
the biannual meetings of the Basic Income European Network (BIEN)
the participation from Finland has been regular, whereas Swedish
representation has been almost negligible.
Lack of enthusiasm in Sweden
Three authors have actively proposed some version of a basic income
in Sweden: Gunnar Adler-Karlsson at the end of the 1970s, Thomas
Ehrenberg ten years later, and Lars Ekstrand in the 1990s. Both
Ehrenberg and Ekstrand wrote as if the idea had never been introduced
in Sweden before.
It is telling of the political climate in Sweden that Adler-Karlsson
had to accept a change of the title of his book from No to full
employment. Yes to a material basic security to the less offensive
Thoughts on full employment. In the Danish edition the original
title was used.
All three proposals were put forward in a futuristic and utopian
manner. They saw a citizen's wage (CW) as a means to radically
transform society, but were relatively short in the analysis of
which trends and forces would actually work in favour of their
visions. Adler-Karlsson's and Ekstrand's ideas did receive some
attention, but they were generally dismissed. I have found no
response to Ehrenberg's book.
As headlines such as "He dreams of a citizen's wage"
and "The apostle of laziness provokes" indicate, the
reception of Ekstrand's books was not enthusiastic. His views
were criticised by a leading authority on social policy, Gunnar
Wetterberg, head of the powerful central organisation for the
municipalities. Wetterberg called the idea "the triumph of
resignation". In another article Wetterberg repeated his
critique under the ominous heading "A citizen's wage would
feed the underworld".
In Sweden the only political party that has been seriously interested
in a CW is the Green party, Miljöpartiet. In 1997 Eva Goës
asked the government to make an official report on the question.
The Social Democrats have been the main defenders of the existing
system, based on the idea of full employment and a general system
of income-related social security. The Left party has also discarded
the CW idea, but it has asked for substantial reductions in working
time as an alternative.
The three parties of the centre - Folkpartiet, Centerpartiet and
Kristdemokraterna - have all stressed the need for a basic security
(grundtrygghet), but they have not accepted deviations from means-testing.
The conservatives, Moderaterna, favour a "general and individual"
system based on a clear correspondence between contributions and
benefits plus strict means-testing for those with special problems.
Broad debate in Finland
In Finland both the public debate and the interest of the political
parties have been much broader than in Sweden. During the 1980s
and 1990s CW and BI proposals proliferated, and four parties,
representing some 40 per cent of the voters - the Centre party,
the Left Alliance, the Greens and the Young Finns - accepted the
idea in their political programmes. I shall mention a few examples
in order to illuminate the Finnish situation.
In 1988 Olli Rehn (from the Centre party) and David Pemberton
(from the Green party) took the initiative in creating a group
which would discuss and promote the idea of a basic income. The
group was chaired by Eva Kuuskoski-Vikatmaa, a leading personality
in the Centre Party and a long-time minister of Social and Health
Affairs. The group included representatives from most political
parties. Its secretary, Ilpo Lahtinen, wrote a book which reflected
the ideas discussed in the group. He proposed the introduction
of a partial basic income along lines suggested by Hermione Parker
in the UK. However, the book appeared at a most unfortunate time;
the Finnish economy was in the midst of a depressionary spiral,
and there was little interest for large reforms or costly improvements.
The now minister of Social Affairs Osmo Soininvaara (representing
the Greens) has been an untiring champion of basic income. Since
the end of the 1970s he has elaborated the idea in several books
and reports. Hyvinvointivaltion eloonjäämisoppi (A survival
doctrine for the welfare state) was awarded a prize as the best
economics book of the year 1994. Here Soininvaara continued the
discussion on basic income in a concrete and detailed way. It
was based on two reports written by the author for the Ministry
of Social and Health Affairs. The base of his scheme was a basic
income (perustulo) differentiated for household composition. The
income tax rate would be 53%. The author proposed two types of
conditional "extra allowances" (lisätuki) to supplement
the basic income for special contingencies. His arguments had,
however, changed if compared to his original ideas. He was now
interested in creating a system that would induce everyone to
contribute as much as possible to the national economy, and explicitly
criticised those who wanted a CW in order to make work voluntary.
In a recent academic study, Kansalaistulo sosiaalipoliittisena
muutoksena (Citizen's income as a change in social policy), Anita
Mattila compares nine different Finnish schemes. Her references
- which, with few exceptions, relates to the Finnish debate -
occupy no fewer than 18 pages.
The most explicit critics of a basic income in Finland have been
the employers' organisation (STK, later TT) and the national trade
union organisation (SAK). Both were critical towards the report
made by an official working group on social security in 1986.
STK interpreteted the suggested income guarantee as a citizen's
wage, since it was not conditional on willingness to work. The
organisation ridiculed the idea that there would be any mass unemployment
in the future and was afraid that it would become difficult to
get people willing to work. They asked for a more selective social
policy instead. According to SAK the report had to be remade from
a completely different premise. Social security should encourage
people to work and promote full employment.
In 1994 SAK published a report on basic income. The title Mikä
ihmeen perustulo? is perhaps best translated as "What on
earth is basic income?", which reflects the disapproval of
the idea. According to the report, full employment could be restored
through rapid and sustained economic growth, through reductions
in working time and work sharing, and through better education
and training. If a basic income scheme were introduced society
would develop towards a low-wage-low-skill society, a 'boot-cleaner
society'.
Differences between Sweden and Finland
There are two relatively obvious reasons why the interest for
basic income has differed between Finland and Sweden. The first
relates to the hegemony of the Swedish Social Democratic party
and the second to the relative success of the Swedish welfare
state.
The party most consistently opposed to any basic income proposal
both in Finland and in Sweden has been the Social Democrats. Both
SAP in Sweden and SDP in Finland have seen basic income as a break
with two fundamental principles: the "work principle"
and the "income maintenance principle". The electoral
support of the Finnish SDP has been only about half of its Swedish
counterpart SAP. SDP has therefore always been compelled to form
coalition governments, whereas SAP has been able to govern alone
for most of the time since the 1930s. In Finland the Centre Party
has been as strong as the Social Democrats, and the Left Alliance
has competed on a more equal footing. Both the Centre Party and
the LA have traditionally tended to support universal benefits.
The other obvious reason for the different receptions of the basic
income idea is that the Swedish welfare state is older and more
sacrosanct than the Finnish, and that Sweden - until recently
- has not been plagued by mass unemployment. Levels of benefits
are generally higher in Sweden. They are also more strongly related
to the income maintenance principle - the "standard social
security". Income-related unemployment benefits - administered
by the trade unions - have covered about 85% of the earlier gross
incomes. In Finland the corresponding figure is 60%. The daily
allowance for the uninsured has also been more generous in Sweden.
It would, therefore, be relatively more costly to change the Swedish
system into a pure basic income system.
Sweden was able to avoid open mass unemployment until the beginning
of the 1990s. This was achieved by careful macroeconomic policies,
by active labour market policies and by a rapid growth of the
public service sector. In Finland mass unemployment appeared in
1976. It was gradually reduced towards the end of the 1980s, but
from 1991 onwards, mass unemployment has been the principal scourge
of the Finnish economy. Despite seven years of rapid economic
growth the rate of unemployment is still some 10%. Unemployment
in Sweden has not been eradicated, but it is only about half that
of Finland.
One reason why basic income has created more interest in Finland
may relate to a difference in national character. According to
experts on culture there is a clear difference. In Sweden it is
necessary to be part of and receive support from the collective.
No decisions are taken without long discussions and an emerging
consensus. In Finland leadership styles are more individualistic.
You are allowed to be somewhat idiosyncratic and to change your
opinions without engaging in long discussions. Finns are thrilled
by new technical solutions and they are not so afraid of sudden
changes. The Swedes seem to be more pragmatic and cautious.
Basic income is probably most welcomed in a society which is both
individualistic and solidaristic at the same time. There must
be a very special combination of values which allows citizens
to make unconventional choices at the same time as their basic
economic security is guaranteed by the state.
Jan Otto Andersson is Reader in International Economics and research
director at the Department of Economics and Statistics at Åbo
Akademi University, Turku. He has been an active participant in
the discussions on basic income, and was a founding member of
BIEN, the Basic Income European Network.
News
Canada: Jean Chrétien is considering the creation of
a cradle-to-grave guaranteed income programme.
The Prime Minister of Canada is reportedly preparing to assemble
a high-level committee to determine the feasibility of a lifetime
guaranteed annual income programme. One name being touted to lead
the committee is Ian Green, the deputy secretary to the Cabinet.
Top-level Liberals said yesterday they expect the initiative to
feature prominently in the upcoming Throne Speech, expected in
mid-February. Sources say little is known about whether significant
new funds would be drawn from the government's ballooning budget
surplus or when the program might be put in place. The minimum-income
supplement would be developed by merging all or parts of the federal
child benefit, welfare, employment insurance and old age pension
programs.
Officials at Human Resources Development Canada (HRDC) have said
that the department plans to undertake a full review of all its
current income programmes and create an inventory of how much
gets spent in each of the regions. They admitt the federal government
is aware that any plan of this sort would be likely to raise concerns
in some provinces and that significant 'horse trading' of powers
will be required. Provinces usually view new social initiatives
with considerable suspicion, complaining that the government creates
new programs and then withdraws funding once the programmes are
up and running. In this case, the provinces would be likely to
demand a guarantee of perpetual funding.
Creating such a program would allow Mr. Chrétien to fulfil
a number of his campaign promises, notably attacking child poverty
and restoring funding to social programs. More importantly for
Mr. Chrétien, a guaranteed income programme would provide
him with a political legacy to rival Pierre Trudeau's repatriation
of the Constitution or Brian Mulroney's North American Free Trade
Agreement. People close to the Prime Minister said he was deeply
moved by the public outpouring of emotion at Mr. Trudeau's death
and the reverence for what he had built.
Mr. Chrétien has suggested that his goal for the new Parliament
will be to wage war on poverty. "The fact is that our prosperity
is not shared by all," the Prime Minister said in his keynote
address at the Liberal party's Confederation Dinner. "There
remain, unfortunately, serious social problems in the land. Too
many children live in poverty. Too many aboriginal Canadians live
in Third World conditions. As a Liberal, I deeply believe that
government has the responsibility to promote social justice."
While Mr. Chrétien's interest in it is new, the concept
of a national guaranteed income is not. It was originally espoused
by the economist Milton Friedman as early as 1962 and, at the
urging of the New Democrats, was examined by the Liberal government
of Lester B. Pearson, in whose Cabinet Mr. Chrétien first
served. It again saw life in 1971 when it was openly championed
by Trudeau-era Cabinet heavyweight Marc Lalonde, who at the time
was Minister of Health and Welfare, in a report titled Federal
Income Security Protection. The idea was hotly debated, but was
never embraced by Mr. Trudeau and was eventually shelved.
The idea was resurrected during the 1993 election campaign when
the Reform Party added it to its platform as a way of streamlining
Canada's convoluted income-security programs. It was then considered
as part of the social security reform undertaken by the Chrétien
government in its first term, but was ignored because it was seen
as potentially too expensive during a period of deficit-cutting.
As the deficit was pared down, the idea again caught the attention
of then-HRDC deputy minister Mel Cappe, who is now Clerk of the
Privy Council and Ottawa's most influential bureaucrat. Ian Green,
a former executive assistant to prime minister Joe Clark, was
an associate deputy minister under Mr. Cappe at Human Resources
Development Canada and is considered one of Mr. Cappe's most reliable
and trusted deputies. He moved over to the Privy Council Office
in 1998, a year before Mr. Cappe became the country's top public
servant.
France: A decisive step towards a negative income tax ?
Along with a number of other countries across Europe, France is
considering a reduction of its income taxes. However, only about
one half of French households currently pay income tax, which
implies that only the comparatively rich half of the population
would benefit from the tax cut. For any European government, and
especially a red-green government, this makes such a measure hard
to sell. To make it acceptable, the government tried to couple
it with a reduction of the generalised social security contributions
(contribution sociale généralisée: CSG) on
the lower layers of income, which would benefit the low-paid workers.
But France's supreme court (Conseil constitutionnel) turned down
this option on 19 December 2000, mainly on the ground that it
involved a discrimination among similarly situated households
and therefore violated the principle of equality before the tax
system. Some, including the social affairs minister Elizabeth
Guigou, then proposed to increase the minimum wage, while offsetting
the cost for the employers of low-paid workers through selective
cuts in their social security contributions. But a majority emerged
in favour of using a more straightforward method to boost the
disposable incomes of low-income households: to design the tax
cut in the form of a refundable tax credit. As the idea smells,
in the French context, of market-liberal ideology, a consensus
was not easy to reach. But by early January the Prime Minister
and Finance Minister became convinced that this was the way to
go, and on 11 January 2001 Le Monde's main headline was: "Lionel
Jospin endorses the tax credit".
The following day's issue of the same newspaper carried, under
the title "Tax credit: don't be shy, comrades!", a characteristically
crisp article by former Prime Minister Michel Rocard (also chairman
of the social affairs commission of the European Parliament and
one of the keynote speakers at BIEN's Berlin congress). He rejoiced
in the fact that the proportionality and hence the yield of the
CSG (introduced by the government he headed) was not affected,
and urged that the existing guaranteed minimum income scheme (Revenue
Minimum d'Insertion: RMI), which his government also introduced,
should evolve into a refundable tax credit of the negative-income-tax
type, such as the "allocation compensatrice de revenu"
recently proposed by the Rocard supporter Roger Godino. "The
replacement of all that [the RMI and other assistance schemes
with a flavour of charity] by a single principle, applicable to
rich and poor alike, designed so as to provide people with work
incentives and to prevent them from being trapped in non-work
situations, is something that looks far more impressive and that
corresponds far more to a leftish conception of the relationship
between income, taxation and work." But what about the idea's
suspicious pedigree, in particular its association with Milton
Friedman, the founder of monetarism, "which causes inequalities
to expand exponentially and many countries to be locked in underdevelopment"?
Rocard suggests that we've got this system, whether we wish it
or not. "Why then refuse the instrument for dampening human
suffering which Friedman himself had seen fit to append to the
system, as he understood the social cruelty of what he was proposing?
It would beat it all to take the worst and leave behind the best."
(Le Monde, 12.01.01)
From the information made available by the Finance Ministry, however,
it seems clear that the French version of the refundable tax credit
will not be integrated with either the RMI nor the tax reductions
for higher earners and will be similar to the American Earned
Income Tax Credit (EITC) or the British Working Families Tax Credit
(WFTC), rather than to a straight negative income tax, though
it would be more general from the start as it would not be restricted
to families with children. In the case of a single person, for
example, once the new scheme is fully in place (2003), the credit
would start at a level of about 2000 Euros annually for earnings
at 30% of the minimum wage, reach a maximum of nearly 7000 Euros
at the level of the minimum wage (about 850 Euros per month) and
be phased out gradually until it vanishes at 140% of the minimum
wage. Because of the refundable nature of the tax credit, this
is no doubt an important and unprecedented step in the direction
of a negative income tax and, beyond, of a universal basic income,
though more modest, for example, than the Netherlands' 2000 tax
reform.
Ireland: The Conference of Religious of Ireland Justice Commission
welcomes interest in a Basic Income
The Conference of Religious of Ireland's (CORI) Justice Commission
has welcomed the Final Report of the Irish Government's Working
Group on Basic Income. In particular it has welcomed the fact
that the Report vindicates the Commission's claim that a basic
income system would have a far more positive impact on reducing
poverty than the present tax and welfare systems.
The Economic and Social Research Insitute's (ESRI) study done
for the Working Group found that a basic income system would have
a substantial impact on the distribution of income in Ireland
in that, compared with the present tax and welfare system it would:
i) improve the incomes of 70% of households in the bottom four
deciles (i.e. the four tenths of the population with lowest incomes)
and ii) raise above this poverty line half of the individuals
who would be below the 40% poverty line under 'conventional' options.
According to the Report, these impacts would be achieved without
any resources additional to those available to 'conventional'
options.
The Working Group's Report also found that the tax rate (including
Pay Related Social Insurance (PRSI) replacement) required to fund
basic income, based on January 1999 estimates, would be 47%. Since
then the economy has grown significantly and the revised rate,
based on Revenue Commissioners' estimates of the tax base, is
42.7%.
This shows that a basic income system is far more effective at
tackling poverty and should form part of a comprehensive strategy
to eliminate income poverty totally in the years immediately ahead.
The Justice Commission says: "Government should now honour
its commitment to publish a Green Paper on Basic Income. Implementation
of this commitment has been delayed pending receipt of this Working
Group's Report. Now that its results are available it should be
relatively easy for Government to publish its long-promised Green
Paper. The Report should also be considered by the National Economic
and Social Council (NESC) as it prepares its study on the medium-term
development of the tax and welfare systems. This study was promised
as part of the new national agreement, The Programme for Prosperity
and Fairness (PPF)."
Looking at the 'losers' identified in the Report, there are two
key issues that need to be borne in mind, according to the commission:
Over a three-year implementation period of a basic income system
all the 'losers' would be better off than they are at present.
They would simply not gain as much under basic income as they
would under the present system; and the 'losers' in the bottom
four deciles identified in the Report could be easily targeted
and compensated through the Social Solidarity Fund which forms
part of the basic income structure.
On the macro-economic aspects the Report itself acknowledges that
the findings are very tentative, speculative and hard to quantify.
However, CORI welcomes the Report's conclusion that a basic income
system could encourage some people to move from the unofficial
economy into regular employment.
For the CORI Justice Commission the critical test of any tax and
welfare system is its impact on people with lower incomes. While
many poor people have benefited from developments of recent years,
especially through employment, the fact remains that the gap between
poor people and the rest of society has been widened over the
past twelve years. While the proportion of the population described
as "consistently poor" has been declining the percentage
of households and persons below every income poverty line measured
by the ESRI is higher now than it was in 1987. The commission
believes that this situation must be reversed immediately and
that the introduction of a Basic Income system would have an immediate
and positive impact on those most in need in Irish society. As
the commission says: "The choice between a basic income system
and 'conventional' tax/welfare options is a trade off between
greater equity and a risk of lower economic growth versus less
equity and less risk to higher economic growth. At a time when
so much concern is expressed about the country's growth rate being
unsustainable, the argument in favour of introducing a Basic Income
system is further strengthened."
CORI is a Social Partner and was one of the organisations that
negotiated and signed the last two national agreements, i.e. Partnership
2000 and the Programme for Prosperity and Fairness. It represents
more than 135 religious congregations with 12,000 members in 1,400
communities throughout Ireland. For further details see the Justice
Commission's website at www.cori.ie/justice/index.html.
The UK: A discussion of values at the Christian Socialist Movement's
'Faith in Politics' conference
On 29 March the Christian Socialist Movement held a conference
entitled 'Faith in Politics'. In his address, Tony Blair discussed
the three 'values' which motivate his politics: the 'equal worth'
of every human being; 'community'; and 'responsibility' - with
'responsibility' being of society towards individuals as well
of individuals towards society.
Many policy areas were discussed at the conference, and particularly
the New Deal. The structure of benefits and taxation was not discussed
(as it usually isn't) - but if it had been then the three values
which motivated the Prime Minister and the faith leaders present
would have led them inexorably towards an approach to reform based
on universal benefits rather than on a means-tested one.
The UK: BBC's Question Time
In the context of a discussion of women's changing employment
patterns, the benefits of a citizen's income scheme got a thorough
airing on the BBC's Question Time programme on 15 March. Comment
from two panel members, Tommy Sherridan, a member of the Scottish
Parliament, and Malcolm Bruce, Chairman of the Scottish Liberal
Party, was positive, and the subsequent discussion was overwhelmingly
positive, particularly in relation to the contribution which a
citizen's income would make to the kind of social security system
we're going to need in a more flexible labour market.
The USA: The Radical Middle Newsletter reports on a Basic
Income option
Under the headline, 'Maybe the election will shame us into sharing
our wealth,' the September / October 2000 issue of the Radical
Middle Newsletter (edited by Mark Satin) reported on six new proposals
for the redistribution of income and wealth, including the basic
income guarantee. Here are excerpts:
"For the first time in four decades, Americans have been
talking about how to intelligently share their wealth. . . . At
least six such ideas are ready to fly . . . if their champions
can get them off the ground. . . .
"The guaranteed income was a hot new idea in the 1960s, assiduously
promoted by Robert Theobald and other young turks. But it never
went anywhere. Today's basic income proponents are more market-friendly
than most of their Sixties counterparts. And they're using arguments
that are more pragmatic (even their term-of-choice, 'basic income,'
is less incendiary than the term 'guaranteed income').
"For the last three years, Research Associate Karl Widerquist
has been doing yeoman work on the basic income at the Jerome Levy
Economics Institute in Annandale-on-Hudson, N.Y. In his policy
papers (no. 245 and no. 289 at www.levy.org), Widerquist provides
reams of evidence that "interest in [the basic income] is
again gaining" -- in part because it's seen as a poverty-precluding
mechanism. The new advocates are calling for smallish basic incomes
that would deter (or at least ease) poverty, not middle-class-like
guaranteed incomes. One typical proposal calls for a basic annual
income of $8,000 for each adult and $2,000 for each child. Another
calls for $4,000 per person.
"Perhaps the best-known member of the new generation of basic
income advocates is Philippe Van Parijs. Educated at Oxford and
Berkeley, he started working on the topic on a commune in 1977
. . . and is still working on it as a professor-activist at Louvain
University in Belgium.
"Like Widerquist, Van Parijs is long past imagining that
a basic income would turn us all into wonderful people. He's interested
in freedom, efficiency, and ecology, not in the New Person. 'The
freedom we need to be concerned with is not just the freedom to
choose among [products],' he says in his scholarly clarion call,
Real Freedom for All (1995). 'It is the freedom to choose among
the various lives one might wish to lead.'
"A good capitalist, Van Parijs thinks the basic income can
make the high-job-turnover, information age economy more efficient:
'With a basic income, individuals could go through repeated and
protracted periods [during which they learned] new skills. [And]
there would be less [need for government programs like] minimum
wage legislation.' Van Parijs also sees the basic income as fundamental
for ecologists. To the extent the basic income 'encourages simple
living,' he says, it would slow down the 'spread of significant
environmental externalities.'
"In the U.S., the Green Party supports the basic income.
Its platform calls for 'a graduated supplemental income, or a
negative income tax, that would maintain all individual adult
incomes above the poverty level, regardless of employment or marital
status' (www.gp.org)."
Other proposals discussed in the article include: (1) 'Universal
capitalism' as Kenneth Taylor calls ideas based on Louis Kelso's
original proposal for universal stock ownership. (2) The 'living
wage' movement. (3) The National Jobs for All Coalition. (4) Employer
subsidies for hiring low wage labour as proposed by Edmund Phelps
and Robert Haveman. And (5) 'Self-help accounts' or 'stakeholder
accounts,' as proposed by Bruce Akerman and others. This idea
is similar to the basic income guarantee because it includes a
universal grant, but the grant is given at key points in a person's
life rather than regularly throughout a person's life.
Satin criticizes the Basic Income Guarantee for being just a little
too radical for the Radical Middle. "On the one hand, [basic
income and universal capitalism] would give each of us maximum
freedom. On the other hand, they'd strip us of responsibility
for standing on our own two feet." He mentions the often
quoted, but questionable, criticisms of the negative income tax
experiments in the United States in the late 1970s: that it broke
up marriages and caused people to quit their jobs. But he concluded
that any of the six proposals would be vastly better than the
meagre proposals put forth by Gore and Bush during the election
campaign.
For the full text of this article go to:
http://www.radicalmiddle.com/x_wealthsharing.htm
Or see the homepage of the Radical Middle Newsletter, "thoughtful
idealism, informed hope" at:
http://www.radicalmiddle.com/index.html
The USA: A temporary Basic Income proposal is made in the New
York Times
Richard Freeman, an economist at Harvard, and Eileen Appelbaum
of the Economic Policy Institute propose sending a one-off 'prosperity
dividend' of $500 to every citizen of the United States. They
made the proposal in a piece in the New York Times on the 1st
February 2001 entitled 'Instead of a Tax Cut, Send Out Dividends.'
Freeman and Appelbaum's logic is two-fold: First, the United States
now has an enormous budget surplus and therefore it can afford
to give back the roughly $140 billion that the prosperity dividend
would cost. Second, as worries of a recession increase President
Bush has promoted his tax cut plan as a way to stimulate the economy.
Tax cuts, however, are a rather slow method to stimulate the economy.
If enacted, they probably wouldn't have much of an effect until
next year, by which time the economy may already be recovering.
The prosperity dividend could be enacted immediately; it would
have a strong stimulative effect on the economy; it would mean
most to those who have least; and it would not have long-lasting
effects on the tax code. Despite this idea's merits, it has little
chance of being adopted by the Bush administration. George W.
Bush's primary motive for his tax cut proposal does not seem to
be fiscal stimulus, but a strong desire to reduce the tax burden
on wealthy Americans.
Of course, a one-time dividend is far from a full basic income
guarantee, but the authors cite the Alaska Permanent Fund as an
inspiration, and the prosperity dividend is similar enough that
it could open up people's minds to this sort of idea.
The USA: President Bush considers a refundable child tax credit
The Caregivers' tax credit campaign has reported that making the
child tax credit refundable is now on the national agenda. The
proposal is for a refundable tax credit of $1000 per child. The
current child tax credit mostly benefits families with children
above $25,000 - those with low or no wages get little to nothing
at all. Refundability would extend the benefit to all children
in families with incomes below that level. This is not a complete
solution to income for poor people nor is it a basic income guarantee,
but $1000 makes an enormous difference if you're poor. The caregivers'
tax credit campaign urges you to contact your members of Congress
and urge them to support this legislation. For more information
see:
http://www.caregivercredit.org.
For those who are skeptical about the difference between a caregivers'
tax credit and a true basic income guarantee, it has one very
important thing in common with it: it lacks the poverty trap aspects
that made Aid to Families with Dependent Children (AFDC) so unpopular.
Also, the guaranteed income movement of the 1960s and 70s is often
spoken of as if it were a complete failure, but it led directly
to the creation of two successful government programs: Food Stamps
and the Earned Income Tax Credit (EITC). Most likely, the success
of the EITC has played a big part in making it possible for a
refundable child tax credit to enter the political agenda. Thus,
the guaranteed income movement of the 1960s is still indirectly
having a positive effect on legislation today. A small refundable
child credit now could lead to a larger one in the future and
perhaps someday to a refundable adult credit. But this is by no
means an inevitable course of events, as the British experience
of child benefit shows.
Reviews
Maurice Roche, Rik van Berkel (eds.), European Citizenship
and Social Exclusion. Ashgate: Aldershot 1997 (304 pages),
£47. Order
this book
This book has been inspired by concern for the future of social
inclusion and citizenship rights in the context of the profound
social, political and economic changes and challenges modern societies
are faced with in the 21st century. In Europe, two developments
in particular need to be considered, namely the crisis of the
'European Social Model' and national-level social citizenship
on the one hand, and integration problems in the development of
the European Union and transnational social citizenship on the
other.
This book aims to explore the potential of a variety of innovative
and inclusive policy strategies concerned with work and employment,
and relating to the roles of civil society and citizens in those
strategies. Thus it includes studies of policies concerned with
civil society's role in work and welfare policy, innovative approaches
to work and employment, urban level work and income policies,
and the basic income approach to income distribution.
The book is concerned with the current development of the European
Union and with the prospects for EU-level social policy and citizenship
policy, and it makes a contribution to debates on the medium-term
development of EU-level policies concerned with deepening the
integration of the EU by developing the general status and rights
of EU citizenship and by developing citizenship-sensitive and
rights-sensitive socio-economic policymaking.
The contribution by Bill Jordan is well worth reading.
Jens Lind, Iver Hornemann Moller (eds.), Inclusion and
Exclusion: Unemployment and Non-standard Employment in Europe.
Ashgate: Aldershot 1999 (240 pages), £41.50. Order
this book
This book discusses aspects of work in terms of social inclusion
and exclusion. It explores unemployment and non-standard employment
and evaluates social and labour-market policies and their effects
in four European countries: Denmark, the UK, the Netherlands and
Portugal. These represent the typical welfare regimes in Europe:
a Scandinavian, social-democratic model; a liberal, Anglo-Saxon
model; a corporate, 'Bismarckian' model; and a southern 'variant'.
The analyses provide a thorough insight into the variety of issues
in recent labour-market developments in the four countries and
combine this with an overview of the major schemes and programmes
designed to combat social exclusion. The book is an important
contribution to the debate on the development of a specific European
strategy on work, unemployment and social inclusion based upon
alternatives to new-liberal strategies.
A. McKay and J. Vanavery, 'Gender, Family, and Income Maintenance:
A Feminist Case for Citizen's Basic Income", in Social
Politics 7 (2), 2000, 266-284. (First author's address:
Glasgow Caledonian Univ, Dept Econ, Glasgow G4 0BA, Lanark, Scotland.)
Economist McKay and sociologist Vanavery consider proposals for
a citizen's basic income in the light of feminist arguments about
welfare and inequality. Drawing on feminist critiques of the male
breadwinner family, on lesbian and gay demands for sexual citizenship,
and on the need to develop welfare policy suitable for a 'postfamilial'
society, they argue that a citizen's basic income has the potential
to provide a basis for a truly universal citizenship.
David Nissan and Julian Le Grand, A Capital Idea. Start-up
Grants for Young People, Fabian Society (11 Dartmouth
Street, London SW1H 9BN, www.fabian-society.org.uk), 'Second Term
Thinking', February 2000, 16p, £7.50. (Second author's address:
London School of Economics, Houghton St. London WC2A 2AE)
In the same vein but more modestly than Ackerman and Alstott's
Stakeholder Society (Yale U.P. 1999), this is a lucid and firm
plea for a universal yet conditional grant of about 15.000 Euros
to be paid to all young people at the age of 18, to be funded
by an inheritance tax and to be used for education purposes, as
a down-payment on a house or as start-up capital for a business
venture. Quite a distance from an unconditional basic income!
But some arguments will sound familiar to basic income supporters,
for example the "fundamental reason for a universal grant":
"Everyone born into a developed country benefits from a share
in a common inheritance: a set of capital assets, including buildings
and other infrastructure, transport links, capital equipment and
agricultural land."
Philippe Van Parijs, Basic Income : Guaranteed income for
the XXIst century ?, Barcelona: Fundació
Rafael Campalans (c/o Rocio Martinez Sampere ), Papers de la Fundació
n°121, 2000, 36pp. (vanparijs@etes.ucl.ac.be )
Neatly published by the foundation linked to the Catalan socialist
party, Van Parijs's compact introduction to basic income was commissioned
by the Portuguese Presidency of the European Union and served
as a background paper for BIEN's Berlin conference.
Philippe Van Parijs, 'Basic Income and the Two Dilemmas of
the Welfare State', in The Welfare State. A Reader (Christopher
Pierson & Francis G. Castles eds.), Cambridge: Polity
Press & Malden (MA): Blackwell, 2000, pp.355-59.
Now included in a major new anthology on social policy, this is
a reprint of a brief plea for basic income as a response to the
two central dilemmas that face welfare states in Europe and beyond
as we enter the XXIst century: fighting unemployment versus fighting
poverty as productivity varies ever more widely across individuals;
securing the economic feasibility of solidarity versus its political
feasibility as human capital becomes more mobile across national
boundaries.
Loïc Wacquant, 'Logics of urban polarization: the view
from below' in Rosemary Crompton & al., Renewing Class
Analysis, Oxford: Blackwell, 2000, pp. 107-119. (loic@uclink2.berkeley.edu)
Order
this book
In this paper on marginality and inequalities in Western cities,
the renowned Berkeley-based French sociologist Loïc Wacquant
briefly reasserts his commitment to an unconditional basic income:
"Radical innovations, such as the institution of a citizen's
wage (or unconditional income grant) that would sever subsistence
from work, expand access to education through the life-course,
and effectively guarantee universal access to essential public
goods such as housing, health, and transportation, are needed
to expand social rights and check the deleterious effects of the
mutation of wage-labour" (p.118).
Events
Social Policy, Marginalisation, and Citizenship: a conference
to be held at Aalborg University, Denmark, from 2 - 4 November
2001
The purpose of the conference is to contribute to a clarification
of the dynamics and effects of changes in society, policies, and
the aims and purposes of social policy. On the subject of a session
on the afternoon of 3 November the organisers write: "The
erosion of the Fordist system of production has resulted at the
same time in the de?institutionalisation of the traditional threefold
organisation of the life-course. A new, flexible organisation
of the life course is emerging. This new flexibility results in
uncertain, de?standardised and mixed trajectories, as education,
work and inactivity alternate in complex, variable ways that are
hard to define and to manage. The 'old' welfare state models and
their assumptions with respect to the relation between work, welfare
and age are increasingly out of joint and out of time with the
new needs for security that more flexible life?course trajectories
have bred.. These changes in the life cycle and the increasing
need for new models of social security and social policy will
be the focus of this session." See http://www1.ldc.lu.se/soch/conference.htm
for further details.
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