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The basic case for Basic Income

Blog 6 Comments

  • Creative economy

Someone (too busy to read our detailed and authoritative report!) asked me if I could make the case for basic income in 400 words. Here’s my best effort:

Our welfare system is a cruel mess. High benefit withdrawal rates mean people are trapped in a low pay, no pay cycle and ever more sanctioning mean hundreds of thousands every year being denied basic subsistence – no wonder food banks are busier than ever. Poor benefit claimants are much more likely to be punished for failing to follow regulations than are well-off tax evaders.

Iain Duncan Smith’s Universal Credit was supposed to be the answer. Debate rages over whether it will ever be delivered, but virtually no one outside Government thinks it will make the system fairer or help more people escape the lower reaches of the labour market.

There is a better way. A universal basic income payable to all, including children and pensioners, can improve incentives and rewards for work, increase human freedom and dignity, and give society and citizens the flexibility we need to thrive in a world of demographic change and accelerating technological innovation.

At the RSA we’ve spent a year looking at the evidence. We’ve seen how versions of basic income have worked in other places including Alaska where it is seen as ‘third rail’ issue – mess with it and you fry. We’ve engaged with policy experts in Finland, Canada and cities in Europe who are considering their own national version. The global movement for a basic income is growing but it’s still not too late for the UK to lead the world in visionary reform, just as we did when we created the welfare state.

Basic income has supporters on the right, left and centre. The right like it because it enhances freedom and incentives and keeps the state out of people’s lives. The left like it because it is offers dignity and opportunity to all. And we have shown how by keeping the cost down we can sell this bold idea to middle England.

How can anyone argue against a reform that means the low paid keep 67 pence in every pound they earn not the current 30 pence? Who can disagree that people should sometimes be able to choose training or caring or volunteering or setting up their own business over a dead end low paid job?

A basis income won’t fix the world but it will turn our welfare system from a straightjacket to a trampoline.

The idea has been around for centuries but now, today, is the time to make it happen.

Introducing: The RSA's Basic Income model (Blog)

Read our report online: 'Creative Citizen, Creative State' (on Medium)

Report PDF: 'Creative Citizen, Creative State' (PDF, 0.5MB)

 

Download our quick guide to Universal Basic Income

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  • I like the principal of Basic Income, summed up well by; from a straightjacket to a trampoline.

    Of course the detail is important but I believe it will boost rural communities, training whilst having the potential to reduce administration costs.

    The language used in the context of employment/occupation/work/volunteering needs to change. I believe people are happiest when busy. Raising children, helping out in the library, education, training etc. are valuable ,positive contributions to society. BI can give a more explicit value to these and make it easier for people to be gainfully active. 

    A few thoughts:-

    could the basic income be recovered from employers rather than the individual , possibly at a discount to encourage employment with further discounts where training is provided?

    -Can we eliminate NI for employees at the same time and recover this entirely from income tax to further reduce admin costs? This would also shift more of the NI burden to higher earners. 

    -I am not keen on the idea of 'contracts' , whilst I understand the aim to commit/oblige people to do something in exchange for BI, if they are not going to be monitored/measured it seems an more patronising than constructive.

    - We have to face the fact that the UK ( and global) population is excessive ( and I do not believe we need to have more children to look after the old!) so any new system should avoid state encouragement for families of more than 2 children. BI should therefore not pay parents beyond the second child but it would need to be paid to the child from the age of likely employment e.g 16.

    - taxing property to, in some way, encourage greater occupancy density or to create more housing development is not attractive. People have very different needs , to give 2 (only) examples; socialites may need little space since they may spend much of their time away for the home whereas hobbyists, artists or musicians may need a lot of space for all their 'stuff'. There is a need to re-balance the population distribution and BI should help this by removing some of the need for people to migrate to cities and the south. Council budgets would ideally be funded by charging according to 'use' - but that sounds like the poll tax and doesn't take account of the ability to pay whilst also creating problems for councils in poorer areas - I am not sure that the current system isn't the least worst option. However, I do think development and industry needs to be discouraged for expanding in dense areas and encouraged in under-developed areas - e.g. charge developers significant sums for any building over 4 stories in London with a proportion of the revenue transferred to under-developed areas. Combining this kind of discouragement with BI would help invigorate depressed locations.

    -does there need to be disincentives for 'laziness'? On balance I want to believe that, once the idea was fully up an running , the amount of abuse would be not worth penalising. However, part of the PR process to get BI accepted may need to include some penalties. Perhaps a (growing) list of approved (maybe locally approved) activities which people have to participate in for 2/3 of the time to avoid deductions might work. Approved activities would of course include work, education, training, caring. community work etc. Certainly there should be no penalties for not being engaged in traditional work (See the example of the women who had to give up training to work). There is a great phrase about education ; it should be about lighting a fire not filling a bucket, we should take a similar view of constructive activity and employment.

  • Thanks for the comments. Matthew, Victor I think BI is one of those ideas that has been around for some many years in so many forms that - while we should always acknowledge sources for ideas and evidence we quote directly -  that it is impossible to cite everyone who has suggested or contributed to the idea's evolution. We are hoping to be another pebble on the scales.   


  • Alaska's unconditional basic income (UBI) scheme relies heavily upon the health of its Permanent Fund Dividend which, in turn, is seminally affected by the stability of the Alaskan Constitutional  Budget Reserve and the health of the country's oil wealth (although the PFD is not wholly funded by this). If there is a prolonged collapse of international oil prices in the wake of rivalry and over-production of oil between Russia and Saudi Arabia, the future of Alaska's oil wealth and its UBI could well be placed at risk.

    http://usbig.net/alaskablog/2015/04/alaska%E2%80%99s-budget-deficit-is-political-threat-to-its-basic-income/

    The Alaskan example of UBI shows that funding for this kind of scheme is often dependent on unique local conditions and policies- ie. having a substantial oil reserve and early adopting the policy of distributing its revenues as a citizen dividend. These conditions are not necessarily transferable to other nation states.

    Interestingly, Saudi Arabia as an oil rentier country also has a kind of UBI system for its Sunni population in order to maintain favour and loyalty to its Saud monarchy. This does not, however, extend to the country's Shia minority.

  • Hi Matthew,

    I have a copy of the full report, and am really looking forward to reading it.

    Though - given the timescale you mention of a year the RSA has spent working on this - I'm wondering whether you pay more attention to my comments here than I imagined... ;-)

    It was 13 months ago when I made a case for the Basic Income here. I'm now wondering whether I ought to throw out some other suggestions, in case the RSA's capable researchers are on the look-out for new avenues... ;-)

    Here's what I wrote here on 9th December 2014:

    ---

    Perhaps we should be supporting a 'Basic Income' scheme as a route to greater equality…?

    I find it rather amazing that revolutionary of the moment Russell Brand is backing the Basic Income idea, via the anarchist/Occupy figure David Graeber - whilst on the other side of the Left-Right divide Charles Murray also promotes it (in his book 'In Our Hands: A Plan To Replace The Welfare State').

    To have such diverse minds in agreement suggests there must be something in it! ;-)

    Having said that, I see from Wikipedia that everyone from Hardt & Negri, Andre Gorz, the Skidelskis, Martin Luther King Jnr, Tobin, JK Galbraith and Jeremy Rifkin through to Friedman and Hayek seem to have offered support for some version of Basic Income!

    And "A January 2014 article in Rolling Stone magazine argued that universal basic income, or social security for all, should be one of five economic reforms Millennials fight for"!

    http://www.rollingstone.com/po...

    --

    I also sometimes wonder whether Basic Income might free up the full possibilities for more digital age peer-to-peer collaborations? Perhaps one day we'll all be enabled to take on the multiple Roles we want to in multiple organistions (how much more creative that would be!). A sort of Holacracy-style set-up, but extended across society rather than tied to individual workplaces.

    That said, I rather suspect that the UK population's values and our GNP might not quite be ready for Basic Income as yet (we'd need a greater proportion of the population with 'Inner Directed' post-materialist values, I suspect; this proportion is high and rising again, I think, but not high enough). Rather in the same way we might one day put many urban main roads into tunnels so that most high streets can be enjoyable, walkable communities for all - human and animals! - once again. Just not yet...

    Perhaps the report will convince me that we're closer than I realised. I hope so.

    Happy New Year!

    Matthew Mezey

  • Hello Matthew,


    I have read the RSA report and yes, it makes a strong case for B.I.,which is good.

    However, like many B.I. reports, the accent seems to be on "rigor" rather than realism.

    You also appear to rely heavily on the work of the C.I.T. and Malcom Torry which,as you in fact point out, has been seriously criticized.

    Depressingly,you also appear to "borrow" substantially from an article of mine " Citizen's Credit : how to abolish unemployment and re-vitalize communities" - which I know you have consulted - without any acknowledgement whatsoever!

    Citizens Credit - available for all to read at www.citizenscredit.org - offers a considered and practical approach to B.I., with the aim of eliminating "unemployment" as a first priority.


                                                                                                               Victor Cockerill


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