‘What would you work as, if your income was taken care of?’ A catchy phrase. If one is willing to give it some thought, the idea opens up a space for personal freedom that seems utopian, even in most of Western Europe’s developed societies. What would you do if you were to receive a regular, unconditional income that covered your basic needs? Would you stop working altogether?  Would you start from scratch, go back to university and do something completely different? Or would you simply continue doing what you’ve been doing all along, maybe feeling a little bit more confident that you had the freedom to leave if you wanted?

Utopian as it may sound, the idea of an ‘unconditional basic income’ has
actually risen to some prominence in various European countries and is currently being discussed within a number of countries, like Austria, Germany, Switzerland and Spain. Radical as this may sound, the idea has the potential to develop into forceful assertion of the notion that, before everything else, everyone has a ‘right to exist’ – without fear.

The idea of a basic income grant would reorganise the European welfare state in a way that ensured everyone’s basic needs were covered as well as that everyone was able to participate in the cultural and political life of society, at least on a basic level. In return, most social benefits, along with a vast amount of often inefficient and discriminatory bureaucracy of means tests and work availability requirements could be abolished. But what is behind this idea, how financially sound are its proposals and what would it require?

Philosophically, the idea of a ‘basic income grant’ is closely wound up with the understanding that many Western Europe societies have become so productive that they no longer manage to provide employment for each and every one of their citizens. Instead, many would argue, we have reached a level of productivity which necessitates a review of the conceptualisation of work that lies at the heart of Western-style capitalism and the welfare state that has grown out of it.

Rather than only understanding traditional wage labour as ‘work’, such a view acknowledges that other forms of ‘work’ may be of equal importance to the cultural and political wellbeing of society.

A case in point is the unpaid work carried out by mothers and housewives but also social work that is done on a voluntary basis. Indeed, a more in-depth analysis of the historical development of the concept of ‘work’ reveals that today’s commonly held position of efficiency and productivity as foundational pillars of a healthy economy are everything but ‘natural’ or ‘god-given’: in the ancient world ‘work’ was considered amongst the lowliest of human activities; while being a necessary evil, it was seen as preventing and distracting humankind from ‘being human’ and the pursuit of the ‘good life’.

Philosophers, such as Hannah Arendt have argued that the social ascendancy of paid work can be attributed to the development of modern, industrial societies and the accompanying rise of capitalism, which in order to achieve continuous economic growth relies on a culture that values productivity and output-oriented work more than reflective, creative or social work. John Locke was amongst the first to link the right to an income to the need to work.

The idea, when taken to its ultimate conclusions, seems to stipulate that only those, who are productive, have the right to a secure income. While the most extreme results of such a system have been somewhat mitigated by the introduction of the welfare state, the idea continues to be at the heart of the employment debate today. Still, many people would agree that someone who works hard to make his living is entitled to more than another who spends his days being lazy, or, for that matter, contributing less ‘visibly’ to an output-oriented society.

What such views are dismissive of, however, is the fact that the relationship between income level and quantity of work are increasingly determined by factors other than the amount of labour input needed. It is inherent to the capitalist mode of production that as productivity increases there is less work needed and thus less jobs available.

This is particularly problematic if productivity growth exceeds economic growth, meaning that more economic output can be produced with the same labour input, for example when new technologies enter the market. Overall then, the prospects of reaching ‘full employment’ seem rather bleak. The very idea of such ‘full employment’ being possible rests inherently on the assumption that there is an inefficient allocation of resources and/or too high wages that prevent producers from employing more workers.

However, considering the environmental and ethical limitations of becoming ever more efficient, shouldn’t we ask ourselves whether we actually want our economies to expand limitlessly and whether it is sensible for people to consume more than they need? Isn’t there a point at which we should make use of the high level of productivity that we have reached in order to devote more time and energy into things that aim at things other than the ‘most efficient allocation of resources’?

Increasingly, economist have come to accept that ‘full employment’ may not be feasible, and that it is likely that there will always remain a ‘base unemployment’, a certain percentage of the population that will remain unemployed even if the economy was to recover fully. Such ‘base unemployment’ is often expected to stagnate somewhere around 3-5% of the labour force, in other words even during times of high levels of economic growth there would be roughly 1,235 million unemployed in Britain. If this fact has become a definite reality in the system we live in then maybe the time has come to ask, whether it is the system itself that will need to change?

The objections put forward by its opponents seem reminiscent of the good old days when communists and capitalists used to get into heated debates about the nature of humankind and its ability to cope with too much freedom: but would the income ‘eliminate the incentives for work and thereby stifle competition and productivity growth’? The basic income grant is different in so far as it seeks to improve personal freedom without dismissing the importance of incentives and competition. It aims to cover a socio-cultural minimum, yet everyone is free to earn as much on top of it as he/she likes.

Indeed, to a certain extent it actually seeks to animate the market by providing for a much more flexible margin of negotiations as workers and employers know that the basic needs are covered through the basic income. At the same time, an unconditional basic income would put workers in an improved bargaining position by forcing employers to create working conditions that will actually be attractive to potential employees.

The question remains how such a project could be put into practice and how financially sound the proposal is. Introducing a basic income grant would require such pervasive changes in the basic structures of our societies that it is difficult to say exactly what amount of funding it would require or in how far it could contribute to economic growth by making the economy more efficient.

While different models exist, one of the most prominent models currently being discussed in Germany proposes to abolish the social benefit system altogether, whilst simultaneously replacing most existing taxes with a single – though considerable higher – consumption tax. While the current system raises social funds by taxing revenue thereby making new investments less attractive, the new system would tax consumption, meaning that those who consume the most will also contribute more to the wellbeing of all.

Simultaneously, the system assumes that a considerable amount of money would become available simply by abolishing a large part of a highly inefficient social bureaucracy which spends much of its time trying to
discriminate between those who are deserving of benefits and those who are not. Lastly, reducing the social contributions employers need to pay for their employees would encourage job creation and attract new forms of investment. In essence, it would discourage irresponsible consumption but strengthe employment and innovation.  

In the recent general elections in Germany, thirty candidates that ran campaigns explicitly in favour of an unconditional basic income eventually made it into the parliament. This represents roughly five per cent of parliamentary seats. While this was not exactly a decisive vote in favour of an unconditional basic income, it still means that close to 2 million people have voted in favour of the idea. Maybe it needs some more years for this project to grow. Maybe it never will. And maybe we first need to be able to ‘think’ it, as Götz Werner, Germany’s most prominent supporter has claimed repeatedly.

This entry was posted on Sunday, November 1st, 2009 at 14:42 and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed.