Basic income
A basic income (also called basic income guarantee, Citizen's Income, unconditional basic income, universal basic income, or universal demogrant is a form of social security in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere.
An unconditional income transfer of less than the poverty line is sometimes referred to as a partial basic income.
Basic income systems that are financed by the profits of publicly owned enterprises (often called social dividend, also known as citizen's dividend) are major components in many proposed models of market socialism.[4] Basic income schemes have also been promoted within the context of capitalist systems, where they would be financed through various forms of taxation.
Similar proposals for "capital grants provided at the age of majority" date to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism. The phrase "social dividend" was commonly used as a synonym for basic income in the English-speaking world before 1986, after which the phrase "basic income" gained widespread currency.Prominent advocates of the concept include Rutger Bregman, André Gorz, Ailsa McKay.Guy Standing, Hillel Steiner, Peter Vallentyne, Philippe Van Parijs and Milton Friedman.
Transparency
Basic income, it is argued, is a much simpler and more transparent welfare system than the one existing in the welfare states around the world today. Instead of having numerous welfare programs, it would simply be one universal unconditional income.
Administrative efficiency
The lack of means test or similar administration would allow for some saving on social welfare, which could be put towards the grant. The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits,and they have put forth proposals for implementation that they claim to be financially viable.
Poverty reduction
Basic income is often argued for by its advocates because of its potential to reduce poverty, or even eradicate poverty.[citation needed]
Basic income and growth
Basic income and growth (or BIG) allows for potential economic growth: people may decide to invest in themselves to earn higher degrees and get interesting and well-paid jobs that, in turn, could trigger growth.As Jason Burke Murphy argues, a substantial discussion has grown over recent years about whether basic income could be a part of a degrowth agenda.
Freedom
Philippe Van Parijs
Supporters commonly make three very different arguments that basic income promotes freedom. First, although most basic income supporters tend to be politically left, right-leaning supporters, at least since the 1970s, have argued that policies like basic income free welfare recipients from the paternalistic oversight of conditional welfare-state policies. Second, Philippe Van Parijs has argued that basic income at the highest sustainable level is needed to support real freedom, or the freedom to do whatever one "might want to do."[16] By this, Van Parijs means that all people should be free to use the resources of the Earth and the "external assets" people make out of them to do whatever they might want to do. Money is like an access ticket to use those resources, and so to make people equally free to do what they might want to do with the external assets of the world, the government should give each individual as many such access tickets as possible—that is, the highest sustainable basic income.
Third, at least since Thomas Paine, some supporters have argued that basic income is needed to protect the power to say no, which these supporters argue is essential to an individual's status as a free person. If some other group of people controls resources necessary to an individual's survival, that individual has no reasonable choice other than to do whatever the resource-controlling group demands. Before the establishment of governments and landlords, individuals had direct access to the resources they needed to survive. But today, resources necessary to the production of food, shelter, and clothing have been privatized in such a way that some have gotten a share and others have not. Therefore, this argument goes, the owners of those resources owe compensation back to non-owners, sufficient at least for them to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because people can consider themselves free only if they are not forced to spend all their time doing the bidding of others simply to provide basic necessities to themselves and their families.Under this argument, personal, political, and religious freedom are worth little without the power to say no. In this view, basic income provides an economic freedom, which—combined with political freedom, freedom of belief, and personal freedom—establish each individual's status as a free person.
Work incentives
There is also a belief among critics that if people have free and unconditional money, they will not work (as much) and get lazy. Less work means less tax revenue and hence less money for the state and cities to fund public projects. There are also concerns that some people will spend their basic income on alcohol and drugs.
If there is a disincentive to employment because of basic income, it is however expected that the magnitude of such a disincentive would depend on how generous the basic income were to be. Some campaigners in Switzerland have suggested a level that would only just be liveable, arguing that people would want to supplement it.
Tim Worstall, a writer and blogger, has argued that traditional welfare schemes create a disincentive to work, because such schemes typically cause people to lose benefits at around the same rate that their income rises (a form of welfare trap where the marginal tax rate is 100 percent). He has asserted that this particular disincentive is not a property shared by basic income, as the rate of increase is positive at all incomes.
In one study, even when the benefits are not permanent, the hours worked by the recipients of the benefit are observed to decline by 5 percent, a decrease of two hours in a typical 40-hour work week:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level.
However, in studies of the Mincome experiment in rural Dauphin, Manitoba, in the 1970s, the only two groups who worked significantly less were new mothers and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was a pilot project implemented in 2008 and 2009 in the Namibian village of Omitara; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power. However, the residents of Omitara were described as suffering "dehumanising levels of poverty" before the introduction of the pilot,and as such the project's relevance to potential implementations in developed economies is unknown.
An unconditional income transfer of less than the poverty line is sometimes referred to as a partial basic income.
Basic income systems that are financed by the profits of publicly owned enterprises (often called social dividend, also known as citizen's dividend) are major components in many proposed models of market socialism.[4] Basic income schemes have also been promoted within the context of capitalist systems, where they would be financed through various forms of taxation.
Similar proposals for "capital grants provided at the age of majority" date to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism. The phrase "social dividend" was commonly used as a synonym for basic income in the English-speaking world before 1986, after which the phrase "basic income" gained widespread currency.Prominent advocates of the concept include Rutger Bregman, André Gorz, Ailsa McKay.Guy Standing, Hillel Steiner, Peter Vallentyne, Philippe Van Parijs and Milton Friedman.
Transparency
Basic income, it is argued, is a much simpler and more transparent welfare system than the one existing in the welfare states around the world today. Instead of having numerous welfare programs, it would simply be one universal unconditional income.
Administrative efficiency
The lack of means test or similar administration would allow for some saving on social welfare, which could be put towards the grant. The Basic Income Earth Network (BIEN) describes one of the benefits of a basic income as having a lower overall cost than that of the current means-tested social welfare benefits,and they have put forth proposals for implementation that they claim to be financially viable.
Poverty reduction
Basic income is often argued for by its advocates because of its potential to reduce poverty, or even eradicate poverty.[citation needed]
Basic income and growth
Basic income and growth (or BIG) allows for potential economic growth: people may decide to invest in themselves to earn higher degrees and get interesting and well-paid jobs that, in turn, could trigger growth.As Jason Burke Murphy argues, a substantial discussion has grown over recent years about whether basic income could be a part of a degrowth agenda.
Freedom
Philippe Van Parijs
Supporters commonly make three very different arguments that basic income promotes freedom. First, although most basic income supporters tend to be politically left, right-leaning supporters, at least since the 1970s, have argued that policies like basic income free welfare recipients from the paternalistic oversight of conditional welfare-state policies. Second, Philippe Van Parijs has argued that basic income at the highest sustainable level is needed to support real freedom, or the freedom to do whatever one "might want to do."[16] By this, Van Parijs means that all people should be free to use the resources of the Earth and the "external assets" people make out of them to do whatever they might want to do. Money is like an access ticket to use those resources, and so to make people equally free to do what they might want to do with the external assets of the world, the government should give each individual as many such access tickets as possible—that is, the highest sustainable basic income.
Third, at least since Thomas Paine, some supporters have argued that basic income is needed to protect the power to say no, which these supporters argue is essential to an individual's status as a free person. If some other group of people controls resources necessary to an individual's survival, that individual has no reasonable choice other than to do whatever the resource-controlling group demands. Before the establishment of governments and landlords, individuals had direct access to the resources they needed to survive. But today, resources necessary to the production of food, shelter, and clothing have been privatized in such a way that some have gotten a share and others have not. Therefore, this argument goes, the owners of those resources owe compensation back to non-owners, sufficient at least for them to purchase the resources or goods necessary to sustain their basic needs. This redistribution must be unconditional because people can consider themselves free only if they are not forced to spend all their time doing the bidding of others simply to provide basic necessities to themselves and their families.Under this argument, personal, political, and religious freedom are worth little without the power to say no. In this view, basic income provides an economic freedom, which—combined with political freedom, freedom of belief, and personal freedom—establish each individual's status as a free person.
Work incentives
There is also a belief among critics that if people have free and unconditional money, they will not work (as much) and get lazy. Less work means less tax revenue and hence less money for the state and cities to fund public projects. There are also concerns that some people will spend their basic income on alcohol and drugs.
If there is a disincentive to employment because of basic income, it is however expected that the magnitude of such a disincentive would depend on how generous the basic income were to be. Some campaigners in Switzerland have suggested a level that would only just be liveable, arguing that people would want to supplement it.
Tim Worstall, a writer and blogger, has argued that traditional welfare schemes create a disincentive to work, because such schemes typically cause people to lose benefits at around the same rate that their income rises (a form of welfare trap where the marginal tax rate is 100 percent). He has asserted that this particular disincentive is not a property shared by basic income, as the rate of increase is positive at all incomes.
In one study, even when the benefits are not permanent, the hours worked by the recipients of the benefit are observed to decline by 5 percent, a decrease of two hours in a typical 40-hour work week:
While experiments have been conducted in the United States and Canada, those participating knew that their benefits were not permanent and, consequently, they were not likely to change their behaviour as much or in the same manner had the GAI been ongoing. As a result, total hours worked fell by about five percent on average. The work reduction was largest for second earners in two-earner households and weakest for the main earner. Further, the negative work effect was higher the more generous the benefit level.
However, in studies of the Mincome experiment in rural Dauphin, Manitoba, in the 1970s, the only two groups who worked significantly less were new mothers and teenagers working to support their families. New mothers spent this time with their infant children, and working teenagers put significant additional time into their schooling. Under Mincome, "the reduction of work effort was modest: about one per cent for men, three per cent for wives, and five per cent for unmarried women."
Another study that contradicted such decline in work incentive was a pilot project implemented in 2008 and 2009 in the Namibian village of Omitara; the assessment of the project after its conclusion found that economic activity actually increased, particularly through the launch of small businesses, and reinforcement of the local market by increasing households' buying power. However, the residents of Omitara were described as suffering "dehumanising levels of poverty" before the introduction of the pilot,and as such the project's relevance to potential implementations in developed economies is unknown.
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