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Indignation, Basic Income and the First Social Law

Taking It to the Streets in Spain

by DANIEL RAVENTOS and JULIE WARK

The citizens of Spain have taken to the streets and squares in great numbers to demand their rights. Estimates vary enormously. Spain’s right-wing government claims that 22,000 people came out in Barcelona in the demonstrations on 12th May while the organisers estimate between 200,000 and 250,000. What matters, however, is not the battle of numbers but the prevalent idea that “They don’t represent us”. A quick look at the present situation explains why growing numbers of indignant citizens have taken up this slogan and why they are calling for a Republic of the 99% in which the right of existence is deemed to be fundamental. With an economy at “huge crisis point” after two consecutive quarters of negative growth, an overall unemployment rate of 24.44% and 52.01% for the under-25s, and veering close to a “junk rating” by S&P, the Spanish government has responded with harsh and absurd measures that would make any decent economist shudder. Among the latest are stripping “illegal” immigrants and other vulnerable people of health care and more repressive laws against protestors. The population, or the 99%, is certainly “restless”, as some newspapers put it. The restless ones are not just vandals who burn rubbish bins and destroy property, as we are supposed to believe, or even “terrorists”, according to some elements in the Catalan government. Many of them are thinking hard about alternatives.

As the government partially nationalised and granted a second bailout, this time of €10 billion, to the “vampire bank” Bankia, activists from the Acampada (Occupy) movement were organising a Citizen Rescue Mission. Workshops and debates have been organised for the next three days in the main squares of Spain’s cities to discuss a five-point campaign. This isn’t kids’ stuff. People of all ages are participating, among them indignant grandparents, the “iaioflautas” (a name coined in solidarity with the young Madrid occupiers, dog-flute punks, “perroflautas”, as the President of the Community of Madrid, the ultra-right Esperanza Aguirre, contemptuously calls them). The widely-accepted “Citizen Rescue Plan” is very down-to-earth and based on the sound economic principle of stimulating the productive base. It outlines five demands “for guaranteeing the right of existence of the 99%”: (1) No more money spent on rescuing banks; (2) Quality public health and education; (3) Decent jobs and no early retirement; (4) Decent guaranteed housing; and (5) A universal basic income.

The demand for a universal basic income is growing so fast that the Occupy movement is now working hard to explain its principles to the public. For example, the Barcelona Acampada has a programme of twenty workshops to be held in the plaça de Catalunya and three of these are devoted to basic income, understood as a human right. On Sunday afternoon (13th May) 1,000 people attended a workshop precisely on this theme. The working definition of the Red Renda Básica (Basic Income Network) in Spain is: Basic income is an income paid by the State to each full member or accredited resident of a society, regardless of whether he or she wishes to engage in paid employment, or is rich or poor or, in other words, independently of what any other sources of income might be, and irrespective of cohabitation arrangements in the domestic sphere. For further clarity, the terms of the definition also need explanation:

“[A]n income paid by the State”. The word “State” can cover a juridical-political entity that is larger than existing nation-states, as is the case of the European Union, or it might refer to juridical-political spheres that are smaller than the nation-state, for example autonomously governed territories. Hence, the basic income is paid by one or more institutions in the public sphere.

“[T]o each full member or resident of a society”. In the different models for financing basic income there are variations in the amount paid (which should be above the poverty line), according to age and whether minors are included in the policy or not, and so on. However, in all cases, this is a sum of money that citizens receive as individuals (and not by family groups, for example), and universally (not conditioned by, say, predetermined thresholds of poverty).

[R]egardless of whether he or she wishes to engage in paid employment”. “Work” is all too often understood as “paid employment” or “job”. The following typology is more realistic: (1) paid work in the labour market, (2) domestic work, and (3) voluntary work.

“[W]hether he or she … is rich or poor or, in other words, independently of what any other sources of income might be”. Unlike means-tested subsidies that depend on predetermined levels of poverty or types of situation, basic income is received by rich and poor alike. If basic income is conceived as a right of citizenship (as the definition suggests), it excludes any additional condition. Like the right of universal suffrage, the basic income proposal does not impose any conditions beyond citizenship (or accredited residence). The fact that basic income is received by the whole population does not mean that everyone gains. The most viable studies show that a basic income financed by means of tax reform would entail a redistribution of income from the richest members of society (the top ten per cent, approximately) to the rest.

[I]rrespective of cohabitation arrangements in the domestic sphere.” Basic income does not favour or penalise any form of cohabitation. It makes no difference whether a heterosexual couple, people from different generations, a group of friends or a homosexual couple live under the same roof. All these ways of living together are completely independent of the right to receive a basic income.

Basic income, then, is formally secular, unconditional and universal. It would be received by each and every member of the society irrespective of gender, level of income, religion (if any) and sexual orientation. In this distinctive feature of not being conditioned to any requisite other than citizenship or accredited residence, basic income is very different from other proposals, whether they have been in application for years or whether they have never gone beyond the state of “theory”. Since many people confuse basic income with other supposedly similar measures, we shall now mention some of them.

Basic income is not participation income, a proposal that was made by Anthony Atkinson and others. This is the payment of a sum of money to all citizens who are able to work and who are engaged in some kind of activity that is deemed socially useful. This “socially useful activity” might include remunerated employment, voluntary work, domestic labour, studying, and so on. If defining “socially useful activity” were not complicated enough, monitoring it would require an army of supervisors, which would be a great drain on public funds, not to mention the fact that, in “socially useful” terms, the supervisors could be much more gainfully employed.

Neither should basic income be confused with Negative Income Tax. This is a uniform, refundable tax that, through taxation policy, guarantees a minimum income. If this minimum income level is exceeded in the tax declaration, the corresponding taxes must be paid. If the minimum level is not exceeded or there is no income, the State pays the difference in order to make up the minimum stipulated level.

Basic income is not what is known in Kingdom of Spain as Rentas Mínimas de Inserción (RMI – Minimum Income Support), which is paid (to less than 1% of the population) by most of the country’s seventeen (or nineteen if we include the enclaves of Ceuta and Melilla in North Africa) Autonomous Communities. In France, under the name of Revenu Minimum d’Insertion, it is paid by the central Government. The aim, according to RMI enthusiasts, is to achieve a coordinated development of activities so as to help people who do not have the sufficient economic means to cover their basic needs, and to prepare them for integration into the job market and social life. These activities include making social services available, and providing economic assistance and personal support for their incorporation into the workplace and society.

Basic income, a guaranteed regular payment, should not be confused, either, with any kind of indefinite unemployment benefit or dole system whereby an individual receives payment from the State as long as she or he is unable to find paid work but, once a job is found, the payment stops. To sum up, basic income is not a grant, subsidy or conditioned unemployment benefit of any kind because the only requisite for receiving it is citizenship or accredited residence.

 

Basic Income and Work

This is the area where most misunderstandings arise and hence where more explanation is needed. By work, we understand a set of remunerated or non-remunerated activities with the aim of attaining goods and services. Waged work is one subset of remunerated work on the market, but other kinds of paid work also exist outside this category, for example that done by self-employed people. More important is the fact that waged work is just one of three forms of work: remunerated, domestic and voluntary. Criticisms aimed at basic income tend to be related with remunerated work and, in the academic and political debates over the past three decades, often take the form of four main objections raised by champions of waged work: (1) integration into society by means of waged work should be the cornerstone of all struggles against poverty; (2) in addition to the right to a wage, the right to being socially useful but be taken into account; (3) the right to live from one’s own work is inalienable; and (4) waged work is an inseparable element of social recognition.

The first objection is somewhat inconsistent when broken down into the two assertions that, (a) the struggle against poverty is essential, and (b) the way (only way, in the most uncompromising version) to go about it is through waged work. However, agreeing with (a) evidently does not entail agreeing with (b). If a waged job is not available for everyone who wants to have one, by the terms of this argument, it will never be possible to eliminate social exclusion or even to alleviate it significantly. It all boils down to a simple empirical question: Is there, or is there not a waged job for everyone who wants one? The answer is a very clear no. In many states of the European Union, full employment is a very long way from being a reality. Unemployment figures are hitting their highest figures for decades and are still getting worse.

The second argument is not only confined to critics of basic income and it would seem clear that social utility does not – necessarily or principally – come through having a salaried job. This would imply that people, mainly women, engaged in domestic labour are not socially useful and neither are those who are engaged in voluntary work.

Argument three, which states that living from one’s own work is an inalienable right, would seem to be on the wrong track. At no point does the basic income proposal oppose people’s right to waged work, if they can get it. However, those who cannot achieve this, have the right to live with at least minimal dignity.

The fourth argument, among those most frequently levelled against basic income by those who champion the virtues of waged labour as an inseparable part of social recognition, has lost ground over recent decades, partly because perceptions as to the value of paid work are changing in a negative sense. This has more than a little to do with the fact that income-earning activities are less associated with production of agricultural products or material goods for the benefit of society than with dispossession and speculation with such ephemeral, not to say dangerous, “means of production” as futures, hedge funds and derivatives. In the present situation of alarming economic crisis this fourth argument takes on grotesque connotations.

In a nutshell, criticisms asserting that, by breaking the link between income and paid employment, basic income prevents individuals from participating in the virtues of waged work have little substance.

 

On the Right to (Waged) Work and Basic Income

 

One question that has led to some dispute in academic discussion of basic income is the (supposed) clash between basic income and waged labour (employment). There is no such conflict. Being in favour of basic income is perfectly consistent, or even complementary, with defending access to paid employment for anyone who wants it, whether in times of boom or crisis. Indeed, basic income is compatible with earning a wage, which is not the case with present-day benefits, the dole for example. Not only that, but our studies suggest it would afford a cushion for people wanting to start up a small business as well as a better bargaining position for workers. Neither is it an option for the developed world alone. We have found, for example, in our study of East Timor – where the constitutionally enshrined goals of agrarian reform, cooperative endeavours, local-scale agricultural projects, environmentally sustainable projects, improving the territorial balance between rural and urban areas, security, public education, and health service facilities are far from being attained – that the material independence guaranteed by a basic income just above the poverty line could create the conditions for sustained economic progress precisely in these areas by opening up, on a universal, consistent and guaranteed basis, autonomous collective or individual productive opportunities for the overwhelmingly agrarian population.

Criticisms of conditional benefits do not apply to basic income. One drawback of the former is the poverty trap. The payments received as benefits are not accumulative, which is to say they are irreconcilable with other sources of income and do not, therefore, permit the individual to receive any more than a predetermined threshold. There is no incentive, then, to take part-time jobs or seek any other form of remuneration when one receives conditioned benefits. In technical terms, this might be expressed as follows: the marginal tax rate applied is 100 per cent, meaning that one monetary unit of the subsidy is lost for each unit of salary payment that might be obtained. The unemployment and poverty traps appear because, in order to receive benefits, monetary or any other type, the condition is that the authorities monitor the amount of income received on the job market. Basic income, due to its universal, unconditional nature does not entail these problems.

Finally, basic income makes no discrimination between people with waged work and others who engage in domestic or voluntary work. Everyone would receive an income, which would increase the levels of comparability between the three kinds of work. In times of crisis in particular, basic income highlights a particularly interesting principle, nothing less than the most basic of all human rights: a guaranteed material existence for all citizens, without which they cannot be free. The austerity measures presently being imposed on the citizens of Europe are undermining the basic conditions of life, work and freedom of the great majority of the non-rich population, with shocking brutality in some cases of the more vulnerable among them. Many people are beginning to reclaim the principle that society should guarantee and protect the inviolable rights of its citizens, and the first and foremost of these is the right to exist. As Robespierre pointed out more than 200 years ago, “The first social law is thus that which guarantees to all society’s members the means of existence …”

A basic income could bring this law into effect.