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Free Money for Everyone! What’s the World Coming To?

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Barcelona.

From Liberia, to Tokyo, to the Cherokee Nation and Old Europe, more and more people are talking about Basic Income in all kinds of different forums. If the global economic and environmental crises have had any positive effect it would be that people are fighting back. As history has so often shown, the neediest people are those who best understand human rights (in their absence). For more than three millennia the three basic principles of human rights, freedom, justice and human dignity, have been inscribed on clay and stone tablets, parchment and paper, usually after they have been shouted for and fought for, all around the world, in streets, squares and a variety of battlefields, from Mount Vesuvius (Spartacus) to slave ships. Nobody has to be taught these principles because all humans understand them as their rights. In the concept of “universal human rights”, “universal” is redundant since the qualifier “human” means all humans. In the Universal Declaration of Human Rights (1948), it qualifies “Declaration”, suggesting the geographical scope of the proclamation rather than rights for all humans. In any case, the “universal” rights it pledged were swiftly rendered into separate “generations” of broken promises floating above and outside social and juridical institutions, without any mechanisms of guarantee and bestowed piecemeal by leaders or in the warped forms of humanitarianism and charity, although it is obvious that the generalised nature of a human right theoretically distinguishes it from any privilege confined to a group, class or caste. Now, with the obscenely growing gap between rich and poor, when it is estimated that by 2016 the richest 1% will own more than the rest of the world, the universal principle is more urgent than ever.

Basic Income is one very practical example of a universal human right. It is not just an economic measure to eradicate poverty but an income paid by the State to each member or accredited resident of a society, regardless of whether he or she wishes to engage in paid employment, or is rich or poor, independently of any other sources of income and irrespective of cohabitation arrangements in the domestic sphere. The fact that everyone receives a Basic Income doesn’t mean that everyone gains: the rich lose. How to finance it is as important as the quantity involved and we favour progressive tax reform which redistributes wealth from the rich to the rest of the population. Precisely the opposite of recent trends. In guaranteeing the most basic right of all, that of material existence, it would bring a host of side benefits, as many studies show. In the case of work, for example, it could have a major positive impact, not only in this regard but also in other spheres. With her momentous climate change alert This Changes Everything, Naomi Klein pulls together elements of science, politics, geopolitics, economics, the “stupid growth” and “stupid profits” of capitalism, “extractivism”, patriarchy, psychology, ethics and activism, inter alia, which shape the future of the planet. She concludes that there is an urgent need for valuing work that we currently don’t value and specifically mentions Basic Income, saying, “there has to be a stronger social safety net because when people don’t have options, they’re going to make bad choices”. For Klein, the “universal” sense of Basic Income is that it could help to transform the way we treat and think about our whole (social and physical) environment.

After years of having relatively few supporters, the idea of Basic Income is now spreading around the world. In Spain – probably “the place on Earth where the debate around Basic Income is most advanced” – after five years of public spending cuts, depressed demand, record unemployment, burgeoning poverty, and a growing public debt now at around 100% of GDP, and after twenty years of discussion in universities, grassroots movements and social networks, Basic Income is finally going mainstream. Although the new game-changing left-wing political party Podemos has temporarily retreated from its initial Basic Income proposal in favour of “full employment” (more fitting, perhaps, for the welfare states of the 1940s, 1950s, and 1960s), many party members are Basic Income stalwarts. Other political organisations now proposing it include Equo, Pirata and Bildu (a coalition in the Basque Country) and, in Galicia, Anova, while still more small parties have projects which, while not strictly a Basic Income, come close.

A recent number of the Basic Income Earth Network newsletter gives an idea of the worldwide spread of different versions of Basic Income. In Greece the new ruling party Syriza has declared its aim to establish “a closer link between pension contribution and income… and provide targeted assistance to employees between 50 and 65, including through a Guaranteed Basic Income scheme so as to eliminate the social and political pressure of early retirement which over-burdens the pension funds”. In Finland, 65.5% of 1,642 (out of nearly 2,000) candidates for the parliamentary elections on 19 April publicly support the policy. Cyprus has passed a new law giving low income families a Guaranteed Minimum Income of €480 a month. In 2013, a grassroots movement in Switzerland called for a Basic Income of 2,500 Swiss francs per month and received over 100,000 signatures needed to force a referendum on the proposal. Ninety per cent of the members of Hungary’s Green-Left party Párbeszéd Magyarországért (“Dialogue for Hungary”) have voted for a Basic Income to which all citizens would be entitled, €80 per month for children, €160 for adults and €240 for young mothers. The poverty line in Hungary is estimated at around €200 for a single adult. In Portugal, where Basic Income is relatively unknown and misunderstood, the political party LIVRE has included Basic Income in its draft political programme for the autumn elections this year. Now recognising that inequality and social justice are also “green” issues, the fast-growing Green Party of England and Wales has announced that a Basic Income will be included in its manifesto.

Outside Europe, Basic Income is gaining support in other industrialised countries including the United States, Canada, Australia, New Zealand and Japan. Alaska is an outstanding example because since 1982 it has had its own particular form of Basic Income, an unconditional annual dividend paid on an individual basis to all people who have lived there for at least twelve months (except those convicted of felony in the past year). The Alaska Permanent Fund (APF), consisting of 25% of the proceeds of the state’s mineral (oil and gas) sales or royalties, foots the bill. The annual payout is based on a five-year average of APF earnings and has varied from $331.29 in 1984 to $3,269 in 2008. Although this “Basic Income” doesn’t entail tax reform, its benefits are undeniable. Alaska features among the states with the lowest poverty rates in the United States and is one of the least unequal. In 2009, the dividend added US$900 million to Alaskans’ purchasing power, the equivalent of 10,000 new jobs.

The idea of Basic Income has taken root in the countries of the South as an anti-poverty measure, for example in Brazil, Namibia and South Africa. Brazil is the world’s first country to have adopted a law (2003) calling for gradual introduction of a Basic Income. In South Africa, trade unions, churches and many NGOs are calling for it and, in Namibia, the Basic Income Grant Coalition (headed by the Council of Churches, National Union of Namibian Workers, Namibian NGO Forum, National Youth Council and the Namibian Network of AIDS Service Organisations) conducted a two-year pilot project (2007–2009) in Otjivero-Omitara, a low-income rural area, where 930 inhabitants received a monthly payment of 100 Namibian dollars each (US$12.4). The payment was small but the results were surprising: numbers of underweight children went from 42% to 10%; school dropout rates fell from 40% to almost 0%; the number of small businesses increased, as did the purchasing power of the inhabitants, thereby creating a market for the new products. However, the Namibian government has thus far balked at introducing a national Basic Income. In Mexico City a pension paid as a right to all people (some 410,000) of 68 years and over has also paid social dividends: increased autonomy and freedom of the aged, more respect in the family milieu, greater public visibility, improved self esteem, better nutrition and health, and a decrease in social inequality. In 2010, a partial Basic Income was introduced in India in a UNICEF-supported pilot scheme conducted by the trade union Self-Employed Women’s Association (SEWA). For one year, 6,000 individuals in rural areas of Madhya Pradesh received an unconditional payment, working out at about US$24 per month for the average family. The project ended with improved nutrition, health, education, housing and infrastructure, economic activity and, especially, educational attainment.

Other initiatives, related to Basic Income to the extent that they are “free money programmes” have given one-off payments to homeless people in London, to the poor inhabitants of a village in the west of Kenya, and to girls and women in Malawi. All of them show clear correlations between free money and lower crime rates, reduced inequality, less malnutrition, lower infant mortality and teenage pregnancy rates, less truancy, better school completion rates, greater economic growth and higher emancipation rates. Then there is the interesting case of Cherokee, North Carolina (population 8,000) where the Eastern Band of the Cherokee Nation owns the casino. In 1996, the tribal council voted to distribute half the casino’s profits evenly among its approximately 15,000 members so as to give the community a share in the gambling wealth. The payouts have risen from $500 to about $10,000 per person per year. Jane Costello, a Duke University researcher who has been studying the effects of these payments on 1,420 Cherokee-area children over the last twenty years, comparing the lives of poor children who got the payments with those who didn’t, found that, some years on, those getting the payments were one grade ahead in school compared with those who didn’t, overall mental health improved, and behavioural problems in this group decreased by 40% and crime rates by 22%.

The “partial” Basic Income programmes and one-off “free money” initiatives are instructive because they demonstrate that small unconditional payments can make great differences in social and mental health. If a one-off non-universal payment can have such positive effects, what could a “true” Basic Income do? But what is a Basic Income? There is some confusion here because what is often thought to be “Basic Income” takes many forms and different names. Spain, for example, has a “renda garantida de ciutadania” in the Statute of Catalonia, while in other Autonomous Regions it appears as a “salario social” or “renta mínima de inserción”. However, these are all conditioned subsidies for people below a certain income threshold. Podemos came up with an impeccably defined Basic Income in the heady days of its win at the European elections but then opted out, while the smaller parties, Bildu, Anova and Equo, have programmed a Basic Income close to the definition used by the Spanish Red Renta Básica (Basic Income Network). This coincides with that adopted in November 2007 by the Universal Declaration of Emergent Human Rights, approved at the Universal Forum of Cultures in Monterrey. Basic Income is enshrined as a human right in Article 1 (3):

The right to a basic income or universal citizen’s income that guarantees to every human being, independently of age, gender, sexual orientation, civil or employment status, the right to live in material conditions of dignity. To this end, a regular cash payment, financed by tax reforms and covered by the state budget, and sufficient to cover his or her basic needs, is recognised as a right of citizenship of every member-resident of the society, whatever his or her other sources of income may be.

Rather than holding out a right to having certain minimal vital needs covered in cases of poverty or some catastrophe, Article 1 (3) enshrines Basic Income as a right, an ongoing guarantee to every single individual of being able “to live in material conditions of dignity”. No one would be excluded by poverty from engaging in social life and exercising her or his rights and duties as a citizen. It conceives of this right on a universal scale, for rich and poor, developed or developing countries alike.

A guaranteed basic income, above the poverty line, for everybody, would offer a much firmer, autonomous base of existence to (theoretically) all the world’s citizens. The economic independence furnished by a basic income, paid not to households but to individuals, would establish a kind of domestic “counter-power” that could strengthen the bargaining position of women, especially those dependent on the husband or male head of the family, or low earners in exploitative, part time or discontinuous employment. Many farmers in poor countries and workers in developed countries are struggling to survive. In capitalist economies, unemployment is comparable with the landlessness of small farmers in agrarian societies because both economies are characterised by dispossession of land and other means of production. The dispossessed must then sell their labour, usually in crushing conditions, in order to subsist. One of the basic features of today’s economic functioning is the great power of capital to bring the working population to heel. Underlying this disciplinary capacity is the existence of a large, jobless part of the population. When the possibility of dismissal looms ever-larger, the working population must accept increasingly worse conditions from bosses having the whip hand. In a situation close to full employment, when this existed, the power of employers was diminished. A Basic Income would represent an effective tool for countering the disciplinary power of capital and would make leaving the job market a viable option. Although it may seem paradoxical at first sight, many unions (with a few honorable exceptions) have failed to understand the enormous capacity of Basic Income for undermining the discipline that capital can and does impose in a situation of widespread unemployment.

In poor countries this possibility of non-dominated organisation of labour power could bring into being alternative networks of production while also protecting traditional ways of life. For example, a group of small farmers could buy a tractor to increase food production, and a truck to take their produce to a market. This would expand productive networks and encourage sustainable community development, which would then give villagers more effective leverage in claiming essential or improved infrastructure, for example schools, clinics, roads and bridges. In a post-conflict situation, a Basic Income would also have beneficial effects by enabling a return to traditional forms of community-based production and, thus reintegrating people, would help to defuse the potential for violence that flares up periodically and dramatically especially among uprooted young people who have no opportunities to work, or because evident signs of increasing social inequality in a traumatised society are a permanent flashpoint for a generalised feeling of injustice. Food security is vitally important. Such a basic matter as a well-balanced diet could be greatly favoured, for example, if people could transport vegetables to the coast and fish to inland villages. This alone could make a notable difference in the overall health of the population. Economic development is better achieved by breaking ties of dependency and promoting robust productive initiatives at both individual and group levels, projects that are conceived and planned within the society as opposed to the often drastically inappropriate schemes that are imposed from outside aid agencies.

A Basic Income is not difficult to finance, as a recent exhaustive study for Catalonia has shown. Another study recently carried out for the Kingdom of Spain as a whole, based on a sample of almost two million income tax declarations, showed that a Basic Income at the poverty threshold of €7,500 per year (and a fifth of that to under-eighteens) could be financed without touching any social service and, moreover, saving a lot in administrative costs and welfare payments of lesser sums, which would be abolished. A person getting a pension of €1,500 per month would receive the same (€650 as Basic Income and €850 as a pension) but the person now receiving benefits or a pension of €400 would receive €650, more than 60% extra. These two studies are based on a system of progressive income tax redistribution in which the richest 20% would finance the Basic Income, which they would also receive. The lower-income 70% of the population would gain; a neat reverse of the present situation. Introducing a Basic Income is not an economic problem but a political one.

Each zone and country is different, but financing should basically entail changing budgetary priorities, reform of taxation systems or increasing VAT and excise duties on luxury goods, cars, alcohol or tobacco, and financial transaction taxes, for example. This achieves a substantial reduction in inequality of income distribution and greater simplicity and internal coherence in taxation and welfare systems. Basic Income isn’t a panacea that would solve all the world’s social and economic problems, but it would mean wider-spread opportunities for people to participate in productive activities, enhanced social inclusion within stronger communities, greater political and social participation, and a major reduction of poverty and poverty-related problems. It is not an isolated economic policy but part of an overall project in the domain of political economy, aiming to guarantee and fortify the material existence of the whole population. It is an institutionally guaranteed and inclusive form of property that might also be seen as a kind of indemnification of past and present wrongs because it calls upon the more privileged citizens to contribute towards achieving the right of existence for everyone. Herein resides the political obstacle to Basic Income.

Daniel Raventós is a lecturer in Economics at the University of Barcelona and author inter alia of Basic Income: The Material Conditions of Freedom (Pluto Press, 2007). He is on the editorial board of the international political review Sin Permiso

Julie Wark is an advisory board member of the international political review Sin Permiso. Her last book is The Human Rights Manifesto (Zero Books, 2013).

Daniel Raventós is a lecturer in Economics at the University of Barcelona and author inter alia of Basic Income: The Material Conditions of Freedom (Pluto Press, 2007). He is on the editorial board of the international political review Sin Permiso.   Julie Wark is an advisory board member of the international political review Sin Permiso. Her last book is The Human Rights Manifesto (Zero Books, 2013).

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