A basic income guarantee (or basic income) is a proposed system[1] of social security, that regularly provides each citizen with a sum of money. In contrast to income redistribution between nations themselves, the phrase basic income defines payments to individuals rather than households[2], groups, or nations, in order to provide for individual basic human needs. Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it. The U.S. Basic Income Network[3] emphasizes this absence of means testing in its precise definition, "The Basic Income Guarantee is an unconditional, government-insured guarantee that all citizens will have enough income to meet their basic needs."
In everyday usage, the phrase basic income is often inaccurately conflated with means tested guaranteed minimum income alternatives such as a negative income tax. A basic income of any amount less than the social minimum is referred to as a partial basic income.
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.
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One of the arguments for a basic income was articulated by the French Economist and Philosopher André Gorz:
...The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...From the point where it takes only 1,000 hours per year or 20,000 to 30,000 hours per lifetime to create an amount of wealth equal to or greater than the amount we create at the present time in 1,600 hours per year or 40,000 to 50,000 hours in a working life, we must all be able to obtain a real income equal to or higher than our current salaries in exchange for a greatly reduced quantity of work...
Neither is it true any longer that the more each individual works, the better off everyone will be. The present crisis has stimulated technological change of an unprecedented scale and speed: 'the micro-chip revolution'. The object and indeed the effect of this revolution has been to make rapidly increasing savings in labour, in the industrial, administrative and service sectors. Increasing production is secured in these sectors by decreasing amounts of labour. As a result, the social process of production no longer needs everyone to work in it on a full-time basis. The work ethic ceases to be viable in such a situation and work-based society is thrown into crisis...—André Gorz, Critique of economic Reason, Gallile, 1989
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.[4] However critics have pointed out the potential work disincentives created by such a program, and have cast doubts over its ability to be implemented.[5] In later years, BIEN has made several fully financed proposals.[6]
The U.S. State of Alaska has a system which provides each citizen with a share of the state's oil revenues[7], although this amount is not necessarily enough to live on. The Alaska Basic Income is subject to Income Tax on Federal level. That way the "Basic Income" works like a Negative Income Tax but with a "prebate" instead of a "rebate" (as far as state finances are concerned). The U.S. also has an Earned income tax credit for low-income taxpayers. In 2006 a bill written by members of the advocacy organization USBIG[8] to transform the credit into a partial basic income was introduced in the US Congress but did not pass.[9]
The city of Dauphin, Manitoba, Canada took part in an experimental basic income program ("Mincome") between 1974 and 1979.[10]
In 2008, a pilot project with a basic income grant was started in the Namibian village of Omitara by the Namibian Basic Income Grant Coalition[11][12]. After six months the project has been found to significantly reduce child malnutrition and increase school attendance. It was also found to increase the community's income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities.[13][14]
The concept of basic, or guaranteed income in the form of social provision, was foreshadowed by Karl Marx, who came to the conclusion that as the productive forces increased, along with automated production, the need for unskilled labor would diminish, eventually leading to a situation in which work would be divided among all members of society (solving the issue of unemployment in capitalism) as it is gradually reduced, emancipating labor from the need to engage in long and alienating work. Marx referred to this stage as Upper-stage communism, where goods and services (rather than income) would be provided free of charge.[15] Other socialist authors, such as Bertrand Russell, envisioned four-hour workdays in a future socialist society.
Many of the following advocates have actually proposed a negative income tax, which is means tested, rather than a basic income. Despite their differences in administration and effect, the two proposals are usually conflated.
Many countries have political parties that advocate a basic income, such as the Green Party of the United States, Green Party of Canada, Green Party of England and Wales, Vivant (Belgium), De Groenen and GreenLeft (The Netherlands), the Scottish Green Party, Socialist Party of South Korea, the New Zealand Democratic Party, the Liberal Party of Norway, Norwegian Green Party and Norwegian Red Party, New Party Nippon (Japan), Greens Japan as well as the Pirate Party Germany.
Worldwide, supporters of a basic income have united in the Basic Income Earth Network. BIEN recognizes numerous national advocacy groups.
One of the world's outspoken advocates of a basic income system is the Belgian philosopher and political economist Philippe van Parijs.[16]. Other advocates include Gunnar Adler-Karlsson (Sweden), Götz Werner (Germany), Saar Boerlage (Netherlands)[17], Herwig Büchele (Austria), André Gorz (France)[18], Michael Hardt and Antonio Negri[19], Charles Murray[20] (USA), Keith Rankin (New Zealand)[21], Daniel Raventós (Spain)[22], Osmo Soininvaara (Finland)[23], Guy Standing (UK)[24][25], Eduardo Suplicy (Brazil)[26] and Walter van Trier (Belgium)[27]
In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.[28]
In the 1972 presidential campaign, Senator George McGovern called for a 'demogrant' that was very similar to a basic income.
In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income (ISBN 0394463544) in which he advocated for the Basic Income and discussed Richard Nixon's GAI proposal.
Mike Gravel, a former US congressman and presidential candidate, advocates a tax rebate paid in a monthly check from the government to all citizens as part of a transition away from income taxes and toward a pre-bated national sales tax (the FairTax).[29]
Winners of the Nobel Prize in Economics who fully support a basic income include Herbert Simon[30], Friedrich Hayek[31][32], James Meade, Robert Solow[33], and Milton Friedman[34].
In his final book Full employment regained? James Meade states that a return to full employment can be achieved only if, among other things, workers offer their services at a low enough price, that the required wage for unskilled labour would be too low to generate a socially desirable distribution of income, and that therefore a citizen's income would be necessary.[35]
Erik Olin Wright characterizes basic income as a socialist project and a further reform to capitalism that establishes the basis of a social economy by empowering labor in relation to capital.[36]
Richard Parncutt argues that income tax is effectively progressive when basic income is combined with flat income tax. The combination would radically simplify the tax-welfare system, enabling voters to support policies that truly serve their personal interest and strengthen the entire economy, leading to elimination of poverty. [37]
In his Robotic Nation essays, Marshall Brain argues that the growing amount of automation in the workplace will eventually displace a large percentage of workers, and that in order to be able to maintain the economy, an annual stipend will be needed.[38] A similar argument was made by Jeremy Rifkin, in his book The End of Work.[39]
Martin Ford in The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future (free PDF available) [40], argues that most routine jobs in the economy will ultimately be automated via advancing technologies such as robotics and artificial intelligence and that, without a basic guaranteed income, this will cause a drastic decline in consumer demand and confidence, possibly precipitating a major economic crisis.[41] Ford further argues that the level of the basic income should vary based on incentives such as the pursuit of higher education, or behaviours that benefit the community or the environment.
Many different sources of funding have been suggested for a guaranteed minimum income:
One critical view of Basic Income theorizes that it would have a negative effect on work incentive[42] and labor supply. Even when the benefits are not permanent, the hours worked - by the recipients of the benefit - are observed to decline by 5%, a decrease of 2 hours in a typical 40 hour work week, in one study:
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.[42]
However, in studies of the Mincome experiment in rural Manitoba, the only two groups who worked less in a significant way 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.[43] 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."[44]