F.A.Q.

What is basic income?

Basic income, as Basic Income UK defines it, is a payment from society which is unconditional, universal, made to each individual and high enough to maintain human material existence. It can include other collectively provided universal and unconditional services such as healthcare and education; and perhaps in the future transport, housing, energy. The availability of these or lack of them will have an impact on how high the payment needs to be.

Unconditional: without any requirement to do work, to look for work, to participate in other government programmes or services. It will also come without outside controls over how people might spend it.

Universal: available to all.

Individual: available to each individual, regardless of household status.

High enough for material existence: basic income, possibly in combination with collectively provided universal services, will be enough to live on and participate fully in society.

This last part of our definition is a matter of controversy within the global movement for basic income. We work with other groups which define basic income using only the first three, that is unconditional, universal and individual, without the stipulation that it be high enough to live upon.

 

What are other names for it?

Over the years there have been many different names for basic income. It is also called citizens income, social wage, social dividend, social credit, guaranteed liveable income. In his novel ‘For Us, the Living’ Robert Heinlein called basic income a ‘heritage payment’ in recognition that the rise in human living standards is a collective result of the efforts of our ancestors.

 

Is Basic Income the same as ‘Negative Income Tax’ or ‘Guaranteed Minimum Income’?

No, although it might (or might not) share the lack of a work requirement or other conditions. Negative Income Tax, as promoted by Milton Friedman and other monetarists, carries with it a means test. While a negative income tax would be far simpler if integrated into the tax system and represent some savings on bureaucracy, in most iterations it maintains the disincentive to work inherent in all means-tested benefits if withdrawn pound for pound over the agreed rate. Its proponents also generally envisage that all universal services like education and health would be privately provided and paid for individually by the users.

Guaranteed Minimum Income, as it has been introduced in Cyprus and is mooted for Greece, carries with it the condition that the recipient accept any job offered, and will also be withdrawn on the basis of earned income.

Both of these are also generally assessed on a household, not individual, basis. This means neither would tackle the bureaucracy and surveillance needed to define what a household is, nor would either have an impact on inequities inherent within households.

 

How would it be paid for?

Payment of an unconditional basic income would eliminate the bureaucracy needed to administer current conditional social security systems. It would eliminate the public expense which goes towards private provision of programmes meant to ‘fix’ people who are unemployed due to either disability or lack of jobs or both. In the UK, these two savings alone could pay for about a third of what basic income could cost nationally.

For the rest, there will have to be higher taxes on corporate profits, the elimination of tax dodging through complex corporate structures and off-shored money in tax havens, higher taxes on luxury goods, on resource use and/or pollution, higher taxes on income which is not remuneration for work. Some possibilities for this last are: rents above the amount needed to maintain property; fees/profits from financial speculation; inheritances; royalties for copyright or patents above a certain level.

 

How high is ‘high enough’?

At the moment the Joseph Rowntree Foundation defines ‘enough to live upon’ in the UK as £14,500 – the annual rate if someone received the living wage working 40 hours a week. Basic Income UK agrees that for the time being this is a good place to start. All should receive, in John McDonnell MP’s words, ‘living wage, whether in a job or not’.

Of course this is with universal free healthcare and education, and marketised essentials like housing, transport, energy and food. We believe once the principle of basic income is agreed – that all people deserve the means to live – the final rate to individuals and the services provided collectively should be decided by a democratic process.

 

What are the implications of basic income?

First of all, basic income separates human subsistence from working for a wage. It recognises that society depends on a lot of work which isn’t paid for – especially the daily care for children and others, but also voluntary efforts to improve the environment, increase social and democratic engagement, pass on skills. Basic income takes away the danger of impoverishment if someone devotes him/herself to the care of others.

Basic income also recognises that technology and better organisation produces surpluses which should be shared and put to use by all of society and not hoarded (and often frittered away) by private interests.
A basic income paid to individuals promotes equality within households, and would particularly help the position of women and people with disabilities both within their own households and more widely in society. This was a particularly striking effect documented in the most recent pilot study in India – with an income which was only 30% needed for subsistence.

Many feel basic income would encourage entrepreneurial self-employment, an effect also documented by the Indian pilot study and another in Namibia. It takes away the risk of losing everything if someone devotes themselves to a new idea, a new method, a new technology, a new product. But whether devoted to entrepreneurial, scientific, or cultural projects, basic income has the potential to free people’s imagination from what Brian Eno called ‘the constant emergencies of the here and now’.

Basic income would give those in paid employment the power to refuse work in order to improve their working conditions or wages. Generally basic income would give people the power to refuse work which is harmful to themselves or the environment, or work which is (or should be) unnecessary to support human existence. It would enable rational individual and collective decisions about what work, and how much work, needs to be done. As it currently exists the labour market mitigates against rationality – by generally paying the most important jobs the least amount in wages, and paying the most for those jobs which would be least noticed in terms of human existence if they disappeared.

Basic income, in so far as it reduces the stress of real or feared poverty, would have a beneficial effect on health. The Indian pilot study saw an overall reduction in the use of alcohol and tobacco. The Canadian Mincome experiment during the 1970s saw a 13% decrease in hospital admissions, especially for accidents, domestic violence and mental health problems, and a similar decrease in visits to family doctors [especially by those with long-term health problems]. Thus basic income could well reduce the costs of healthcare.

The reduction of stress, and capture of time induced by what David Graeber has called ‘bullshit jobs’ – and the overall stress of having to ‘earn a living’ regardless of whether the job is needed or not – has the potential to cut compensatory consumption of non-essentials. This is why basic income is supported by many who call for a ‘steady-state’ or ‘de-growth’ society on environmental grounds. Since currently production – and innovation – is led by private consumer wants rather than societal needs, and are often themselves manufactured by advertising to support further production of consumer goods, basic income has the potential to reduce stress on the earth’s resources.

Basic Income would reduce crimes of domestic violence, burglary and theft, and reduce substance abuse. This was also documented by the Mincome experiment, and the Indian and Namibian pilot studies. Considering that it currently costs some £42k a year to keep someone in prison in the UK, paying all people a fraction of that could save our society a huge amount, as well as freeing up those who administer the justice system to work on more proactive, rather than punitive, projects.

Some proponents say basic income would save capitalism, others say it would destroy it. This really depends on how one defines capitalism, and Basic Income UK leaves this question to individuals to decide for themselves. Whether basic income does one or the other, society would undoubtedly be transformed.

 

Has basic income been tried before? If so, how well did it work?

There have already been a number of experiments and pilots throughout the world. Here as some examples.
Iran has a non-means tested, cash transfer program known as the Iranian subsidy reform plan. Every two months 810,000 rials (£43 or $66) are distributed to 96% of the population. It is not a Basic Income because the head of the household receives all the household’s individual entitlements. But, despite such limitations, it has led to a drop in income inequality, reductions in inflation and has even been widely praised by the IMF.

In Brazil, there is now a program in place which attempts to both reduce short-term poverty by direct cash transfers to the poor and fight long-term poverty by increasing human capital through a conditional stream of cash transfers.

In addition, Alaska has a ‘permanent fund’ sourced from the state’s massive mineral wealth which is distributed to all citizens on a yearly basis. It is not substantial but it is non-means tested and by now something of a political given.

Why should the rich get it as well as the poor?

For starters, who is going to define the rich? And what about those who are near the margins and might slip into the poor? There are also the costs associated with monitoring and regulating access to benefits that do have a means-tested element. Basic income is intended to simplify and streamline such bureaucracy. However, aside from these technical issues, basic income is an entitlement. It is a human right. It is given to every citizen as a matter of right and is thus unaffected by their wage or income from other sources.

 

Won’t it cause economic problems like a rise in rents and inflation?

Well there might be some initial problems, certainly. The European Citizen’s Initiative is advocating for a study into these issues. There is some reason to think that these problems will be alleviated by the introduction of a basic income. For instance, the UK is currently suffering from a shortage of housing in places where jobs are available meaning the prices of houses are skyrocketing, both in the private renting sector and ownership. A basic income could possibly allow people to live in areas that currently lack available paid work and regenerate the economies of these neglected areas. In addition, the fact that a basic income would redistribute money and thus allow it circulate in the economy is one of the reasons that many neo-liberal thinkers (like Milton Friedman) advocated a negative income tax. This circulatory mechanism remains at the heart of the basic income model.

 

Isn’t it politically impossible?

Well, we won’t know without more comprehensive study. It is an idea that has pedigree on both the right and the left. More than that, however, a great many of us believe it is not just possible but necessary. Labour and capital markets have changed a great deal since the inauguration of the welfare state. Basic income is a way to evolve this system to match current political, social and economic realities.