Basic income (2)
In the Canadian Globe and Mail’s March article, Eric Reguly described basic income as:
“. . . a concept that has been around since Thomas More’s Utopia was published in the early 16th century. It was proposed by Thomas Paine, one of the founding fathers of the United States, in his pamphlet Agrarian Justice, and tested during the 20th century in a few unlikely spots, including the town of Dauphin, Man. Martin Luther King, Jr., extolled the virtues of basic income, as did Milton Friedman, the American economist respected by Ronald Reagan and Maggie Thatcher.
“Basic income is being contemplated, or about to be launched in experimental forms. It would streamline bureaucracy if it replaced a tangle of means-tested welfare and support programs. It would, in theory, boost demand in the economy and give people the flexibility to hold out for, or train for, high-paying jobs instead being forced into menial labour to put food on the table. And for those unable, or unwilling, to train for a better job, it could make it worthwhile to take a low-paying one because any additional earnings would not be clawed back. It just might even trigger the development of a young entrepreneurial class”.
On August 25th, the Globe and Mail republished a Bloomberg news report that Finland is pushing ahead with a plan to test the effects of paying a basic income as it seeks to protect state finances and move more people into the labour market. Kela, the Social Insurance Institution of Finland, will carry out the experiment starting in 2017 and including 2,000 randomly selected welfare recipients. The level of basic income would be €560 a month ($816 Canadian), tax free and mandatory for those picked.
“The objective of the legislative proposal is to carry out a basic income experiment in order to assess whether basic income can be used to reform social security, specifically to reduce incentive traps relating to working,” the Social Affairs and Health Ministry said. The effect of a basic income will be assessed by comparing the participating group with a carefully matched control group.
However, Eric Reguly fears that basic income could become the equivalent of a monstrous form of quantitative easing aimed not at the financial markets, but at unskilled and semi-skilled workers: “Don’t worry about the robots, young man and young woman, here’s your guaranteed gruel ticket; now leave the privileged alone”.
He added that the right sees it as way to allow job destruction due to robotisation to happen more easily; the left sees it as protection ‘beefing up’ the welfare state and a tool to protect unskilled workers from automation-obsessed, job-killing corporations.
Environmentalists, on the other hand, will warm to news sent in June by WMNEG member Jeremy Heighway, after attending a UBI Hamburg conference which saw unconditional basic income as a route to a ‘degrowth society’.
The idea of a basic income is gaining ground, for a variety of reasons. In June BI was the subject of a national referendum in Switzerland and there is serious interest in the proposal in several other places, including Ontario, Denmark, Portugal, Spain and the Netherlands. There will be great interest in the findings of the Finnish pilot project.
Note: The first ever Nordic conference on Basic Income Pilots, will take place in Christiansborg, the Danish parliament building in the centre of Copenhagen, on September 22-23, 2016