This article was originally published on the openDemocracy.net website.
Rethinking basic income in a sharing society
RAJESH MAKWANA 6 April 2015
Few debates highlight the moral issues around how wealth is shared across society more than the growing demand for a universal and unconditional basic income. At face value, the idea of receiving a regular income from the state presents a fair and inclusive solution to the financial constraints many people face in a consumerist society—especially at a time when unemployment and inequality are on the rise. But it’s not clear whether a guaranteed citizen’s income would ultimately help or hinder the creation of truly sharing societies, in which ‘freedom from want’ can be achieved within a redistributive economic framework that reinforces the social ties that bind people and communities together.
The arguments in favor of a basic income are persuasive and should not be dismissed lightly. Aside from the clear case for reforming means-tested benefit systems that are failing many targeted claimants, there’s the question of how to maintain decent wage levels when jobs become increasingly scarce. In 1930, John Maynard Keynes famously posited that standards of living would be between four and eight times higher in a hundred years’ time, and that people would need to work a mere 15 hours a weeks. Although Keynes’ era of leisure is still a pipedream for most people despite the tremendous improvements in living standards he predicted, it’s likely that formal working hours will have to be significantly reduced in the years ahead.
For the past three decades the demand for labor, and wages as a share of GDP, have both been declining. Meanwhile, people are living longer and retiring later, and part-time work, insecure casual contracts, and self-employment are increasingly the norm for the precariously underemployed. The reductions in wages that could follow this dramatic shift in employment patterns provide a pragmatic case for the state to grant a supplementary unearned income to all citizens in order to prevent millions more people falling below the poverty line. A basic income could give people the freedom to work fewer hours if they choose. Sharing the work available more equitably across society would also have a range of additional benefits such as reducing levels of consumption and markedly improving the quality of life.
Despite these convincing arguments, there are plenty of reasons for being cautious about the basic income, particularly since it is most often proposed as an alternative to existing systems of social protection.
From an ideological perspective, there are important differences between the provision of a universal basic income and the insurance-based benefits it would replace. Welfare states essentially promote social solidarity through a process of economic sharing, since they provide collectively-funded services that ensure everyone has access to social protection without having to rely on commercial alternatives. Rather than sharing risks and pooling resources in this way, unconditional cash transfers provide people with the money they need to fend for themselves, which is a highly individualistic approach to achieving social security.
This is a key distinction for progressives to bear in mind, since a citizen’s income would be competing for the same government funds that currently pay for a wide range of social services. Under the present trajectory of public policy—in which welfare services are being subjected to increasing waves of neoliberal reform—it is therefore likely that basic income schemes would undermine existing mechanisms of redistribution and social solidarity.
It’s also clear that the cash transfers most universal programs would deliver in industrialized countries would be too low by themselves to keep households above national poverty lines. A truly comprehensive program for a citizen’s income is likely to remain unaffordable unless it is accompanied by a substantial shift in the way governments raise taxes, while a less costly version may not provide a worthwhile alternative to means testing.
In light of these problems, it is worth considering an alternative approach that sidesteps many of the arguments against the idea of a basic income: a universal social dividend that’s based on the value of shared resources.
This model of economic sharing recognizes that all citizens have a right to income from the commons—such as land and other resources that are either inherited or co-created by society. Although this approach is rarely part of the popular discourse on implementing a citizen’s income scheme, the idea can be traced back to the work of the American revolutionary Thomas Paine, who stated that “the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.”
As explained by Peter Barnes in his book With Liberty and Dividends for All, the majority of the wealth that’s inherited or created in society is captured and extracted by the rich, rather than distributed fairly among citizens. Meanwhile, the damaging social and environmental costs of this process are largely borne by the public or the biosphere. The simple idea at the heart of most proposals for a social dividend is therefore to charge user fees on shared resources, which can then be distributed to all citizens as a basic right.
Although an agency would initially have to be set up by governments to administer the program, it would operate independently of the private and public sector as a ‘commons trust’ that could conceivably manage a range of shared resources—from land, fossil fuels and atmospheric carbon storage, to the electromagnetic spectrum and intellectual property. According to calculations by Barnes based only on a specific selection of shared assets, the program could provide every American citizen with as much as $5,000 a year.
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The real advantage of a social dividend from resource rents is that it would facilitate, rather than impede, the creation of a more equal society that embodies the ethic and practice of sharing. Unlike the standard basic income proposal, this alternative approach would not compete with existing welfare budgets, and it would therefore complement solidarity-based systems of social protection.
The social dividend also acknowledges that all citizens are entitled to a fair share of co-owned wealth and resources, which is a commonsense proposal with the potential to dramatically reform economic systems and enhance social cohesion. Since the value of common resources would be shared more equitably, social dividends present an important systemic solution to poverty that can counterbalance the injustice of a global economic model in which wealth predominantly flows to the richest one per cent of the world’s population.
In line with some of the common arguments made in favor of a basic income, social dividends would also increase our sense of personal freedom, since people would no longer feel forced to do menial or difficult jobs that they would otherwise undertake reluctantly or for reasons of survival. This would leave them free to devote more time to creative, cultural and caring pursuits, sparking a much-needed debate on the nature and purpose of work at a time when the escalating environmental crisis necessitates a radically new economic model that is no longer predicated on consumption-driven economic growth.
Furthermore, social dividends could have a transformative impact on individuals and communities, which could pave the way for more extensive changes across society. The additional income received by individuals could help sustain the indispensable unpaid activities that take place in the core economy by giving people the freedom to act on their inner desires to give or be of real service to others. This includes raising children and caring for the elderly, maintaining community relationships and mutual support networks, and participating in voluntary action and civil society organizations.
According to Edgar Cahn, the core economy produces “love and caring, coming to each other’s rescue, democracy and social justice”, which is why there is a clear imperative to rebuild and strengthen this fundamental aspect of society that is increasingly under assault. The profound relationship between genuine compassion and the creation of a more equal world was also vividly expressed by Martin Luther King, who once declared that “Standing beside love is always justice.”
Embodied in these insights is the hope that strengthening the bonds of love, empathy and reciprocity within communities could spark a cultural shift in favor of social justice, and that this could eventually find expression in democratic institutions and policy debates. By helping to resuscitate a rapidly diminishing core economy, a basic income derived from the value of collectively owned resources could therefore empower citizens to take a crucial first step in the co-creation of a truly sharing society.
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