Basic Income: utopian or realistic?
Joerg Drescher, philosopher and writer, believes that the right distribution of resources in the modern economy can free mankind from poverty and offer the possibility to enjoy freedom, perform creative activities and be an entrepreneur.
The worldwide economical crisis shows today, that the current form of capitalism can not exist successfully without some reforms. The greatest scientists and analytics agree, even if they represent different schools: The world economy can get out of the crises only when it is clear, how the renewed version of the capitalism will look like. One future element of such a new system has been discussed for many years and scientists examine it seriously. It is referred to the Basic Income Guarantee (BIG). This is a defined sum of money, which is paid regularly to each citizen of a country – regardless if he or she works, how much they earn or if they are successful. Of course it can not be 1000 Euro per month. Moreover, it is a smaller sum, which is just enough to satisfy the basic needs of a human and without which the can not live. And of course everyone has the freedom to work and earn additional money.
History
The idea of BIG is not new: Something similar was described even 500 years ago by Thomas More in his tractate “A Fruitful and Pleasant Work of the Best State of a Public Weal, and of the New Isle Called Utopia.” The social and economic catastrophes in the 20th century gave the understanding and discussion of this idea a strong impulse. The British thinker Major Clifford Hugh Douglas developed during the First World war a regularity, which disagreed with the postulates of the classic economy from David Ricardo: The total value of goods and services, which are produced by a company in a definite time are always higher than the total sum of paid wages to the employees and paid dividends to the owner. This means, in spite of the classic work the produced value is not immediately distributed to the buying power, but fills the pockets of the rich and unleashes useless poverty. To correct this, the theorist offered the help of a “National Dividend”: A special sum should be distributed between all citizens equally, while the prices are adjusted with the help of a special mechanism to exclude possible inflation. A few political parties and social movements crowded round the thoughts of Douglas in Australia, Canada and New Zeeland.
Later there was a wider discussion in Canada. In the 1960th Milton Friedman started a debate about the BIG-idea. He proposed the introduction of a “negative income tax”, where income, which is higher than some defined sum is taxed; the collected means could be distributed between those, who would have a lower income. More detailed it works in the following way: what a human doesn’t earn, he gets from the state as a fixed sum, which correlates with the minimum subsistence level (about 10.000 Dollars), but pays a quarter of his other income to the treasury. Through this, even if a person earns the fourth of the minimum subsistence level, he keep “his”, but if he earns less, he gets an extra pay. Only those, who earn more than 40.000 USD, pay more than they get. With this system it is best to keep your income at this level.
In the 1970th this system was introduced on trial with the name “Mincome” in some states (abbr. “Minimum income”). The best results were shown in Alaska, where such a system works until today successfully. A special fund was founded, in which a part of the income from the revenues of oil is paid. From this fund all citizens from the state get a little income: each citizen earns about 1.000 USD per year. For the USA it is not much and it is impossible to live only from this. But there the idea, that each human has the right to a certain part of the national income, is at least reality.
Since the 1980x in Europe there has been again a relatively active discussion about BIG, because there are stronger neoliberial tendencies. In the mid of the 1980x the Basic Income Earth Network (BIEN) was founded, which deals with the scientific investigation of questions, which are connected with BIG.
Funding
There are a few possibilities to fund a BIG system. One of these possibilities is to found a special fund, like in Alaska, where revenues from a very successful area are collected (e.g. gains from natural resources). Another way is, to fund BIG by taxes. In Germany Prof. Helmut Pelzer and the politician Dieter Althaus proposed in each case a model, which is funded by income taxed – the “Transfer-limit models.” For businessmen there is no fundamental difference, because they would pay the tax directly like they do it today. They consider taxes even today in his calculation of his goods. But BIG would free businessmen from their conscience, which could torture them, if they would like to fire a worker (e.g. because they substitute him by a more effective machine). His own profit can grow by his sale and the fired worker gets anyway a special sum by BIG.
Labour market
The most frequent question, which advocates of this concept are asked and which is connected with BIG: Who is going to work in such system? But actually it would be more correct to ask, what people wil work, if they are freed from the necessity to do stupid work. Even today there are a lot of workplaces not because of their economical necessity, but only because a high mass of people need something to do, so that they can earn money, which is again necessary for consumption, without which a modern economy couldn’t exist.
But what will people work? According to a theory of the sociologist Erich Fromm a human being can’t live longer than two months without work. After this time he wants to work. And this work could be any work – e.g. even one, for which he doesn’t earn money today and he will do on own wish in his spare time. Today money is the main motivation to work, but with this new system new motivations must be found, which force a human to work and to be creative: individual fulfilment, climate at work, reaching aims – again something like an income. Even if a human has a “basic level of living”, which is guaranteed by a Basic Income, he would like to live under better conditions. And if he would like to buy a car, for example, than he needs a suitable paid job.
Of course you can say: This works even today in rich countries by a wide social welfare system. But the universal difference is, that today almost only unemployed people get help. But BIG is paid to everybody, regardless, how much money he has. It is his starting capital, which he can use for example to open his own business.
Anticrisis
What is special about BIG is, that it unites the best features of capitalism and socialism. Everyone gets a certain minimum, which is necessary for his life, but the prices are built further through the market and the market economy is completely untaught. But the today’s crisis, which a lot call as systematic crisis of the capitalism, is produced through an overproduction and a low demand: This means, people do not have enough money to consume all produced goods. It is the same problem, which the capitalism had during the great depression. Let’s remember Henry Ford, who said: “I pay my workers so much, that they can buy my cars.” The introduction of BIG makes it possible to solve the problem of a decreasing demand: Evidently the first step of the introduction of the new system is attended by a big consumption boom. But after this the economy will recover and the growth will be put to a new, stable basis.
Business-Dossier
Joerg Drescher, director of the Project Jovialism, member of the Basic Income Earth Network (BIEN), writer
For your information!
The used material is from the newspaper БИЗНЕС Nr. 39(870), 28. September 2009 (www.business.ua)
