Last year, the European Commission received a ‘citizens’ initiative’ on the introduction of an unconditional basic income in the European Union. It asked to promote and encourage cooperation among the Member States in order to launch such a basic income and to improve the systems of social security.
One million signatories were necessary to successfully introduce this demand, but it failed. However, it did stimulate the debate. In many meetings of social movements, someone is asking to put this topic on the agenda, whereas social protection is hardly mentioned. It is indeed an attractive and easy proposal, more particularly at a moment when all people are suffering from austerity policies and when social protection systems are ‘modernized’ in order to make them more ‘effective’. The proposal certainly has to be looked at carefully in order to see its advantages and its pitfalls.
In order to avoid all risks of misunderstanding, it is necessary to see what exactly a ‘basic income’ means and where and how it differs from other proposals. There is still quite some confusion, and some people do support the demand for a basic income, without knowing exactly what it implies.
In the ‘citizens’ initiative’ the basic income (BI) is defined as follows: ‘a guaranteed income, given to all in addition to any other income they might receive. By advancing equality and economic participation while enabling simpler welfare systems, the BI leads to a fairer and more efficient society’. The BI is unconditional, universal, individual, high enough to ensure an existence in dignity and participation in society.
As we will see in this article, the BI replaces certain parts of the current social security and social assistance systems.
This BI is not the same as the ‘guaranteed minimum income’ (MI). The MI is a proposal made in a recommendation of the European Council of Ministers in 1992. It aimed to give everyone sufficient resources so as to maintain human dignity. It came about in the framework of a discussion on the convergence of social protection systems. The harmonisation of these systems was said to be impossible and undesirable, though the Member States were asked to define a minimum amount of income everyone should be able to receive. This recommendation was referred to in different EU-documents till some years ago but it was never implemented. Nevertheless, a European framework directive should be possible. The MI can be given to all people who fall below a given income floor.
The third concept to take into account is the minimum wage. Some countries have legally binding minimum wages, whereas others work with wages defined in a process of collective bargaining. Some European countries have no minimum wage at all. This issue is now also on the agenda with a demand to avoid social dumping in the European Union and to define a legal minimum wage throughout the EU.
This minimum wage is part of labour law and is paid for waged labour. The MI is a kind of social assistance for people who are not participating in the labour market and are not able to provide for their livelihood. The BI is an amount paid to all citizens, rich and poor, irrespective of their income and/or labour. This is why it is also called ‘citizens’ income’.
The proposal to give all citizens, irrespective of their status, income or job a certain amount of money is rather old. It is based on the idea that all have a right to an ‘adequate standard of living’ as is stated in the International Pact for Economic, Social and Cultural Rights, and the fact that States have to guarantee it.
In Belgium, the idea was promoted by the philosopher Philippe Van Parijs in order to promote social justice, given the fact that ‘equality of opportunity’ cannot really be achieved. Today, the idea is promoted by the political party Vivant and some greens. More recently, the idea was strongly promoted by Guy Standing in his book on ‘the precariat’..
There are convincing arguments to defend a system of BI.
The first one relates to citizenship, this is the idea that all human beings are equal and have equal rights. It is unacceptable to make distinctions in function of job or status. All citizens of a national community should in the same way be able to share in nationally produced wealth. In this way, the BI creates a kind of real freedom instead of the formal freedom of an abstract citizenship.
This is directly linked to the idea of universalism. Our systems of social security are, in theory, also universal but they are far from it in practice. By treating everyone in the same way and giving equal rights, one can work towards an effective social integration. Targeted and selective allowances should not exist. This will make an end to stigmatization, the frequent manifestations of clientelism, the biased assessments and the high administrative costs linked to the management of granting targeted benefits and detecting possible fraud.
The BI is unconditional, which means that huge targeting and management costs can indeed be avoided. The amount can differ in function of age – children and youth on the one hand, aged people on the other hand will receive lower or higher amounts. This is the only criterion to be taken into account.
In the proposals coming from leftwing groups it is pointed out that a BI gives people the freedom to choose whether they want to be active on the labour market or not. Those who prefer to dedicate their time to artistic activities or to social and/or political work, can do so. Those who want to do nothing, are free as well. No one is obliged to go and look for a job, which can only have an emancipating and liberating impact. The pressure that is put on people to go and work, will disappear. At a moment when there are insufficient jobs and ‘full employment’ seems to be a lost utopia, this argument is very important.
The BI also makes an end to ‘the precariat’, people who today have no rights and therefore no interest in defending the rights of social security. Migrants and refugees can now participate in the labour market precisely because they do not respect the social rules and can offer their labour force at a much lower price. By seriously diminishing labour costs above the net paid wages, the BI can make an end to the ‘black’ or ‘informal’ labour market which is based on competition.
By also eliminating the pressure to look for a job or to create jobs, it would no longer be necessary to subsidize companies.
With a BI system, people would be free to participate or not in the labour market. Labour would become much cheaper, not only because non wage labour costs would disappear but also because employers would not be willing to continue to pay the same net wage above the BI. A labour income certainly would help to raise the living standards above the BI and workers will be able to exert more pressure on employers since they are not obliged to stay on the labour market. The currently badly paid jobs, for difficult or ‘dirty’ work could become well-paid jobs, since otherwise no one would be willing to take them. Employers would thus be stimulated to offer attractive labour conditions so as to attract sufficient workers.
Contrary to our social security systems the BI cannot be made responsible for the high labour costs or for distorting labour markets. BI is indeed a distribution of incomes but outside the market for labour and goods. Income is de-linked from labour. BI is not a simple distribution from rich to poor, since the rich would also receive the same amount of money.
Finally, the BI is an effective tool to eradicate poverty, at least if the amount is high enough. The BI gives freedom to the poor who are now constantly harassed in order to receive their conditional benefits and have to give evidence of their willingness to work and to justify their behaviour and their expenses.
These advantages are very important and can advance a real systemic, progressive and ecological change. It could mean the end of capitalist labour relations by giving workers their freedom. Workers would indeed no longer be obliged to sell their labour force in order to survive. Labour relations can be based on free contracts that can end as soon as labour conditions become unsatisfactory.
Questions, doubts, pitfalls …
But why is the BI not on the agenda of the left if it is so interesting? If the advantages are so clear and irrefutable, and if a BI even can erode capitalism, why not organize a huge campaign in order to promote it? Why did the citizens’ initiative get so little support?
BI is often presented as being ‘neutral’, a proposal that goes beyond the opposition between the right and the left. This is clearly wrong since there is a very strong ideological opposition concerning this topic. BI can be promoted by the left, as it can be promoted by the right, but with a different content and philosophy. It is no coincidence that in Belgium, the most important party supporting the BI is the liberal Vivant. At the left, it is mainly libertarians and greens who support it.
For liberals, the arguments are obvious: a radical reduction of labour costs, a dismantlement of social protection and of their responsibility for it, and a weakening of trade unions.
This liberal background is present already in some countries who work with negative income taxes: if your income drops below a certain threshold, government will pay a compensation. This is not the same philosophy as the one of the BI, but it is good to never forget that even in a neoliberal context, there is room for a minimum income, whereas minimum wages are refused because they are said to distort the labour market.
Leftwing libertarians and greens interpret the BI as a kind of new paradigm, a tool for building a new society, without any obligation to work and with a real emancipatory potential.
Both ways of thinking are problematic.
A BI gives everyone the right to work or to not work. It constitutes a right to laziness. We may assume that most people do want to give meaning to their life and spend their time in a useful and agreeable way, doing some work or any other activity. But some people may want to avoid any activity, or just keep busy with themselves. Is this acceptable? Some social and productive work is absolutely necessary – food production, for instance, and many other activities. This work has to be done, at any rate. Should not every member of society do some part of these tasks? Should this work not be distributed fairly or is it acceptable that some people totally withdraw from any responsibility?
The question is particularly relevant for so-called burdensome and ‘dirty’ work. Just imagine there are too few candidates to do the fruit picking, work in the mining sector or garbage collection. Can we assume all these tasks will be robotized or will just disappear? Or will some people be willing to continue to do it, out of duty, in the same as women will continue to do their unpaid domestic work?
The BI exempts the State from doing anything for people above and next to the BI. Even if today’s social protection systems are not meant to fight inequality, they do rise peoples’ incomes and limit inequality. The best tool in the fight against inequality is a fair tax system and this can be maintained when a BI system is introduced. Taxes could be used to limit the highest incomes and thus provide money for a BI. But the responsibility of the State stops when the minimum floor of BI is reached. Social progress through higher incomes stops to be a task of governments and income inequalities can rise. Allowances above the BI become impossible because all resources will be needed to pay for the BI.
Questions can also be put concerning the feasibility and the desirability of unconditionality. The freedom given to people is very important, but what if the BI is used for gambling or drinking? What if people become homeless? Is the State responsible for people who fall off the wayside of minimal protection? And if so, how are governments to justify this help to those who behave ‘correctly’? If not, is it possible to let people just die from hunger?
Can conditionality not also be seen as reciprocity? It would mean that people have to behave correctly if they do not want their BI be withdrawn, whereas public authorities are committed to provide people with good quality social services. Or a decent labour market policy. Benefits rarely are totally unconditional and this is probably a good thing. Citizenship is based on a relationship between citizens and the state. It is an implicit agreement on rights and duties for all. A BI is a cash transfer and the money has to be found somewhere, it is nationally produced wealth and someone has to produce it. Is it possible for some to totally withdraw from any political or social commitment? Can someone claim respect for his/her rights without respecting the rights of others?
By eliminating non wage labour costs, labour will become far more cheaper for employers. The advantage for them is much more important than for workers who still will have to fight for decent labour conditions. In whatever way the BI is being financed, it will always be some kind of tax to be paid by everyone. And that means that labour costs which are now paid by workers and employers as part of the wage cost, will have to be paid by the whole of society, possibly through a higher VAT rate. It thus comes down to a shift from labour costs to costs for society. One could react by stating that the price of labour and of capital are being passed on in the prices of products, and that is correct. But the price of products is determined on a competitive market and is very relative, if not arbitrary. It always is more interesting to raise social contributions at the level of wages.
It is obvious that trade unions are not very keen on such a system of BI. It will become much more difficult to negotiate good labour conditions, certainly when the BI is not high enough to live on. Their only possible threat is withdrawal from the labour market. If workers do not only want to survive, but also want a car or a holiday abroad, it will become difficult to put pressure on employers.
It is clear that trade unions will lose much of their power. A basic income is paid by public authorities out of tax money. If there are fiscal problems, it will be easy to diminish the BI. Social security, on the contrary, is jointly managed by employers and workers and cannot suffer from arbitrary decisions. In a BI system, the freedom workers have is a freedom to not work. This is very relative and is only valid when one is satisfied with a life in relative poverty. Chances are real that wages above the BI will remain very limited. An unconditional income outside of the labour market cannot influence that labour market. Contrary to the thesis that capitalism is being eroded, it is possible that one ends up with a capitalism without a labour market and that employers pass on as many costs as possible to the whole of society. Trade unions will become redundant, as Roland Duchatelet, the founder of Vivant, admitted in an interview with a Belgian newspaper. In his ‘business model’, trade unions could become ‘coaches’.
Finally the main questions concern the amount of the BI.
How much? How to finance?
In Vivant Europe’s proposal the idea is to have a BI amounting to 50 % of the guaranteed minimum wage. Children up to 18 years old would receive 25 % of this amount, young people between 18 and 25 years old would receive 75 %, whereas aged people above 65 years would receive 150%.
For Belgium this would mean 700 Euro per month and the system would cost around 24 % of GDP. This is more or less the share now taken by social expenditures. Roland Duchatelet also mentions an amount of more or less 700 Euro.
Pensions, unemployment benefits, family allowances and costs for sabbaticals would disappear. According to Vivant, huge savings are possible on defence, police and cultural policies (because non wage labour costs disappear). The costs for health care would be halved because doctors would not have to pay social security costs.
Vivant also proposes a lowering of company taxes to 15 %, whereas all incomes beneath 1500 Euro per month would be exempted from income tax. Above 1500 Euro per month the tax rate would be 50 %.
The BI is mainly financed through the savings on the current social expenditures and a substantial rise of VAT. The idea is that net wages would remain unchanged.
Apart from the clearly liberal ideology behind Vivant’s proposal – speaking about ‘taxes’ on labour instead of social contributions as being part of wages and of a ‘society of welfare recipients’, this proposal gives rise to serious doubts.
This contribution cannot analyse the detailed amounts, but a first look at the proposals does raise questions about their feasibility and adequacy. It is very improbable that net wages would remain unchanged. It would mean that workers would really gain with these proposals and pensioners would seriously loose. Net wages may remain unchanged indeed, if workers only pay the difference between the BI and the former net wage.
It is clear that a ‘decent life’ is not possible with 700 Euro per month. Those who work can raise their income. And those who earn enough can buy a private insurance against illness, unemployment and old age, without any solidarity. But is it possible to chose not to work if it means you have to live with 700 Euro a month? Is it possible for an aged person to live with 1050 Euro a month, let alone to enjoy your old age?
Many of the arguments in favour of the BI disappear rapidly when translated into concrete amounts. In the European citizens’ initiative it is stated one wants to shift from a ‘compensatory’ system towards an ‘emancipatory’ system, but 700 Euro a month can hardly be said to be sufficient to achieve this. Even 1000 Euro a month is hardly emancipatory.
The amounts for other countries are not any better. In Bulgaria the BI would only cost 5,45 % of GDP but the amount would not rise above 37 Euro per month. Bulgarians will not be too happy.
The current proposals for Germany, Spain and Finland all mention amounts around this same floor as in Belgium. No one proposes an amount up to the poverty line (for Belgium: 1000 Euro per month). Apparently this is too optimistic and this means the BI would not be sufficient to really eradicate poverty.
It just means that the BI would not be enough to have a decent life, and mini-jobs will have to be added, flexible jobs that employers will be happy to provide on a temporary basis. Emancipatory?
Philippe Van Parijs, who plays a very important role in the promotion of a BI, now proposes a European ‘dividend’ of 200 Euro a month for every citizen of the EU. Apart from this sad choice of economic terminology, the philosopher sees this BI as a tool for giving the EU more legitimacy. However, people have economic and social rights. Why should they be satisfied with alms? And should this legitimacy not come from policies that promote and protect their rights?
Re-thinking social protection
However much one may want to introduce a universal system of basic income with individual rights, if a BI implies that a substantial part of society would have to live with an amount beneath the poverty line, it is not convincing.
The advocates of a BI have very good arguments, but the problems outweigh the advantages, and the funding is highly problematic.
The BI could be an attractive proposal allowing for new thinking on social protection. However, this new thinking also accepts the economic reality and is not geared towards changing economic relationships. The BI certainly should be further examined in order to see if other, more modulated versions could be more feasible.
At any rate, our social protection will have to be re-examined. Its fragmentation into many different sub-systems has to be countered. The way our welfare states are currently dismantled is not acceptable. But trade unions are on the defensive and remain very silent whenever a progressive reform could be discussed. It means that our societies are now victims of neoliberal reforms. A partial decoupling of labour and income/social protection could be discussed. A passing on of non wage labour costs to the whole of society should not.
A flexible labour market in favour of workers, lower and differently organised social contributions in order to avoid the delocalisation of labour, a better and simplified protection against unemployment, better pensions, different family allowances and a more efficient health care system focused on prevention, more redistribution and more solidarity. These points are perfectly possible but are insufficiently reflected on to-day.
Most current advocates of the BI want to dismantle social protection and weaken the trade unions. We certainly may have reasons to criticize them, but they are the result of a century old social struggle and should not be abandoned. In order to eradicate poverty and to protect human rights, we do not need a BI. There are other solutions possible, able to protect the poor and workers better. They are not ideologically neutral either.
Firstly, there is the guaranteed minimum income. In view of the fact that higher classes do not really need a BI, it seems to be more interesting to insist on the introduction, in all EU Member States, of a guaranteed income for all those who do not participate in the labour market or do not earn enough. Such an income should amount to 60 % of the median income in the EU Member States, the official poverty line. Such a system is also difficult to finance, but with solidarity among EU Member States and regions it is perfectly feasible.
It also seems clear to me that we should continue to resist the European and national efforts to exclusively focus on participation in the labour market and on having everyone working much longer. At this moment, there are not enough jobs for everyone, let alone for people older than 65 years. Social needs are not that important as to make this necessary.
A drastic reduction of working time should be possible, in the same way as more possibilities for sabbaticals and credit-time. All those who want to temporarily withdraw from the labour market, for whatever reason, should have a possibility to do it. And obviously, as anti-poverty movements demand, all allowances should reach the poverty line.
We should re-think our social protection. We should be able to offer everyone economic and social security. We have to see how to make our social protection in such a way that it becomes a tool for systemic change and for democratic improvement. Social protection can be important for economic and social change. It can also be seen as a kind of ‘social commons’, since all people have the same needs. Different societies will find different answers to these needs, but if we want to respect universal human rights, there will always be common characteristics. This could be a collaborative project.
So yes, we do have to think of a new paradigm, but it should not be the result of the dismantlement of existing rights. Forward-looking work is not synonymous of breaking with the past. Poverty and inequality should be fought, and this can only happen if the whole of society is involved. Poverty is a social relationship which you cannot change by giving an allowance to the rich.
Comments on this article are very welcome, preferably with arguments. The advocates of the BI are not the only ones who are looking for social solutions. A serious debate on these issues is more than welcome, because the confusion around the terminology is still very important.
 Recommendation of the Council 92/442, 27 July 1992.
 Van Parijs, P., Qu’est-ce qu’une société juste? Introduction à la pratique de la philosophie politique, Paris, Seuil, 1991.
 Standing, G., The precariat. The new dangerous class, London, Bloomsbury, 2011.
 Roland Duchatelet, Zelfs een micro-basisinkomen was te veel gevraagd, De Morgen, 04/01/2014.
 Le Vivant Europe, n° 83 (nov and dec 2010) – Coût d’un revenu de base au niveau de l’Union européenne ; Le Vivant-Europe n° 108, mars-avril 2013.
 Duchatelet, op. cit.
 Perkiö, J. , Basic income proposals in Finland, Germany and Spain, Transform Newsletter, 2013.
 Van Parijs, , http://www.express.be/business/?action=view&cat=economy&item=200-euro-per-maand-voor-elke-eu-burger-een-eurodividend-gefinancierd-via-de-btw&language=nl&utm_source=newsletter&utm_medium=email&utm_campaign
 Cantillon, B. and Van Mechelen, N., Tussen droom en daad, CSB, november 2011.
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