The liberal case for basic income

English/Politics
Photographer: geralt via Pixabay

WELFARE. The idea of basic income has a long history. In Europe, during the last decades, it has transformed from a theoretical approach to the practical implementation as with the experiment in Finland during 2017-2019.

 

In Switzerland, a referendum in 2016 took place where citizens voted about the issue concerning the government providing every citizen with a guaranteed citizen salary. The proposal was later rejected by a significant marginal. Namely, around 74% voted against. However, despite the relevant terms basic income, citizen income or citizen salary a considerable difference within the debate.

The ongoing debate and the supporters of the basic income policy can be divided into three main categories: the economic-liberal, the welfare supporters and the economic-growth critics. In its original, the idea of the basic income, such as argued by academic Phillipe van Parijs, should be provided to each individual and citizen within the society. In practice, it means that a basic income should, by the state government, be given, for example, both a businessman who earns several million euros per year as well as to a low-income job seeker.

One of the most prominent specifics of the basic income idea is that it has broader support within the ideological sphere since political thinkers from left to the right, from freedom to authoritarian side, have been supporting the idea. The economic-liberal side of the debate has different political ambition, based on two main arguments. The first one is to reduce the overall size and expenditure of the welfare state by cutting down the size of bureaucracy and its costs. The second is to make the welfare state gentler and less paternalistic towards the individual.

Liberals in favour of basic income often argue that the individual should have the personal freedom to choose how to spend the basic income. The argument is that the individual knows better how the basic income can be used for their own personal success, welfare and future perspectives. Therefore from the economic-liberal side of the debate, the general idea is that basic income should be provided by a more limited distribution of welfare. For example, by providing basic income only for those who are outside of the labour market or who lack other kind of sufficient income. Also, there can be an age limit, such as providing basic income only for individuals in the age span of 19 – 65 years.

 Another support for the economic-liberal basic income policy is original ideas of liberal economist Milton Friedman regarding the negative income tax (NIT). The primary purpose is that a person without income or earning much less than the average salary would be able to receive payments in the form of subsidies from the taxation agency based on the scale the person`s income gets under the tax threshold.

Historically seen the idea of basic income has had its supporters among liberal thinkers. One prominent thinker who supported the purpose of such income was Friedrich Hayek. As a classical liberal, he was against the existence of the welfare state. However, he argued that an individual should be guaranteed a basic income if for example, being left out from the labour market. For Hayek, the primary assignment of the basic income was to deal with and correct the ”imperfections” of the free market economy.

According to Hayek, the basic income could function as a protective floor to hinder the individual from falling down into poverty. For him, this was a preferable method for making things right in the free market economy where the government could provide support for the individual in a difficult socio-economic situation.  A classical liberal argument can, therefore, be presented in short as the argument that every individual member of the society should be guaranteed freedom from poverty.

Similar ideas as Hayek’s are proposed by Matt Zwolinski, a bleeding-heart libertarian and philosophy professor in the USA.  He argues that a basic income would be an effective way to reduce the spending and the size of the federal government’s welfare, by cutting down the administration and giving money directly to individuals. Also, he means that basic income is compatible with original thoughts of the classical liberalism, meaning that the tax-funded necessary social protection can be provided.

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Zwolinski’s argument is that society’s morals, rules and rights should be available to be exercised by everybody in the society as much as possible. A society based on free but complex social and economic interactions between individuals also leads to specific problems. By having citizens who are stressed and dissatisfied because of the issues as poverty, social exclusion and lack of confidence, the free and democratic society gets challenged by having the members not being able or willing to practice the morals, rules and rights of the society. The basic income can, therefore, ensure that a free and democratic society can function better since its imperfections can be corrected.

Another support for the economic-liberal basic income policy is original ideas of liberal economist Milton Friedman regarding the negative income tax (NIT). The primary purpose is that a person without income or earning much less than the average salary would be able to receive payments in the form of subsidies from the taxation agency based on the scale the person`s income gets under the tax threshold.

In contrast to the progressive taxation, the NIT is also part of the method where overall taxation would be lower and managed with the different percentage depending on the size of the taxpayer’s income. Friedman’s vision was that this would be a kind of win-win situation where the welfare state and its spending are being reduced while individual is more stimulated to take a low-paid jobs as well as getting protected from poverty.

Finally, there are also more social-liberal arguments for basic income based on positive rights. Civil rights activist Martin Luther King also advocated that a basic income should be given to every citizen, human and families in the USA. He argued that it was easier to erase poverty than to deal with its roots. Interesting fact is that during the same time period president Richard Nixon was also in favour of basic income policy which was called the family assistance plan and inspired by Friedman’s approach. For Martin Luther King, the basic income was a way for empowering the civil rights movement and also of reshaping the society into becoming more civic.

In Europe historically seen the idea of the welfare state was from the beginning, a conservative idea which can be traced to Bismarck’s Germany during the later period of the 19-the century. By, for example, providing guaranteed pensions and free schooling for all citizens it was a method of maintaining stability in the society. Many conservative politicians at the time were, for example, worried about the class-based struggle and protesting actions among the growing working class.

Today the idea of having more substantial or smaller welfare states is widely spread across the union, including the different models being implemented such as the Nordic and the continental model. For most of the citizens welfare is not a question of having or not having but a question about what kind of welfare policy should be exercised. The basic income idea has, therefore, a lot of potentials to become a modern welfare approach in future within the EU to have a more human-centric welfare policy rather than older versions of paternalistic and integrity infringing welfare states.

VLADAN LAUSEVIC

Vladan Lausevic är stockholmare och aktiv som skribent, liberal debattör och aktivist med intresse för såväl mjuka som hårda politiska frågor. I bagaget har en examen i historia och Europastudier. Vladans motto: “Jag har ingen identitet, jag har bara identiteter”.

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