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.

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.

The post The liberal case for basic income first appeared on Opulens.

SOCIAL EUROPE. Uncertainty and unease surround both Europe´s current predicament and future prospects. Be it national governments devoid of European solidarity, the self-contained Brussels bureaucracy or fear of another economic recession. The status quo in Europe contains much to be concerned about.

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In particular, the rise of the far-right casts a shadow over contemporary Europe from Poland and Hungary to France and Italy. As things stand, after the European Parliament elections of 2019, the far right is a force to be reckoned with. The liberal consensus of the European Union, previously successful in presenting itself as essentially the only viable way forward for Europe, has suffered serious setbacks in the last decade, including the exit of one of the member states, Great Britain.

The EU has absorbed the calamitous developments but, at the same time, carefully avoided any major reconstruction in order to recalibrate its project. Thus one might well wonder if the European Union has reached an impasse as a democratic project which benefits populations and stands for a better, more liveable world?

The current troubled state has its origins in the Maastricht Treaty of 1992. With the Maastricht Treaty, the Union officially itself adopted a market-liberal stance both in terms of policy-making and discourse, which effectively marginalized earlier concerns with welfare and cohesion. A vision of individualistic and competitive social life which has dominated Europe ever since came decisively to the fore.

Economically, the treaty places a one-sided emphasis on fiscal responsibility at the expense of other issues such as growth, employment or unregulated capital flows.  Nation-states were deprived of their earlier sovereignty in economic governance without anything like this sovereignty being recreated at the European, i.e. federal level. In a nutshell, economic liberalism triumphed over social Europe. But it still got a lot worse in the 2010s.

Social Europe is by now, let´s face it, but a rapidly fading dream.

With the sovereign debt crisis of 2010, a distinctive mode of governance emerged. This was a juncture of massive government intervention to save the banks. Structurally unprepared for a crisis of this magnitude, governments after initial hesitation rapidly moved from stimulus to fiscal austerity. This decision, and the dogged refusal to reverse it against all evidence, still continues to hold sway in Europe. The overall impression throughout the post-crisis era has been one of continent adrift and in decline.

Desiccated welfare states in South Europe and Great Britain, trenchant austerity in Ireland and Eastern Europe were morbid symptoms of this. Progress made in addressing inequality between Scandinavia and Western Europe and Eastern and Southern peripheries has been rapidly undone. Solidarity, the indispensable building block of social Europe, was in short supply everywhere. Social Europe is by now, let´s face it, but a rapidly fading dream.

What is to be done if we are not willing to bid farewell to social Europe, i.e. socially just Europe with commitment to human well being and solidarity? In late 2018, a prominent group of European intellectuals published a “Manifesto for the Democratization of Europe” which contains several important ideas for tackling the current malaise. The manifesto calls for a Eurozone Parliamentary Assembly and a shared European Budget.[1]

The assembly is the institution representing the people of Europe within the governance of the euro area. It is composed of both members of national parliaments and members of the European Parliament; both of whom will be involved in decision-making processes as citizen representatives.

Such a proposal matters because currently the Eurozone governance is thoroughly undemocratic, with the European Parliament carefully sidelined from any meaningful policy-making role. Instead, we are now dealing with an executive power of the dense network of extra-mural governance of the Eurogroup, bureaucratic and financial treasuries and senior officials of the Commission´s economic and financial affairs and bankers.

The shared budget has the purpose of fostering sustainable growth, social cohesion and employment, as well as greater economic and fiscal coordination between the Member States of the euro area. Fixed at 4% of GDP, the budget provides Europe much-needed resources for investing in the future (i.e. in research, training and European universities) and for addressing the problem of inequality between countries. Finances would come from four significant European taxes on profits of major firms, the top incomes (over 200,000 per annum), the highest wealth owners (over 1 million euros) and carbon emissions.

In sum, the EU and the single currency union need a major recalibration to put a stop to the progressive unravelling of Europe, of which the latest development is the rise of nationalist international spearheaded by prominent right-wing politicians and ideologues. However complicated the manifesto´s political prospects at the current juncture of emboldened far-right and the European Union reluctant to undertake far-reaching reforms, the initiative to achieve European solidarity instead of growing polarisation can be dismissed only at our increasing peril. Both are indispensable for rekindling the spirit and practice of social Europe hospitable to a sense of hopeful future and social justice.

[1] There are, of course, other credible ideas to recalibrate social Europe. For example, the concept of basic income or Eurodividend is one of them. Among the supporters of basic income is the pan-European DIEM 25 movement.

The post Europe at the Crossroad: Decline or Reconstruction? first appeared on Opulens.