Unconditional Basic Income – From a Utopia to a Political Alternative

The idea is as simple as it is controversial: an Unconditional Basic Income (UBI), enough money to cover a person’s basic needs, would be paid out each month by the State regardless of whether or not a citizen engages in wage labour. Various conceptions and models have been more or less widely circulated and discussed since the 1960s. But wherever large-scale implementation has been proposed, UBI has always been dismissed as a starry-eyed social utopia.

But today (especially in Western countries) the debate has reached a new stage: since 2015, more detailed and serious discussions of UBI have been taking place in the public sphere than ever before, and many field studies will begin in 2017. The concept cuts across party and ideological lines, with supporters on the political left and right as well as among free-market neoliberals. These developments demonstrate that UBI is becoming an evermore relevant political response to the processes of globalisation, automatisation and digitalisation.

North American Field Tests until the Oil Crisis

The idea of a Universal Basic Income was already spreading in the US and Canada in the 1960s and ‘70s. Free-market conservative and social-democratic politicians began negotiating and implementing experiments aimed at improving their countries’ welfare systems. Of the many financing models, the most well-known was that of the economist Milton Friedman. In 1962 he began a repeated call for the “negative tax” model, which would guarantee a cheque from the tax office for citizens without an income.

Three field tests were conducted between 1968 and 1972 in various economically disadvantaged areas in the US, with astounding results: while wage labour decreased by 13%, family households invested heavily in better food, healthcare and education. Young people’s marks in state-run schools improved significantly. Following this, the “Mincome” field test was conducted in the small Canadian town of Dauphin beginning in 1974. Around 1,000 families, most of whom lived in the countryside, were financially supported by the State without any income-based means testing. The positive affects on education and childcare were confirmed, and in addition, researchers documented higher levels of social cohesion as well as a significant reduction in visits to the doctor and hospitals, which resulted in large savings for the state healthcare system.

Basic Income as an Alternative Form of Developmental Aid

UBI disappeared from public and political consciousness as the oil crisis of the 1970s and 80s led to a politics of austerity in both nations. Despite the promising field tests, the international debate regarding UBI fell silent. It was not until the turn of the millennium that a number of smaller projects aimed at combating stark material deprivation and poverty began to employ the concept again.

Prominent examples of this phenomenon include the Namibian villages of Otjivero and Omitara, where an organisation financed by churches and non-profits provided residents with a Universal Basic Income in 2008 and 2009. The population of approximately 1000 people primarily invested the money in healthcare, education and the production of goods. They also increasingly discussed community problems in groups and searched for political solutions. In the Brazilian village of Quantiga Velho, residents have been receiving a UBI since 2010, enabling them to attend school and obtain medical care. The residents of eight villages in India have also been receiving a UBI since 2010, and the positive effects are visible there as well: the quality of living conditions has improved, especially in terms of nutrition and health. Additionally, residents are increasingly engaged in entrepreneurial activities and able to support themselves and those around them.

Due to differences in the contexts of poverty, questions are often raised regarding the usefulness of the knowledge gained from these experiments for Western societies. But others argue that the approach could be advantageous because, alongside the positive economic aspects of improvements in health and education, UBI has an emancipatory effect on all forms of community: people begin to articulate their needs and navigate problems on a local level, in solidarity with one another.

An Upswing in the Debate, Due to Automation and Digitalisation

In the face of dwindling employment opportunities and ever more precarious working conditions, in recent years the public debate regarding Universal Basic Income has taken off again in Europe and North America. Proponents hope that a UBI will streamline bureaucracies while removing the financial pressure and sanctions that characterise many social welfare systems, thereby allowing people to remain productive members of society in an age of increasing robotisation and digitalisation.

There are various tax models for financing UBI that give new weight to income taxes and value added taxes as well as property and inheritance taxes. Moreover, there are now calls for new forms of taxation such as a machine or value creation tax, or a financial transaction tax. Depending on the model, UBI can also be used to replace the bureaucracies that distribute various social benefits, which in turn could save on costs.

Since the turn of the millennium, successful entrepreneurs from Silicon Valley and Western Europe have been calling for Universal Basic Income. But the referendum to include UBI in the Swiss Constitution in 2016 was what sparked the widespread public debate in the West. The Swiss initiative would have provided the same UBI to all Swiss citizens. Although not successful, the referendum initiated a differentiated public discussion, and numerous countries are now seeing an increase in political parties calling for a UBI.

This trend can be seen in the free-market conservative Finnish government’s response to economic distress: a pilot project will be launched in 2017 in which 2,000 currently unemployed Finns will receive up to €750 per month. Internationally criticised as a loser’s allowance, the goal is ultimately to create a short-term simplification of labour market policy and a reduction in the number of unemployed workers. The goal of the project is not to improve the Finnish economy in the long term. Similarly, the Basic Income studies that are taking place in the Netherlands in 2017 in the cities of Utrecht, Groningen, Tilburg, and Wageningen are also intended to better integrate social benefit recipients into the labour market over the short term.

Neoliberal Approaches and Social-Democratic Alternatives

Above all, these experiments are a pragmatic reaction to the realisation that the dream of full employment no longer corresponds to the modern world of work, and that the stricter requirements for unemployment benefits introduced in many European countries in recent years have not delivered positive results, either for individual citizens or for the labour market. As guaranteed unemployment benefits do not represent a sustainable alternative to neoliberal, market- and employer-oriented policies, the last few months have seen an increase in left-wing, green, and social-democratic parties calling for worker-oriented UBI models. Their goal is to provide long-term relief to workers and to counteract growing trends of social fragmentation without weakening unions or eliminating important social benefits like health insurance.

This approach is currently gaining popularity, especially in France where parts of the Parti Socialiste (PS) are going into the 2017 presidential campaign promoting a social-democratic conception of Universal Basic Income. In order to properly meet the challenges of growing poverty among the youth and the elderly, UBI is understood here as a basic provision that provides financial relief to workers, enabling them to perform the kinds of actions required for a dignified life. The accumulated effects of better health, better education and entrepreneurial personal responsibility are expected to positively influence the labour market. They should also counteract social divisions, as UBI establishes an equal ground of human dignity for every citizen.

The Debate over Basic Income Has a Bright Future

Recent debates over Universal Basic Income in Western societies have become much more constructive and fruitful. Experiments that are being run at the moment, such as those in the Canadian province of Ontario, in Oakland, California and in the Nouvelle Aquitaine region in France, will serve to further enrich these debates. An especially important shift is that Basic Income is being discussed less from the point of view of employers, with more emphasis now being placed on the changing nature of the labour market.

In order to strengthen the middle class in a time of increasing social fragmentation and right-wing populism, a specific focus on workers is crucial. The governing political parties, whether socialist-influenced or conservative, should conceive of UBI as a possible solution to the present economic and social crises. In this way, they can meet the scourge of right-wing populism with an urgently needed concrete alternative, one that appears to offer long-term positive results.