Working Without Coercion

by Reinhard Loske Sunday, May. 20, 2007 at 3:44 AM

Basic income is not a plant-closing bonus. Labor productivity will continue growing if the tax burden on the factor labor is reduced. The belief that full employment could return through economic growth is wishful thinking. Ecologically it could prove a horror.


Why a basic income is what our society needs

By Reinhard Loske

[This article published in: DIE ZEIT 18/2007 is translated from the German on the World Wide Web, Reinhard Loske is a prominentGreen spokesperson in the German Bundestag.]

A specter flits about in Germany: a basic income for every citizen without a needs test and without a work duty. This is a revolutionary idea that would change the welfare state from top to bottom. Paid from the general internal revenue, this basic income would protect people from poverty from cradle to grave while ensuring social participation and more election options for individuals.

The variety in transfer payments including the bureaucracy for examining need – from unemployment benefits, income support, housing allowances to child benefits – would be unnecessary. Contributions to health and nursing care insurance would be paid in a lump-sum way out of the basic income. The reform could be financed by discontinuing transfer payments – and by rearranging the social system from contribution- to tax-financing. Tax increases and changes of the tax structure would be necessary according to the amount of the basic income – the proposals now range from 600 to 1500 euro monthly for adults and half for children.

The businessman Gotz Werner makes the most far-reaching proposal. He would change the tax system from labor to consumption taxation and urges higher sales tax with a simultaneously lower income and business taxes. For ecological reasons, I suggest including rational taxation of energy and resources in financing the basic income. The branches of environmental-, solar- and efficiency technology would profit from this changeover. Giving back to society as an eco-bonus would improve social distribution. Revenue from the red-green eco-tax would not flow into the ailing pension insurance. Everyone would obtain an energy-dividend. A family of four would receive nearly a thousand euro per year. We need a new social eco-tax concept.

More objections besides the financing question are advanced by opponents of the basic income. Unionists criticize the model as a clandestine introduction of combined wages depressing the wage level. Many economists fear motivation to work would fall and idlers would be subsidized. Defenders of the activating welfare state are convinced a basic income and building the social infrastructure exclude each other. A social worker in a big city recently told me: “We need help on all levels for our problem groups. For them, 800 euro would be like a plant-closing bonus.”

Some of these arguments should be taken seriously. Others reflect veiled organizational interests, a negative anthropology or exaggerated social paternalism. For me, the objections are not strong enough to reject the basic income. I see many arguments that speak for its introduction.

The work society has marginalized all activities that do not serve moneymaking. Self-employment, family work, cultural creations and civil engagement are socially useful. A basic income would relieve the citizen from compiling a portfolio of activities. That joy in active existence would disappear if people in society were anxiety-free is a cheap sweeping judgment. On the contrary, people will offer their talents and earn respect. Enormous creative potentials for the community will be released.

Labor productivity will continue growing if the tax burden on labor is reduced.. We also need this productivity growth in the sectors facing international competition. The belief that full employment could return through economic growth is wishful thinking. Ecologically it could prove a horror.

Vast job possibilities slumber in areas without the highest labor productivity: nursing care, bio-agriculture, nature conservation, artisan shops and experimental social fields. The basic income could act like a combined wage. Even if these employment fields do not open up, that is not a convincing argument for denying basic income. People will accept activities out of their free will without activation and without coercion. Some important decision-makers cannot even imagine this.