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Theses on the Basic Income Discussion

by R. Brems Saturday, Jul. 12, 2008 at 12:32 AM
mbatko@lycos.com

Poverty can only be overcome globally. A change in perspective is necessary where social assistance is seen as positive and not negative. Without a committment to human dignity and a human future, barbarism seems inevitable.

THESES ON THE BASIC INCOME DISCUSSION

By R. Brems

[These theses are translated from the German on the World Wide Web. More articles are available at www.basicincome.org.]

Contents

0. Introduction

a) Changed Conditions

b) Conceptual Clarification

1. Basic Concept

2. Framework

a) Questions of Financing

b) Distribution Problems

c) Basic Income as a Human Right

3. Perspectives

a) Rethinking

b) Drafts and Experiences

c) Concrete Experiments

- Global Initiatives

- Model Projects

4. Final Thoughts



0. INTRODUCTION

a) Changed Conditions

Proposals for a minimum income, a basic security or at least subsistence grants for households without self-help potential have been made in individual state social-political discussions but have hardly entered the international discussion of development policy. That is the main reason why the nation state has both set the framework and been the organization for the social security of individuals since the 19th century. While there are international legal obligations (from the human rights pacts), there is no global social policy.

Payments of development funds are based on the voluntariness principle. The cost argument (“unaffordable competitive disadvantage”) was always brought into the discussion as a main objection against basic security models on the national level while “help for self-help” (“Don’t give fish but teach fishing”) represented the unquestioned central international theme for decades.

In a social regard, two marked consequences result from (neoliberal) economic globalization. Firstly, a social security becomes ever more difficult to finance for the individual state since social costs become an increasingly negative location factor in the international competition. On the other hand, social inequality represents a competitive advantage. Poorer countries already can no longer finance their poor today. Richer states increasingly face the predicament of deciding between promotion of future technologies and support for the poor. Investments in people (school education etc.) become less and less rewarding because fully-trained experts can be purchased less expensively on the world market.

Secondly, Poverty in the globalized market is limited just as little as CO2 emissions. Poverty is an increasingly supra-national problem but can only be combated through global solutions. Today’s situation is comparable to that of European industrial states in the 19th century. After market expansions (“customs union”) and mass poverty (with millions of “economic refugees”), the national social legislation brought help and was the main reason in Europe for the gradual disappearance of the great plagues like the poverty sickness, tuberculosis. A similar paradigm shift in combating poverty away from the sole nation-state authority to the additional responsibility of global institutions is necessary today.

b) Conceptual Clarification

Terms like “minimum wage,” “minimum income” and “basic financial security” are used vaguely and inconsistently in the discussion of social policy and development policy. In this article, the following terms are used:

“Minimum income” describes the necessary (and individually different) minimum financial requirement for every person to satisfy basic needs.

“Basic income” means the allocation of a sum of money (standard for everyone). The essential difference between the two support strategies is that minimum income programs are intended as a social equalizing project (and necessitate an individual examination of the financial situation of every person) while basic income would be paid out as a kind of civil or human right of every individual without consideration of other income.

1. BASIC IDEAS

“Whoever has the necessary purchasing power can claim human rights.” This exaggeration of an unnamed development strategist mirrors the experience of over 50 years of human rights work, largely uncontested among experts that the worldwide poverty gradient is expanding quickly under the conditions of progressive globalization of the last decades and despite all programs combating poverty. Is this development connected with the conditions of progressive globalization? Is it an accident that basic rights listed in the human rights charter do not include a minimum financial income to buy what is necessary for survival? Why is it so little noticed that the question of global social security drops out completely with all global regulatory rage and the increasing trend to international regulation of nearly all areas of life? Notwithstanding a large number of agreements, there is no “global pact on social security” or “world social treaty.” The interesting question about the psychological, historical and political causes for this denial process cannot be outlined here. Against all globalization trends, combating poverty remains only a national affair limited to emergency interventions or an alms or pittance policy called “development assistance.”

In the last years, reports of the World Bank and civil rights movements like Attac call attention to the globality of poverty, the originating conditions, psycho-social consequences and poverty’s essential generality. This generalized poverty was compared to questions of protecting the atmosphere. “Reform deadlock” was striking in global social policy.” This fact was repressed in many ways.

Another difficulty is the “trickle down” problematic, the question whether relief funds and aid, products of economic growth, really help the neediest. The cases of corruption as a social carcinoma that can destroy whole states are well known and the examples that can almost be called normality in which development funds do not reach the truly distressed have become so public that this knowledge causes increasing problems in “fundraising.”

In this situation, a paradigm shift in combating poverty has occurred in discussion of development policy. This can be summarized as follows:

• The international community is competent in combating poverty (not exclusively but at least additionally). This is also self-evident in the sense of a global provision policy as in other border-crossing areas.

• Both direct financial transfer to individual needy persons and a kind of international financial equalization (balance) should be considered in which national authorities grant balancing payments in the sense of global intervention rules on combating poverty.

• Minimum financial support can be paid out according to transparent, uniform and non-discriminating rules. In considering the substantial corruption risks of a controlling social bureaucracy, a basic income strategy should have a priority. Certain clearly defined limitations could be practical (for example, payments to children or their parents or mothers from a certain minimum age).

• On one side the human right to a basic financial security is a universal human right and on the other is a justiciable national and international individual right.

2. FRAMEWORK

a) Questions of Financing

“A basic income for everyone cannot be financed” is the most frequent reply that often reflects spontaneous rigidity and something repressed and unpleasant. Some rethinking is necessary because many of the conventional counter-arguments do not work.

• According to many national studies, all OECD- and most threshold countries could finance a minimum income out of their own resources.

• As long as the social stability of a country is not touched, social costs are often seen as a negative location factor. Help for the poor is made out to be a disadvantage in global competition. Binding international agreements could help here. The worldwide environment protection movement has shown that a global agreement is possible and environmental know-how can be a competitive advantage even if initial investments seem harmful to the location.

• Many human rights initiatives promoting global democratization point to the huge money supply in the trillions pressing for investment possibilities that surpass the whole annual world gross domestic product and the annual world trade volume. While on one side enormous sums either lie fallow or are destroyed in regular “post-bubble recessions,” the redirection of a small part of this money in the pockets of the poor could increase the worldwide demand for basic goods. The savings rate of those fighting for their survival could directly promote money circulation and thus the economy and protect against turbulences (based on the sale of crisis-susceptible luxury goods) and help smooth the business cycle waves. There would always be enough money for a minimum income program on a global scale with inclusion of the tax havens.

• The amount of such a basic income could be determined firstly according to the different national costs of living and secondly according to the constantly changing framing conditions of the world economy and therefore must be subject to permanent discussion and adjustment. Supra-national organizations and interest groups of the affected must develop measurement standards and mechanisms for settling conflicts. Since the argument of a national competitive disadvantage drops out because support funds are financed from a tax on international currency transfers for example, and not from national taxes, the question how far the wealth of this world can be shared will be crucial when this tax firstly is borne by all the wealthy and secondly the use of the money represents an investment in the sustainability of the world and in a fair society that is worth living in.

There are many motivations for a basic income. Besides people who champion more social justice from idealist or far-sighted reflections, the suppliers of products to satisfy basic needs and producers interested in selling goods with a mass demand and less in luxury goods are promised advantages from a wider distribution of purchasing power. [Note: Ecological objections about an increasing productivity in an economically democratized society are worth considering though not convincing. The very poor and the very rich may damage natural resources more than others while a more egalitarian community could discover other interests than consumption and material competition.]

b) Distribution Problems

In many countries, illiteracy, inadequate infrastructure and corruption up to the kleptocracy of the rulers represent the weak spots of efficient management. Under these circumstances, the establishment of a social bureaucracy may seem utopian. However the (re-) building of such a bureaucracy will not be necessary:

• To support countries in which a basic income is introduced, a discussion about framing conditions reducing competitive disadvantages and a financing equalization would be necessary. Basic incomes could be handled through already existing distribution mechanisms.

• In many countries with trifling administrative infrastructure, an informal group unity and social control often exist.

c) Basic Income as a Human Right

The human rights side of the demand of a minimum income should not be underrated.

• The right to payment of an internationally fixed financial support (different in different countries) could be examined and claimed more easily than other obligations from the human right to an appropriate living standard (CESCR Art. 11). This human right could be more easily justiciable for individuals.

• Concrete support payments are also contested in political discourse. Instead of declarations of intent, what the individual receives and what the giver pays must be fixed very concretely.

• That the market has already long penetrated in every crack should be recognized. Partaking in life resources usually costs money. Given the worldwide privatization of basic resources, more and more poor persons must pay a higher price for essential goods. Engaging oneself for a direct financial support of the neediest in no way means generally approving the present privatization wave.

• The right to a basic income cannot solve all problems or replace the right to a proper living standard or the right to food. The latter involve more comprehensive human rights. Realizing these rights will be urgently necessary where markets – as with the purchasing power of the poor – do not exist or are unable to satisfy basic needs for other reasons.

3. PERSPECTIVES

a) Rethinking

Persuasive work must be done in both public discourse and technical groups. Four insights are crucial:

A) Insight in the (complementary) necessity of direct “cash transfers”

B) “Right instead of handout” also means “right to financing”

C) “Combating poverty is (also) a task of the world society,” which means “co-financing through international funds”

D) “Freedom from (extreme) poverty is a global human right”

On A:: Direct “Cash Transfers”

“Cash transfers” do not replace other efforts for more justice (“common property resources programs,” “public health,” “education for all,” “equalization fund,” “debt relief etc) but should supplement or make them possible. Without a fundamental protection from the constant threats of impoverishment, a dignified participation in other social initiatives and personally responsible life planning are impossible.

Still everything cannot be purchased.

For many poor persons, cash transfers are a necessary but not sufficient possibility for satisfying basic needs.

On B: “Right to Financing”

For “rights” an addressant is necessary. For the social rights of a population, this is usually the state or a partial community (for example, sickness or pension insurance).

The protection of human rights is incumbent on the state with its diverse administrative levels and its legislative and judicial organs. For basic financial security programs to assure a (justiciable) human right, the state must guarantee its financing and be take up on its promise.

On C: “Co-Financing”

Many low income states are too weak to adequately support their own needy through social programs. International funds to co-finance national programs are absolutely essential here – either through bilateral agreements or through the world community as a whole. UN taxes (“Tobin tax,” “aviation fuel tax) could be levied to finance combating poverty.

Financing equalization payments should be considered to compensate competitive disadvantages for those states that through higher social spending help realize or enforce the right to human dignity.

On D: “Freedom from Extreme Poverty as a Human Right”

In the future, international basic income programs should be seen as offensive and not purely defensive “programs to combat poverty” (“only for the poorest”). A more balanced national and international distribution of life risks should be the goal. This distribution should help soften the distress of the poorest and make a necessary contribution to more justice for all.

Without the basic right to freedom from extreme poverty as a sign of human dignity, all democracy in the national and global framework will be incomplete and threatened.

Justice programs in nation-state frameworks breakdown increasingly in arguments of economic competition. The coordinated worldwide approach offers the new historical chance to combat poverty globally as “the main problem of the 21st century” (Klaus Topfer).

With all the points discussed above, we face first of all different acceptance problems. Still all the initiatives belong together and none may be left out…

The following evaluation of the chances for realizing particular approaches and possible alternatives is subjective:

A. A global “income support” is largely accepted by experts. Investments are always more highly regarded by economists than “consumer spending.” Increasing demand as an economic development factor (in the sense of a “world Keynes-program”) is undisputed. [Initiation of a “global Marshall Plan to combat poverty” with direct maintenance of the poorest has already been proposed by many authors].

The knowledge that unequal distribution of chances is the main cause of worldwide hunger and not absolute food shortage is more and more part of everyday understanding. The more the knowledge spreads that seeing social spending as a negative location factor for the world as a whole is not sensible for the world as a whole, the more the development of compatible social models will be emphasized. Research has a vast field here.

B. If a country is not generally relieved of responsibility for human rights, financial transfers could be financed in a non-governmental way. These could be described as model projects. Improved living situations on account of basic income could be documented.

C.” Co-financing” not handouts and “worldwide responsibility for combating poverty.” Much persuasive work or rethinking will be necessary particularly in the North. “Solidarity” gains a new global content after its historical meaning in the early workers movement. Still the idea is clear and comprehensible. Help comes directly and not from interconnected elites. This is also conducive to the idea of internationally uniform criteria and controls. Mine-limitation agreements, atmospheric protection protocol and international courts have shown that global civil society can enforce community values against the egoism of individual states and groups and for cooperative worldwide life.

D. The human rights component may be the most demanding because it represents a paradigm shift in value standards )”money without work” as a general civil right). This can be tackled in different ways. As a requirement guaranteeing an individual right [Kunnemann], the justification can occur administratively as an ethical-political demand only where many are supported, have quality programs and prospects for lasting stability. The poor may not be excluded but as equal citizens in the “global village” are an integral element of a general public culture of sharing and redistributing.

b) Drafts and Experiences

Theoretical drafts and practical results can be found at www.basicincome.org. The “Social Trust” initiative of the ILO is another source (B. Schubert).

Concrete experiences with basic income programs can be seen in the Gulf States and Alaska. Mozambique has an income support program for extremely poor households that cannot help themselves established with the support of the GTZ. Financial support of the poorest occurs in some villages (a base security program in Kenya is beginning as part of a village-oriented self-organization project of the GTZ). The financial support of the poorest in some villages comes about through church and non-profit institutions in Germany to the neediest without return favor. In addition there are experiments with “partial universal programs” (for example, “base pensions for all”) in South Africa and Namibia and initiatives in South America (Argentina). Many “basic security models” are discussed in the European welfare states and recently concretized in Germany at least in a minimalized form.

c) Concrete Experiments and Initiatives

Like environmental protection, combating poverty has a local or national and an international component. The problems caused by globalization can only be ultimately solved in the global framework. This is important. Just solutions must be sought and tested again and again on a small scale and a large scale.

To support this discussion and show concrete examples of successful solutions, isolated cases are helpful and necessary, according to the principle nothing is more convincing than a (functioning) reality. In this sense, the creation of functioning and verifiable

Model Projects

is an important challenge for a civil society seeking social change. Certain criteria must be satisfied in these model projects:

• The community supporting persons should have a “natural limitation” (for example, a self-contained parameter, be socially homogenous and have (still) functioning social structures.

• A reliable allocation of financial support must be guaranteed and verifiable. An evaluation should be carried out.

• The model must be limited enough to guarantee sustainable financing and manageability.

• A country with a low income level should be chosen to show the advantages of the highest possible monetary parity.

• Integration in a personal framework (community partnership) would be desirable.

4. FINAL THOUGHTS

De-ideologizing developments and making them “operable” (manageable, changeable and verifiable) is increasingly important in all social areas. If poverty means the lack of money needed to buy the necessities of life, then it is time to give the poor this money – and ask why they apparently acted against their own interests and persisted so long in languishing in their misery. Perhaps the possibilities for alternative action are lacking and those who urge “learning to fish” ignore the circumstances that despite “fisher training” make impossible having enough. But the most important point of a new self-understanding in the “global village” is that speaking figuratively, the dignity of neighboring people is more than their reduction to the sole ability to fish.

New self-understandings require time. This is vital to know when one appeals to the necessity of a paradigm shift in combating poverty. Still the global human right to a basic individual financial security could be as self-evident to us as democracy and engagement for the threatened creation are today. Necessary changes are imperative. Otherwise new barbarism threatens through the massive resistance against economic refugees. (Spain is already building a “prison island”). Keeping the number of victims arising through avoidable delays on the vital way to new helpful shores as low as possible is one of the most important and most human challenges of the global civil society.

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