In January, the Dutch Basic Income Association celebrated its 25th anniversary in Maastricht with a conference on partial Basic Income Experiments. In attendance were politicians, councilors, scholars and activists who came together at the StayOkay, a laid-back hostel in the city, to share their insights and activities. Around 150 people from all walks of life and age groups followed the call. Presentations and lively dialogue ensured—clearly, these folks are up to something.
After attending one day of this conference, I was left with the feeling of having witnessed a congregation of true believers, chanting to realize heaven on earth. The object of their worship is Unconditional Basic Income (UBI), a social welfare instrument in the portfolio of the national government that is situated in the category as unemployment benefits, subsidies for rents or tax deduction for the self-employed.
Their stories reminded me of Jehovah’s witnesses who believe they cannot see the face of God because it would burn them alive. This is the grace of UBI as a platonic idea(l). Whatever UBI means to you—and it means many things to many people—it is, in essence, a set of principles as frequently violated or watered down as the ones comprising the UN’s declaration of human rights. A “true” idea of UBI only exists as written word.
What is it, actually?
But let’s start at the beginning, for those new to the concept. UBI denotes an income provided by an authority, unconditionally granted to all legal members of a society on an individual level. The income is high enough to provide a decent standard of living, enabling everyone to participate with dignity in society, and is not dependent on any preconditions such as having paid work or doing community service.
As a movement, it is encapsulated in Basic Income Earth Network (BIEN), formerly known as the Basic Income European Network, which works as an umbrella organisation for national or local groups.
Guy Standing, cofounder of BIEN and eloquent professor of development studies at the University of London, sees in it as “a way to freedom and human dignity.” BIEN members talk about it as if it was a magic pill: by crediting everyone’s bank account monthly with a lump sum of roughly €1500, everybody will be able to realise the abundance of his or her creativity for the benefit of the community.
When you take the “Basic Income” pill, you can allow yourself time to figure out what you really want to do and what your real contribution can be, without the burden of a paying job that you don’t want to do.
Or you can escape the poverty trap. The poverty trap is a modern version of the prisoners’ dilemma: should you stay on the unemployment benefits that allow you to “survive,” or should you take on a job that pays less and lose the welfare benefit?
From potentiality to actuality
The genesis of UBI is as simple as the idea itself. UBI came alive from the consolidation of existing social security mechanisms such as subsidies or grants and by cutting red tape (which presumably means decreasing the number of public sector employees). Some participants at the recent conference mentioned econometricians who calculated that by fusing the 100 different forms of subsidies that are available to French citizens into a BI stream for everyone, UBI could be achieved without adding an extra tax burden for the 99%. The 1% who own 60% of the wealth in capital in the Netherlands might get taxed, but that is not the point; the point is that the idea is moving from a potentiality to an actuality. At least mathematically.
It is worth mentioning that there are current (or soon to be) experiments on partial Basic Income— a “light” version of the platonic idea(l). By shifting budgets for social welfare from one funding stream into another, it allows the setup of pilots or experiments. There are currently more than a handful of municipalities in the Netherlands where such discussions take place.
The most concrete proposal comes from Finland, which will (or should) begin in 2017 with a budget of €20 million and a duration of two years. Kela, the provider of social security benefits in Finland, is organising this to study whether basic income works. Four other experiments have already taken place in Brazil, India and Africa.
But when one moves away from theoretical musings to practical application, the idea becomes Aristotelian in character. A wide range of models crunch numbers of tax authorities to see if a “Partial” Basic Income, a negative income tax or other models such as a “participation” income can be realised.
What, then, accounts for the astonishing appeal of something that only exists on paper and is so far only mathematically possible, and if applied can do so only partly? The answer requires an investigation of what brings UBI to earth: technology. Or to be more concrete, the surplus value created by man’s augmented power over nature, thanks to the engines of his ingenuity.
When we hear about Tim Ferris’ “four-hour work week” or mention Peter Drucker’s “post-industrial society” in a chat, we suppress too easily the fact that for most of our “needs” labor power is no longer a necessity but rather a luxury, a choice. This point was raised by Luc Soete, Rector Magificus of Maastricht University, who joined the debate saying, “a big part of these gifts of technology are not picked up in the GDP.”
To understand this, one needs to understand Karl Marx’s critique of David Ricardo who is still a giant ghost in economic theory. At the time when Karl Marx pointed out that men’s labour power augmented by the machine generates surplus value, the average worker of England already possessed more interior goods then the King Louis XVI of France. At his time, David Ricardo had insisted on the matching of work and product, leaving the worker at the subsistence level of Malthus.
Malthus argued that “real wages” should not rise above the level of subsistence, because they would disrupt the natural “law of supply and demand” that governs Adam Smith’s marketplace. This was his “iron law of wages,” which in a curious way is now upheld by those who Karl Marx saw as liberators of the alienated worker: the unions. Today’s salaries are adjusted to the level of inflation and not to the surplus values created by a mechanized economy in high gear.
Adam Smith’s optimism was rooted in his preference for the new mechanical acceleration that seemed to end all former social and natural barriers. His equilibrium economics was the firm basis of David Ricardo’s “iron law,” and is now as obsolete as feudal loyalties were by the end of the 18th century. This is also the reason why apologetics call for an overhaul of today’s welfare programs when the marriage of mechanical economy with its electronic bride makes “Automation” (or what is called the Fourth Industrial Revolution) appear in the rear-view mirror.
Today, we discover that all those equilibrium theories are useless in describing the economic reality of instant and simultaneous information exchange. Prices in all commodity markets change with the news ticker, losing all relation to the “real” world. The value of abuse or advertisement outweighs most of the “use value” of the commodities it advertises. Hal Varian, the chief economist at Google, wants to bring the latest technology to the lowest income groups, and the Common Fridge movement has become an accepted form of charity. It is not surprising that advertisement merges once more Marx’s “alienated worker” with the products of his own making in todays post-information age.
Central Banks control “Hardware Economy” measured in the GDP (Gross Domestic Product) by raising interest levels in a world of free floating currency exchanges, much the same way the Nielson Ratings control the “Software Economy” by regulating ad-spending and consumer preferences in the Global Theater.We are baffled to see the butter we buy in the supermarket is the same as the one next to it that is 40% more expensive. And when we listen today’s newsbites about Libor manipulations who tend to dismiss them as hocus pocus or some other (super)natural disaster that has nothing to do with the “everyday life” of “everyday women and men,” me and you. But the fact that it draws everyone into the military operation of shopping as a quest of identity visa vi the 24/7 news cycle escapes even the most pontificate Econometrist.
So what should one make of this new faith in UBI when even those who argue for it see population explosion and material scarcity as roadblock on our return to paradise?
For those not familiar with the term Armageddon, let me boil it down to the term crossroad. There is no doubt that UBI would dismantle Jeremy Rifkin’s “European Dream” and, with it, a large part of our Western-European identity. Whenever a group of true believers (and they are) tune in to a chorus to preach heaven on Earth, even the most heterodox-minded adversary could dismiss the holy spirit for a genuine fake spook.
And it would not leave any bad taste in the mouth if it was not for the prophetic intonations of the first row in selling “the root of all evil” as the means of financial re-incarnation. But let’s be fair: the same old songs of ultimate freedom, liberty and dignity for all now were chanted by the women’s liberation and civil rights movement long before their lyrics became the accepted tunes in our parent’s hearts and ears. But does it really require us to take the basic income pill to realise the abundance of our own creativity and the necessity of healty communities?
Opinions expressed here are not necessarily that of Talkin’ Business.
For more related news, watch interviews and lectures by experts who attended January’s Dutch Basic Income Association anniversary celebration.