Basic Income Guarantee and Politics

Since the late 1970s, massive and long-lasting unemployment was the primary problem for social economic policy in the welfare states. In Finland, this phenomenon was experienced as a rough time later—at the beginning of the 1990s—when unemployment jumped almost to half a million (about 15.5 percent). Governments tried to relieve the consequences of unemployment and poverty by providing social benefits conditionally and, in so far as in their power, to take employment-promoting measures. Although unemployment is no longer massive, structural and long-term unemployment still exists. It is difficult for governments and political leaders to rethink the changes in the economy and working life. Although the nature of work has changed, almost all benefits are somehow connected with paid work. In addition, the concept of work/labor itself has to be redefined. At least the relation between work and basic livelihood needs a new definition. A major problem is that the social security system in welfare states, for instance in Finland and Nordic countries, is very complicated and leads to poverty and other traps. It also lessens work incentives.

This chapter is divided into two sections. In section one, we outline in a summary manner the discussions and studies of Basic Income in Ireland since the first such study in 1977. In section two, we focus on possible pathways toward introducing a Basic Income in Ireland. In this section, we outline various pathways that have been studied and assessed in recent decades and set out a further option that we believe could lead, over time, to the introduction of a full Basic Income system in Ireland.

In December 1994, the idea of a (modest) basic income was publicly supported by two members of the Dutch cabinet, both liberals (Holland¹ has two liberal parties: D66* and VVD*). However, the socialist members of the same cabinet dismissed the idea. Therefore, basic income did not become a policy item of the cabinet. Politicians of both sides nonetheless generated headlines in newspapers and attention on television. The basic income at that time was closer than ever to being accepted as an item on the political agenda in the Netherlands, even closer than in 1985, when the advisory body for the government WRR* proposed a partial basic income—and found no support whatsoever in the main political parties.

With the present economic crisis and the ensuing economic policy measures introduced by the Spanish government as of May 2010, a curious two-way shift has occurred in the debate on basic income. On the one hand, basic income has virtually disappeared from the official agenda, even in the form of piecemeal discussion among the political parties whereas, on the other hand, there is greater interest in it among the activists of quite a wide range of social movements. A short history of basic income in the Kingdom of Spain¹ is essential here if one is to comprehend and contextualize what this means in political terms. Before providing this, however, we shall give a brief outline of the present situation in Spain as a result of the economic crisis and, more important, an account of the economic policies adopted since May 2010. Otherwise, it is difficult to understand the recent two-way shift regarding basic income, at the level of government in the political parties represented in the Spanish parliament and at the grassroots level among the social movements.

Australia has had a federal social security system since the inception of the 1908 age and disability pensions legislation in 1910. From then until the late 1980s, the system became more comprehensive and generous. It was and still is a categorical and means-tested system paid from the Commonwealth government’s general tax revenue. It provides assistance to older Australians; to families with children; to people when they are sick, unemployed, experiencing a disability or illness; and to those enrolled in some education programs. The Commonwealth system runs alongside private superannuation, commercial unemployed and sickness insurance, and a war veteran’s benefit system.

Like other economically advanced democracies, Canada has had recurring discussions on how to provide more effective income security measures as a key component of the welfare state. This discussion has arisen on a regular basis, particularly since the period of rapid growth in Canadian social programs in the 1960s. Not only through numerous reports and academic publications, but also through the action of several groups ranging from trade unions to small associations, innovative proposals have been made and debated. Among these proposals, the most controversial might be the idea of giving all Canadians the right to an unconditional and universal “basic income” (BI)—frequently referred to in English-speaking Canada as Guaranteed Annual Income (GAI).¹

Employment insecurity after the financial crisis of 2007 finally destroyed the “We are all middle class” myth. Another result of the crisis was the defeat of the Liberal Democratic Party (LDP). After over half a century as the majority party in the Diet, the LDP lost the 2009 election to the Democratic Party of Japan (DPJ). A prominent economist made the statement, “The logic of the income security and household subsidies indicated in the DPJ’s manifesto ultimately lead to the Basic Income discussed in Western Europe” (Ito 2009). In this vein, the DPJ’s Tax Policy Investigation Committee organized seminars on the topic of Basic Income (BI) in which I and two other experts gave presentations.

In Mexico, discussion surrounding basic income (BI) is relatively new. It is primarily though far from exclusively situated in academic circles, mainly in the sociopolitical circle, serving as indispensable references when thinking about poverty, inequality, and the transformation of social policy in Mexico. It could be noted that there have been many moments and initiatives that have consolidated this discussion in Mexico: the creation of the universal pension for senior citizens (from 2001 onward), the incorporation of BI as part of the electoral platform of one candidate in 2006, the presentation of two initiatives of law for installing BI nationwide in 2007, and the creation and formal recognition of the Basic Income Earth Network’s Mexican chapter in 2008. In 2007 and 2010, two seminars on BI were held in Mexico City.

The United Kingdom already has an unconditional and nonwithdraw-able income—for children. I shall therefore tell the story of how Family Allowance came about, how it became Child Benefit, and how it fares today; and at each stage of the story I shall seek reasons for why things happened as they did. Beyond hearings by parliamentary committees, there has been no legislative process relating to an unconditional and nonwithdrawable income for every adult citizen, but during the early 1970s there was an attempt to legislate a Tax Credits scheme that bore some resemblance to a Negative Income Tax. I shall draw lessons from that attempt. The Tax Credits proposal of the early 1970s should not be confused with the last Labour government’s means-tested wages supplement, which it erroneously and confusingly called “Tax Credits.” I shall then study parliamentary committee discussions of universal benefits for adults and a recent proposal for something like a citizen’s pension; and finally I shall discuss the factors that might determine whether the United Kingdom will ever legislate for a Citizen’s Income (CI).

The United States’s experiences with guaranteed annual income (GAI) schemes suggest that linking them to resolving specified social problems increases the political acceptance of the idea, although it by no means ensures adoption and implementation. Alternatives more aligned with existing programs and policies of social welfare provisioning tend to be taken more seriously by the public at large and policymakers in particular. This chapter, which in part synthesizes related material from a much broader work of mine that examines social welfare policy transitions in the United States from the 1980s through the first years of the Obama administration (Caputo 2011), discusses how a GAI proposal was seriously considered and nearly adopted by the US Congress when deliberating about how to best reform its major welfare program designed primarily for low-income families, especially single-mother families with young children. It highlights the centrality of reciprocity and priority given to labor force attachment as contributing to the loss of popular support for the idea of an unconditional basic income guarantee and shows how alternative policies such as the Earned Income Tax Credit were adopted that fit more readily into a cluster of values and an existing array of social welfare provisioning associated with individual responsibility.

Iran’s experience with basic income is paradoxical. The concept is virtually unknown in the country and almost entirely absent from the public discourse. And yet, since December 2010, all Iranians residing in the country have been entitled to, and nearly all receive, a monthly cash transfer of Rl 455,000 (about $45)¹ per person from the government. These unconditional transfers are officially known as “cash subsidies,” since they replace price subsidies that are being phased out. The scheme falls short of a basic income as commonly conceived in the literature, but it comes far closer to it than any other large-scale cash transfer scheme in the world. It is in effect a de facto basic income that is unique not only in its scope and size, but also in its provenance and prospects. Indeed, as a potential model for replication, it may claim certain advantages over some alternative pathways to a basic income, not least the fact that it is already in place as it approaches its first anniversary.