Universal Basic Income and the Reshaping of Democracy

The discussion of universal basic income has come to a deadlock. So far, the questions whether, when, where, and how a universal basic income could eventually be put into political practice have played a minor role in this discussion. However, these questions belong not at the end, but at the beginning of the debate.

Unconditional basic income is difficult to discuss free from emotion and ideology. Controversies in this field result less from differences in economic calculations than from political and ideological prejudice. The discussion therefore cannot be objective and sober unless the political logic of unconditional basic income is fully revealed. This logic is the key to the question of whether, how, where, and when an unconditional basic income could be implemented.

The basic income system is a distant goal, and all current discussions of design, financing, complementary social insurance, and the adequacy of established democratic decision-making procedures are at an early stage. Creating the necessary awareness will largely be a project for future generations. In order to decide whether such a system is really worth a long-term commitment one must, however, have a concrete vision in mind, and this vision should make it as obvious as possible that unconditional basic income would actually improve the quality of the welfare state.

A citizens’ stipend system of the type proposed here would thus bring about a broad spectrum of positive changes without risking serious transitional problems. Such a system would be administratively easy to handle, it would be transparent, it would be fair, it would make the economy and working life more creative and innovative, and it would lead to full employment by reshaping the wage structure and economic risk sharing. Combined with the associated statutory social security system, it would cover all special needs in aggravated conditions of life. In addition, it would offer the greatest possible transparency and simplicity in distribution issues, and it would thereby help secure social peace, contribute to a new, clearer, and more rational perception of politics, counteract disaffection with democracy, reduce the susceptibility to populist messages, raise the level of political discourse, and even pave the way for a higher level of political civilization. It is hard to imagine that this broad range of positive effects of the citizens’ stipend system may in any way be outweighed by negative side effects.

There are two fundamental objections to basic income that need a particularly well considered response. One of these objections refers to an expected tax increase and its economic consequences. The claim is that the aggravated tax burden would impair the incentives for work and the willingness to invest by so much that economic output—and thereby redistributable wealth—would substantially decline. Such decline of redistributable wealth could then be detrimental also to the least advantaged.

The idea of basic income has intellectual charm, but however much this may inspire the intellectual discourse, it cannot overcome the political indifference. Much of the sympathy the idea has gained in the past is based on the frivolous expectation that it would bring the vast majority of citizens an increase in prosperity and an easier life. This assumption often goes along with the prediction that digitization will lead to an unprecedented upsurge in productivity and an unprecedented destruction of jobs, increasing both distributable income and the need for redistribution to an unprecedented extent. If such a state of the world were to emerge, the conditions for the implementation of a citizens’ stipend would actually improve, but such expectations are highly exaggerated. Therefore, even the noteworthy increases in public attention the basic income idea has meanwhile triggered will not overcome the fundamental political indifference it normally encounters.

The basic income system would make the welfare state simpler, more transparent, and politically more manageable, thus improving the conditions for solidarity and social fairness. However, the more deeply the political logic of this concept is analyzed, the more fundamental questions arise, even beyond matters of the political order. Concerns include questions that need urgent discussion independent of the basic income issue. One of these questions is so fundamental that it should have far anteceded any discussion of the basic income system: the question if and how the well-functioning of a solidary system such as basic income depends on geographic and demographic demarcation and social context.

That the prospects of success for a citizens’ stipend project depend not only on economic and political conditions, but also on criteria such as the size and homogeneity of the population, illustrates the wide spectrum of political risks involved. The more thoroughly the conditions of success of citizens’ stipend projects are analyzed, the more risks of failure become apparent, in cases, for example, where the recipients of the stipend do not perceive themselves as a voluntary solidary community.

Thanks to widespread international activism, the idea of basic income has attained remarkable publicity and prominence in the past three decades. But in spite of that, the discussion on basic income to this point cannot be considered a success story, and it cannot be one if continued with the same arguments. In order to improve the odds of success at least for a distant future, basic income would, as explained above, have to be discussed in a much broader political context and with a much wider time horizon than in the past.