Wednesday, 1 October 2014

The Political Aspects of a Basic Income Guarantee

Brian has put up a useful post called Consequences of a Basic Income Guarantee which runs through some of the technical issues of an Income Guarantee for Canada and other countries.

I'm from the UK, and we've had 'Means Tested' Unemployment Benefit, Housing Benefit, Universal Child Benefit, Universal Pensions and a National Health Service for decades.  The history of these benefits show why general income schemes just don't work properly in practice.

Let's run through some reality.

The UK Conservative party in their 2014 conference announced its intention to extended a benefits cap and reduce the amount of money going to the unemployed in order to 'fund' .... apprenticeships.

Yep that's jobs folks.

This is a wildly popular idea in the UK and has massive support in polls from the majority of the population.
"At heart, I want us to effectively abolish youth unemployment," Cameron said.
"I want us to end the idea that aged 18 you can leave school, go and leave home, claim unemployment benefit and claim housing benefit.
"We shouldn't be offering that choice to young people; we should be saying, 'you should be earning or learning'."
Reducing payments and increasing work, from those who are fit and able, is the political goal here, which is what chimes with the population.

Let's see what the other side has to offer.

The Labour party put forward proposals to limit Child Benefit - which was a universal benefit paying a massive £20 per week to a child. Basic income for a child in other words; although 'a pittance' would be a better description.

That has already been removed from high wage earners and the 'socialist' Labour party will remove the indexation of that benefit and will not restore universality. 'All savings used to reduce the deficit' - so there's not even any redistribution. A whole £400 million over five years - which is a rounding error in the UK budget.

It actually costs an awful lot to do the means testing rather than to simply pay out the money to wealthy people earning more than £50K. But "they don't need it" you see, and that's an important moral point. Again to huge applause from the general population and lots of column inches in the papers.

They also propose a 'Job Guarantee' - which isn't a full Job Guarantee but offers a limited amount of work to the young. Not much of a noise about that in the press and how it impacts our 'freedom'.

So there you have the political reality of operating a social security system in the real world with real human beings. It's not a matter of mathematics or accounting. It's got nothing to do with tedious technical economic issues about the nature of value.  It is simply a matter that the default Basic Income Job - "spend the money I'm given" - is not seen as sufficient recompense by the rest of society - even when the payment is universal. That makes it a non-starter.

Much is made of all the 'trials' and 'pilot projects' of basic income. You'll note that none of them ever get any traction after that. This is why. It's a political turkey.

Receiving money when you don't need it is seen as morally reprehensible, as is spending money and doing nothing of perceived value. Politically they get removed when they show up, or slowly chipped away at best. We've seen this in the UK since the Second World War - increasingly since the 1970s. Even the Universal Pension is moving the wrong way. The age at which you receive the pension is ever increasing despite having a clear contribution element that people can relate to.

Although many may benefit from being 'freed' from work, there are known detrimental effects to health amongst a chunk of the population that already receive income guarantees (the retired).  Unemployment can transform into social isolation, despair and depression unless there is active assistance finding something useful to do. That doesn't happen spontaneously. It has to be provided actively by the social support system.

I could come up with endless headlines, comment threads and quite a few TV shows that use the line: what are you doing that is of value to everybody else? Even the sympathetic press are often very keen to show people on benefits working for charities or volunteering in some way.

Getting to a useful Job Guarantee is going to be difficult enough - ensuring, as it must, that everybody is doing something they enjoy and that others see as valuable, as well as informing the general public constantly of that value in each local area. Broadening the concept of what work is and means is the main challenge. In fact in some countries it may be impossible until unemployment gets to depression levels, probably beyond that towards societal breakdown. Humans like to push things to the very edge before making a course alteration - as we're seeing with the response to Climate Change.

Ultimately BIG people tend to be interested in abolishing a quite narrow idea of 'work' as a matter of basic philosophy. It's a core value to them. They are a very small minority of people that like the idea of not having to do anything for a living and being 'free' - even though that freedom isn't really extended to those that will have to continue to work to keep the lights on, and who would have to pay a much higher tax rate for the privilege.

Essentially they come across as extreme individualists just like the free market bunch, with which they have a lot in common to the point where they can find agreement over this issue. That speaks volumes.

BIG fails in the same way that 'free markets' fail. Because you have these annoying things called human beings to deal with, operating in a social structure that requires a quid pro quo. Something that is innate and cannot be easily wished away.

But the good thing, politically, about having the Income Guarantee people pushing their line is that alongside it a Job Guarantee, within the context of Universal Health, Education and Pension provisions, sounds immensely reasonable. Something that perhaps should be made more use of in debate.