Published Dec 23 2012 by Feasta, Archived Dec 23 2012
Cultivating sustainable and ethical prosperity with basic income
by Anne B. Ryan
Paper originally presented to TASC (Think-tank for Action on Social Change) conference, Crisis to Opportunity, on Oct 19th, 2012 in Dublin. The paper was presented as part of a session entitled Equality fuelling recovery.
This paper examines the role of basic income in constructing a dynamic, diverse and democratic social economy. ‘Basic income’ or BI is shorthand for a regular, sufficient and unconditional income, administered by the state and issued to every member of society. BI replaces social welfare payments, child benefit and the state pension as we currently know them. It also extends to all those who currently receive no income from the state. Ideally, a BI would be sufficient for each person to have a frugal but decent lifestyle without supplementary income from paid work.i
Basic income is a measure that could be implemented during the current crisis in Ireland. It is a step that is possible within the tax and money regime that prevails at the moment, even in the EU-ECB-IMF troika programme. By itself, it will not achieve all that we need, but it has a crucial role to play in the transition to an economy and society based on the well being of all and the sharing of resources for the prosperity of all.
The paper begins by calling for ecological and economic literacy, so that the concept of basic income can be understood in a wider framework of knowledge about:
The paper then examines the immediate benefits of basic income and the longer-term possibilities for all kinds of work and workers. It also examines how basic income can support pioneers and seed projects that are already working towards a transformed economic and social regime characterised by greater equality, economic resilience and social solidarity.
The paper treats basic income as an essential and do-able step in such a transformation. As a stand-alone measure it would have beneficial effects. But it would have maximum effects if accompanied by democratic reform in tax and money systems.
Ecological and economic literacy
Real and achievable possibilities exist to create a future that is secure and fair for everyone. However, we cannot ask for what we do not know about. No genuine development or progress can take place without the understanding, participation and creativity of as many people as possible. The general public is motivated by issues such as quality of life and well being.ii But we largely lack a language in which to discuss and visualise a social economy that can support the diverse interests of all the people of Ireland and that can release talents and energies largely constrained in the present system.
Elements of economic and ecological literacy
There are things every adult should know if as many people as possible are to participate in public conversations about our goals and aspirations for Ireland, and understand the global situation. In a nutshell, we need a wider understanding of the ways modern hypercapitalism operates on a system of privilege, which allows the local and global accumulation of wealth and power in the hands of a few. At the same time, it reduces the ability of the majority to participate in and benefit from economic development. And it is completely dependent on ecosystems that it does not respect.
Developing economic and ecological literacy is not just about analysis of problems. It extends to facilitating equal opportunities for people to present new visions, while also articulating their fears and insecurities. In our deliberations about what we want from life we must construct useful knowledge on which we can act. If we don’t we will perish in outdated thinking and actions. The sections below outline some of the elements of useful knowledge for the future.
Understanding the double binds created by undifferentiated growth
We now face two classic double binds.iii First, we want to preserve our ecosystems and natural environment, but everything we do to grow our economies and preserve our material rates of consumption disrupts our relationships with the natural systems on which we depend.
Second, we also face a social double bind. We are in a situation of severe social inequality. The most widely proposed solution is to grow the economy in the same mode as we have done previously. However, the result of growing the economy in hypercapitalist mode is more inequality (the rich get richer). Growth is no guarantee of jobs, since many new enterprises are automated, with as few human workers as possible. Proceeds flow upwards to a small minority of shareholders and top executives.
A double-bind does not mean that there is no hope of resolution; but we have to seek answers from a different angle. We have to break out of the level of consciousness that keeps us stuck in a model that does not work.
Restore a sense of the richness of enough
The philosophy and practice of enough can be taken forward in ways appropriate to the 21st century. Wealth is inherent in sufficiency, and this knowledge can challenge the understandings of wealth implicit in the desire for constant expansion and undifferentiated growth. More never feels like it is adequate or sufficient for our needs – indeed, more is always less — if we don’t have a feel for the richness of enough.iv
Developing our capacity to reflect on and converse with others about the nature of wealth is part of the required cultural development towards economic and ecological literacy. For most people, genuine wealth resides in meaningful choices about how to arrange their lives, and this would be enhanced by the knowledge that they could live in a resilient social economy that is capable of coping with shocks.
We need a deep rethinking of morals and ethics about what constitutes the good life. If our goals and aspirations are well worked out, so too is it possible that associated investment costs will be accepted. Nobody wants to pay unfair taxes, devised in a piecemeal fashion, which stifle economic development and are also used to stop up a black hole of debt repayment. But if people see that public monies are raised and invested in ways that enhance the well being of the community at large (the commoners), they are likely to participate willingly in the taxation system.
In hypercapitalist boom times, equality came to mean equality of ability to consume on an equal footing with other high-consumption individuals and economies. That kind of consumption has been a cause of serious ecological degradation, resource depletion and global warming through the emission of greenhouse gases. Ecologically speaking, we need a certain amount of contraction in the production and consumption of material goods. We have recently seen reduction in carbon emissions largely because of recession, but this is not the kind of contraction that is required.
We need to create better quality of life, while at the same time consuming less in material terms. Importantly, however, this is not generalising about the common good, or saying that everyone has to live the same kind of lifestyle. It is, however, saying that at the broad parameters there have to be ecological and social limits. All growth must pay its full ecological and social costs.
Basic financial security is a right and a necessity for progress
The concept of security underpins the welfare state, but the system for welfare was designed to financially support those temporarily out of work from standard employment. It is not capable of providing basic financial security for all at this time.
People want growth because they see it as the only way to get jobs and other paid work. They want paid work because it is currently the only chance of financial security. But paid work is no guarantee of continued financial security. Increasing numbers of workers experience short contracts, very low wages, short hours of labour, unpredictable hours of labour, lack of representation by trades unions, and a limited range of rights and resources.
A great deal of work that comes on stream at this time is also personally or socially unsatisfactory and sometimes destructive, wasteful, or useless. Some paid work is morally unacceptable, ecologically harmful or personally alienating. Nobody should have to do such work in order to survive.
Currently, however, a large and growing group that includes many highly educated people — self-employed, migrants, women, young people and knowledge workers — have no or little choice about the kinds of paid work situations they enter. Paid work is the only way most people can access money.
Financial security should be a right of one’s membership of a society, not a right that comes only with employment. The thinking behind basic income wants to democratise security, in other words, to offer modest levels of protection to everybody, regardless of paid work.v Like other basic securities, such as food, energy, public transport, climate and water, sufficient income should remain stable in a democracy and should not be a matter of chance or subject to the arbitrary power of others. In addition, sustainability and resilience require that the basic securities be in place, so that members of society are not channelled into work that harms or destroys the environment or ecosystems, directly or indirectly. If the basics are in place, then people have genuine choices about taking on such work. And it is also possible to legislate to prevent work or enterprises that are ecologically or socially harmful.
Failure by the state to prevent chronic insecurity also breeds cynicism about the state and democratic processes. If large numbers of people are cast adrift, many will be open to exploitation by far-right politicians and neo-fascist groups. The presence of basic securities supports social tolerance; there is less fertile ground for divisions and hatred to grow. Security and tolerance also support creativity, innovation, cooperation and resourcefulness, which are greatly needed at this time. Such resources can help us move out of the constrained thinking and actions that that have caused the double binds.
Reverse the work-money link
The commons and commoners: sharing for prosperity
The natural commons consists of the resources provided by nature such as air, water, oil, gas and the atmosphere with its capacity to absorb a certain amount of carbon and other greenhouse gasses. The human-created commons arises from public investment and community activities.
Everyone has rights to the commons, nobody is an owner.vi Everybody is entitled to benefit from the use of the commons, natural or constructed. Those who use the commons should pay rent, which should then be shared as a dividend to everybody in society. We need shared management of the commons that benefits all right-holders.
Talk about the commons is increasing in private finance and investment. But this talk assumes that it should be brought into the market sphere. In other words, private financial institutions are trying to corner the ownership of resources that everyone needs and charge the rest of us for using them.vii This has similarities to the concept of rent-seekingviii but for purposes of literacy, the concept of commons, commons-management and commoners (the 99%) is more useful and politically resonant. Whatever we call it, the capture of the commons in the interests of a few is not going to deliver equality and progress. On the other hand, managing the commons for the benefit of all citizens of the earth helps to resolve a myriad of other interrelated issues that threaten our well being and security.ix
Dividends (a share of the rent) from the commons would be best used as an income delivered to individuals, nationally and globally. This is clearly not going to happen any time soon, but it is worth holding onto the notion of dividend, because it is a rights-based way to view basic income.x The current language used to describe transfers administered by the state and passed on to individuals — the language of welfare, allowances and assistance — is not too far from the notion of ‘handouts’ and even from a view of welfare as charity for the ‘deserving poor’.
Good land-value taxes push land prices down, and with them, house prices. Lower house prices mean less personal stress for people trying to buy. Less stress means better personal health, less crime and better personal relationships. The consequences of these are usually paid for from the public purse and the saving involved should be taken into account.
Taxing the right things
A basic income is possible now
Various movements and activists are working nationally and internationally towards these cultural, political and economic changes. The more we can support these changes and raise public awareness of the concepts outlined, the more likely it is that governments will eventually engage in these new ways of thinking and acting. However, we are now, in Ireland, in a position to almost immediately introduce a universal, sufficient and unconditional basic income. If introduced now, a basic income would make huge practical differences to people’s lives. At the same time, it would help to increase understanding of the foundational concepts outlined in the first part of this paper.
Within the tax system that prevails now in Ireland, basic income would require the payment of a higher rate of income tax – about 45% — on any income over and above the basic income, which is always tax-free. That extra tax would be offset by the basic income received. In other words, only very high earners would experience a decrease in net income.xv The chief point is that any tax paid to finance basic income would be returned as basic income. But the change in the system would bring priceless freedom and dynamic benefits for everybody.
Basic financial security requires just a modest amount of adjustment to the current system, but gets money circulating in economy and society, without reliance on banks and without tying a basic standard of income to paid employment. Basic income also eliminates the benefits trap that many people welfare recipients can often experience if they are offered employment. With the benefits trap gone and basic security and money circulation in place, individual members of society can judge for themselves how best to organise their lives; they have scope for creativity and diversity in how they manage their different concerns, including paid and unpaid work, family, personal relationships, self-development, community and education.
Basic income is based on trust in the human capacity to judge what is good for oneself, one’s local community and for society at large. The thinking behind BI does not generalise about where the social interest or the common good lie, beyond agreed social goals and ecological limits. It is based on a logic of pluralism, multiplicity and diversity, and equality of esteem for all these differences.
At the same time, progressives would need to keep working for the important cultural changes outlined, as well as practical measures for commons management, the introduction of fair and efficient money and tax systems. These sources of revenue would need to be developed, in order to have ongoing funding for basic income.
Advantages of basic income to business and entrepreneurship
Running a business, especially a small one, would be a different kind of experience. Everybody involved would have basic financial security, so any income from the business would be a top-up to a basic income. People would be free to try out business ideas, and a business would be viable as long as it made some small profit. It might even be able to carry losses for a short time while the business got established. As long as the business was ecologically and socially sound, there would be every chance to try out entrepreneurial ideas. There would be no harm done if a business failed, because the people involved would have their basic income to fall back on. This would be a support to entrepreneurs and would-be entrepreneurs and a boost to existing businesses. It would also support social entrepreneurs, who want to work for direct social benefit and are not motivated by profit. It would support collective ventures, cooperatives or partnership approaches to business.
Basic income is a necessary part of any coherent state strategy for cultivating private-sector business and entrepreneurship. It creates an ecosystem for pioneering projects and small businesses. In the future, the economy will be better served by a larger number of small enterprises, rather than reliance on large employers. In such a ‘polyculture’, if one part of the system fails, the system at large can continue and is able to support the individuals involved in the failed part.
Alone, a basic income will not make entrepreneurs of all of us, and not everybody will want to be self-employed or start a businesses. Those who do not will be supported by their basic income to engage with the labour market in ways that involve genuine choices (see below). But for those wishing to start a venture, basic income creates a supporting scaffold on which creativity and inventiveness can flourish. It allows people the time required to develop new business skills and become entrepreneurial.xvi It uses the state to build conditions where innovation can happen and people can act on good business ideas.
Basic income would also allow for the enforced closing of businesses (of any size) that are socially or ecologically harmful, such as weapons producers or big polluters. If a business was threatened with such closure, owners and employees could work (together or separately) to devise an alternative plan for the company. At the same time, all involved have financial security.
Basic income facilitates a genuinely flexible relationship with the labour market for employees. It re-balances power between employers and employees, giving employees a genuine exit strategy from a job that is unsatisfactory. There will always be a financial incentive for people to take up paid work, but if the conditions of employment are poor, there is a choice about staying. Having an exit strategy in place in turn affects the conditions under which employees are willing to stay, and increases one’s power in negotiating with employers.
If employees choose to negotiate collectively with employers, then trades unions will have a role to play. Basic income has been described as a ‘kind of unconditional and inexhaustible strike fund’, which frees trades unions from the responsibility of fighting for a living income.xvii It allows them to concentrate on improved pay and conditions of work.
For any worker in precarious employment, basic income provides a shock absorber during times of illness or when no paid work is available. There is no need to apply for social welfare, with its frequent payment delays. The basic income is always in place.
Basic income also makes low-paid work financially viable. Low-paid work of direct social benefit has a better chance to thrive. And people doing low-paid work that is dead-end, useless, harmful or morally unacceptable have a genuine exit option.
Basic income facilitates shorter-hours of paid work. It makes what is currently called ‘part-time’ employment financially viable and it eliminates the pension problems associated with it. This in turn would free up time for employees’ other commitments, such as family, community, self-development, education, leisure and civic-political activities. Shorter hours of paid work also benefit the environment; people who work long hours are more likely to engage in high-resource consumption such as fast travel and fast food.
Many small businesses have already turned towards shorter-hours working, out of necessity. Employers and employees, talking about their situation and acting in solidarity with each other, have created knowledge about how to share available work and save jobs. The people who are now working a three-day week on the job are in many cases enjoying the opportunity to be more involved in their families and active in their communities. They are growing the core economy, on which so much of the rest of the economy depends.xviii Basic income could help people like this to look positively on a long-term future of shorter-hours paid work, even if it becomes possible to work longer hours again.
Ideally, in the future, shorter-hours working for pay would become the norm for everyone, so that everyone can has the opportunity to balance of paid and unpaid work. As it stands now, some people have too much paid work and some cannot get any. If more people in thriving businesses chose to work shorter hours on the job, this would create employment opportunities for others.xix It would not be wise to legislate to enforce shorter hours in paid work, but basic income would make this option more attractive, and is an opportunity to expand it as the cultural norm. There may come a time when society actively disapproves of those who choose to take on extra paid hours, thereby denying others a share of the paid work available.
In addition, a good balance between paid and unpaid work is a foundation for personal, household and local resilience. It allows people to do much more production for themselves, in their households and communities.
Support for pioneers
Some people are ready to make maximum use of the support of a basic income. Thousands of projects all over the country are already engaged in pioneering ways to live and work, based on principles of solidarity, sharing, cooperation, sufficiency and ethical prosperity. The range covers small businesses including farming and growing; community supported agriculture; social entrepreneurship; repair, reuse and recycling enterprises; transition towns; community gardens; an eco-village; local mutual-help and resilience groups; local currencies and exchange networks; and many kinds of activism. Many of those involved are financially very precarious and basic income would support their work.
BI would also help others to become involved in projects for a sustainable and resilient future. Many people who are not currently involved in pioneering projects would like to become more active, but are tangled in the constraints of long hours of paid work, on the one hand, or the conditionality of receiving welfare, on the other. Whether employed, self-employed or unemployed, their talents and energies would be freed up by basic income.
Pioneering seeds-of-change projects are instances of social and ecological citizen-leadership. The people involved are shaping the wider cultural landscape. Many of them are also trying to educate high-level decision-makers in the political and economic realm about the need to manage the commons for the benefit of all. Their efforts would be hugely scaled up by the introduction of basic income.
A jobs guarantee in the transition period
For the transition period, or even for longer, the state could offer socially and environmentally valuable paid work to anyone who wants it.xx The income from it would be supplementary to basic income.
A Jobs Guarantee (JG) programme offers a socially or environmentally useful job, and the training and skill-development that go with it, to anyone who wants to do valuable or useful paid work but who cannot find such work in the private sector. A social-green jobs programme is separate from the existing ‘public sector’ jobs. It uses the energies and skills of the public, at a time when the private sector is unable to use those skills and energies, or to offer work that is of direct social benefit. The state offers to purchase any surplus labour that the private sector is not purchasing. In the process, workers are learning skills that may be useful to them with future employers or if they wish to become self-employed. So a JG functions as a training scheme, but it is not training for the sake of training. It is on-the-job training doing necessary and valuable work.
A social-green JG creates a reserve army of employed people, who are available to the private sector when it is able to use the labour again.xxi Importantly, however, with a basic income also in place, everyone has the freedom to be discerning about jobs that come on stream in both the public-jobs scheme and in the private sector. There is no requirement to take a job. There is no question of workfare because the basic income is sufficient, universal and unconditional.
In keeping with the desirability of normalising shorter job-hours, it would be preferable if no social-green job were more than 20 hours per week, or the monthly or annual equivalent. If employees got accustomed to a 20-hr week in a JG scheme, they might enjoy having more time to be producers in their own lives and the opportunity to be active citizens. They might, as a result, seek shorter-hours jobs in the private sector, when private-sector jobs become available, so that they could continue their other activities.
The political and economic regime
The thinking behind basic income sees a role for the state. But it shifts the function of the state away from that of provider, to that of manager of the commons on behalf of the commoners. Basic-income thinking is also characterised by an emphasis on upstream investments, away from the notion that the role of the state is to rescue people who get into trouble, or who cannot look after themselves from the outset.xxii Basic income is an investment in building our capacity to self-organise and meet many more of our own needs than we do at present. The state, representing the community at large, pre-distributes public goods and provides security at the broad parameters of economy and society. In turn, this facilitates a diversity of expressions of social and economic health and there is no generalisation about what the outcomes should be, or what the common good should look like.
Some groups and communities are doing a great deal for themselves and showing what is possible. They already possess human and other resources that allow them to localise and become self-reliant and resilient, and basic income can help to scale up the efforts they are making. Crucially, however, the responsibility of government is to make similar possibilities available to all communities, and basic income is one element of this. Localisation and local resilience are very important, and it is equally important that some communities do not get left behind.
Present policies do not encourage the mainstreaming of pioneering projects. They do not encourage a culture of sharing, sufficiency and solidarity a chance to emerge at the general level. Where such cultural expressions do emerge, policies do not support them; pioneers — communities and individuals — sooner or later come up against the structures of the state. We need an eventual reorganisation of the political and economic regime so that it supports rather than blocks, as it is currently doing.
Longer-term possibilities for a greater transformation of society and economy
The introduction of basic income does not require huge changes in the political and economic regime. Introduced in a stand-alone fashion, which is currently possible, it would have beneficial multiplier effects socially, culturally and economically. But for its full benefits to emerge, we need to change in parallel other aspects of the way we run our affairs. Most notably, we need to create democratic money and tax systems and manage the commons (starting with land-value taxes) for the benefit of commoners. The crucial point, however, is that even before those reforms begin, we have the means to put basic income in place now.
The political and economic regime where high-level decisions are made may eventually be transformed towards social and ecological leadership, by means of higher levels of participation from people at large who are creating a new cultural landscape. Pioneering projects will continue to emerge, with or without basic income, but basic income would support them greatly and increase their multiplier effects. Politicians may become better educated about economy and ecology, but ongoing grassroots work is crucial so that any legislation that emerges is legitimised by its grounding in civil society (national and global).xxiii
Basic income is not going to make all these things happen, but it can allow and support them. It is one essential piece – a keystone — in the transition to a positive future. We should not underestimate the challenges involved in having the idea of basic income accepted, however, despite the fact that we can afford to pay for it. At the very moment when social, ecological and economic conditions mean that we need to move to upstream investment and foundational basic-security actions such as commons-management and basic income, ‘the ideas that shape our economy and politics are still pulling in the opposite direction’.xxiv The situation is not helped by a mainstream media machine that cannot or will not understand the creation of something new, but is fixated on the imitation of concepts and methods that have failed to deliver well being and equality.
It suits the minority who accumulate wealth and power within the present system if the majority remains ignorant. It is not difficult to understand the principles and concepts involved in progressive change, but the minority want to create and maintain an aura of mystery around the entire system. The times demand that we (the commoners) develop our economic and ecological literacy, to understand that fairness and well being for all are entirely possible, and to develop confidence in our demands for them. We also need to build influence for the kinds of democratic, egalitarian thinking associated with basic income and commons management for the benefit of commoners. Key actions include dialogue, learning, creating ideas together and refining them in partnership.
We do not act because we know. We know because we are called upon to act.xxv
This article and the presentation based on it were made possible by the work, ideas- sharing and actions of my fellow-members in Feasta , Basic Income Ireland, Cultivate Celbridge and colleagues at the Department of Adult and Community Education, NUI Maynooth. The views presented are my own, as are any errors.
i. Guy Standing (2011) Work after Globalization. Cheltenham, Edward Elgar.
xxi. Matthew Forstater (2006) ‘New Roles for Government: Green Jobs, Public Service Employment and Environmental Sustainability’, in Challenge: July/August.
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