Ingeborg van Teeseling outlines the benefits of a European Basic Income trial, which could radically reduce Australia’s welfare spending.
Yes, I know I’m getting annoying in constantly telling you about great things that happen in Holland. I promise I will try to make this the last time, but seriously: if you come across a great idea, don’t you want to share it? So here I go again. Humour me.
From today, 20 cities and towns in The Netherlands will start a pilot program, trialling a concept called Basic Income. The idea is that everybody who lives in a country, irrespective of age, gender or status, gets a basic income. This income is unconditional, so not means tested and without any work requirement. It is also paid to individuals, regardless of who you live with or how much money they earn, and, in its ideal form it is just enough to live on. Radical, isn’t it!?
I can feel a number of your “buts” coming on, but bear with me.
The first one to come up with the concept was Thomas Paine, philosopher, political theorist, journalist and one of the Founding Fathers of the USA. Heavily influenced by Enlightenment ideals of universal rights, he wrote a pamphlet in 1797 called Agrarian Justice in which he introduced the notion of a guaranteed minimum income. Paine thought that even people who were not lucky enough to inherit property or other forms of wealth still had “equal right to the value of the Earth.” He argued that freedom is nothing more than an empty concept if it is not founded on and supported by the material means to live your life according to your wishes, aims and talents. Over time, the currency of the idea has waxed and waned and has gathered as many detractors as advocates. (Not least in the area of economics, where the 1970s and 1980s saw a debate between Nobel Prize Winners in Economics, some in favour and some against.) Now though, the Basic Income is again on the political agenda, especially in Europe, where there is a European organisation called the Basic Income Earth Network (BIEN). At the moment, BIEN is gearing up for an international conference on the subject, to be held in Maastricht (yes, sorry, in Holland) on January 30 and 31. A number of European political parties have also made it part of their aims.
So why is this the case?
Let me start by saying something about economic reasons for the Basic Income. We live in a world that values work above almost anything else. Full-time employment is our goal, preferably doing something that we like, but if that is not possible, then work, any work, is what we aim for. Work is considered to be our only way to wealth, happiness and identity. This idea we have inherited from religion (“idle hands do the Devil’s work”), capitalism and the Industrial Revolution. The problem is that work is changing. Technological advances and globalisation have produced more wealth (in the West especially) and a higher productivity, but less work. Particularly, people who work in low-skilled jobs and manufacturing have seen themselves put on the scrap heap in ever greater numbers. Now the roles have been reversed: instead of work creating wealth, wealth now has to create work. And that costs money. A lot of money. Most governments spend enormous amounts of cash and incentives to obtain the ultimate goal: zero unemployment. The issue is that even in times of plenty, at the peak of the jobs cycle, no government has ever succeeded in having no people out of work.
Those people have to be taken care of. Not just because we want to be a fair society, where nobody starves on the street, but also because people who are starving, who have nothing to lose, are dangerous. They might take up arms against the government or the rich, or vote in Donald Trump. It leads to poverty, forced migration and ultimately war…which in times of trench warfare killed a lot of those pesky poor people, but now, with wars fought by drones, kills not enough to solve the problem. Cynical? Sure, but true nevertheless. So we have to come up with something else. Also because a lack of jobs is a social problem in a world where work is the be-all-and-end-all of our existence.
The people who don’t have jobs feel excluded from this world, not valued, not full members of society. If they get a Centrelink benefit, they have to live with the fact that they are “on welfare,” receiving hand-outs, almost charity. That is not a nice feeling and can make them angry and despondent. Social workers also tell us that this system leads to a “welfare trap,” where people are reluctant to find work, because that puts them at risk of ending up with less money than they would get otherwise. Which, in turn, leads to generations on welfare: disenfranchised and distant from society – a society that can use all the human capital it can muster. If you are unemployed and live with a working partner, you get no benefits at all. This is also a problem because it makes you dependent on that partner, and dependency leads to all manner of issues, domestic violence and bad mental health being only the most visible.
This system is also not an undivided pleasure for the people who are still working full-time. A lot of companies complain about low productivity of their employees because they are burnt out, depressed and pull sickies far too often. At home, those workers aren’t popular either, because they don’t pull their weight in the raising of children, the housework or the maintenance of social networks.
So a redistribution of work would be a Godsend for everyone. And that is what the Basic Income aims for. If everybody has just enough to sustain themselves, work becomes a choice. You can work as much or as little as you want. More people will become part-timers, a trend that is now forced upon them, but would become an option instead. This will free up the full-timers and pull the unemployed back into the system – with obvious benefits for both. With a Basic Income, you could take time out to raise children (men and women), study, do a course, set up your own business or travel. It would make it easier to write a book, care for your elderly parents or teach English to refugees. Instead of this being the prerogative of rich people, it would become possible for all.
That sounds great, I hear you say, but what about the costs? Surely this plan would be incredibly expensive? Yes, it will, I grant you that. But look on the bright side, to all the money that can be saved. A wide range of existing benefits can be abolished or reduced. We will need less bureaucracy, less people who work at Centrelink or other organisations who are trying in vain to get people back into non-existing jobs. We will save on prisons, hospitals, mental health, even addiction-services, childcare and care for the elderly. We might even, with a more equal society, be able to force wealthy people and companies to pay (a reasonable amount of) tax. If we’re not careful, it would actually lead to the “fair go” country we say we inhabit already. Companies would have to pay less for their employees, because they would work less hours, and productivity would go up, making them more money. It would create less traffic jams, because not everybody would have to work from 9 to 5. And with Basic Income, you would be able to live in Woop Woop, because you are no longer limited to places where full-time work is available. This, in turn, would lessen the strain on big cities like Sydney, which would then become more liveable.
So with that out of the way, let me tackle the last argument against the Basic Income (as far as I can see): the idea that it turns people into lazy slackers, who will sit in front of the television and smoke pot all day. First of all: so what? If that makes them happy, good luck to them. It will mean more work for the rest of us. And besides, some people are doing that already under the old system, so nothing will change there. Of course, most people do not want to live like that at all. We know this, because when we give people a Basic Income called the pension, they don’t suddenly start watching their pot plants all day. A University of Adelaide study has recently found that volunteering in Australia is now worth more economically than the mining industry – about 200 billion dollars a year. A lot of that work is done by retirees. Another example: in the 1850s, England had a lot of vicars who did not have a lot to do. While they had to deliver a service once and tend to their flock, church officials in smaller areas had quite a bit of leisure time. As Bill Bryson wrote in At Home, this was fortuitous for society, because they wrote novels, the world’s first dictionary of Icelandic, invented the power loom and the submarine, bred Jack Russell terriers, scientifically described dinosaurs for the first time, started the disciplines of political economy and archeology and helped build the telescope which discovered Uranus.
Because of their Basic Income (sort of), they could have gone on nice long walks instead and contributed nothing. But, as Bryson wrote, they helped their country become even greater than it already was.
All of this is at the basis of the experiments that are about to start in Holland. The Dutch are not the first to try it out, though. In the 1970s, a small Canadian town called Dauphin did a pilot program as well. For five years, the whole town received a Basic Income. The results were encouraging: a decline in doctor and hospital visits, better mental health, more children who completed high-school and no reductions in people’s motivation to work. Unfortunately, a change in government and a recession shelved the program, but it was a start. Now India is thinking about something similar, the Swiss will vote on it this year and the Fins are starting a parallel pilot to that of the Dutch. Maybe, just maybe, we can at least begin to talk and think about it? That would make this writer very happy.