Basic income guarantee – visionary or shortsighted?


 After the last welfare reforms and the ongoing social distortions and rise of poverty that followed, the idea of the basic income (Bedingungsloses Grundeinkommen – BGE) became increasingly popular in Germany.

The underlying idea is to provide everybody with a monthly paid amount of money that guarantees social security and participation.

This idea has some support inside all political parties and all classes of society, including rich entrepreneurs and intellectuals. The concepts differ of cause, but a growing number of supporters is increasingly enthusiastic about it in general. Although the basic concept seems to be simple, just and able to find a consensus in society, there are some flaws in it which should be considered.

The critique that nobody would be willing to work if we had a basic income guarantee will be put aside, as the current activation policies show serious negative impacts on qualifications, wage levels, the freedom to chose a profession and the general idea of self management, so that the possible losses of productivity might have a less negative impact than the current workfare system. For sure they would be more compatible with the ideas of a free society and workers emancipation.

The basic income idea seems to have some other very severe flaws when long term development, the idea of social justice and the distribution of political power are considered.

Starting with the idea of social justice, it´s difficult to understand, why everybody should receive a social welfare transfer payment. For the wealthy, it´s just peanuts, playing no considerable role in their income, for the poor it might be enough, but it also might put additional disadvantages on those, who have increased need for transfer money because of health conditions and other individual hardships. The basic income guarantee tries to cover material needs that differ individually with one general payment.

Furthermore, while it seems to be possible to finance the basic income in Europe, the different concepts of taxation to pay for it include other problems which should be discussed. One suggestion is to finance it over an increased tax on consumption (value added tax, sales tax). As everybody with a low income is spending a high percentage of his or her money on consumption there might be some kind of vicious circle in this type of funding. When you raise the taxes on consumption, you have to spent more money for your daily needs, increasing the needed basic income again.

The other idea is to finance it over property and income taxes, one model among those is the so called negative income tax, which would only provide the poor and low income households with additional money to reach the basic income level and increase the taxes for the wealthier. This idea would probably address the idea of social justice much more than the general payment for everybody, but it highly divides the basic income supporters, as some of them might fear the social conflict potential this idea has.

Regarding influence on decision making the basic income doesn´t seem to give the poor any more of it than the current welfare state does. They have an increased control of their own life, as there are no sanctions and no limits on duration of the welfare transfer anymore, which would be a great step forward, but it still stays a money transfer that has to be granted and distributed. It also might be denied, if tax payments fall short or are needed elsewhere for example in the military budget. The political impact of a strike by those completely dependent on the basic income and therefore not being part of the capitalist production process anymore, is probably not very big too.

Another problem is the global devision of labour; if the way production is financed and controlled today isn´t challanged, it´s still possible that other countries become or stay the providers of cheap resources or  low wage assembly lines for the basic income societies. Of cause it might even be possible to introduce a basic income worldwide, as proposed by the Basic Income Earth Network (BIEN).
The general problem of the basic income of being a macropolitical project with very few possibilities to introduce it in a self managed bottom up process, is giving it disadvantages compared with other alternatives to current capitalism, like participatory economics, which offer the possibilities of small scale steb by step intoduction without necessarily being dependend on central government funding or large scale donors.

The basic income tries to give a maximum of self determination in consumption without seriously trying to get it in the area of production, so it has to rely on decisions made elsewhere by representative governments and top down regulation. It´s hoped that the improvement in working conditions will follow by giving workers the possibility to hold their labour back, if there are no proper conditions on the offered job.

Not addressing the just distribution of power, the basic income might be able to prevent absolute poverty but it´s incabable to help against relative poverty which still includes social outclassing, dependence on top down decisions made by central governing institutions and structural violence. Under these conditions, the possibility to lose the little that has been given still remains.

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