The Guaranteed Basic Income
During my recent trip to Germany I heard of a new initiative which interested me greatly. It’s called the “Basis Income”, according to which every individual child, working adult or retiree receives a guaranteed basic income, sufficient to live on, financed by the state. This is not unemployment insurance or a political handout, but a right. Sound utopian? Let’s examine the idea in order to determine whether it is practical or just a utopian dream.
The world’s developed countries are continuously increasing production and profit; even some so-called Third World countries, such as Brazil, Argentina and India, are following the same pattern. Nevertheless, the distribution of the wealth produced is grossly unequal. The rich are getting richer and the poor poorer.
A few years ago I attended a consultants’ conference in Helsinki, Finland. One of the speakers was on expert on How to Fire People! She was eloquent and convincing. She told us that because of ever more sophisticated technology the amount of manpower required in the workplace is being reduced at an alarming rate, so despite increased production, unemployment is increasing instead of decreasing and the trend is irreversible. Therefore, as consultants the most we can do is try to make the firing process more humane. This involves such tactics as retaining the person being terminated until the two or three paid months until the termination date are completed, with all the time off needed for looking for another job, so he or she will at least feel wanted, if not needed. Also, it’s easier to find a new job if you’re still gainfully employed. Some companies in Scandinavia even provide professional assistance in résumé writing and job seeking tactics. And so on. All her suggestions were logical, caring and provide a psychological cushion, but they don’t essentially change the reality of despair in the heart of a suddenly unemployed individual.
Due to taxes and benefits, labor is becoming too expensive for companies, large and small. So they prefer to replace people with machines, especially computers, and/or outsource work to countries where labor is still cheap. Often the managers responsible for such actions have guilty consciences, but they see no choice. It’s the bottom line that speaks to owners and investors.
A Basic Income could go a long way to change this, too. Replacement of human labor by machines would not create unemployment, because those people no longer needed in industry would be able to do the kind of work they choose, work which is beneficial to society. Artists (writers, painters, musicians, educators, physicians) would be able to direct their efforts towards others as well as to themselves, without worrying about their next meal. Creativity would be the norm instead of the exception.
The first objection which comes to mind is too obvious: if people are guaranteed a basic income without the obligation to work, they simply would not work and society would collapse. But this knee-jerk reaction neglects to take into consideration many sociological studies which indicate that the principle motivation for work is not money, but such things as recognition, interaction with others and the sense or performing a worthwhile activity — once basic needs are met. If a worker, employed or not, is obliged to provide for his and his or her family’s basic needs, he is most often in a locked position of needing to do any kind of work to satisfy these needs. Which means he is not free, but is a slave (partly at least, for his work is unfree) to economic necessity. With a guaranteed basic income however, automation would be a blessing rather than a curse.
Another question is: how would the political state be able to finance such a project? It could do so by redirecting social security (pension) funds to this project. If more money is needed how about reducing the huge amounts of capital wasted on arms development and procurement and the resultant wars?
Productive companies would also benefit if they are legally able to reduce salaries by the amount of the Basic Income. For example, if a worker now earns 3,000 dollars a month and receives $1,000 as a basic income, the company would only need to pay him $2,000. (U.S. dollars, still the international currency, are used as a model only; local currencies would apply in practice.)
There are still many questions and details involved as to exactly how such a system would be implemented, but a fundamental benefit is obvious. Armies of losers would no longer exist, but free individuals who no longer regard work as a necessary evil but as an opportunity for self-fulfillment.