Rebuilding the economy after Covid requires a bold new standard: Basic Income

A basic income would strengthen everyone's robustness and resilience to shocks, from financial crises to pandemics.

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There has been a worldwide surge in support for a basic income since the pandemic struck. Two-thirds of Europeans are in favour, and there have been experiments in 45 US cities, plus pilots in countries as different as South Korea, Kenya and Brazil, with Wales too announcing a pilot to come. Yet in Britain the Conservatives and the Labour leadership have rigidly opposed it, while a few commentators have expressed prejudiced hostility.

The rationale for making a basic income an anchor of the distribution system is fundamentally ethical. The left should stand on ethical grounds, and not fall into the trap of "labourism" – i.e. tying entitlement to income support to the performance of labour. This has always been the case. But what makes the debate particularly relevant is that it is now an economic imperative if we are to overcome the horror of rentier capitalism, as described in my new book.

The idea of basic income is that every legal resident in society should receive a modest monthly income provided by the state, paid individually, without means tests, behavioural conditions or a record of "contributions". It would be paid equally to all adults, regardless of age, sex, marital or household status, and regardless of labour status, with a smaller amount for children.

As the objective is to give everybody equal basic security, there should be supplements for those with extra costs of living, such as those with disabilities. Government could claw back from the wealthy by adjusting tax rates.

There is nothing in the concept to say how much basic income should be. But during the "rescue" phase of a pandemic it should be enough to give the means of survival. In the longer term, it would depend on building up a financing mechanism. The key is that we should be on the road to a meaningful basic income system, not, as now, on one going away from it.

Common justice

The right to a basic income can be traced to the Charter of the Forest, sealed in 1217 alongside Magna Carta. This constitutional foundation stone asserted that every free man had a right to subsistence, on the commons.

So, the first justification is that it is a matter of common justice. The wealth and income of all of us is due far more to the efforts and achievements of the many generations before us than anything we do ourselves, however clever we think we are. But we do not know whose ancestors contributed more. If society allows for private inheritance, "something-for-nothing" for a minority, then we should allow for social inheritance, a form of social dividend.

A related strand of common justice arises from the fact that over the centuries elites have taken much of our commons, acquiring vast riches without compensating commoners. A basic income would be compensation for that loss, a view associated with Thomas Paine and Henry George. The commons belong to us equally, including not just land, waterways, forests, parks and natural "resources", but also the amenities and public services we inherit as society, and the body of ideas and knowledge.

Elsewhere, I have proposed that the optimum way of funding a basic income would be through a "commons capital fund", designed to respect the principle of intergenerational equity – i.e. recognising that the state has a stewardship role in protecting the commons for future as well as current generations.

Basic income could also be seen as a matter of religious justice, in that God has given people unequal talents, so that it would be a way of compensating those with lesser talents. It is also a matter of ecological justice, in that the rich pollute more, while the poor are afflicted with the consequences more. It would promote ecological justice more than prioritising resource-depleting jobs.

It is also a matter of "compassion justice". By giving everybody an equal economic right, it would roll back the charity state, the reliance on pity, which as David Hume showed is akin to contempt. A basic income promotes "public dignity". Finally, it would be a matter of "work justice", in rewarding work that is not labour – notably, unpaid care and voluntary community work.

Security and freedom

By definition, a basic income would increase basic security, even if only modestly initially. Basic security is a human need and a public good, in that the value to anybody increases if everybody has it. Psychologists have shown that insecurity reduces "mental bandwidth" – one’s IQ. It is unfair to expect rational responsibility if that is the case.

A basic income would also respond to the reality that in today’s globalised rentier capitalism the main form of insecurity is uncertainty, for which social and private insurance systems are ill-suited. And it would strengthen robustness and resilience in response to shocks, including pandemics. Unless everybody has resilience, nobody is likely to have it.

Freedom

Furthermore, basic income would enhance three types of freedom. First, it would enhance libertarian freedom – the freedom from artificial constraints and the freedom to choose and to say "no". Second, it would enhance liberal freedom, that is, the freedom to be moral and have the ability to decide on what is the appropriate thing to do. You cannot be moral if you have to do what you are told or steered to do by bureaucrats – for example, those deciding your eligibility for benefits – however well-meaning.

Such freedom exists if you are free even from potential domination by figures in positions of unaccountable authority. A woman does not have it if she can only do things on approval by a husband or father, even if they usually "allow" her to do as she wishes.

Basic income would also enhance republican freedom. In this regard, pilot programmes have found that women having a basic income were more likely to leave abusive relationships, and escape domestic violence, which has worsened during the pandemic lockdown.

Economic reasons

William Beveridge in 1942 said it was “a time for revolutions, not for patching" and that the welfare reforms were intended to slay five "giants": disease, ignorance, idleness, squalor and want. Today we are confronted by as many as eight giants (inequality, insecurity, debt, stress, precarity, automation, extinction and populism) and in all respects a basic income would help weaken them. Properly designed, it would reduce inequality; it would reduce insecurity, partly by providing an automatic economic stabiliser; it would cut debt, reduce stress and roll back precarity, defined as loss of citizenship rights and the feeling of being a mere supplicant, reliant on charity. It would make robots less threatening. Above all, it would lessen the threat of extinction. We need high eco-taxes to control greenhouse gas emissions and other pollution, but these would be regressive unless the revenue were recycled as equal dividends. And having basic income would encourage more care and community work rather than resource-depleting jobs. Finally, by providing basic security it would help halt the drift to neo-fascist populism, which feeds on insecurity.

There have been dozens of pilots and experiments around the world, with different methodologies, durations and sizes. As reviewed elsewhere, what is remarkable is that the findings have been consistent: improved health, less stress, reduced debt, increased work, stronger bargaining position – particularly for women – and better social attitudes. It is no panacea, but it will be a vital component of a new progressive politics.

Guy Standing is a Professorial Research Associate at SOAS University of London and a founding member and honorary co-president of the Basic Income Earth Network.

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