Guide Arguing for Basic Income: Ethical Foundations for a Radical Reform

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ARGUING FOR BASIC INCOME: ETHICAL FOUNDATIONS FOR A. RADICAL REFORM. Edited by Philippe Van Parijs. New York: Verso,. pp. Paper.
Table of contents

Robots are not the enemy but rather the friend of the work force — they make labour more productive and therefore have a positive impact on wages and competitiveness. New technologies have always led to a reduction in jobs in the short run but more prosperity in the long run. Many scholars, such as Nobel laureate Christopher Pissarides, believe it is important to search for more clever strategies to cope with the challenges of digitisation:. Now, having a universal minimum income is one of those ways, in fact, it is one I am very much in favour of, as long as we know how to apply it without taking away incentive to work at the lower end of the market.

Of these, perhaps the most discussed is the idea of a "citizen's income" or a "basic income", whereby a universal benefit is paid individually to all citizens. If the EU is to go down the basic income route, then a natural starting point is with an EU basic income for children. In his very last book, Atkinson went a step further by proposing that "there should be a capital endowment minimum inheritance paid to all at adulthood".

Finally, it is by no means a coincidence that managers of leading companies in the field of digitisation are very much in favour of an unconditional basic income. They experience daily how unmanned drones replace the postman, clever sorting machines make human hands superfluous and digitalised logistic solutions increasingly eliminate even qualified work, rendering many blue-collar as well as white-collar jobs obsolete.

  1. Negative Income Tax (NIT) and Unconditional Basic Income (UBI);
  2. Basic income.
  3. Measuring Suicidal Behavior and Risk in Children and Adolescents (Measurement and Instrumentation in Psychology).
  4. On the Political Feasibility of Universal Basic Income: An Analytic Framework.

Compared to a robot tax, a UBI does not focus on the process but on the outcome of an economic activity i. A UBI would allow the taxation of the total value added and not just the "robot" labour, which would lead to a negative distortion of relative factor prices for labour and capital. Taxing value added at the end of the production process just at the moment when value added is leaving the production site and is distributed to the production factors in the form of wages for labour, or interests or dividends for capital owners, or profits for the shareholders or the owners of the robots , looks like the most promising response of the welfare state to "digitisation".

As soon as value added reaches people i. The best response to the impact of robots on jobs and on the welfare state is not to tax the robots but rather to tax the owners of the robots. The UBI is an adequate and effective way to adjust the concept of the social market economy to the age of digitisation, globalisation and the long-term trends that go along with a demographically ageing society.

It is an efficient reaction to the increasing polarisation between human capital owners and less qualified workers who must finance their lives with labour income stemming from low-paid jobs. The social market economy follows a simple principle: it wants to "dissolve a merely imaginary contradiction between liberal and social worldviews in the peaceful way of social irenics", which means with harmonious reconciliation. The simplicity of the basic idea makes the concept of the social market economy so powerful. The main focus lies in the separation of allocation and redistribution.

Generating the highest value added possible is the most powerful precondition for the socially oriented redistribution from the economically strong to the economically weak. While the extent of redistribution requires a normative political discussion, the positive economic analysis can convincingly demonstrate that a "blind" social policy is the most effective, most efficient and thus the most equitable social policy. Furthermore, it should refrain from paternalistic behaviour and simply flow unconditionally. The fundamental aim should be to redistribute some degree of purchasing power from people with higher incomes to those with lower incomes.

Direct individual payments to economically weaker people are more targeted, less expensive and more effective than indirect measures which require the fulfilment of specific criteria, particular preconditions or certain behaviours, for example, the requirement of being employed or at least searching for employment, or the attainment of a specified age.

It is part of the tragedy of a misunderstood social policy that it attempts to reach a political goal with unsuitable means.

  1. Philippe Van Parijs - Google 学术搜索引用.
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Social-politically motivated interventions in the markets' mechanisms are inappropriate. In many cases, they provoke outcomes that are the opposite of what should be achieved. They lead to unnecessary duplicate structures and an expensive bureaucracy. Many people receive financial support through the current procedure via the social insurance system, only to have that support contradicted through the tax system.

The UBI completely replaces today's social insurance systems. At first glance, this may appear to be a dismantling of social rights and claims. On closer inspection, however, it becomes clear that such a judgement is based on a fallacy.

  1. Philippe Van Parijs - Google Scholar Citations.
  2. A personal view of APL?
  3. Arguing for Basic Income: Ethical Foundations for a Radical Reform!
  4. Philippe Parijs.
  5. Sustainable Development Handbook?

Using Germany as an example, the country's current social insurance schemes are neither efficient, nor do they achieve their socio-political objectives with the required precision. Redistribution is a public good and therefore a normative political goal that should be financed by taxes. Insurance is a mathematical calculation. It would therefore be sufficient to ensure that insurance works efficiently and to concentrate on the efficient allocation and management of risks and not to overload the capacities of insurance with redistribution issues.

Fairness and goals of justice should be approached with specific instruments for redistribution — not with insurance. The negative income tax aspect of a UBI completely fulfils this basic requirement of the social market economy concept. Insurance payments should therefore be calculated according to purely actuarial rules and should be paid by the insured themselves. It is only after this efficiency requirement is satisfied that the social policy component begins: those who are financially unable to pay the individual insurance contribution should receive state subsidies.

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Inevitably, these state subsidies would have to be financed not by wage levies but by general taxes. And of course, it is a normative question that is up for political debate regarding the kinds of risks a basic insurance should cover and the degree to which public subsidies should allow poor people to pay private insurance fees to cover basic risks. Even the concept of "equal funding" meaning that employers and employees are both responsible for similar shares in the financing of social security payments is misleading.

As a technical matter, these payments are indeed split into separate parts — one that goes directly to the worker and another that goes to the social security system. In fact, however, it is always the employee who pays the entire amount, and it is his or her money — and not the employer's — that flows into the social security systems.

From the employer's point of view, contributions to pension insurance are simply costs, and whether such payments are made directly to the employee in the form of higher wages or into a social security system is immaterial. Without "equal funding", therefore, the gross income of employees would be correspondingly higher. Neither the transparency nor the inefficiency of today's social insurance is necessary.

Basic Income. A radical proposal for a free society and a sane economy

Social policy measures can be strictly separated into redistribution and insurance instruments. A clear separation into the generation allocation and distribution of market income would be necessary. It is precisely this separation that makes the social market economy such a successful concept.

It is also the core of a UBI. The UBI follows the principle that economic efficiency and social justice are not opposites. They can be harmoniously combined and, moreover, they complement one another. It is equal for everyone — and at the same time allows everyone to be different. Like the social market economy, the UBI consistently separates the allocation of income and the distribution of income.

Basic Income

It frees the labour market from social-political redistribution tasks. But it also corrects the distribution effects of the labour market. It takes something away from the better-off to give it to those who earn little or nothing. Freedom, personal responsibility and competition should enable an efficient allocation of production factors. In a first step, a free market economy would allow the maximising of the value added. In a second step, goals of justice, fairness and the guarantee of equal opportunities provide good reasons for a complementary social policy. However, to achieve and to secure social aims is a duty for all and not just a task for the payrolls of lower-paid workers.

Therefore, equity and distribution intentions ought to be financed through taxation levied on all kinds of income — i. The UBI wants to create the best possible pre- conditions for people willing to work.

Basic Income - Oxford Research Encyclopedia of Politics

If as many people as possible are working in well-paid jobs, there are also more funds available for the support of the economically weak. That is why everything must be done to enable people to work and earn their own incomes. The UBI empowers people, irrespective of gender, age and preconditions.

It makes it easier for people to live according to their own ideas, wishes and norms. Not everyone will take advantage of these opportunities, but at least the options are open to everybody. The UBI would empower people to more readily take on some risks of daily life. If people are assured that a failure will not lead to a bottomless case of destitution and poverty, and that their subsistence minimum is secured, they will assess future challenges as opportunities rather than threats. This applies to all people, and not just to those who behave in accordance with social norms and traditional values or behaviours.

On the contrary, nonconformists often help to see the world through different eyes and from novel perspectives. New ideas and innovative solutions can emerge from the new thinking of outsiders. The economics of insurance behaviour can convincingly show that insured people are willing to accept more risks.

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This empirical observation is the justification for compulsory insurance, for example motor vehicle liability insurance or health and accident insurance. However, the positive correlation between being insured and taking more risks also contains sound economic reasons for a state social policy which serves the purpose of securing the subsistence minimum for everybody.

In spite of the radical rhetoric that some proponents use, the UBI is nothing but a fundamental tax reform. The UBI follows the concept of a negative income tax and enables a politically determined redistribution goal to be achieved much more precisely than with today's principle of a tax system combined with a social insurance system.