Building Block Foundation – what is the Citizen’s Income and how would it work?

What if

Okay. What if, perhaps every week or every month, you receive a small sum of money, purely for being a citizen of your country? While it would not be a substantial amount, it should be enough for you to live on. You could put this free money towards starting a new business, to pay for your education or training, or to take time off from work to care for a child or another relative. There are no strings attached: it can’t be taken away from you and everybody else in the country receives the same sum of money, wherever they live and however rich they are. It would be your very own block foundation to build on. 

Surely such a scheme could only be found in a fantasy world? Surely a government wouldn’t give money away to everybody, no matter who they are? Well, some people – including a few famous thinkers – think that a Citizen’s Income (also known as a Universal Basic Income, or just Basic Income) is not only desirable, but also very possible.

 

What is a Citizen’s Income?

There is even a group dedicated to making the Citizen’s Income a reality, known as The Citizen’s Income Trust. According to the Trust, a Citizen’s Income is “an unconditional, automatic and nonwithdrawable payment to each individual as a right of citizenship.” So if you’re living as a citizen of the UK, you would automatically receive the Citizen’s Income purely by virtue of being a citizen of the UK. It would be paid directly into your bank account every week or month (or into parents’ bank accounts for children), with a higher Citizen’s Pension established for older people.

 

How would it work?

As a result, to receive a Citizen’s Income, you would only need to give the government two pieces of information: your age (to determine whether you are entitled to the Citizen’s Income or the Citizen’s Pension) and some sort of acknowledgement that you are a UK Citizen. And that’s it: you would have the money and you can do whatever you like with it. Because there are no strings attached to the scheme, some have suggested that giving everybody free money would act as a disincentive to actually go out and get a job. Proponents of the Citizen’s Income, however, suggest that it is the current means-tested benefits systems which acts as the main disincentive for people to work. Currently, if an unemployed person decides to take up a job they could lose their benefits, sometimes leaving them worse off than if they’d not taken the job in the first place. By contrast, the Citizen’s Income would allow for all sorts of work without the fear of losing that unconditional source of income. Indeed, some have suggested that the Citizen’s Income is a great way to promote part-time work, which may be increasingly necessary to prevent mass unemployment as more occupations become automated with the increased use of technology. But the unconvinced cry: how would you pay for it?

Most of the Citizen’s Income fans favour a new, comprehensive form of Income Tax. Tax would be paid on all income (except the Citizen’s Income), from the very largest to the very smallest amount. Under the Trust’s proposed scheme, the Citizen’s Income and Income Tax would be linked, with Income Tax rising and falling in accordance with the demand of the Citizen’s Income. In addition, proponents point out that savings would be made by abolishing other benefits which would be rendered unnecessary after Citizen’s Income is introduced: Jobseeker’s Allowance, Working Tax Credits, National Insurance, Child Benefit and the state pension would all be replaced by the Citizen’s Income; only housing benefit and disabilities benefits would remain. This would also create administrative savings, as a Citizen’s Income theoretically requires less civil servants to administer it than benefits which need details about your gender, relationship and employment status. So a much smaller bureaucracy.

 

Life and how to live it

There are many arguments for and against the Citizen’s Income: those in favour point to greater efficiency caused by a smaller bureaucracy, the more balanced labour market and the possibilities for the redistribution of wealth; those against warn of the possibility of inflation the scheme might cause or the apparent injustice of giving people “something for nothing.” For its most passionate champions, however, the attractiveness of the Citizen’s Income comes down to its ability to give individuals more freedom. The philosopher and political economist Philippe Van Parijs, who coined the term “real freedom,” suggests that the Citizen’s Income is emancipatory: “It is about the power to decide what sort of life one wants to live. It is about the power to say no to the dictates of a boss, a bureaucrat, or a spouse. And it is about the power to say yes to activities that are poorly paid or not paid at all, but are nonetheless attractive either in themselves or because of the training and the contacts they provide.” According to Van Parijs, there can be no better way to open doors to a new career, hobby or way of life than giving everybody an unconditional Citizen’s Income. Now there’s an idea.

Money for Namibia – international examples of the Citizen’s Income

According to its proponents the Citizen’s Income will allow human flourishing and emancipation as we haven’t felt in ages, but is it even possible? Could we implement a Citizen’s Income, or is it just for the musings of a fantasy utopia, where the flowers are always in bloom, the sun always shines and the trains run on time. In his excellent book Money for Everyone, Dr. Malcolm Torry surveys some of the places in which a Citizen’s Income or similar schemes actually exist or have been trialled. His examples feature areas of the globe with a wide range of temperatures and train punctuality.

Dr Torry points to the US state of Alaska. Since 1977 Alaska has run the Alaskan Permanent Fund, which sees the surplus from the state’s oil revenues distributed between all of the citizens in the form of an equal annual payment, which is the same for all people but changes annually depending on the size of the surplus. Dr Torry argues that the Fund has increased income, which has increased consumption, which has in turn increased employment. And the Fund has remained unchanged in nearly 40 years which (given Tea Party cheerleader Sarah Palin was once the governor of the state) is either a testament to the popularity of the fund or suggests that it isn’t as much the tool of “big government” as you might think.

In addition to Alaska, there have been a few trials of a Citizen’s Income which appear to have gone rather well. Between 2007 and 2009, a trial of a Citizen’s Income in two villages in Namibia yielded some very positive results. The trial scheme gave the equivalent of £7 to every man, woman and child per month, with the team behind the pilot surveying the impact the scheme had. The researchers found that household poverty fell from 76% to 37% within a year; child malnutrition fell, with the number of underweight children reduced from 42% to 10% by the end of the scheme; and the number of people employed or engaged in other activity increased from 44% to 55%. Public health improved, school attendance rose and crime rates fell. Self-employment rose, new shops opened and the people in the villages even set up an elected advisory committee to oversee projects, such as the opening of a post office.

The trial in Namibia shows how a Citizen’s Income has the potential to radically change society, with extremely positive results. Two other pilot projects were begun in India in 2011: one in West Delhi’s Raghubir Nagar slum; and another in eight villages in Madhya Pradesh. In the interim results (announced in 2012), researchers found that most people spent their benefits on food, healthcare and education, with some communities pooling their income to fund infrastructure projects like roads, drains and toilets.

Far from being the product of a fantasy land, then, the Citizen’s Income has helped to build an otherwise unattainable reality in an extremely diverse range of states. Whether it could work in an advanced economy with a complicated welfare system like the UK remains to be seen, but what if the positive experiences found in other nations could be replicated? Just imagine.

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