Universal Citizen’s Income

Have you heard of the universal citizen’s income?

Otherwise known as universal basic income, it refers to this (so far) theoretical policy where every citizen in a country is given enough money to cover their basic needs. It doesn’t matter if they’re working or not, how much they earn, what their health status is, – as long as they’re an adult and a national citizen, they get the same amount. Everyone does.

Do you think it sounds crazy? I kind of do too. But this article by the ever knowledgeable Another Angry Voice has made me doubt my initial incredulousness. 

Basically, some of the pros to the idea are that it’d replace the very bureaucracy-and-stigma-heavy welfare system by giving everyone the means to survive from the get-go, setting up a new business would be less risky, the labour market would favour workers – meaning better jobs, and absolute poverty would be abolished (a major win in it’s own right!) so charities could focus on the international poor.

According to the above article, the only economic con would be the risk of extra inflation. In other words, landlords may put up their prices, knowing their tenants get the citizen’s income. If done wholesale, this would under-mean the value of the citizen’s income so it could only really be implemented with rent caps and other policies to hold back inflation.

Most of the objections are more ideological. “Why should people get something for nothing?” “Without the threat of destitution, all we’ll do is watch daytime telly and eat crisps! Fancy crisps that we’ll buy with our free money!”

Well, it’s quite clear that the incentive to work would still be there. The citizen’s income would only be enough to cover your basic needs like food, bills and rent on a small simple home. If you want to buy other stuff (like everyone does) then you’d still need to work. It’s just that you’d be motivated by an apatite for more, rather than a fear of losing everything. And anyway, rich people still work – don’t they? We tend to want more than the minimum.

To be honest, my main gripe with the idea is that people who’re already rich would receive the citizen’s income, when they clearly wouldn’t need it. This would be not only unfair, but also a massive waste of public money. But as soon as you try to means test it, the beauty of the scheme evaporates and you’re back with the existing benefits system. Thomas Clark from Another Angry Voice makes a good point on this issue. He points out that as the biggest tax payers, the upper class would be very unlikely to fund a nation-wide cash giveaway that benefited everyone except them. So perhaps I should just stop being bitter, hm?

The case for the citizen’s income is, at it’s core, very ideological as well. Its based on this idea that, as a citizen, you have the right to, well, live. That’s quite a powerful concept really.

I’m very interested in how a citizen’s income would fit into a “steady state” or post-growth economy, as well as our current one. Apparently a citizen’s income would boost economic demand, as people would have more disposable income to spend on consumer goods. This would lead to economic growth, which would be great for a growth-based economy like our current one, but bad for a post-growth economy – which aims for stability, not growth. However starting a new business would be less risky, especially for small start-ups, and this could lead to a wealth of small companies springing up. This would be good in our current growth-based economy because more competition in the marketplace leads to better products, small businesses provide more jobs per unit of profit, they keep capital in communities etc… And it’d be good in a post-growth economy too, for the same reasons, plus the fact that having more small businesses rather than a few large ones is more environmentally sustainable. Lastly, if the citizen’s income was rolled out, a small proportion of people may decide to live off it and spend their time working for charity or in the Arts, in an unpaid capacity. This would be bad for a growth-based economy, but pretty good for a post-growth economy.

So, what do you think? Is it still a crazy idea?
Maybe so. There’s about 0% chance this government would even think of such a thing, so I wouldn’t get your knickers in a twist about it. But the Green Party support it, and Switzerland is having a referendum on whether they should roll it out.

Of course, the UK is much too debt-riddled to fund such a scheme at the moment. And that’s my other massive issue with the concept: where’s the cash coming from? I mean sure, it will replace pretty much all benefits. Plus there’d be a lot of savings on the administration and bureaucracy of the welfare state. If all you need to check is nationality and age, that’s a lot cheaper and quicker than the extensive means testing for all the different benefits that currently gets done. But surely a lot more funding has to come from somewhere?

Personally, I think its time will come – just not quite yet.

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