November 1998  

eagle.gif (11717 bytes)

Why a Citizen's Income should be combined with a Citizen's Wage

by Jan Otto Andersson

1. Two concepts and a vision

The way in which the basic income concept was introduced into the
Scandinavian debate caused some quibble. In 1978 a Danish best-seller
"Revolt from the Center" proposed a "citizen's wage" to every one,
covering basic living costs. The term was taken to be identical with a
basic income (BI). However, the authors also proposed an obligatory -
although short - national social service (Meyer et al 1981, p.126). Thus
the epithet was not as misleading as one might think. However, the damage
was done. It is easy to ridicule the concept of a "citizen's wage" which
is paid out to everybody independently of any work effort.

In my contributions to the discussion I preferred the term "citizen's
income" (CI) for an unconditional basic income. I thought that it
expressed my intentions in a telling way. It hinted at the hopes for an
invigorated civil society, but it did not imply any particular level,
e.g. an income which would be high enough to live on. I was therefore
pleased when the Basic Income Research Group (BIRG) adopted the term,
and became the Citizen's Income Research Group (CIRG).

However, I have found the concept of a "citizen's wage" (CW) appropriate
-- not in order to express the right to an unconditional income -- but in
order to designate an income, which would be paid out for activities that
society wants to encourage. The citizen's wage would be more like a
scholarship than an ordinary wage. A person would apply for a CW, and the
CWs would be granted by different social bodies entitled by the state to
do so. Although being similar to scholarships, I think that the CWs
should be taxed and also give right to income related social benefits,
such as pensions, and insurance in case of sickness or unemployment.

Through the CWs several goals could be pursued:

1. It would be possible to consciously create and expand a "third",
non-state and non-market sector. This sector would include activities
that are socially or ecologically valuable, but are not well suited
neither for administration by the state nor production guided solely by
market demand.

2. It would give everyone a better chance to do something that is both
personally rewarding and socially accepted. It would be a means to
enhance social insertion. In so far at the CWs attract people that
otherwise would do ordinary wage work, they help others to find decent jobs.

3. By combining a CW with the unconditional CI a person could earn enough
not to be dependent on means-tested benefits.

4. The existence of CWs would provide a motive and focus for a continuing political discussion on how the human resources in a society should be
directed. The allocation of the CWs to different kinds of activities, the
levels of the CWs and the conditions required by the recepients would be
of constant concern for all citizens. The old debate of public versus
private would be enriched by a third possibility.

My vision of a future society is one in which a substantial part of the
national income is distributed as unconditional CIs, and another, about
equally important part, is used for CWs. Through the use of CIs society
would enhance the real freedom of its members. Through the CWs it would
encourage activities that it deems to be advantageous from a social and
ecological point of view.

A CI- cum CW-scheme would combine the gains sought for by
real-libertarians with a more communitarian approach, encouraging
individuals to be active and responsible citizens. Through the
simultaneous use of both instruments society could try to find the right
balance between individual freedom and collective needs.

2. The political unfeasibility of a pure CI-scheme

There is an inherent dilemma that makes it difficult to implement any
particular CI-scheme, even if a majority supports the idea in principle.
If you strive for a grant level that is high enough to make the need for means-tested benefits and social insurance marginal you tend to create
high incentives for free-riding. People may choose a socially
irresponsible way of life which they can afford thanks to the high CI. On
the other hand, if you settle for a low grant level in order to avoid
parasitic behaviour, you may end up in a situation where you will have to supplement the CIs with solid social insurance and means-tested schemes.

There may be no good solution to this dilemma within the framework of a
pure CI-scheme. Even though proponents of citizen's income would like to
find the right balance between two objectives - to minimize means-testing
and other conditionalities on the one hand, and to encourage active and responsible life style choices on the other - they may not succeed. For
any conceivable level of the grant a majority would reject the proposal.

This dilemma also explains the "excess of meaning"-phenomenon encountered
by Walter Van Trier in his intense search for the roots and meanings of
basic income.

Any particular basic income proposal depends crucially on its substantive features, the most decisive of which is the grant level (ibid. p.419).
The idea of a basic income has been supported by people from very
different political camps, but their support has been conditional. They
put their particular scheme in a certain context. Proposals from other
parties and groups are dismissed if they do not fit that context.

In Finland the most sincere political adherents have been the Left-Wing
Alliance (to the left of the Social Democrats), the Green League, the
youth organisation of the Center Party (agrarians) and the Party of the
Young Finns (right wing liberals). However, it is almost inconceivable to
reconcile the views of the Young Finns and the Left-Wing Alliance. The
Young Finns want to rationalise and cut down the existing welfare state
system, whereas the LWA would like to develop a citizen's income in
accordance with the Nordic universal welfare state model.

The problems associated with any particular CI-scheme are probably so
difficult that it would be politically unfeasible to implement it, without
connecting it firmly to a broader conception, which directly take
account of the dilemmas. A combination of a citizen's wage and a
citizen's income could supply an acceptable solution. A relatively low CI
should be used to achieve a limited number of the advantages associated
with a full basic income. A supple system of CWs should be used to
achieve as much as possible of the other advantages looked for.

3. Why real-libertarianism is not enough

The most consistent argument for an unconditional basic income is
provided in terms of "real-libertarianism". Especially Philippe Van
Parijs and Robert van der Veen have given valuable contributions resting
their case on the concept "real freedom for all". According to them a
just society is a society that guarantees each person the greatest
possible opportunity to do whatever she might want to do. They argue that
this can be achieved through a basic income, which is the highest that
can be permanently maintained.

Although I find this real-libertarian argumentation valuable, I have two
objections, which weakens the weight given to the simple basic income
model. The first relate to the concept of real freedom, the second to the communitarian critique of individualism and 'political atomism'.

Formal freedom, even in combination with a substantial unconditional
income, may not assure all central aspects of real freedom. If we use
Amartya Sen's notion of capability to be and to do what you want to as a synonym for real freedom, one important aspect is the ability to have
self-esteem and to be recognised as valuable by others. A citizen's
income helps to do this in two ways. The fact that you have a right to
receive an unconditional income can be interpreted as a recognition of
your value by the rest of society. An unconditional income also
facilitates your participation in activities that give you social
recognition. However, if you receive an unconditional income like anybody
else, and if you are not compensated in any noticeable way for the
activities you pursue, you may feel useless and excluded.

Critics of basic income sometimes imply that it would leave the
unemployed to themselves and deprive them of their 'right to work': "we
give you this basic income, so that you can survive, but we have no need
for you". This argument is particularly frequent among social democrats,
who tend to see BI-proposals as giving in to mass unemployment. The same argument was forcefully put by Robert Kennedy, who found a guaranteed
income wanting because, "whatever good it might do, simply cannot provide
the sense of self-sufficiency, of participation in the life of the
community, that is essential for citizens of a democracy." According to
him the solution had to be "dignified employment at decent pay, the kind
of employment that lets a man say to his community, to his family, to his
country, and most important to himself, 'I helped to build this country.
I am a participant in its great public ventures." (Cited in Sandel (1996)
p.19)

Although recognising the validity of real-freedom-for-all as a
fundamental value, I have argued that it should not be used
single-mindedly. Two other values - democratic communities and
sustainable development - are of equal importance, and cannot be derived
from the notion of real-freedom-for-all (Andersson 1996). To focus on
real freedom or capabilities of the individuals may entail a downgrading
of the communities, which of necessity give the individuals their
identity, tastes, desires and beliefs. It is not possible to derive the
institutions for a good society only by focusing on what is good from the
point of view of presupposed individuals, since they are formed by the
society they live in.

If we value democratic communities and sustainable development as such,
we would like to encourage activities and life styles which promote these
ideals. It is unlikely that maximising the unconditional grant would be
consistent with these goals. It is generally possible to use part of the
grant in order to induce certain activities and life styles which are
deemed to conform to democracy as well as social and ecological
sustainability. From a community point of view it will be more congenial
to spend a certain sum of money on a CI- plus CW-scheme as on a pure CI-scheme.

4. CIs, CWs and the economy

The epoch-making fact that only a small fraction of the population is
needed to provide society with its food and other necessities of life has
radically altered the economic logic. We have become forced to
continually invent new ways of finding suitable tasks and incomes for
everybody.

What is happening is that small differences in 'productivity', or rather
'quality', tend to show up as large differences in market value. When
several highly skilled persons compete, but only a few of them are needed
to satisfy demand, the difference between success and failure in the
market becomes very narrow. As small advantages in know-how, public
relations or some other elusive factor, become crucial for the prosperity
of individuals and firms, the fate of people and localities may vary
dramatically almost as if by chance. As in professional sports the
winners take all. Factor incomes tend to diverge everywhere and without
an extensive network of social transfers the distribution of disposable
incomes would become intolerable in a democratic society.

An important haven, which as least partly has been sheltered from the
logic of market competition, is the public sector. In the Scandinavian
countries until the 1990s it was the continuos expansion of the public
sector in education, health care and social services, that was able to
provide people - especially women - with decent jobs. A growing share of
the fruits of the productivity gains in industry was transformed into
publicly provided services. When this absorption-mechanism was destroyed
even the 'Nordic models' succumbed to mass unemployment. The costs of
high unemployment is undermining the financial position of the welfare
state. The dualization of society is becoming accepted as a matter of
fact, a development that increases rivalry among the disadvantaged and
disdain among the fortunate.

It may be impossible to recreate the dynamics of the old Nordic models. However, it may be possible to create a new logic through which an
increasing portion of the population is self-employed in activities that
are subsidised by the most successful. For many already a low CI may be
enough to support an otherwise too unrewarding activity. For others the
combination of a low CI with a modest CW could make life meaningful for themselves and for society. The costs to tax-payers for these activities
are smaller than the costs for civil servants and maybe even for
unemployed. At the same time they can gain from a more vibrant community.
The gradual growth of a third sector - a part of the economy with a logic
of its own - can transform the atmosphere of the whole of society.

References:

Andersson, Jan Otto (1996) Fundamental Values for a Third Left. New Left Review 216, March/April 1996

Meyer, Niels E, Helveg Petersen & Villy Sorensen (1981) Revolt from the
Center, Marion Boyars, London (Published in Danish 1978)

Sandel, Michael J.: The Politics of Community: Robert F. Kennedy versus Ronald Reagan. The Responsive Community, Vol 6, Issue 2, Spring 1996

Van Parijs, Philippe (1995) Real Freedom for All. What (if anything) can
justify capitalism? Clarendon Press, Oxford

Van Trier, Walter (1995) Every One a King. An investigation into the
meaning and significance of the debete on basic incomes with special
reference to three episodes from the British Inter-War experience.
Department Sociologie K.U.Leuven

Jan Otto Andersson is an economist, based at Åbo Akademi University in Finland.

janderss@abo.fi
tel 358-2-2154162
fax 358-2-2154677
Institutionen för samhällsekonomi och statistik
Åbo Akademi
20500 Åbo, Finland

See also:

            Archbishop of Finland supports Citizen’s Income

 

Index of back issues

Theuuslogo.jpg (2196 bytes) in London