By Jan Otto Andersson
Basic income is a fascinating idea. People tend to react strongly, either looking upon it as a pivotal liberating device or showing open disregard for it. In two of the Scandinavian countries - Denmark and Finland - the idea of an unconditional basic income has received much attention. However, in Sweden and Norway it has almost been a non-issue. To compare the theoretical and political debates in Finland and Sweden is therefore a means to look at the differences between these two closely related societies.
The term most widely used in the Scandinavian countries is "citizen's wage" (medborgarlön, kansalaispalkka). In Finland the terms "basic income" (grundinkomst, perustulo) and "citizen's income" (medborgarinkomst, kansalaistulo) have also received a wide circulation.
To use the term "citizen's wage" adds to the provocation. How can you speak of a "wage" when you automatically receive a sum of money even though you do not work or even do not pretend to work! The reason given by the supporters - like Erik Christensen from Denmark in a recent fascinating study (the title in English would be "Citizen's Wage. Stories about a Political Idea") - is that they want to alter the dominant work concept. A citizen's wage can be viewed as a compensation for all the unpaid, but socially necessary activites, contributed by the citizens.
In a speech to the unemployed a similar view was expressed by the then Archbishop of Finland, John Vikström:
"A basic income would send every citizen the following encouraging and motivating message: You are important. You are not a burden, but a resource. You are important by being a human being for others. Whatever work you do, in whatever situations, whether or not you are paid to do it, you still contribute to building our society."
The provocative term has also made it possible for the opponents to use it in a derogatory way: "Work or Citizen's Wage?" is the title of a report presented by the Confederation of Finnish Industry and Employers, although it did not relate to any genuine proposal for a basic income.
The differences between Swedish and Finnish basic income debates can be seen both in the intellectual debates and in the activities of the political parties. Another telling difference is that at the biannual meetings of the Basic Income European Network (BIEN) the participation from Finland has been regular, whereas Swedish representation has been almost negligible.
Lack of enthusiasm in Sweden
Three authors have actively proposed some version of a basic income in Sweden: Gunnar Adler-Karlsson at the end of the 1970s, Thomas Ehrenberg ten years later, and Lars Ekstrand in the 1990s. Both Ehrenberg and Ekstrand wrote as if the idea had never been introduced in Sweden before.
It is telling of the political climate in Sweden that Adler-Karlsson had to accept a change of the title of his book from No to full employment. Yes to a material basic security to the less offensive Thoughts on full employment. In the Danish edition the original title was used.
All three proposals were put forward in a futuristic and utopian manner. They saw a CW as a means to radically transform society, but were relatively short in the analysis of which trends and forces would actually work in favour of their visions. Adler-Karlsson's and Ekstrand's ideas did receive some attention, but they were generally dismissed. I have found no response to Ehrenberg's book.
As headlines such as "He dreams of a citizen's wage" and "The apostle of laziness provokes" indicate, the reception of Ekstrands books was not enthusiastic. His views were criticised by a leading authority on social policy, Gunnar Wetterberg, head of the powerful central organisation for the municipalities. Wetterberg called the idea "the triumph of resignation". In an another article Wetterberg repeated his critique under the ominous heading “A citizen's wage would feed the underworld”.
In Sweden the only political party that has been seriously interested in a CW is the green party, Miljöpartiet. In 1997 Eva Goës asked the government to make an official report on the question.
The Social Democrats have been the main defenders of the existing system, based on the idea of full employment and a general system of income-related social security. The Left party has also discarded the CW-idea, but it has asked for substantial reductions in working time as an alternative strategy.
The three parties of the centre - Folkpartiet, Centerpartiet and Kristdemokraterna - have all stressed the need for a basic security (‘grundtrygghet’), but they have not accepted deviations from means-testing.
The conservatives, Moderaterna, favour a "general and individual" system based on a clear correspondence between contributions and benefits plus strict means-testing for those with special problems.
Broad debate in Finland
In Finland both the public debate and the interest of the political parties have been much broader than in Sweden. During the 1980s and 1990s CW- and BI-proposals proliferated, and four parties, representing some 40 per cent of the voters - the Centre party, the Left Alliance, the Greens and the Young Finns - accepted the idea in their political programmes. I shall mention a few examples in order to illuminate the Finnish situation.
In 1988 Olli Rehn (from the Center party) and David Pemberton (from the Green party) took the initiative in creating a group which would discuss and promote the idea of a basic income. The group was chaired by Eeva Kuuskoski-Vikatmaa, a leading personality in the Centre Party and a long-time minister of Social and Health Affairs. The group included representatives from most political parties. Its secretary, Ilpo Lahtinen, wrote a book which reflected the ideas discussed in the group. He proposed the introduction of a partial basic income along lines suggested by Hermione Parker from the UK. However, the book appeared at a most unfortunate time; the Finnish economy was in the midst of a depressionary spiral, and there was little interest for large reforms or costly improvements.
The now minister of Social Affairs Osmo Soininvaara (representing the Greens) has been an untiring champion of basic income. Since the end of the 1970s he has elaborated the idea in several books and reports. Hyvinvointivaltion eloonjäämisoppi (A survival doctrine for the welfare state) was awarded a prize as the best economics book of the year 1994. Here Soininvaara continued the discussion on basic income in a concrete and detailed way. It was based on two reports written by the author for the Ministry of Social and Health Affairs. The base of his scheme was a basic income (‘perustulo’) differentiated for household composition. The income tax rate would be 53%. The author proposed two types of conditional "extra allowances" (‘lisätuki’) to supplement the basic income for special contingencies. His arguments had, however, changed if compared to his original ideas. He was now interested in creating a system that would induce everyone to contribute as much as possible to the national economy, and explicitly criticised those who wanted a CW in order to make work voluntary.
In a recent academic study, Kansalaistulo sosiaalipoliittisena muutoksena (Citizen's income as a change in social policy), Anita Mattila compares nine different Finnish schemes. Her references - which, with few exceptions, relates to the Finnish debate - occupy no less then 18 pages.
The most explicit critics of a basic income in Finland have been the employers' organisation (STK, later TT) and the national trade union organisation (SAK). Both were critical towards the report made by an official working group on social security in 1986. STK interpreteted the suggested income guarantee as a citizen's wage, since it was not conditional on willingness to work. The organisation ridiculed the idea that there would be any mass unemployment in the future and was afraid that it would become difficult to get people willing to work. They asked for a more selective social policy instead. According to SAK the report had to be remade from a completely different premise. Social security should encourage people to work and promote full employment.
In 1994 SAK published a report on basic income. The title Mikä ihmeen perustulo? is perhaps best translated as “What on earth is basic income?", which reflects the disapproval of the idea. According to the report, full employment could be restored through rapid and sustained economic growth, through reductions in working time and work sharing, and through better education and training. If a basic income scheme were introduced society would develop towards a low-wage-low-skill society, a 'boot-cleaner society'.
Differences between Sweden and Finland
There are two relatively obvious reasons why the interest for basic income has differed between Finland and Sweden. The first relates to the hegemony of the Swedish Social Democratic party and the second to the relative success of the Swedish welfare state.
The party most consistently opposed to any basic income proposal both in Finland and in Sweden has been the Social Democrats. Both SAP in Sweden and SDP in Finland have seen basic income as a break with two fundamental principles: the “work principle” and the “income maintenance principle”. The electoral support of the Finnish SDP has been only about half of its Swedish counterpart SAP. SDP has therefore always been compelled to form coalition governments, whereas SAP has been able to govern alone for most of the time since the 1930s. In Finland the Centre Party has been as strong as the Social Democrats, and the Left Alliance has competed on a more equal footing. Both the Centre Party and the LA have traditionally tended to support universal benefits.
The other obvious reason for the different receptions of the basic income idea is that the Swedish welfare state is older and more sacrosanct than the Finnish, and that Sweden - until recently - has not been plagued by mass unemployment. Levels of benefits are generally higher in Sweden. They are also more strongly related to the income maintenance principle - the "standard social security". Income related unemployment benefits - administred by the trade unions - has covered about 85% of the earlier gross incomes. In Finland the corresponding figure is 60%. The daily allowance for uninsured has also been more generous in Sweden. It would, therefore, be relatively more costly to change the Swedish system into a pure basic income system.
Sweden was able to avoid open mass unemployment until the beginning of the 1990s. This was achieved by careful macroeconomic policies, by active labour market policies and by a rapid growth of the public service sector. In Finland mass unemployment appeared in 1976. It was gradually reduced towards the end of the 1980s, but from 1991 onwards, mass unemployment has been the principal scourge of the Finnish economy. Despite seven years of rapid economic growth the rate of unemployment is still some 10%. Unemployment in Sweden has not been subdued, but it is only about half that of Finland.
One reason why basic income has created more interest in Finland can relate to a difference in the national character. According to experts on culture there is a clear difference. In Sweden it is necessary to be part of and receive the support from the collective. No decisions are taken without long discussions and an emerging consensus. In Finland leadership styles are more individualistic. You are allowed to be somewhat idiosyncratic and to change your opinions without engaging into long discussions. Finns are thrilled by new technical solutions and they are not so afraid of sudden changes. The Swedes seem to be more pragmatic and cautious.
Basic income is probably most welcomed in a society which is individualistic and solidaristic at the same time. There must be a very special combination of values which allows citizens to make unconventional choices at the same time as their basic economic security is guaranteed by the state.
Jan Otto Andersson is Reader in international economics and research director at the Department of Economics and Statistics at Åbo Akademi University, Turku. He has been an active participant in the discussions on basic income, and was a founding member of BIEN, the Basic Income European Network.
See Citizen's Income Online
Why a Citizen's Income should be combined with a Citizen's Wage by Jan Otto Andersson
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