With its promise of lifting people out of poverty and ending the need for food banks, the Guaranteed Basic Income (GBI) sounds radical, and even subversive, an invitation to create a shiftless, dependent population—but it may be an idea whose time has come.
This is not a new thought—Thomas Moore wrote about it in Utopia, (published in 1516), in which he explored some of the problems of society. Observing the stern measures that were being taken against thieves, and recalling a conversation with John Morton, the Archbishop of Canterbury, he wrote:
“We’re hanging them all over the place, I’ve seen as many as twenty on a single gallows. And that’s what I find so odd. Considering how few of them get away with it, how come we are still plagued with so many robbers? Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse.”
His close friend and fellow humanist, Johannes Vives (1492-1540), took the idea further and worked out a detailed scheme. Without putting a name to it, those early thinkers unconsciously initiated the idea of a basic income, given freely, with no strings attached.
The idea continued to grow during the 20th century
Many great philosophers have joined the discussion: Bertrand Russell wrote about it in 1918 in Roads to Freedom, (page 143) advocating a small income for all, and famously saying,
“When education is finished, no one should be compelled to work, and those who choose not to work should receive a bare livelihood and be left completely free.”
Also in the 1900s, Friedrich Hayek, and liberal economists and thinkers Buckminster Fuller, and Martin Luther King Jr. entered the discussion, defending the idea.
The Guaranteed Basic Income, an elegantly simple idea
It’s simple, and can be framed in a few words:
A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.
Here are five of its main characteristics:
Periodic: it is paid at regular intervals (for example every month), not as a one-off grant.
Cash payment: it is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use. The amount varies, but an average of $10,000 a year is common.
Individual: it is paid on an individual basis—and not, for instance, to households.
Universal: it is paid to all, without means test.
Unconditional: it is paid without a requirement to work or to demonstrate willingness-to-work.
Note: In order to promote fairness, the GBI is subject to tax based clawback of income.
Where does the GBI stand today?
Today, the idea is newly popular. Social reformers like James Tobin, Stephen Hawking, Robert Reich and Bernie Sanders are advancing a new concern, based on the threat of massive unemployment caused by the technological explosion.
The GBI has already been implemented in several countries: Finland, Kenya, The Netherlands, and California— all programs offer a regular income to selected populations. Closer to home, in Alaska, what started as an oil dividend scheme now provides all official residents (currently 650,000 people) with a uniform dividend resembling a basic income.
In other countries, the concept of GBI is having an uncertain start. It is introduced and debated, then frequently put on the shelf for a later date. Governments start out with good intentions—they know the need is there, but their political will is swayed by fear that a guaranteed income would bankrupt a country and encourage idleness. For example, France and Portugal introduced a basic income years ago, only to change it into a more conservative model later on.
To me, it’s clear—a minimum income would mean a significant reduction of government involvement in citizens’ lives, and the elimination of the “judgmental” aspects of social programs like welfare and unemployment insurance.
And what about Canada?
GBI already exists in some form in Canada via the Guaranteed Income Supplement (GIS) for seniors and the Canada Child Benefit (CCB) for families with children, but the long term proposal is for something much more universal.
Glen Hodgson, chief economist with Conference Board of Canada, is supportive of the idea, observing:
“If they take the initiative and go out and find a job we penalize them by taking big chunks of their other income, The attractiveness of the guaranteed income model is you can have a very low marginal tax rate and provides the incentive to actually go out and earn more without losing your base. And then the higher your earnings, the higher your tax rate becomes. And at some point you become financially independent.”
This spring, Ontario was the first to provide residents with free annual income (up to $17,000 for single people). This is not a true GBI program (see above), but rather an experiment which targets certain residents of three Ontario cities, who are living in poverty, unemployed, underemployed, homeless or working minimum-wage jobs.
These are early days, and it has not been reported yet whether the extra funds improve peoples’ job prospects and/or quality of life.
As a resident of Canada, I am firmly in the cheering section. I understand, however, that social change has always traveled a tough road. A shift in attitudes about transforming poverty is slowly evolving, but has not yet reached a critical mass.
Michael Rosenfeld, an associate sociology professor at Stanford University, in a discussion about social change says this:
“The people who are not sort of really ideologically committed to one side or the other, see which way the wind is blowing and they move with that. The only question is when the movement will hit the tipping point and the rest will follow.”