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About Basic Income

About basic income | FAQs | History of Basic Income, Part One | History of Basic Income, Part Two
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About Basic Income

A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in various European countries in three important ways:

it is being paid to individuals rather than households;
it is paid irrespective of any income from other sources;
it is paid without requiring the performance of any work or the willingness to accept a job if offered.

Liberty and equality, efficiency and community, common ownership of the Earth and equal sharing in the benefits of technical progress, the flexibility of the labour market and the dignity of the poor, the fight against inhumane working conditions, against the desertification of the countryside and against interregional inequalities, the viability of cooperatives and the promotion of adult education, autonomy from bosses, husbands and bureaucrats, have all been invoked in its favour.
But it is the inability to tackle unemployment with conventional means that has led in the last decade or so to the idea being taken seriously throughout Europe by a growing number of scholars and organizations. Social policy and economic policy can no longer be conceived separately, and basic income is increasingly viewed as the only viable way of reconciling two of their respective central objectives: poverty relief and full employment.
There is a wide variety of proposals around. They differ according to the amounts involved, the source of funding, the nature and size of the reductions in other transfers, and along many other dimensions. As far as short-term proposals are concerned, however, the current discussion is focusing increasingly on so-called partial basic income schemes which would not be full substitutes for present guaranteed income schemes but would provide a low - and slowly increasing - basis to which other incomes, including the remaining social security benefits and means-tested guaranteed income supplements, could be added.
Many prominent European social scientists have now come out in favour of basic income - among them two Nobel laureates in economics. In a few countries some major politicians, including from parties in government, are also beginning to stick their necks out in support of it. At the same time, the relevant literature - on the economic, ethical, political and legal aspects - is gradually expanding and those promoting the idea, or just interested in it, in various European countries and across the world have started organizing into an active network.

FAQs

The following FAQ's are based on Philippe Van Parijs's Background Paper to BIEN's 9th Congress in Berlin, Basic Income. A simple and powerful idea for the 21st century.

Click here to download Van Parijs's paper.

activating
affordable
cash benefits
children
definition
distribution
expensive because income-unconditional
expensive because strictly individual
expensive because work-unconditional
future of Basic Income
giving to the lazy
giving to the rich (1)
giving to the rich (2)
household-based Basic Income
household-based Regressive Negative Income

inadequate Basic Income
income
Individual Tax Credit
in-kind benefits
inmates
Job Seeker's Allowance
liberating
Low Earners' Overcharge
making the rich richer
making work pay
means-unconditionality
Nation-state
Negative Income Tax, equivalence with BI
Negative Income Tax, more costly than BI

non-citizens
one-off endowment
Partial Basic Income
Participation Income
pensioners
redistribution
regular instalments
taxing the poor
uniform levels of benefit
willingness-to-work
work incentives at the bottom
Workfare
work performance
work-unconditionality

How is Basic Income defined?A basic income is an income paid by a political community to all its members on an individual basis, without means test or work requirement. This definition does not fit all actual uses of the English expression "basic income", or of its most common translations in other European languages, such as "Bürgergeld", "allocation universelle", "renda basica", "reddito di cittadinanza", "basisinkomen", or "borgerlon". Some of these actual uses are broader : they also cover, for example, benefits whose level is affected by one's household situation or which are administered in the form of tax credits. Other uses are narrower: they also require, for example, that the level of the basic income should coincide with what is required to satisfy basic needs or that it should replace all other transfers. The aim of the above definition is not to police usage but to clarify arguments. Each of its components are explained in more detail below.

Basic Income in cash, rather than in-kind?One can conceive of a benefit that would have all other features of a basic income but be provided in kind, for example in the form of a standardised bundle of food, or the use of a plot of land. Or it could be provided in the form of a special currency with restricted uses, for example food stamps or housing grants, or more broadly consumption in the current period only without any possibility of saving it, as in Jacques Duboin's (1945) "distributive economy". A basic income, instead, is provided in cash, without any restriction as to the nature or timing of the consumption or investment it helps fund. In most variants, it supplements, rather than substitutes, existing in-kind transfers such as free education or basic health insurance.

Is Basic Income paid on a regular basis, rather than as a one-off endowment?A basic income consists in purchasing power provided at regular intervals, such as a week, a month, a term or a year, depending on the proposal. One can also conceive of a benefit that would have all other features of a basic income but be provided on a one-off basis, for example at the beginning of adult life. This has occasionally been proposed, for example long ago by Thomas Paine (1796) and far more recently by Bruce Ackerman and Anne Alstott (1999). There is a significant difference between a regular basic income and such a basic endowment. Yet, it should not be overstated. Firstly, the basic endowment can be invested to generate an actuarially equivalent annual or monthly income up to the recipient's death, which would amount to a regular basic income. If left to the insurance market, the level of this annuity would be negatively affected by the length of a person's life expectancy. Women, for example, would receive a lower annuity than men. However, the advocates of a basic endowment (including Paine and Ackerman and Alstott) usually supplement it with a uniform basic pension from a certain age, which erases most of this difference. Secondly, while other uses can be made of a basic endowment than turning it into an annuity, the resulting difference with a basic income would be essentially annulled if the latter's recipients could freely borrow against their future basic income stream. Even if one wisely protects basic income against seizure by creditors, the security it provides will make it easier for its beneficiaries to take loans at every stage and will thereby reduce the gap between the ranges of options opened, respectively, by a one-off basic endowment and a regular basic income.

Is Basic Income restricted to the Nation-state?By definition, a basic income is paid by a government of some sort out of publicly controlled resources. In most proposals, the basic income is supposed to be paid, and therefore funded, at the level of a Nation-state, as sometimes indicated by the very choice of such labels as "state bonus", "national dividend" or "citizen's wage". However, it can in principle also be paid and funded at the level of a politically organised part of a Nation-state, such as a province or a commune. Indeed, the only political unit which has ever introduced a genuine basic income, as defined, is the state of Alaska in the United States (see Palmer 1997). A basic income can also conceivably be paid by a supra-national political unit. Several proposals have been made at the level of the European Union (see Genet and Van Parijs 1992) and some also, more speculatively, at the level of the United Nations (see e.g. Kooistra 1994, Frankman 1998, Barrez 1999).

See also: children, pensioners

Does Basic Income imply uniform levels of benefit?A basic income is paid to each individual member of the community, rather than to each household taken as a whole, or to its head, as is the case under most existing guaranteed minimum schemes. Even if a benefit is paid to each individual, its level could still be affected by the composition of the household. To take account of the fact that the per capita cost of living decreases with the size of the household, existing guaranteed minimum income schemes grant a smaller per capita income to the members of a couple than to a person living alone. A fair and effective operation of such schemes therefore supposes that the administration should have the power to check the living arrangements of their beneficiaries. A basic income, instead, is paid on a strictly individual basis. Not only in the sense that each individual member of the community is a recipient, but also in the sense that how much (s)he receives is independent of what type of household she belongs to. The operation of a basic income scheme therefore dispenses with any control over living arrangements, and it preserves the full advantages of reducing the cost of one's living by sharing one's accommodation with others. Precisely because of its strictly individualistic nature, a basic income tends to remove isolation traps and foster communal life.

Is Basic Income paid irrespective of income? Relative to existing guaranteed minimum income schemes, the most striking feature of a basic income is no doubt that it is paid, indeed paid at the same level, to rich and poor alike, irrespective of their income level. Under the simplest variant of the existing schemes, a minimum level of income is specified for each type of household (single adult, childless couple, single parent of one child, etc.), the household's total income from other sources is assessed, and the difference between this income and the stipulated minimum is paid to each household as a cash benefit. In this sense, existing schemes operate ex post, on the basis of a prior assessment, be it provisional, of the beneficiaries' income. A basic income scheme, instead, operates ex ante, irrespective of any income test. The benefit is given in full to those whose income exceeds the stipulated minimum no less than to those whose income falls short of it. Nor are any other means taken into account when determining the level of benefit a person is entitled to: neither a person's informal income, nor the help she could claim from relatives, nor the value of her belongings. Taxable "means" may need to be taxed at a higher average rate in order to fund the basic income. But the tax-and-benefit system no longer rests on a dichotomy between two notions of "means": a broad one for the poor, by reference to which benefits are cut, and a narrow one for the better off, by reference to which income tax is levied.

Does Basic Income make the rich richer? From the fact that rich and poor receive the same basic income, it does not follow, however, that the introduction of a basic income would make both rich and poor richer than before. A basic income needs to be funded. If a basic income were simply added to existing tax-and-benefit systems, it is clear that the comparatively rich would need to pay both for their own basic income and for much of the basic income of the comparatively poor. This would clearly hold if the funding were through a progressive income tax, but would also hold under a flat tax or even a regressive consumption tax. For the ex nihilo introduction of a basic income to work to the financial advantage of the poor, the key condition is simply that, relative to their numbers (not necessarily to their incomes), the relatively rich should contribute more to its funding than the relatively poor. In most proposals, however, the introduction of a basic income is combined with a partial abolition of existing benefits and tax reductions. If the proposed reform simply consisted in spreading more thinly among all citizens the non-contributory benefits currently concentrated on the poor, the latter would clearly lose out. But no one is making such an absurd proposal. In most proposals that rely on direct taxation, the basic income replaces only the bottom part of the non-contributory benefits, but also the exemptions or reduced tax rates on every taxpayer's lower income brackets. The immediate impact on the income distribution can then be kept within fairly narrow bounds for a modest basic income. But the higher its level, the higher the average rate of income tax and therefore the greater the redistribution from the comparatively rich to the comparatively poor.

Is it better for the poor to give to the rich? Thus, giving to all, rich and poor, is nor meant to make things better for the rich. But, for a given level of minimum income, is there anything reason to believe that it is better for the poor than a means-tested guaranteed income? Yes, for at least three interconnected reasons. Firstly, the rate of take up of benefits is likely to be higher under a universal scheme than if a means test is in place. Fewer among the poor will fail to be informed about their entitlements and to avail themselves of the benefits they have a right to. Secondly, there is nothing humiliating about benefits given to all as a matter of citizenship. This cannot be said, even with the least demeaning and intrusive procedures, about benefits reserved for the needy, the destitute, those identified as unable to fend for themselves. From the standpoint of the poor, this may count as an advantage in itself, because of the lesser stigma associated with a universal basic income. It also matters indirectly because of the effect of the stigma on the rate of take up. Thirdly, the regular, reliable payment of the benefit is not interrupted when accepting a job under a basic income scheme, whereas it would be under a standard means-tested scheme. Compared to means-tested schemes guaranteeing the same level of minimum income, this opens up real prospects for poor people who have good reasons not to take risks. This amounts to removing one aspect of the unemployment trap commonly associated with conventional benefit systems, an aspect to which social workers are usually far more sensitive than economists.

Does Basic Income make work pay? The other aspect of the unemployment trap generated by means-tested guaranteed minimum schemes is the one most commonly stressed by economists. It consists in the lack of a significant positive income differential between no work and low-paid work. At the bottom end of the earnings distribution, if each Euro of earnings is offset, or practically offset, or more than offset, by a loss of one Euro in benefits, one does not need to be particularly lazy to turn down a job that would yield such earnings, or to actively look for such jobs. Given the additional costs, travelling time or child care problems involved, one may not be able to afford to work under such circumstances. Moreover, it would generally not make much sense for employers to design and offer such jobs, as people who would be grateful for being sacked are unlikely to constitute a conscientious and reliable work force. A minimum wage legislation may anyway prevent full-time jobs from being offered a wage lower than the income guarantee, in which case the latter consideration only applies to part-time jobs. The replacement of a means-tested guaranteed income by a universal basic income is often presented as a way of tackling this second aspect of the unemployment trap too. If one gave everyone a universal basic income but taxed at 100% the portion of everyone's earnings that does not exceed the minimum guarantee (see for example Salverda 1984), the unemployment trap would be the same, in this respect, as under a means-tested guaranteed minimum income. [Fig.1 and Fig.3] But if one makes the mild assumption that the explicit tax rate applying to the lowest income brackets must remain noticeably lower than 100%, then the following statement holds. Since you can keep the full amount of your basic income, whether working or not, whether rich or poor, you are bound to be better off when working than out of work. [Fig. 2]

Is a Basic Income equivalent to a negative income tax? If you can keep the full amount of your basic income, whether working or not, whether rich or poor, you are bound to be better off when working than out of work. [Fig. 2] But this aspect of the unemployment trap can be removed just as effectively, it would seem, by a means-tested scheme that would phase out the benefit less steeply as earnings rise. This is achieved through the so-called negative income tax, a uniform and refundable tax credit. The notion of a negative income tax first appears in the writings of the French economist Augustin Cournot (1838). It was briefly proposed by Milton Friedman (1962) as a way of trimming down the welfare state, and explored at more depth by James Tobin (1965, 1966, 1967, 1968) and his associates as a way of fighting poverty while preserving work incentives. On the background of an explicit tax schedule which taxes no income at 100% and which can be, but need not by definition be, linear, a negative income tax amounts to reducing the income tax liability of every household (of a given composition) by the same fixed magnitude, while paying as a cash benefit the difference between this magnitude and the tax liability whenever this difference is positive. [Fig. 3] Suppose the fixed magnitude of the tax credit is pitched at the same level as under some basic income scheme under consideration. Someone with no income, and hence no income tax liability will then receive an amount equal to the basic income. As the income rises, the benefit will shrink, as in the case of conventional means-tested schemes, but a slower rate, indeed at a rate that will keep post-and-transfer income at exactly the same level as under the corresponding basic income scheme. [Fig. 3 and Fig. 4] The NIT variant simply consists in netting out taxes and benefits. Under a basic income scheme, the revenues needed to fund the NIT's universal tax credit are actually raised and paid back to all. Under NIT, transfers are all one-way only: positive transfers (or negative taxes) for households under the so-called break even point, negative transfers (or positive taxes) for households above. [Fig. 3]

Is Basic Income cheaper than negative income tax? How much of a real difference there is between the a basic income and a negative income tax depends on further specification of administrative procedures. It shrinks, for example, if taxes are levied at source on a pay-as-you-earn basis (rather than only after tax returns have been processed), or if tax liabilities are assessed on a weekly or monthly, rather than an annual basis, or if everyone is entitled, under a NIT scheme, to an advance payment of the presumptive tax credit (subject to subsequent correction), or if everyone is entitled, under a BI scheme, to get the BI as a tax discount rather than in cash. But even in the closest variant, there remains a difference between a system that operates, by default, "ex ante", and one that operates, by default, "ex post". Any remaining difference would count as an advantage for the basic income variant with respect with the first, uncertainty-linked dimension of the unemployment trap. Yet, with a rudimentary benefit payment technology (coins carried by the postman!) or with a tax collection administration plagued with corruption or inefficiency, the case for the NIT variant, which does away with the back-and-forth of tax money, may be overwhelming. In an era of technological transfers and with a reasonably well run tax administration, on the other hand, the bulk of the administrative cost associated with an effective guaranteed minimum income scheme is the cost of information and control: the expenditure needed to inform all potential beneficiaries about what their entitlements are and to check whether those applying meet the eligibility conditions. In these respects, a universal system is bound to perform better than a means-tested one. As automaticity and reliability increase on both the payment and the collection side, it is therefore, in this administrative sense, increasingly likely to be the cheaper of the two, for a given degree of effectiveness at reaching all the poor. In is for this sort of reason that James Tobin (1997), for example, preferred a universal "demogrant" to its negative-income-tax variant.

Should Basic Income be paid irrespective of present work performance? The right to a guaranteed minimum income is by definition not restricted to those who have worked enough in the past, or paid in enough social security contributions to be entitled to some insurance benefits. From Juan Luis Vives (1526) onwards, however, its earliest variants were often linked to the obligation to perform some toil, whether in the old-fashioned and ill-famed workhouses or in a more varied gamut of contemporary private and public workfare settings. Being unconditional, a basic income sharply contrasts with these forms of guaranteed income intimately linked to guaranteed employment. It also diverges from in-work benefits restricted to households at least one member of which is in paid employment, such as the American Earned Income tax Credit or the UK's more recent Working Families Tax Credit. By virtue of removing the unemployment trap - i.e. by providing its net beneficiaries with an incentive to work - a basic income (or a negative income tax) can be understood and used as an in-work benefit or a top-up on earnings. But it not restricted to this role. Its unconditionality marks it off from any type of employment subsidy, however broadly conceived.

Should Basic Income be paid irrespective of willingness to work? It also marks it off from conventional guaranteed minimum income schemes, which tend to restrict entitlement to those willing to work in some sense. The exact content of this restriction varies a great deal from country to country, indeed sometimes from one local authority to another within the same country. It may involve that one must accept a suitable job if offered, with significant administrative discretion as to what "suitable" may means in terms of location or skill requirements; or that one must give proof of an active interest in finding a job; or that one must accept and respect an "insertion contract", whether connected to paid employment, to training or to some other useful activity. By contrast, a basic income is paid as a matter of right - and not under false pretences - to homemakers, students, break-takers and permanent tramps. Some intermediate proposals, such as Anthony Atkinson's (1993a, 1993b, 1996, 1998) "participation income", impose a broad condition of social contribution, which can be fulfilled by full- or part-time waged employment or self-employment, by education, training or active job search, by home care for infant children or frail elderly people, or by regular voluntary work in a recognised association. The more broadly this condition is to be interpreted, the less of a difference there is with a basic income.

Are means-unconditionality and work-unconditionality linked? If we want no means test, it is important to drop the work test. Bringing together the last two unconditionalities discussed - the absence of the means test and the absence of the work test - makes it possible to briefly formulate the core of what makes basic income particularly relevant under present circumstances. At first sight, there is total independence between these two unconditionalities, between the absence of an income test and the absence of a work test. But the strength of the basic income proposal crucially hinges on their being combined. The abolition of the means test, as we have seen, is intimately linked to the removal of the unemployment trap (in its two main dimensions), and hence to the creation of a potential for offering and accepting low-paid jobs which currently do not exist. But some of these jobs can be lousy, degrading dead-end jobs, which should not be promoted. Others are pleasant, enriching stepping-stone jobs, which are worth taking even at low pay because of their intrinsic value or the training they provide. Who can tell the difference? Not legislators or bureaucrats, but the individual workers who can be relied upon to know far more than what is known "at the top" about the countless facets of the job they do or consider taking. They have the knowledge that would enable them to be discriminating, but not always the power to do so, especially if they have poorly valued skills or limited mobility. A work-unconditional basic income endows the weakest with bargaining power in a way a work-conditional guaranteed income does not. Put differently, work-unconditionality is a key instrument to prevent means-unconditionality from leading to the expansion of lousy jobs. If there is no means test, no work test is needed. At the same time the work incentives associated by means-unconditionality makes work-conditionality less tempting as a way of alleviating the fear that benefits without a counterpart would nurture an idle underclass. In the absence of a means test, the tax and benefit structure can be expected to be such that beneficiaries can significantly increase their disposable incomes by working, even at a low rate and on a part-time basis, and without being trapped in such jobs once their skills improve or once they can improve their working time. Moving (back) into the work sphere will therefore be facilitated and encouraged, and, for those who fear a dualisation of society into workers and non-workers, there will therefore be far less of a need to insist on coupling the right to the benefit to some obligation to (be available for) work. To put it (somewhat too) succinctly: Just as work-unconditionality prevents means-unconditionality from unacceptably supporting exploitation (which it would do by subsidising unworthy low-paid jobs accepted under the threat of losing the benefit), similarly means-unconditionality prevents work-unconditionality from unacceptably fostering exclusion (which it would do by inviting one to no longer regard as problematic a system that durably disconnects the less productive from any labour participation by effectively killing off low-productive jobs). The two key unconditionalities of basic income are logically independent, but they are intrinsically linked as components of a strong proposal.

How does Basic Income activate while liberating? This solidarity between means-unconditionality and work-unconditionality underlies the central case for basic income as a specific way of handling the joint challenge of poverty and unemployment. Compared to guaranteed income schemes of the conventional sort, the crucial argument in favour of the desirability of basic income rests on the widely shared view that social justice is not only a matter of right to an income, but also of access to (paid and unpaid) activity. The most effective way of taking care of both the income and the activity dimension consists in maintaining the income transfer (in gross terms) whatever the person's activity, thereby "activating" benefits, i.e. extending them, beyond forced inactivity, to low-paid activity. It may correctly be objected that there are other schemes - such as earned income tax credit or employment subsidies - that could serve better, or more cheaply, the objective of securing the viability of low-productive jobs and thereby providing a paid job to the worst off. However, if the concern is not to keep poor people busy at all cost, but rather to provide them with access to meaningful paid activity, the very unconditional nature of a basic income is a crucial advantage: it makes it possible to spread bargaining power so as to enable (as much as is sustainable) the less advantaged to discriminate between attractive or promising and lousy jobs. It is therefore on the basis of a comprehensive conception of social justice, which gives work the importance it deserves, and not in spite of it, that the right to a basic income should be as unconditional as is sustainably generalisable to all. (See Van Parijs ed. 1995 for a variety of ethical justifications of basic income, Van Parijs 1995 for a systematic statement of the argument just sketched, and Elkin ed. 1997, Krebs ed. 2000 and Williams ed. 2001 for sets of critical assessments of this argument.)

History of Basic Income, Part One

The idea of an unconditional basic income has three historical roots. The idea of a minimum income first appeared at the beginning of the 16th century. The idea of an unconditional one-off grant first appeared at the end of the 18th century. And the two were combined for the first time to form the idea of an unconditional basic income near the middle of the 19th century.

1. Minimum income: the humanists More (1516) and Vives (1526)
Raphael's cure for theft - The idea of a minimum income guaranteed by the government to all the members of a particular community is far older than the more specific and radical idea of an unconditional basic income. With the advent of the Renaissance, the task of looking after the welfare of poor people ceased to be regarded as the exclusive preserve of the Church and of charitable individuals. Some of the so-called humanists started playing with the idea of a minimum income in the form of public assistance. In Thomas More's (1478-1535) Utopia, published in Louvain in 1516, the Portuguese traveller Raphael Nonsenso, walking on the central square of the City of Antwerp, narrates a conversation he says he had with John Morton, the Archbishop of Canterbury. Such a scheme, he argued, would be a more astute way of fighting theft than sentencing thieves to death, which had the unpleasant side effect of increasing the murder rate.

"I once happened to be dining with the Cardinal when a certain English lawyer was there. I forgot how the subject came up, but he was speaking with great enthusiasm about the stern measures that were then being taken against thieves. 'We're hanging them all over the place', he said. '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?' 'What's odd about it?', I asked - for I never hesitated to speak freely in front of the Cardinal. 'This method of dealing with thieves is both unjust and undesirable. As a punishment, it's too severe, and as a deterrent, it's quite ineffective. Petty larceny isn't bad enough to deserve the death penalty. And no penalty on earth will stop people from stealing, if it's their only way of getting food. In this respect, you English, like most other nations, remind me of these incompetent schoolmasters, who prefer caning their pupils to teaching them. 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."

[Note 1]

A pragmatic theological plea for public assistance - It is, however, Thomas More's close friend and fellow humanist, Johannes Ludovicus Vives (1492-1540), who should be regarded as the true father of the idea of a guaranteed minimum income, as he was the first to work out a detailed scheme and develop a comprehensive argument for it, based both on theological and pragmatic considerations. Juan Luis Vives was born in Valencia in a family of converted Jews. He left Spain in 1509 to escape the Inquisition, studied at the Sorbonne but soon got fed up by the conservative scholastic philosophy that was prevailing in Paris at the time and moved on to Bruges in 1512, and in 1517 to Louvain, one of the main centres of the humanist movement, where he was appointed professor in 1520. He taught more briefly at Corpus Christi College, Oxford, but spent most of his adult life in the city of Bruges, where his statue can still be seen on the bank of one of the main canals. In a memoir addressed to the Mayor of Bruges in 1526 under the title De Subventione Pauperum (On the Assistance to the Poor), he proposed that the municipal government should be given the responsibility of securing a subsistence minimum to all its residents, not on grounds of justice but for the sake of a more effective exercise of morally required charity. The assistance scheme would be closely targeted to the poor. Indeed it is because of their ability to target them more efficiently that public officials should be put in charge of poor relief. To be entitled to the latter, a poor person's poverty must not be undeserved, but he must deserve the help he gets by proving his willingness to work.

"Even those who have dissipated their fortunes in dissolute living - through gaming, harlots, excessive luxury, gluttony and gambling - should be given food, for no one should die of hunger. However, smaller rations and more irksome tasks should be assigned to them so that they may be an example to others. [...] They must not die of hunger, but they must feel itspangs." Whatever the source of poverty, the poor are expected to work. "Even to the old and the stupid, it should be possible to give a job they can learn in a few days, such as digging holes, getting water or carrying something on their shoulders." The point of requiring such toil from the beneficiaries of the scheme is in part to make them contribute to the funding of the latter. But it is also to make sure that "being busy and engrossed in their work, they will abstain from those wicked thoughts and actions in which they would engage if they were idle". Indeed, this concern should consistently extend to those born rich: Emperor Justinian was right, according to Vives, "in imposing a law that forbade everyone to spend his life in idleness". If the poor cannot be parasites, why could the rich?

[Note 2]

At two junctures, Vives anticipates some insights that will drive later thinkers in the direction of a basic income. "All these things God created, He put them in our large home, the world, without surrounding them with walls and gates, so that they would be common to all His children." Hence, unless he helps those in need, whoever has appropriated some of the gifts of nature" is only a thief condemned by natural law, because he occupies and keeps what nature has not created exclusively for himself". Further, Vives insists that relief should come "before need induces some mad or wicked action, before the face of the needy blushes from shame... The benefaction that precedes the hard and thankless necessity of asking is more pleasant and more worthy of thanks". But he explicitly discards the more radical conclusion that it would be even better if "the gift were made before the need arose", which is exactly what an adequate basic income would achieve.

From Vives to the Poor Laws - Vives's plea explicitly inspired a scheme put into place a few years later by the Flemish municipality of Ypres. It also contributed to inspiring incipient thinking and action about forms of poor relief, from the School of Salamanca of Francisco de Vitoria and Domingo de Soto (from 1536 onwards) to England's Poor Laws (from 1576 onwards). Less well remembered than his friends and protectors Erasmus and More, Vives's pioneering thinking on the welfare state has been recently rediscovered. [Note 3]

He is also still remembered in his Alma Mater, the University of Louvain: A stone from his house has been incorporated in the wall of the "Universitaire Halle", which houses the rectorate in the old town of Leuven. And the meeting room of the Chaire Hoover in the new town of Louvain-la-Neuve, where the Collectif Charles Fourier met in 1984-86 to discuss basic income and organise the founding meeting of the Basic Income European Network, has been named "Salle Vives".
Vives' s tract is the first systematic expression of a long tradition of social thinking and institutional reform focused on the public exercise of compassion through government-organised means-tested schemes directed at the poor. Despite the difficulties and doubts aroused by the operation of the poor laws, the thinkers of the nouveau régime made public assistance an essential function of the government. Thus, Montesquieu (L'Esprit des Lois (1748), section XXIII/29, Paris: Flammarion, Vol.2, p. 134): "The State owes all its citizens a secure subsistence, food, suitable clothes and a way of life that does not damage their health". This line of thought eventually led to the setting up of comprehensive, nationally-funded guaranteed minimum income schemes in a growing number of countries, most recently, France's RMI (1988) and Portugal's RMG (1997).

2. Basic endowment: the republicans Condorcet (1594) and Paine (1596)
Condorcet on social insurance - However, towards the end of the 18th century, a different idea emerged that was to play an even greater role in the alleviation of poverty throughout Europe. The first known person to have sketched the idea is the first-rate mathematician and political activist, Antoine Caritat, Marquis de Condorcet (1743-1794). After having played a prominent role in the French revolution, both as a journalist and as a member of the Convention, Condorcet was imprisoned and sentenced to death. While in prison, he wrote his most systematic work, the Esquisse d'un tableau historique des progrès de l'esprit humain (published posthumously by his widow in 1795), whose last chapter contains a brief sketch of what a social insurance might look like and how it could reduce inequality, insecurity and poverty.

"There is therefore a necessary cause of inequality, of dependency and even of misery, which constantly threatens the most numerous and most active class of our societies. We shall show that we can to a large extent removing it, by opposing luck to itself, by securing to those who reach old age a relief that is the product of what he saved, but increased by the savings of those individuals who made the same sacrifice but died before the time came for them to need to collect its fruit; by using a similar compensation to provide women and children, at the moment they lose their husbands or fathers, with resources at the same level and acquired at the same price, whether the family concerned was afflicted by a premature death or could keep its head for longer; and finally by giving to those children who become old enough to work by themselves and found a new family the advantage of a capital required by the development of their activity and increased as the result of some dying too early to be able to enjoy it. It is to the application of calculus to the probabilities of life and to the investment of money that one owes the idea of this method. The latter has already been successfully used, but never on the scale and with the variety of forms that would make it really useful, not merely to a handful of individuals, but to the entire mass of society. It would free the latter from the periodic bankruptcy of a large number of families, that inexhaustible source of corruption and misery."

history

[Note 4]

This distinct idea, which will end up inspiring, one century later, the birth and development of Europe's massive social insurance systems, starting with Otto von Bismarck's old age pension and health insurance schemes for the labour force of unified Germany (from 1883 onwards). Though not targeted to the poor and involving massive transfers to the non-poor, these systems soon started having a huge impact on poverty as their development quickly dwarfed public assistance schemes and relegated them to a subsidiary role. In one way, social insurance brought us closer to basic income than public assistance, as the social benefits it distributed were not prompted by compassion, but by an entitlement, based in this case on the premiums paid into the insurance system. But in another way, it took us away to basic income, precisely because entitlement to the benefits is now based on having paid (or having had one's employer paying) enough contributions in the past, typically in the form of some percentage of one's wage. For this reason, unlike the most comprehensive versions of public assistance, even the most comprehensive forms of social insurance cannot provide a guaranteed minimum income.

Condorcet and Paine on basic endowment - However, it is the very same Marquis de Condorcet who was the first to briefly mention, in the context of his discussion of social insurance, the idea of a benefit restricted neither to the poor (deserving of our compassion) nor to the insured (entitled to compensation if the risk materialises), namely the idea of "giving to those children who become old enough to work by themselves and found a new family the advantage of a capital required by the development of their activity." Condorcet himself is not known to have said or written anything else on the subject, but his close friend and fellow member of the Convention Thomas Paine (1737-1809) developed the idea in far greater detail, two years after Condorcet's death, in a memoir addressed to the Directoire, the five-member executive that ruled France during most of the period separating the beheading of Robespierre and the rise of Napoleon.

"It is a position not to be controverted, he writes, that the earth, in its natural, uncultivated state was, and ever would have continued to be, the common property of the human race." As the land gets cultivated, "it is the value of the improvement, only, and not the earth itself, that is in individual property. Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue." Out of this fund, "there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age". Payments, Paine insists, should be made "to every person, rich or poor", "because it is in lieu of the natural inheritance, which, as a right, belongs to every man, over and above the property he may have created, or inherited from those who did"

history

[Note 5]

From Paine to the Stakeholder Society - This idea of an equal basic endowment given to all as they reach adulthood, has reappeared now and then, for example in the writings of the French political philosopher François Huet. In his attempt to combine liberalism and socialism, he proposed that young people should all be given an endowment financed out of the taxation of the whole of that part of land and other property which the bequeather has himself received (see esp. Le Règne social du christianisme, Paris: Firmin Didot & Bruxelles: Decq,1853, pp. 262, 271-3).
The same endowment idea, combined as it was by Paine with a basic pension, has been more recently revived and developed in great detail by two Yale Law School Professors, Bruce Ackerman and Anne Alstott (The Stakeholder Society, New Haven: Yale University Press, 1999). The justification for this $80.000 unconditional grant, however, is no longer common ownership of the earth, but more comprehensive conception of justice as equality of opportunities. [Note 6]

3. Basic income: the utopian socialists Charlier (1848) and Mill (1849)
Charles Fourier's right to subsistence - What equal ownership of the earth justifies, in Paine's view, is an unconditional endowment for all, not a guaranteed income. A number of 19th century reformers, such as William Cobbett (1827), Samuel Read (1829) and Poulet Scrope (1833) in England (see Horne, Thomas A. "Welfare rights as property rights", in Responsibility, Rights and Welfare. The theory of the welfare state, Boulder & London: Westview Press, 1988, 107-132, for a useful survey), have rather interpreted it so as to give guaranteed income schemes a firmer basis than public charity. Most famous among them is the eccentric and prolific French writer Charles Fourier (1836: 490-2), one of the radical visionaries Marx contemptuously labelled "utopian socialists". In La Fausse Industrie (1836), Fourier argues that the violation of each person's fundamental natural right to hunt, fish, pick fruit and let her/his cattle graze on the commons implies that "civilization" owes subsistence to everyone unable to meet her/his needs, in the form of a sixth class hotel room and three modest meals a day.

"Le premier droit, celui de récolte naturelle, usage des dons de la nature, liberté de chasse, cueillette, pâture, constitue le droit de se nourrir, de manger quand on a faim. Ce droit est dénéié en civilisation par les philosophes et concédé par Jésus-Christ en ces mots: (...). Jésus, par ces paroles, consacre le droit de prendre quand on a faim, son nécessaire où on le trouve, et ce droit impose au corps social le devoir d'assurer au peuple un minimum d'entretien: puisque la civilisation le dépouille du premier droit naturel, celui de chasse, pêche, cueillette, pâture, elle lui doit une indemnité. (...) Si l'ordre civilisé enlève à l'homme les quatre branches de subsistance naturelle, chasse, pêche, cueillette, pâture, composant le premier droit, la classe qui a enlevé les terres doit à la classe frustrée un minimum de subsistance abondante, en vertu du neuvième droit (subsistance abondante). Mais voici de nombreux obstacles à la concession de ce droit: D'abord, il faudrait chercher et découvrir le mécanisme sociétaire d'industrie combinée qui, donnant quadruple produit, fournirait de quoi satisfaire en minimum. D'autre part, comme la multitude assurée d'un minimum abondant ne voudrait que peu ou point travailler, il faudrait découvrir et organiser un régime d'industrie attrayante qui garantirait la persistance du peuple au travail, malgré son bien-être."

[Note 7]

Fourier, however, is as clear about the non-universality of the delivery of this income in kind (only a minority would be accommodate in those sixth class hotels) as he is about the absence of a work test: it is an unconditional entitlement for the poor by way of compensation for the loss of direct access to natural resources. His disciple and leader of the Fourierist school, Victor Considérant (Exposition abrégée du système Phalanstérien de Fourier, Paris, 1845) makes a step in the direction of a genuine basic income when emphasizing that, when work will have been made attractive thanks to the Phalansterian system, "one will be able to forward a minimum income to the poor members of the community with the certainty that they will have earned more than the expenditure by the end of the year". But despite the nature of the underlying justification, poor relief is still not being turned into a universal income.
"La distribution des travaux par groupes et séries ayant la propriete de les rendre attrayants, toutes les classes de la société recherchent avec ardeur des places dans toutes les branches infiniment variées de fonctions sociales. Il n'y a donc plus de paresseux: on pourra faire aux sociétaires pauvres l'avance d'un minimum, avec la certitude qu'ils auront gagné plus que leur dépense à la fin de l'année. Ainsi, l'établissement du régime sociétaire extirpera la misère et la mendicité, fléaux des sociétés basees sur la concurrence anarchique et le morcellement. Il serait impossible aujourd'hui de faire au peuple l'avance du minimum: il tomberait aussitôt dans la fainéantise, attendu que le travail est répugnant. Voilà pourquoi la Taxe des pauvres, en Angleterre, n'a fait qu'élargir la plaie hideuse du paupérisme. - L'avance du minimum, c'est la base de la liberté et la garantie de l'émancipation du prolétaire. Pas de liberté sans minimum; pas de minimum sans attraction industrielle. Toute la politique d'émancipation des masses est là." [Note 8]

Joseph Charlier's territorial dividend - In 1848, however, while Karl Marx was finishing off the Communist Manifesto in another neighbourhood of Brussels, the Fourierist author Joseph Charlier (1816-1896) published in Brussels his Solution du problème social ou constitution humanitaire (Bruxelles, "Chez tous les libraires du Royaume", 1848, 106p.), which can be regarded as containing the first formulation of a genuine basic income. Undoubtedly inspired by the Fourierist tradition, he saw the equal right to the ownership of land as the foundation of an unconditional right to some income. But he rejected both the right to means-tested assistance advocated by Charles Fourier himself and the right to paid work advocated by his most prominent disciple Victor Considerant. The former, he reckoned, only dealt with the effects, and the latter involved too much mingling by the state. Under the labels "minimum" or "revenu garanti" (and later "dividende territorial"), he proposed giving every citizen with an unconditional right to a quarterly (later, monthly) payment of an amount fixed annually by a representative national council, on the basis of the rental value of all real estate. In a later book, in which he further develops his proposal, he relabels it "dividende teritorial" (La Question sociale résolue, précédée du testament philosophique d'un penseur, Bruxelles, Weissenbruch, 1894, 252p.). Such a scheme, he argues, would end "the domination of capital over labour". Would it not encourage idleness? "Hard luck for the lazy: they will be put on short allowance. Society's duty does not reach beyond securing each a fair share of the enjoyment of what nature puts at his disposal, without usurping anyone's rights." Anything above the minimum will have to be earned. [Note 9]

Mill's most skillfully combined form of socialism - Charlier's obstinate plea was hardly heard, and he was himself quickly forgotten. This is not quite what happened to another admirer of Fourierism: John Stuart Mill. The relevant passage is the sympathetic discussion of Fourierism which he added to the second edition of his Principles of Political Economy, published the year after Charlier's first book. This discussion unambiguously ascribes to the Fourierists the proposal of a non-means-tested basic income:

"The most skilfully combined, and with the greatest foresight of objections, of all the forms of Socialism, is that commonly known as Fourierism. This System does not contemplate the abolition of private property, nor even of inheritance; on the contrary, it avowedly takes into consideration, as elements in the distribution of the produce, capital as well as labour. [...] In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent."

The idea is clearly there, and under the pen of one of the most influential political thinkers of the century. But it will take another six decades before something like a real discussion arose for the first time.

history

[Note 10]

1. Thomas More, Utopia (1st Latin edition, Louvain, 1516), English translation by Paul Turner, Harmondsworth: Penguin Classics, 1963, p. 43-44.
2. Juan Luis Vives, De Subventione Pauperum, Sive de humanis necessitatibus, 1526; Dutch translation on behalf of the Magistrates of Ypres: Secours van den Aermen, Antwerp, 1533, reprinted by Valero & Fils, Brussels, 1943, 114p.; French translation by Ricardo Aznar Casanova: De l'Assistance aux pauvres, Brussels: Valero et Fils, 1943, 290p; English translation of part II only by Alice Tobriner: On the Assistance to the Poor. Toronto & London: University of Toronto Press ("Renaissance Society of America Reprints"), 1998, 62p.
3. Vives's impact on social policy thinking has been emphatically recognised in Spain, for example, through the creation (in 1987) of the Fundacion Luis Vives, a foundation supporting Spanish NGO's in the area of social policy with seats in Madrid and Brussels (http://fundacionluisvives.recol.es/quienes.asp), or through the creation (in 1998) of the Instituto de Seguridad Social Juan Luis Vives, a research institute on the welfare state at Madrid's Universidad Carlos III (http://www.uc3m.es/uc3m/inst/IUSS/dpiuss.html).
4. Condorcet, Esquisse d\'un tableau historique des progres de l'esprit humain (1st edition, 1795), Paris: GF-Flammarion, 1988, p. 273-274.
5. Thomas Paine 1796, p. 611; 612-613.
6. For discussions of basic endowment proposals in connection with basic income, see The Ethics of Stakeholding, Keith Dowding, Jurgen De Wispelaere, and Stuart White eds., Basingstoke: Palgrave/Macmillan, 2003; and "Rethinking Distribution", Erik O. Wright ed., special issue of Politics and Society, 2003.
7. Charles Fourier, La Fausse industrie (1836), Paris: Anthropos, 1967, p. 491-492.
8. Victor Considrant, Exposition abrege du systeme Phalansterien de Fourier, Paris, 1845, section "Plus de paresse - extinction de la misere et de la mendicite - armees industrielles", p. 49.
9. For more details, see Cunliffe, John & Erreygers, Guido, "The Enigmatic Legacy of Charles Fourier: Joseph Charlier and Basic Income", History of Political Economy 33(3), Fall 2001, 459-484. Note that this idea of equal ownership of the value of natural resources justifying a universal basic income is not restricted to the Fourierist tradition. It later appears, for example, in the early Herbert Spencer's (Social Statics, London: J. Chapman, 1851) writings on land reform, in Henry George's (Progress and Poverty (1879) London: The Hogarth Press, 1953) advocacy of a "single tax", in the normative writings of Leon Walras (Etudes d'economie Sociale (1896), Lausanne: Rouge; Paris: Pichon & Durand-Auzias, 1936.), one of the founding fathers of mathematical economics, and, most rigorously, in the writings of the Canadian left-libertarian political philosopher Hillel Steiner (An Essay on Rights, Oxford: Blackwell, 1994).
10. J.S. Mill, Principles of Political Economy, 2nd ed. 1849, New York: Augustus Kelley, 1987, pp. 212-214, Book II, chapter 1.

History of Basic Income, Part Two: coming soon.

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