Universal Citizen Income: The Way Forward

This blog is a reposting of Cormac Russell’s contribution to Axiom News on February 11th 2016. You can see the original article here.

Curator’s Note: The Basic Income Guarantee conversation is heating up in Canada (Click here to read an Op-Ed published today in the Toronto Star titled, “The stage is now set for a basic income for all.”). We’re grateful to Cormac Russell for shedding light on this issue from both an historical perspective and through the lens of asset-based community development, a field in which he is a respected thought leader and active practitioner.


When governments value people they find creative ways of making people even more valuable in their local economies and communities. In turn, people return the compliment by contributing to the building of stronger local economies.

When governments do not value people they inadvertently create systems that stifle inventiveness and trap people in cycles of state dependency and long-term unemployment.

The Servicemen’s Readjustment Act of 1944, known informally as the G.I. Bill, is widely (across all political spectrums; around the world) considered one of the most successful pieces of legislation ever passed. It made provisions that effectively created ‘bonds’ to enable low-cost mortgages, low-interest business start-up loans, cash payments for educational return at all entry points, as well as one year of unemployment benefit for returning servicemen. Canada saw similar results for its programs of support for Second World War veterans. Few would argue that this investment in the human capital of service men and women in turn contributed enormously to the overall wealth of both nations to this day.

At the core of both pieces of legislation was the recognition that citizens are the primary inventors of a better tomorrow. Veterans were valued, and so the way benefits were given to them made them of value to their local economies and communities. In turn, veterans were able to contribute to growing the future economies of the U.S and Canada at their own pace and in their own way.

The central role of a democratic government is to support citizen-led invention, most certainly not to stifle or do harm to it. That support can come in many forms, and wealth re-distribution is by far the most important. Needless to say, welfare states are also meant to provide a safety net for those who need support. The G.I. Bill reminds us that these two objectives should not be split apart; instead, in good public policy they become mutually reinforcing.

Many welfare systems provide a safety net as a base line, but that net has become flaccid. Many poor people in receipt of “benefits” complain such systems have unwittingly contributed to cycles of multigenerational unemployment. Such systems, in managing public scrutiny and political criticism, have often been forced to provide very prescriptive, and at times punitive supports. Predefined progression pathways that people have not chosen, with high levels of stigma and red tape, have become common features of many of these systems.

Another feature of many of the current welfare systems is that significant amounts of money intended to end poverty does not go to the poor. Common sense tells us that the best way to address poverty is by increasing the income of poor people. Yet in nearly all Organisation for Economic Co-operation and Development countries less than one-third of monies intended for the poor go to them in income; the rest goes to professionals who provide palliative programs and oversight of how the poor are spending their benefits.

The contrast between both approaches to the provision of social protection is stark. What’s really going on? I believe this difference is best understood by contrasting how we valued G.I.’s at the end of the Second World War, and how (in general terms) we value poor people today. For the former, money was given directly; they were treated like citizens in an economy who needed support to contribute their gifts. In the latter, the money goes to paid helpers’ poor people are treated like passive clients with deficits, who are taking something from the economy.

In both instances, the people involved are fundamentally the same; what is different is the way in which society is treating them. Basic Universal Income (also referred to as Basic Income Guarantee) in Canada would disrupt that in a most innovative and impactful way. It would pole-vault over the ideological mine field that has blocked reforms in welfare states around the world, and bring significant change not just to poor people, but to everyone. That said, there continues to be a need for other strands of the welfare system to support people in a range of different ways, from personal budgets, to the provision of essential services, etc.

Still, in modern politics, there is little fundamental difference between the left and the right when it comes to their attitude towards “poor” people. It seems to me that they are broadly agreed that poor people are incapable of self-determining their own futures. Their only point of disagreement is on why and what to do about it. The left veers toward rescue and the stock provision of predefined services, the right from the time of Bismarck (who was the first to introduce a welfare system to quell public unrest, and maintain imperial power) toward provision with clear boundaries and strong sanctions for abuse of state generosity.

Feb23 blog_01What would happen if we gave people the basic resources (income) to live above the poverty line and to make their own choices about how to live their own lives? Well, we know the answer already. The experiment has already been done, and the results are worthy of salute. As we contemplate the pros and cons of Universal Basic (Citizen) Income (or Basic Income Guarantee), let’s remember that most of the people from America and Canada who fought in the Second World War were young and poor, so we also know what can happen when the gifts of low-income individuals and communities are liberated. Universal Basic Income is one way of doing this, and in fact may be the best way, certainly current experiments around the world offer us very good reasons for optimism.

The more controversial question will of course be: How are we going to pay for it? That’s for another blog, but I feel sure in saying that if a nation sees value in treating its citizens in this manner, then methods of taxation can be adjusted to align with those values of wealth redistribution.

In reading the tea leaves I suspect Universal Basic Income will win the day because it is neither left nor right, but forward moving, and so in my mind it exemplifies an asset-based approach to wealth distribution, with a strong evidence base already behind it.

Cormac Russell.

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Comments (8)

  1. Reply

    Sorry, Joe, I can’t agree with Cormac’s views. First of all the redistribution will be from the middle to the top and bottom earners.

    Secondly the whole point of UBI is to supplant the welfare state, the idea being that there’s too much red tape, etc., and this makes it simpler and less fraught with the shame of means testing, etc. What would actually happen, given that the UBI is the same amount of money for every person, is that those whose needs exceed the UBI allowance would not receive enough to cover their costs. This consideration is always waved away by UBI supporters.

    Thirdly, UBI is Schrödinger’s fund: it both incentivises work and removes the need to work, according to its proponents. They can’t seem to keep their story straight where that is concerned.

    Fourthly, the argument for giving it to the rich based on egalitarian principles falls flat on its face. They don’t need it and the idea of avoiding means testing on the grounds that it shames recipients pretends that we’ve got enough money to give everyone a decent amount. We don’t, not without cutting essential people-driven services. Think about it: you’re putting people out of work in the name of simplification and egalitarianism to give rich tax-dodgers £XXX a month.

    Finally, every time I’ve asked to see examples of it working I am provided with examples of one-off handouts, dole for poor people, or small dividends from state resources. The only working example worthy of the name fell flat because the costs spiralled out of control, another factor that gets waved away when I try to discuss it. As I told someone on Twitter, when the best argument you can muster is “I want,” you lose. Sorry, case not proven.

    • AllanW

      Reply

      Nicely argued set of comments, Wendy, with which I agree. I’ve always had the same problems with the idea of Universal Basic Income schemes in the various guises they’ve been tried.
      Now a Universal Job Guarantee scheme on the other hand …

  2. Reply

    Thanks Wendy and Allan,

    I intentionally started my arguement with reference to the GI Bill of Rights, in a effort to frame a vision of Universal Citizen Income that goes beyond the narrow frame of UBI you raise concerns around. I think I could have, nay should have been clearer about the distinction as I see it.

    I was unsure if you were advocating for the status quo ante re current modus operandi in dealing with welfare recipients? Are you happy with the current Welfare System? I for one am not. My preference would be a GI Bill of Rights for all poor people, but I know politically that will never fly. And I know why. Too many vested interests and jobs on the line. The welfare state is also part of the service industry. So while UCI may not be ideal, it would be the lesser of evils. I think If I were writing for the UK context which I was not, (this was written by invitation for a Canadian audience) I think I would have framed it differently. I am watching critically experiments in Finland and Utretch. So as ever the debate goes on.

    It does also raise another matter, that of direct payments. Why is it in the UK direct payments and personal budgets for people with disabilities have become so fraught? There is an issue here about choice and control and having a life not just a service which feels even more important than the debate about UCI. For me this is not an economic debate, it’s a moral one. If there’s a way to liberate people to have choice and control and to have interdependence in community life, I’m all for it, if there’s a better more just way than UBI then I will support it 100%. But the current position to my mind is indefensible. Surely on that we can all agree! Now let’s set to work on constructing a more just alternative.

    • Allan Wort

      Reply

      Thanks for explaining how the framing of the piece is not aimed at a UK audience and that you’d present it differently in that case. Much appreciated and understood.

      You make a good point that the current system is deeply flawed; I don’t presume to speak for Wendy but I agree it has flaws and has been warped in recent years to ideological ends that are totally at odds with it’s original intentions. Couldn’t agree more; the current government is embarked upon a jihad as destructive to society as any other. Plainly, we should all be seeking to block and reverse the destruction.

      Your key points about control, empowerment to direct ones life-course, are indeed pertinent but for me point towards a solution away from UBI; job guarantee. This sort of policy has the same economic and social benefits that are claimed for UBI schemes with the vital addition of removing that major stumbling block of being earned in some manner which is so crucial to achieving the wide-spread support of society. That support is so obviously lacking from all UBI schemes and, in my opinion, will always be lacking.

    • Allan Wort

      Reply

      That’s a great article which highlights a special strand of feminist ideology (let’s not get into the fact that the same pressures are exerted on men, shall we?). I have a lot of time for the issue but find their particular prescription problematic.

      It’s all-well-and-good to ask society to foot the bill for currently unpaid ‘work’ such as spawning and rearing children while maintaining some semblance of home life but where’s the ‘responsibility’ side of the equation taken into account? Fine, we’ll pay you from our taxes where you have never been paid before. Fine, we’ll do so in order for you NOT to have to take two shitty part time jobs to make ends meet. I’m not averse to that concept, I can see how you might have a better life; but what’s in it for the rest of us? Just YOUR quality of life? Handed to you on a plate? Really? That requires a helluva one-sided leap.

      How about we make sure you have a great job whenever you want it? A living wage job (no, not the government definition, the real one). A job that pays well, has benefits and is there whenever you need it. A guaranteed good job. Wouldn’t that be better? Crucially wouldn’t it be far more widely acceptable, palatable even, than a gross handout to special pleading?

      I think so. And increasingly so do many others. UBI is special pleading. UJG schemes make far more economic, moral and ethical sense.

    • Allan Wort

      Reply

      Agree with the justification to do something. Don’t agree that UBI is the better thing to do. UJG is.

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