About Basic Income Studies

BASIC INCOME STUDIES
INDEX

Overcoming Dividend Skepticism: Why the Worlds Sovereign Wealth Funds Are Not Paying Basic Income Dividends

Basic Income and Social Value

Near-Universal Basic Income

Introduction: Basic Income, Sustainability and Post-Productivism

Basic Income or Caretaker Benefits?

Basic Income Grants or the Welfare State: Which Better Promotes Gender Equality?

Economically Forced to Work: A Critical Reconsideration of the Lottery Question

Basic Income and the Labor Contract

Anthroposophical Reflections on Basic Income

Why Left Reciprocity Theories Are Inconsistent

The Relative Cost of a Universal Basic Income and a Negative Income Tax

Why Trade Unions Oppose Basic Income
BASICINCOMESTUDIES
AnInternationalJournalofBasicIncomeResearch
Vol.6,Issue1 RESEARCHARTICLE June2011

Winnerofthe2011BISEssayPrize
OvercomingDividendSkepticism:Why
theWorldsSovereignWealthFundsAre
NotPayingBasicIncomeDividends
*
AngelaL.Cummine
UniversityofOxford
Abstract More than 50 states around the world now possess a Sovereign Wealth
Fund(SWF),yetonlytheAlaskaPermanentFund(APF)directlydistributesprofitsto
nationalcitizens.SWFs are governmentowned investment vehicles, more than two
thirds of which have been established since the year 2000. This article seeks to
discover why this recent proliferation of SWFs has not been matched with a similar
increaseintheiruseasafinancingsourceforBasicIncomeschemes.
Keywordsbasicincome,dividends,SovereignWealthFunds
1.Introduction
More than 50 countries around the world possess a Sovereign Wealth Fund
(SWF), yet only theAlaska Permanent Fund (APF) directly distributes profits to

*
For helpful comments, I would like to acknowledge David Murray, Andrew Rozanov, Martin Skancke, Karl
Widerquist, Michael Howard, Gary Flomenhoft, Christian Westerlind Wigstrom, John Cummine, the
participants of the February 2011 North American Basic Income Guarantee Conference in New York and the
April2011ExportingtheAlaskaModelworkshopattheUniversityofAlaska,Anchorage.
Copyright 2011 The Berkeley Electronic Press. All rights reserved.
national citizens. SWFs are governmentowned investment funds, typically
financed by foreign exchange assets that seek returns in overseas markets
(International Monetary Fund, 2008, p. 28). For most SWFs, these foreign
exchange assets come from natural resource trading. This helps explain why
more than twothirds of these funds have been created since the year 2000,
coinciding with the commodity price boom of the past decade. In 2010, more
SWFs were launched than in any previous year.
1
This institutional development
hasconvertedgovernmentsintoholdersandmanagersofwealthinanoveland
promising manner, particularly for Basic Income (BI) advocates. More
governments than ever are capturing national income windfalls and turning
themintopermanentfinancialassetsbystoringandinvestingthiscapitalthrough
SWFs. Currently, these rainy day funds are used to meet a variety of
macroeconomic challenges facing their host countries: projected savings
shortfalls,currencyfluctuations,infrastructureinvestmenttargetsandstructural
deficits. Why could such funds not be used to finance egalitarian redistribution
programmeslikeBI?TheAlaskansovereignfundisalreadyusedinthismanner,
offeringaworkingprecedent,butitremainsanisolatedexampleamongSWFs.
2
This article seeks to discover why the rapid proliferation of SWFs has not been
matchedwithasimilarincreaseintheiruseasafinancingsourceforBIschemes.
The central contention is that an entrenched antidividend posture exists
amongSWFs,actingasamajorbarriertotheconsiderationandimplementation
of sovereign wealth funded BI. Interviews with SWF personnel reveal a near
universal antidividend consensus. This article describes the nature of this
nondistribution preference and critiques it with a view to bolstering the
plausibilityofSWFsasafinancingsourceforBItypeschemes.Sinceafrequently

1
See Monk (2010b) for a discussion on the recent rise of SWFs. The total number of SWFs in the world is the
subjectofconstantdispute,giventhecompetingdefinitionsofthesefunds.SeeRozanov(2011)foranoverview
ofthedefinitionalambiguitysurroundingSWFs.TheSWFInstituteprovidesarelativelyupdatedlist,available
athttp://www.swfinstitute.org/fundrankings/.
2
ForanexaminationoftheAlaskanmodelofSWFfundeddividendsandhowtoexportthisasaBIfinancing
scheme to other countries, see Widerquist and Howard (forthcoming, 2011; forthcoming, 2012). Some might
arguethatAlaskaisnottheonlyinstanceofasovereignfundfinancingBIlikeschemesifoneconsidersSWFs
setuptohelpfundnationalpensionsystemsasfundingaformofrestrictedBIfortheelderly.TheAustralian,
Chilean, Irish, New Zealand and Norwegian sovereign funds are all examples of SWFs established with
pensionrelated mandates. While their potential to evolve their mandate beyond pensions to a universal BI
should be explored, the extent to which their current design and operations are analogous to the Alaska BI
modelmustbeviewedcautiously.Thesefundsarecontingentpensionreservefunds.Theyareonlydrawnonin
case of certain pension shortfalls. Indeed, they differ from traditional pension funds in that pension funds
normallyhavedesignatedbeneficiaries,areruledbytheprincipleoffiduciaryduty,andhavewelldefinedtime
horizons over which they must realise their commitments (Clark and Monk, 2010 p. 1723), none of which
applytoSWFssetupasreservepensionfunds.AlaskaremainstheonlypureexampleofanSWFthatpaysout
returnstopresentandfuturecitizensunconditionally,likeaBI.
2 Basic Income Studies Vol. 6 [2011], No. 1, Article 4
http://www.bepress.com/bis/vol6/iss1/art4
DOI: 10.2202/1932-0183.1209
noted objection to such schemes are their expense and therefore feasibility, the
broader aim is to reveal a new potential source of government finance for such
schemes and how barriers to its adoption may be overcome by challenging the
legitimacyofSWFskepticismtowardsBIdividends.
Before we proceed, two caveats are necessary.
3
First, the current
antidividend posture may be a product of timing, rather than of permanent
institutional preference. Following the upheavals of the global financial crisis, it
isnotsurprisingthatcynicismexistsregardingdividenddesirability.Unexpected
disruptionstothestrategicassetallocationsoffunds,forcedassetsalesatmarket
lows and the disgorging of monies to rescue packages, national budgets and
stimulus programs makes for a difficult climate in which to discuss further
distributionofsovereignwealth.Second,treatingSWFsasanaggregateunitmay
falsely imply the existence of a coordinated opposition to dividends. This is not
theintention.Rather,infullrecognitionofthediversityincultural,nationaland
formation rationale factors behind each fund, this article considers the common
oppositiontodividendsamongSWFstobestrikingandseekstoelucidatemore
preciselythenatureofthatopposition.
Isetoutandtestfourcommonobjectionstodividendschemesadvancedby
SWFs: the anticonsumption objection, the diluted returns objection, the savings
objection, and the technical concerns objection. Treating each objection on its own,
thisarticlechallengesthepersuasivenessoftheentrenchedantidividendposture.
Section 2 discusses these objections and reveals that, far from a coherent
antidistributionphilosophy,thereisconsiderablevariationinSWFperceptionof
the detrimental effects of dividends. Fundamentally, SWFs are sensitive to the
specific fiscal demands of their own host economies and express reluctance to
implement cash distributions in light of these demands. This suggests there is
room for maneuvering where dividends can be made compatible with domestic
fiscal demands. Indeed, dividends emerge as far more feasible than the current
monolith of opposition implies, boding well for the development of targeted
dividend proposals adapted to the needs of individual SWFs. Section 3
concludes, offering some thoughts on the reasons behind the strength of the
currentantidistributionposture.
2.ObjectionstoDividendDistribution
Discussions with SWF representatives reveal a number of practical and
philosophical objections to the idea of sovereign wealth funded dividend

3
IthankDavidMurrayoftheAustralianFutureFundforthesepoints.
3 Cummine: Overcoming Dividend Skepticism
schemes. For many sovereign funds, the issue of dividend distribution has not
beenexplicitlyconsideredbymanagementnorruledoutasapolicyoption.Yet,
when asked about the idea, SWF representatives respond with skepticism. The
essenceoftheresponseisthatdividendsareincompatiblewiththecorepurpose
ofanSWFtoringfenceresourcereturnsaspartofafiscalstrategytomanage
the macroeconomic effects of resource booms and save for longterm
expenditures. On this understanding, distribution constitutes disgorging and
diminishing these assets, jeopardizing the fundamental goal of an SWF. Beyond
the presumption of conceptual incompatibility between dividends and the
purpose of SWFs, a number of specific concerns were identified. Consequently,
an automatic but not necessarily justified preference for nondistribution exists
within the SWF community. This institutional skepticism is one of the most
powerful obstacles to the rollout of dividend programs. While some valid
concerns are couched within these objections, they are not sufficient to warrant
an unequivocal antidistribution preference. The four most common objections
areexaminedbelow.
2.1TheAnticonsumptionObjection
Perhaps the most frequently advanced objection to dividends is that they are
inappropriateforsmallpopulation,resourcedependenteconomiesbecausethey
consume national wealth that should be invested. For such economies,
ringfencing and investment of resource windfalls is crucial since the dominant
source of prosperity is finite and establishing alternative sources of income is
difficult since economic diversification is harder in states with comparatively
smaller workforces. SWFs help to both diversify and preserve sources of
prosperity by turning temporary resource revenues into permanent financial
investments. Examples in the SWF world of high resourcedependence and low
diversification economies include Azerbaijan; the Gulf States of Kuwait, Oman,
QatarandtheUAE;andNorway.Despitetherelativewealthofthesefunds,none
support regular dividend policies, since expenditure on dividends is viewed as
consuming resource revenues that should be preserved and grown through
investment.
4
While this view represents prudence regarding management of temporary

resource windfalls, the economic logic underpinning this position is flawed.As
such, thereare several replies to the anticonsumption objection. First, conflating

4
SWFrepresentativesconfirmedtheirstatesrespectiveopposition todividendsduringinterviewsattheMay
2010IFSWFmeetinginSydney.NorwayspositionwasconfirmedinapersonalinterviewwithMartinSkancke,
DirectorGeneraloftheNorwegianMinistryofFinanceinAugust2010inOslo,Norway.
DOI: 10.2202/1932-0183.1209
dividendpaymentswithconsumptionismisguided.Consumptionistypically
defined as the purchase of final goods. On this definition, consumption does
notoccuruntilcitizensusetheirdividendcapitaltopurchaseagoodoraservice.
Recipientsmay,however,choosetospendtheirdividendonintermediategoods
or financial assets. In this case, the dividend is invested, not consumed. On this
view, the only difference between the distribution of dividends and the pooling
ofresourcesinanSWFisthatunderadividendschemetheultimateinvestment
or consumption decision is transferred to household or individual units rather
than being retained by government. By definition, dividends do not amount to
consumption. They simply transfer the investmentconsumption decision out of
governmenthandsintothoseofindividualswhomayconsumeorinvest.
Even so, one could still argue that dividend schemes are a far riskier
proposition for preserving revenues if individuals are more likely to consume
than invest their dividend. This brings us to the second anticonsumption reply.
Evidence suggests that we cannot assume individuals will automatically
consumetheirdividend.EmpiricaldatafromAlaskaindicatesthatdividenduse
ismixed.InapollconductedbyalocalAlaskannewsstation,respondentswere
asked,followingtheirreceiptofthe2009PermanentFunddividends,whatthey
would do with their dividend that year. Of the 857 persons surveyed, 24% said
Spend, 33% said Save and 40% said A little of both (Alaska Channel 2
News, 2009). This echoes the results of an informal survey conducted by the
Permanent Fund Corporation (PFC) 15 years earlier on the use of dividend
checks, in which threequarters of respondents reported that they planned to
save half or more of their dividend (including debt reduction) (Harrison, 1999,
pp.8191).In1984,therewasalsostronganecdotalevidenceofdividendsaving.
Approximatelyonethirdofdividendincomewenttosavinganddebtreduction,
afterfederalincometax.
AcademicresearchonhowreceiptofthePFDaffectsAlaskansconsumption
behavioralsofoundnoevidenceofasuddenspikeinconsumptionbehaviorby
Alaskanhouseholds,followingPFDpayment,thatwouldsupportapresumption
of dividend blowing (Hseih, 2003, pp. 397405).A 2003 report on this subject
found no evidence that the seasonal pattern of consumption in Alaska differs
fromthatintheother49statesorthathouseholdsinAlaskaaresubjecttofewer
liquidity constraints, engage in less bufferstock saving, or spend a smaller
fractionoftheirincomeonsemidurablegoodsthanhouseholdsintherestofthe
United States (Hseih, 2003, p. 401). One interpretation of this data is that
Alaskanseithersavedtheirdividendincomeorusedittopaydowndebt.While
otherinterpretationsarepossible,thisresearchcertainlycastsdoubtonthebelief
thatindividualsareautomaticallydividendspenders.
Suchfindingsmustbetreatedcarefully,however.Goldsmithhasarguedthat
even if we can rely on survey data regarding what Alaskans will do with their
checks, this only indicates what individuals did with the payment immediately
uponreceipt,nothowtheirconsumptionbehaviormayhavechangedovertime
(Goldsmith, 2010, p. 10; 2005, pp. 553556). Furthermore, Goldsmith has argued
that if people view the dividend payment as indefinite, then they may spread
consumption over a lifetime, treating it like a permanent increase in annual
income.KnownbyeconomistsasthePermanentIncomeHypothesis,thistheory
would distinguish between proximate and ultimate use of dividend funds.
AbsenceofaconsumptionspikeatthetimeofPFDpaymentmightnotindicate
savings, but simply smoothed consumption over a lifecycle. In Alaska, this is
circumstantially supported by the fact that there is no evidence of dividends
havingledtoasignificantaccumulationofwealthorprovidedabaseofassets,
or grubstakeleading to private sector investments generating economic
development(Goldsmith,2010,p.10;2005,pp.553556).Atthesametime,there
isnosignificantevidencesupportingmassiveconsumptionincreases.
Evenwherethereissomeevidenceofincreasedexpenditurearoundthetime
of the PFD, this cannot be taken as proof of dividend consumption since those
funds may be used to purchase goods that Alaskans were likely to purchase
irrespective of whether they received the PFD. The coincidental timing of their
expenditure with dividend receipt may thus be better explained as resulting
from a perception of increased liquidity, rather than dividend blowing. In
otherwords,thePFDmaybeinfluencingtimingofpreplannedconsumption,not
increasing overall consumption. If we draw again on the results of the 1984
survey of dividend use, despite most respondents indicating that the dividend
wenttowardsdailyexpenses,mostsaidithadlittleornoeffectonconsumption
behavior.Thatis,itdidntincreaseoverallconsumption.Toillustrate,Goldsmith
often refers to the fact that on certain dividend use surveys, many Alaskans
indicate they would use their PFD money to purchase winter clothes for their
children, hardly an item they would have forgone in the absence of a dividend
(Goldsmith,2010,p.10).
In short, the evidence regarding dividend consumption versus saving is
mixedinAlaska.ThemixofevidencesuggeststhatthePFDdoesnotencourage
consumption sprees. At best, it may alter the timing of consumption, but one
may still choose to favor the more rigorous study that finds no evidence of a
consumptionspike.Unfortunately,rigorouslongitudinaldataofdividendusedo
DOI: 10.2202/1932-0183.1209
not yet exist. For decisive conclusions about dividend behaviour, we need to
collatedataonhowAlaskancitizenssavingsfluctuateproportionallyinrelation
tothePFDpayment.IfthedividendcausespeoplesincometogoupbyX%,we
needevidencethatindividualsavingsareincreasingbymorethanX%,inorder
toestablishthatmoreofthedividendisbeingsavedthanofindividualsregular
income.Intheinterim,wecanspeculatebasedonthecombinationofanecdotal
use surveys and quantitative analyses that there are reasonable grounds for
questioningtheassumptionthatindividualswillautomaticallyconsumeBIstyle
dividends.
Even if individuals do consume their dividends, the converse assumption
that because resource revenues are quarantined in government coffers and
collectively invested they are consumption immune is equally misguided. For a
start,certainfundsmandatethespendingoftheirsovereignwealthaccordingto
structured expenditure rules. Norway, for instance, has a fiscal spending rule
that requires 4% of real returns of its Government Petroleum Fund Global
(GPFG)tobepaidintothestatebudgetannuallytofinancethenonoildeficit.It
couldbearguedthatsincethismacroeconomicallyresponsibleamountisalready
subjecttoa100%consumptioncommitmentthroughthebudget,thereisnogood
reasonwhythisamountcouldnotbeconsumedalternativelythroughdividends.
If anything, the evidence fromAlaska suggests that it may be more desirable to
transfer this to individuals who have a marginal propensity for saving, as
opposed to a government budget where this entire amount is precommitted for
expenditure. If, on top of this, you accept arguments regarding the collective
wisdom of agents being more accurate in the longer term than a centrally
planned government approach, then the assumption that dividend distribution
toindividualsautomaticallyequalsconsumptionismisguided.
EquallysignificantistheobservationthatSWFheldresourcesareatriskofa
more severe type of consumption since the fate of collectively held funds
depends on market performance. Market volatility poses a risk of both capital
consumption and, more worrying, capital destruction. The potential losses from
market exposure for large institutional investors were evident during the 2008
financial crisis. Again turning to Norway, in 2008 the GPFG experienced sharp
declines posting a negative return of 23.3% (Norwegian Ministry of Finance,
2009, p. 15.). In contrast to acts of individual consumption, which result in the
consumersacquiringsomethingfortheirpurchase,thereisnooutputtoshowfor
anegativereturninvestment.AlmostaquarteroftheGPFGscapitalin2008was
simplylost,notexchanged.Consumptionoftheequivalentamountofcapitalby
dividend recipients could have converted resource revenue into valueadding
goods and services for individual Norwegians. Individuals may spend their
dividend but gain something in return and boost growth for the economy as a
wholeintheprocess.Lostcapitalintheinvestmentuniverseissimplydestroyed.
While the GPFG has recovered over the past few years, the performance of the
fund as of 2008 involved capital destruction.
5
The high fees of fund managers
alsoexacerbatecapitalconsumption,collapsingfurtherthestrictbinarybetween
dividendsasconsumptionandSWFmanagementasinvestment.
6
Intheseways,
a more highrisk notion of consumption attaches to SWF investment than to
individualconsumption.
While consumed dividends reduce financial risk by converting financial
assets whose value fluctuates into a tangible good, invested dividends reduce
risk through diversification. SWF investment carries greater market risk than
individuals dividend investment since the former is aggregated, magnifying
potential gains through leveraging and losses in downturns. Possible losses in a
downturnareminimizedsinceriskisdistributedmorewidelyacrosstheentire
populationofacountryorstate.Onecouldthenarguethatdividenddistribution
constitutes ultimate portfolio diversification, since it is dependent on the
behavior of such a variety of recipients. Unlessall recipients take the same type
and scale of risk with their capital, the overall effect of dividends, whether
consumedorinvested,shouldbeoneofreducedfinancialrisk.

5
One could question this claim if the longterm trend of stock portfolios is typically upward. If the market
rebounds, then the stock is only lost temporarily, not destroyed. But this does not change the fact that at the
point the loss is incurred, capital is destroyed. Nothing is gained in return, in contrast to an individuals
consumption of a dividend, which typically results in the acquisition of a good (except in the case of, say,
gamblingorillicitpurchaseofdrugswhereitismoredifficulttomakethecasethatsomethingworthwhileis
acquired or the economy is stimulated in a desirable manner). In contrast, in any market downturn,
investmentsriskanegativereturn,whichultimatelyhastoberegainedinthenextyearoftrading.Whilestocks
may recover, they would have been worth even more without the downturn, so some capital destruction still
takesplace.
6
Forinstance,thestandardremunerationformulaforhedgefundsandmutualfundsisthe220rule:2%of
assetsundermanagementand20%ofprofitsaboveapredeterminedbenchmark,asignificantfeewhendealing
with the billion dollar holdings of SWFs that are increasingly moving into alternative asset classes such as
hedgefunds.SWFsarealsovulnerabletothecriticismthatsubstantialcapitalhasbeenlostthroughexpensive
active management fees, a fund management style aimed at generating alpha returns that beat index
performance. A 2009 evaluation, commissioned by Norways GPFG, of the impact of active versus passive
(index) management finds that for institutional investment sectors, such as largescale endowments, pension
funds and sovereign funds, there is [little] evidence about the capability of active management to generate
positiveriskadjustedreturnsMostresearchsuggeststhatpensionsfundmanagersarenotabletoidentifytop
managers ex ante and the managers that serve the pension fund sector show little evidence of skill on a risk
adjustedbasis.Thefewstudiesofsovereignfundtradesinpublicsecuritiesprovideevidencethat,whilestock
prices respond positively when a sovereign fund invests, the longterm performance of these investments is not
particularlygood(Angetal.,2009,pp.12,5152;emphasisadded).
DOI: 10.2202/1932-0183.1209
2.2TheDilutedReturnsObjection
A second objection to dividends is that they would result in diluted returns on
resource wealth. The idea here is that the larger the capital sum to be invested,
thehigherthepotentialreturn.Afinanceanalogybringsoutthepoint.Infinance
speak, the term Diluted Earnings Per Share is a performance metric used to
measure what a companys earnings per share would be if all convertible
securities were exercised. Convertible securities are securities that may convert
into stock such as stock options, convertible preferred shares or warrants, and
therefore exist as additional potential shares in a company. If these extra shares
are created in a company and earnings remain the same, the earnings per share
decrease.
Similarly, when the resource wealth of a nation sits within an SWF, it
effectively has one shareholder the government. While the government
represents millions of individual shareholders, its legal shareholder is the
aggregate entity of government. The earnings per share are therefore very high,
as returns attach to just one share, the holder of which represents the many
ultimate owners of a nations resource wealth. Since paying dividends can be
justified on the basis that this monetizes individual ownership of national
resources, giving each citizen a direct share of sovereign wealth is analogous to
converting potential company shares into actual shares and in the process
dilutingreturnsortheearningspershareofsovereignwealth.
A simple arithmetic example illustrates this: the Australian SWF the
FutureFundcurrentlyholdsclosetoAUD$70billion.Ifthisweredividedup
on a per capita basis among the 22 million citizens of Australia, it would
amount to approximately $3,200 per person. However, as members of the
Australian community, each citizen has a stake in the $70 billion fund. Each
citizen jointly holds this one stock worth $70 billion, as opposed to each
individual holding a twentytwomillionth of this stock worth $3,200.
Moreover,evenifindividualstooktheirpercapitashareandgeneratedsimilar
percentagereturnsontheirindividualpotsofstock,thisisamuchlessefficient
way to generate returns. Nor is the same universe of investment opportunity
available to individuals as it is to institutional investors. In addition to
enrichingindividualswithinacommunity,thissharedeconomicassetenriches
the Australian community itself since this capital will ultimately be used to
meet longterm expenditures for the nation. Dividing up the collective pool of
resource wealth on a per capita basis within nations thus significantly dilutes
returnsatboththecollectiveandindividuallevel.
Whatcanbesaidinreply?Twosimplepointscanbemade.First,theanalogy
does not hold since a dividend program does not represent the act of creating
new shares. Rather, it merely indicates the pro rata value of each individuals
share of the existing capital pool or more precisely, based on the typical
meaning of dividend in finance, the pro rata value of each individuals share of
annualnetprofits.Accordingly,dividendsdonotcreatenewsharesinthiswealth.
This approach of giving every individual a per capita chunk of an SWFs total
holdings would be an unusual andimpractical model for dividend distribution.
Asweknow,theAlaskamodelonlydistributesrealreturns,preservingprincipal
resource revenues for reinvestment. That said, this approach has been mooted.
Following its 2003 discovery of copper and gold deposits, Mongolia recently
announced that it would set up a USD$30 billion SWF and would consider
distributing USD$6 billion in dividends to Mongolian citizens (Tang,2009). One
model under consideration involved a universal, flat, onetime payout to every
citizenofMongoliaasamatterofbirthright.
7
Second, dividend programs do not preclude the benefits of pooled

investment since distribution would take place after returns are sought at fund
level.Atthestageofreturnseeking,thereisstillonlyoneshareholderforwhom
returns are sought, so the benefits of large institutional investing are preserved.
In Alaskas case, dividends are distributed on an annual basis after returns are
made on the fund balance and are calculated using the average of the funds
income over five years in order to produce a more stable flow of dividend
amounts.
8
In the APF model, the main disadvantage from an investment
perspectiveisthatthetotalamountofinvestmentproducingcapitalavailablefor
reinvestment each year is reduced by the cost of the previous years dividend.
The only way the principal can grow is through increased resource revenues
from the market (larger volume of sales or higher oil prices). Although the
principal is never touched to pay dividends, the incomeproducing capital is
capped by the cost of the PFD. Contrast this with other SWFs whose principal
capital is augmented each year by both their resource activity revenues and the
returnonthefundscapital.Thatissimplyabulletthatprodividendsupporters
havetobite.Itshouldbeclearthoughthatthisbulletinvolvesareallocationnota
dilution of returns the choice to distribute some incomeproducing capital to
individuals is a reallocation of this capital and not a dilution of its ultimate
returnproducingpotential.

7
PersonalcommunicationwithSWFofficial,IFSWFmeeting,May2010.
8
See Alaska Permanent Fund Corporation website: The Permanent Fund Dividend webpage.
http://www.apfc.org/home/Content/dividend/dividend.cfm.
DOI: 10.2202/1932-0183.1209
2.3TheSavingsObjection
Partofwhatunderpinstheanticonsumptionanddilutedreturnsobjectionsisthe
idea that SWFs are first and foremost savings vehicles for the citizen body as a
collective. Individuals have a right to benefit from this wealth, but visvis their
membershipofthecommunity,notintheircapacityasprivateindividuals.Even
if private rights to thiswealthare found to exist, such rights would betrumped
by jointly held rights to this common wealth. This is reflected explicitly in the
establishing documents of many SWFs, which conceive of SWFs as national
savings funds set up to ringfence capital to help meet longterm community
liabilities.
9
Forinstance,inAustraliascasetheFutureFundwassetuptomeeta
specific longterm savings challenge the funding of Commonwealth Public
Servant pensions from 2020 that current projections say the government is not
equippedtomeet.Ifthefundisnotdrawndownforthispurpose,itmaybeused
to meet broader savingsrelated challenges implied by Australias fiscal profile.
AccordingtotheheadoftheFutureFund,DavidMurray,Australiaisasavings
shortnationinthreesenses:
10
1. On current projections, although Australia is better placed than many

mature OECD economies, Australia has not fully provided for their
superannuationliabilities,mostlyacrosstheprivatesector.
2. The ageing problem poses the dual challenge of a shrinking tax base and
increased government expenditure to meet the needs of an ageing
population.
3. The ratio of working population to land mass in Australia leads to limited
capitalformationcapacitygivenitssmallworkforcerelativetotheverylarge
resource base. To minimize dependency on capital importation, Australia
needstoraiseitssavings,particularlyinlightofthecurrentpositionofhigh
netforeignliabilities.
11
These challenges are national in character. While individuals may be,

ultimately, beneficiaries of sovereign wealth, the problems that these funds are
set up to redress are first and foremost community challenges (ageing
population, intergenerational wealth inequity, depletion of resources). Other

9
ForasummaryofSWFfoundingdocuments,seetheInternationalWorkingGroupofSovereignWealthFunds
(2008)AppendixIII,pp.3149.
10
PersonalInterviewwithDavidMurray,2February2010,SydneyAustralia.
11
PersonalInterviewwithDavidMurray,2February2010,SydneyAustralia.
SWF home nations face similar longterm pressures, partially explaining the
rapid proliferation of SWFs in the past decade to augment national wealth
holdings.ItisthischaracterizationofSWFsasnationalsavingsfundsfromwhich
theantidistributionpositionderivesmuchofitsforce.Inthisconception,theidea
of private individual dividends clashes with the commonplace view of SWFs as
collectivepublicentities.
ThemainresponsetothisobjectionistonotethatSWFscanbothspendand
save.Forevidence,wecanpointtotheAPF,theoneSWFwhichdoesdistribute
dividends and which achieves both tasks. As its name implies, the APF was
established to make temporary resource windfalls permanent. The dividend
paymentwasintroducedmainlyasatooltobuildapoliticalconstituencyforthe
APF (Rose, 2008, especially Ch. 13). Even with a generous distribution program
that has seen 50.7% or $18.8 billion of the funds income paid out in dividends
sincethePFDsinception,thefundstillmanagedtosave49.3%or$18.3billionof
its income for future generations (Alaska Permanent Fund Corporation, 2010
p.2). Indeed, dividend distribution has not prevented the funds growing from
an initial investment sum of $734,000 in 1977
12
to approximately $37.1 billion in
2010(AlaskaPermanentFundCorporation,2010,p.2),makingitlargerthanany
endowmentfund,privatefoundation,orunionpensiontrustintheU.S.
13
This is partly the result of a welldesigned fund with effective governance

mechanisms. In particular, the fund comprises two parts: nonspendable
(principal)andassigned(realizedincome)capital.Thefundobservesthegoalof
principalprotectionbymandatingthattheprincipalsumearnedfromresource
revenues must never be used to fund dividends and is accordingly designated
nonspendable. In turn, the nonspendable portion of the fund is invested
permanently and cannot be spent without amending the state constitution.
14
In
contrast,realizedreturnsearnedontheinvestedprincipalmaybespentandare

12
Todaysinflationadjustedvalueoftheinitialseedfigureis$2.7million.WhiletheAPFhashistorically
earned more than 10%, these figures imply an annual growth of roughly 34%. The discrepancy is
explained if we recall that the APF is augmented each year by at least 25% of Alaskas annual resource
royalties and the unrealized returns on investments (that is, the market value of investments not yet
realized).Realizedearningssuchasstockdividends,bondincome,rent,etc.frominvestmentsareusedto
fund the dividend scheme. (See Alaska Permanent Fund Corporation: About the Fund webpage.
http://www.apfc.org/home/Content/aboutFund/aboutPermFund.cfm.) There were also several special
appropriationsbythelegislatureincluding$1.8billioninsurplusoilrevenuein1981,anadditional$1.26
billionin1986,andseveralhundredmilliondollarsmoreinthefollowingyears(seeOlson,2006,p.165).
13
See Alaska Permanent Fund Corporation website: About the Fund webpage.
http://www.apfc.org/home/Content/aboutFund/aboutPermFund.cfm.
14
TheStateofAlaskaconstitution requiresatleast25%ofcertainmineralroyaltiesreceivedbytheStatetobe
placed into the principal of the Fund. This amounts to approximately 1012% of total revenues from state
resources.SeeAlaskaPermanentFundCorporation(2010),pp.4,29.
DOI: 10.2202/1932-0183.1209
used to fund dividends. As of 30 June 2010, the funds nonspendable principal
totaled $33.6 billion,
15
while the assigned capital dividend funding andinflation
transfers stood at just $1.2 billion or only 4% of the fund (Alaska Permanent
FundCorporation,2010,p.16graph).Again,theAlaskamodeldemonstratesthat
there is no prima facie reason an SWF cannot achieve both the tasks of
accumulating national savings and of distributing dividends to individual
beneficiaries.Ifonetaskisahigherprioritythantheother,thenthefunddesign
can take this into account and be weighted more toward accumulation or
distributionaccordingly.
2.4TheTechnicalConcernsObjection
A closely related aspect of the savings objection is a technical concern with the
macroeconomic consequences of dividends: the technical concerns objection. A
dividendscriticmayacceptthatinprincipleanSWFcansaveandspend,yetstill
be concerned about the technical consequences of dividends. As noted SWF
analystAndrewRozanovargues:Oneoftheproblemswithdirectlydistributing
excess commodity revenues to citizens in the form of individual pay checks is
that it offsets some of the antiDutch Disease effects of SWF saving and
management(Rozanov,citedinMonk,2010a).
Rozanovs concern, which echoes that of several major funds, is that
dividend distribution might impair an SWFs ability to deliver the
macroeconomic benefits of constraining currency inflation and preventing
manufacturing sector decline that can accompany resource booms. A detailed
technical analysis of dividends is beyond the scope of this article, but it is
sufficient to note one technical point here: if one accepts a cyclical view of the
business and economic environment, then this is an argument for adjustable
dividendsratherthannodividends.Inacyclicalenvironment,therearetimesof
contractionwhenahigherrateofspendingfromgovernmentfiscalsources(like
an SWF) is appropriate. These are interspersed with boom times, when there is
greater pressure on government to retrench in order to avoid aggravating an
overheated inflationary economy. During such times, government should save
through higher tax intake and lower spending to build up a buffer for the next
inevitable downturn. It follows then that in times of downturn, government
spending through sovereign wealth funded dividends may be an entirely
appropriate Keynesian policy tool to help stimulate demand. Equally, when the
economy is booming and private sector demand is sufficient, then government

15
Thisisthetotalnonspendableprincipalasof30June2010(AlaskaPermanentFundCorporation,2010,p.24).
spending schemes such as dividends may need to be curtailed. The latter could
be achieved by suspending the dividend program and preserving that years
dividend capital in the SWF until conditions are right for recommencement.
16
Thisapproachissimilartothefiscalmanagementofinterestratelevelsbycentral
banks. According to a cyclical view of macroeconomic conditions then,
unqualified permanent opposition to dividends is not environment sensitive. It
risks overlooking a possible policy lever for government to use to respond to
cyclicalmacroeconomicconditions.
Arelatedaspectofthetechnicalconcernsobjectionisthatdividendsareonly
desirable when funded by actual savings in an SWF. According to Martin
Skancke,theDirectorGeneraloftheNorwegianMinistryofFinance,runninga
budgetsurplusistheonlywayagovernmentcanaccumulatefinancialassetson
a net basis. If a [sovereign wealth] fund is set up with an allocation rule that is
not linked to actual surpluses, the accumulation of assets in the fund will not
reflect actual savings (Skancke, 2003, p. 320). Accordingly, the GPFG only
receives allocations when the budget is in surplus. This has meant that despite
theGPFGsestablishmentin1990,thefirsttransfertothefundonlytookplacein
1995afterNorwayhadcomeoutofrecession(Skancke,2003,p.318).Otherwise,
theNorwegiansargue,thegovernmentisbeingforcedtoborrowmoneytocover
allocations to the fund. For this reason Skancke rejects the Alaskan dividend
model.
The PFD program runs irrespective of whether the State of Alaska is in
surplusordeficit.Everyyear,atleast25%ofmineralresourceroyaltiesmustbe
put into the Fund, regardless of whetherAlaska can balance its budget. During
severalyearsoverthepastdecade,theAPFhasgrownwhilethestatebudgetof
Alaskahasfaceddeficits.
17
Despiteadeficitin2000,thelegislatureappropriated
anextra$250millionforthePermanentFundprincipalfromtheearningsreserve
(Anderson, 2002, p. 63). From the Norwegian perspective, such an arrangement
meanstheAPFisnotachievingitspurposeofbeingasavingsfund.Thesavings
are built on a fiscal illusion of surplus where the obligation to pay dividends
becomesdetrimentaltothelongtermfinancialhealthofthestate.Thelegislature
becomes constrained, as the dividend becomes an expected component of an
individualsincome.AnOctober2003pollbyDittmanResearchCorp.foundthat
64%ofAlaskansbelievedthattheywereentitledtotheirdividend,evenifAlaska

16
Dividendproponentsconcernedwithincomestabilitywouldlikelyobjecttotheideaofadjustabledividends.
17
Alaskafacedpossibledeficitsinthe20082009and20092010budgetcycles,requiringdrawdownsonother
reservedfundsinbothyearstoavoiddeficits.However,theAPFsearningsfirstexceededthestatesgeneraloil
royalty and tax revenue in 1998, as it earned revenue of $2.6 billion with assets of $25 billion (Olson, 2006,
p.166).
DOI: 10.2202/1932-0183.1209
has a budget deficit (Lewis, 2004, p. 81). As Skancke argues, the real issue is
whether there is any higher public support for net, as opposed to gross, asset
accumulation. It does not help much to protect the oil fund if debt is being
accumulatedelsewhere(Skancke,2003,p.32).
Ifpopularsupportfavorsnetassetaccumulation,dividendschemesmustbe
paidoutonlyinyearswithfiscalsurplus.Thisisadesignissue.Itisnotareason
to oppose the implementation of dividends, but it does demand that a polity
determinehowtheyweighttherightsoffuturegenerationsoverthoseofcurrent
generations.Ifacountrysfutureeconomicgrowthandgovernmentrevenuesare
lower than expected, it may be desirable to offer higher protection to future
needsthancurrentpublicoutlays(Skancke,2003,p.320).Inthiscase,theAlaska
dividend model, insofar as it declares the principal as nonspendable and only
distributesreturnsoninvestment,isanacceptablemodel.Otherwise,afundmay
be designed with a similar allocation rule to that of the Norwegian GPFG in
redirectingsomereturnstocurrentpublicoutlays,butalsoallowingexpenditure
ofthefundsrealreturnsondividends.
Skancke offers two further objections to this proposal. First, he argues that
currentNorwegiansarealreadyreceivingadividendsinceeveryyeartheGPFG
transfers an amount corresponding to the amount of petroleum revenues used
in the fiscal budget to cover the nonoil deficit to Treasury (Skancke, 2003, pp.
321322).Whileinsomesensestrue,equatingthistypeofbudgettransferwitha
directcashdividendpaymentistenuousasageneralnationalsurpluswillnever
beviewedbyordinarycitizensinthesamemannerasadirectcashtransferinto
their own hands. Even if these budget transfers have the potential to lower
interest rates and taxation, the psychic effect of cash transfers on the individual
are often stronger as cash offers a greater level of perceived autonomy to the
recipientandimmediatebenefittocashflow.Budgetsurplusesalsofailtocreate
the necessary proximity between an individual and savings that inspire a sense
ofresponsibilityforthefateofcapitalthatinturncanencouragefurthersaving.
Skancke goes on to argue that If [government] has decided to give the
populationdirectaccesstothe[resource]cash,thenthechoiceisbetweentaxcuts
or cash dividends. I would argue that tax cuts, in terms of economic efficiency,
are betterIf you paid a direct cash dividend, for any given level of spending,
youwillhavetoincreasetaxesIfyouthinkthattaxesaredistorting,youwould
prefertogiveprioritytotaxcuts.
18
ForSkancke,thepreferenceistoreducetax
burdens by spending oil revenues in government budgets to avoid future tax
hikes. But this comes down to individual perspectives on tax cuts versus

18
PersonalInterviewwithMartinSkancke,2August2010,Oslo,Norway.
dividends. As Skancke himself observes, he is only considering this issue on
efficiency,notequity,grounds.Ifjusticetrumpsefficiency,itmaybeworthsome
loss of efficiency if the positive effects on income distribution are significant.
Moreover, the distorting impact of taxation may be exaggerated since other
effectsincontrarydirectionssuchasonlaborsupplymightcanceleachotherout.
David Murray of the Australian Future Fund considers dividends more
appropriatethantaxreductionsundercertainconditions,namely,ifrealcapitalis
preservedandthereisnonetdebt.
19
Hesuggestsdividendscouldtaketheform
ofadirectdepositintoindividualsowninvestmentportfoliosorpensionfunds.
Again,thisreinforcestheideathatthedesignofindividualSWFsmustreflectthe
macroeconomic needs, fiscal profile and policy preferences of individual
countries.Technicalconcernsarenotargumentsagainstsovereignwealthfunded
dividends per se, but rather arguments for a particular set of preferred policy
outcomesthatdividendsmayormaynothelpachieve.
3.Conclusion
ThisarticlereviewedfourcommonobjectionsofferedbySWFstotheproposalof
a dividend scheme. None of these objections offered a decisive defeat of
dividends.Theywereeitherfoundedonsimplisticassumptionsaboutindividual
and institutional financial behavior or employed misguided conceptions of key
ideas. Both the anticonsumption and diluted returns objections suffer from
misguided interpretations of how dividends work. The savings and technical
concerns objections expressed valid reservations about dividends hamstringing
the core macroeconomic purposes of SWFs. However, the savings objection
exaggerated the mutual exclusivity of saving and spending goals, while the
technical concerns objection simply underscored that SWFs and dividend
programmes need to be carefully designed, not that dividends are inherently
problematic for countries wishing to achieve savings goals. By questioning the
justifiability of SWFs dividend anxieties and showing they are surmountable
practicallyandphilosophically,thepersuasivecasefordividendsisbolstered.
The question then arises as to why this antidistribution preference exists
throughout the diverse SWF community if the core claims supporting this
position are not compelling. This chapter speculates that such objections are a
rhetorical front for a shared, yet independently formed, institutional preference
within SWFs for centralized, less transparent control over SWF capital. That is,
managerialelitismmayexplainadesiretopreservemaximumcontroloverSWF

19
PersonalInterviewwithDavidMurray,5February2011,Sydney,Australia.
DOI: 10.2202/1932-0183.1209
assets under management. Dividend distribution shares SWFs profits with the
public, heightening citizen awareness of fund activities. Exaggerating the
downside of dividends serves as a useful justificatory tool for current SWF
arrangements where significant national savings stay under the direct and
relativelyautonomouscontroloffinancialmanagers.
References
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DOI: 10.2202/1932-0183.1209 IR AL NDICE
BASICINCOMESTUDIES
AnInternationalJournalofBasicIncomeResearch
Vol.5,Issue2 RESEARCHARTICLE December2010

Runnerupforthe2008BISEssayPrize
BasicIncomeandSocialValue
BillJordan
UniversityofPlymouth
Abstract This article suggests that the justification of basic income should take
account of the evidence of a divergence between growing incomes and stagnating
subjective wellbeing (SWB) in the affluent countries. It argues that this implies
taking the debate outside the orthodox model of economic development and the
strictmethodologicalindividualismadoptedbyVanParijsandothers.Thisdemands
moreattentiontosocialrelationsandananalysisintermsoftheproductionofsocial
valueratherthanutilityandcultureratherthancontract.
Keywordsbasicincome,contract,culture,socialvalue,wellbeing
Inrecentyears,argumentsforbasicincomehavegenerallygonewiththegrainof
the two strongest social forces in todays world, globalisation and
individualisation. Philippe Van Parijss Real Freedom for All (1995) provided not
only a guarded justification of capitalism, but also an endorsement of global
economic integration as the most plausible road to the dynamic efficiency
requiredtosustainmaximumfeasiblebasicincomesforeveryindividual,andas
an exemplar of a methodologically individualistic analysis of justice between
people.
By implication, this approach accepts that competitive markets and
individualistic social relations will subvert (gradually or precipitately) all those
collective institutions by which societies sought to protect their members
vulnerabilities,inacontinuationofKarlPolanyisGreatTransformation(1944).
ThisappliesasmuchtotheregulatedlabourmarketsofScandinaviawhich
should become flexible (Van Parijs, 1995, pp. 222223) as to the traditional
kinship networks, crafts and communes of developing countries. Since the
argument for basic income is that it allows each individual to live as he or she
might like to live (to do whatever he or she might want to do), and since
individuals are by assumption diverse, markets and flexibility generate the best
outcomes towards this goal. It rejects any particular substantive conception of
the good life (Van Parijs, 1995, p. 28), such as might be used to justify specific
social relations of kinship, crafts or community, as perfectionist, in favour of
equalityofopportunityandrespectandefficiency.
Inallthis,VanParijsechoestheorthodoxeconomicmodelofdevelopment,
which has been spread (sometimes by military means) by the affluent
Anglophone countries, and through the policies of international financial
organisations, throughout the world. This includes the principles of individual
sovereignty (that each person makes and develops themselves through their
choices), of easy access to and exit from all collective units, free mobility of the
factorsofproduction,andsoon.
Since the publication of Van Parijss book, there has been evidence of a
growing divergence between individual incomes (as a proxy for the kind of
welfarethatismaximisedbytheprovisionofthehighestfeasiblecashpaymentof
a basic income) and peoples wellbeing (as measured by their own overall and
specificassessmentsoftheirsatisfactionwiththeirlives)intheaffluentcountries.
Decades of data on subjective wellbeing (SWB) have now been analysed (Van
Praag and FerreriCarbonell, 2004; Kahneman et al., 1999), leading economists
themselves to criticise many of the assumptions behind their model of
development(Layard2005,2006;FreyandStutzer,2002;BruniandPorta,2005).
Since the paradox of stalled wellbeing in countries with high and rising
per capita incomes was first noticed (Easterlin, 1974), the components of well
being have also been identified: health, employment satisfaction, close personal
relationships, religious faith and active community participation are the most
significant influences on levels of SWB (Helliwell, 2003). Furthermore,
populations in several developing economies have much higher levels of SWB
than their GNP would predict Ghana, Mexico and Vanuatu, for example. All
this raises questions about whether the relational elementsin wellbeing should
feature in the goals of economic development and in arguments for the basic
incomeprinciple.
DOI: 10.2202/1932-0183.1140
The justification of basic income provided by Van Parijs links this closely
withthemaximisationofwelfareandindividualfreedom;hisapproachtojustice
isinthetraditionofRawls(1972),whichhasrecentlybeencriticisedbyAmartya
Sen (2009) as being concerned with the search for transcendental institutions.
Senarguesthathypotheticalsocialcontractsbetweenabstractindividualswhich
leadtoperfectlyjustarrangements,neglectactualbehaviour,comparativesocial
relationsandthestepstowardsimprovingconditionsforjustice.
At the same time, Michael Sandel (2009) has argued against the Rawls
tradition on the grounds that it puts beyond the domain of justice the moral
worthoftheendswepursue,thesignificanceofthelivesweleadandthequality
ofthelifeweshare.Heconcludesthat,Justiceisnotonlyabouttherightwayto
distribute things. It is also about the right way to value things (Sandel 2009, p.
261).
Taken together with the evidence on stalled wellbeing, these criticisms
challenge basic income advocates to reconsider the terms on which it can be
justified. This is especially worth addressing when, as I show, many of the
current analyses of the shortcomings of social relations in the affluent
Anglophonecountriesconcludethatexcessiveindividualismliesattheirroot.
The need for such a reappraisal can be linked with the concession by Van
Parijs (1995, pp. 228231) that a worldwide redistributive scheme to give real
freedomtoallthroughthemaximumsustainableglobalbasicincomewouldnot
be feasible without the underpinning of certain attitudes and institutions
fostering equal respect and equal concern for all humanity. These he calls
strategies of democratic scalelifting over redistribution, and solidaristic
patriotism over social justice within polities. And he mentions the emotional
basisforthesedispositionsarisingfrominteractionsbetweenpeoplefromall
categories of the same society (Van Parijs, 1995, pp. 230231). Acknowledging
thatthese ideas, presented as afterthoughts at the end of his book, might sound
more communitarian than reallibertarian, Van Parijs admitted that such
relationships, fostered by institutions (if necessary with compulsory powers)
might be needed to achieve a sufficient level of social cohesion to sustain
globaltransfermechanisms(VanParijs,1995,pp.231232).
This concession that there may have to be tradeoffs between justice and
freedomontheonehand,andbondsofconcernandsolidarityontheother,and
that basic income requires an underpinning to mobilise the means to real
libertarianism (Birnbaum, 2008), opens up a debate about the social relations
required to enable and stabilise a basic income society, especially on a global
scale.
3 Jordan: Basic Income and Social Value
Iarguethatthistakesthedebatesoutoftheconfinesoftheeconomicmodel
andofthestrictmethodologicalindividualismadoptedbyVanParijsandothers.
It demands an analysis of social relations in terms of the production and
distributionofsocialvalue(Jordan,2008)ratherthanutility,andofculturerather
thancontract.
1.BasicIncomeasTransformativeofSocialRelations
Not all advocates of basic income have adopted transcendental institutionalist
arguments of the type criticised by Sen, nor have they all excluded issues of
social relations, quality of life or the way that value is created and distributed.
Several have argued that, in addition to achieving justice for and between
individuals, its introduction would change the nature of relationships between
societys members in radical ways, analogous to those sought by socialists and
feminists and hence transformative of their shared lives. For instance, Brian
Barrywrote:
I do not think it too fanciful to claim that those who learned their
socialism from William Morris and R. H. Tawney may recognise the
introductionofasubsistencelevelbasicincomeasapracticalwayof
achieving some of their central aims. Indeed, if we can manage to
strip away the appalling legacy of really existing socialism and go
back to Marxs utopian vision, it is not absurd to suggest that a
subsistencelevel basic income is a far more plausible institutional
embodiment of it than anything Marx himself ever came up with
(Barry,1997,p.165).
Suchclaimsarederivedfromtheargumentthatthetermsonwhichmodern
individuals were defined and by which government was justified by the
Enlightenmentspoliticaltheoristslackedoneormoredimensionsofthefreedom
they needed to realise their ends as social beings. In Barrys version of this
argument, labour markets allowed the exploitation of those without sufficient
property for survival, and this would be rectified. Provided that the basic
incomeisgenuinelyadequate,wecansaythatnobodyisexploited,howeverlow
thepay.Forthejobisfreelychoseninpreferencetoanacceptablealternativeof
not having a job (Barry, 1997, p. 167). This in turn would allow the
reorganisationofsociallydesirablework,suchastransportsystemsmaintenance,
health and social care, urban environmental conservation, education and
training.
DOI: 10.2202/1932-0183.1140
Inasimilarvein,ErikOlinWrighthasclaimedthattheintroductionofbasic
incomewouldalterthebalanceofpowerbetweentheclasses,reducingworkers
dependenceoncapitalistsfortheirsubsistence:
[B]asic income increases the possibility of engaging in
decommodified nonmarket activity, thus expanding the sphere of
economic practices outside capitalism: basic income increases the
capacityofcollectivestrugglebyprovidingaguaranteedstrikefund
forworkers(Wright,2004,p.79).
The economic practices which Wright regarded as socially productive
(Wright, 2004, p. 83) included caregiving, the arts and politics. But as with
Barrys examples of socially desirable lowpaid work it is not obvious why
people would be more motivated and undertake such tasks in a basic income
society than they are under present arrangements. With the exception of (some
of) the arts, none of the work listed by either author is seen as attractive within
the individualistic and selfdevelopmental culture of the affluent Anglophone
countries; it is done either from the sense of obligation or commitment by a
minority(asincaregivingandpolitics),orbecauseofthelackofalternatives,or
becauseofpressurefrombenefitauthorities(asinparkkeeping,railwaystation
maintenance,urbancleaning,etc.),orevenasapunishmentforcriminals.
ThepointhereisthatnothingintheproposalsofVanParijs,BarryorWright
would alter the basis of economic and social relations in rational utility
maximisation an approach fostered by markets, choice, competition and
contractwhich,underneoliberalandThirdWayreformsofthepublicsector,has
come to characterise all the interactions between citizens, especially in affluent
Anglophone states. Why would the basic income not be perceived simply as an
individual right, enabling each selfdeveloping person to realise his or her
project of self (Rose, 1996) more fully (and perhaps more selfishly)? Would it
notconsolidatetherighttochoice,andthecentralityofcontractinrelationships,
rather than shift people to a greater awareness of collective possibilities and
socialneeds?
These questions are more directly addressed by Carole Pateman, who has
been a longstanding critic of contractual relations and the interpersonal power
theyenable(Pateman,1988).Hersupportforbasicincomerestsonitsproviding
the missing element in the freedom conferred on the individuals created by
modernity (Pateman, 1988, p. 16), by enabling democratic selfgovernment by
members who are truly autonomous. This should extend, she argues, to the
workplaceandthehousehold:
A basic income is a crucial part of any strategyfor democratic social
change becauseit could help break the link between income and
employment and end the mutual reinforcementof the institutions of
marriage, employment and citizenship.Individual selfgovernment
dependsnotonlyontheopportunitiesavailablebutalsoontheform
of authority structure within which individuals interact with one
anotherintheirdailylives.Selfgovernmentrequiresthatindividuals
both go about their lives within democratic authority structures that
enhance their autonomy and that they have the standing, and are
able(havetheopportunitiesandmeans)toenjoyandsafeguardtheir
freedom.Abasicincomesetattheappropriatelevelshelpscreate
the circumstances for democracy and individual selfgovernment
(Pateman,2004,pp.9091).
Shedoesnotsuggestthatbasicincomewould,ofitsownaccord,securethe
transformation she recommends, nor does she say how these opportunities are
likely to change social relations, other than that they should ensure
democratisationisattheforefrontofdiscussion(amongmembersofworkplaces
and households) and that feminist arguments are taken seriously (Pateman,
2004, p. 97), and that social reproduction should be one focus of reforms,
addressing social relations and institutions, rather than atomistic individuals
(Pateman,2004,p.101).
What all these authors hint at, but only Pateman directly mentions, is the
idea that basic income might enable a reassessment of societys priorities and
goals, including a revaluation of certain tasks and activities given little
recognition or reward under current conditions. Pateman implies that
democratic negotiation and collective action might lead to a higher value being
placedonthekindsofthingswomenhavedoneonanunpaidbasis,andthatthis
in turn might make social reproduction a clearer focus for public policies and
voluntaryactivity.Thisfocusonthequalityofrelationshipsandoncooperation
andcaringmightalsocontributetoimprovementsinSWB.
2.EconomicValueandSocialValue
Evendeeperunderlyingquestionsconcernthenatureofthehumandevelopment
which is enabled by economic development. Does the creation of an integrated
world economy, in which transfers from rich societies enable the maximum
sustainable basic income to be paid to populations in poor countries, rely on
processesofcreativedestruction(VanParijs,1995,pp.214219)throughwhich
DOI: 10.2202/1932-0183.1140
contractual relationships between utilitymaximising individuals will erode or
replacetraditionalbondsofaffection,kinship,ethnicity,faithandsoon?Arethe
criteria which will determine decisions about development ones derived from
thiseconomicmodelsuchascostbenefitanalysis(AdlerandPosner,2006),and
can such standards place any value on emotional and social elements in human
wellbeing?Doesthepoliticalacceptabilityofbasicincomedependonprocesses
ofindividualisationconsistentwiththemethodologicalindividualismofitsmain
justifications and the expansion of the spheres of markets, flexibility, mobility,
readyaccesstoandexitfromgroupsandassociations,etc?
WeshouldrememberthattheAnglophoneandpostWashingtonConsensus
economic model of human development is the direct descendant of the
Enlightenment political project for installing individual liberty, property rights
and contractual exchange between selfgoverning individuals as the central
socialinstitutions.Thatwasadeliberateattempttooverthrowpaternalauthority,
the divine right of kings, the religious construction of power, andthestandards
setbysuchpassionsashonour,loyalty,dynasty,sexualjealousy,thezealousness
and bigotry of faith, and all the other bases for the religious, civil and imperial
wars of the sixteenth and seventeenth centuries (Hirschman, 1977). Writers like
Locke (1690), Hume (1739) and Adam Smith (1759) wanted to substitute the
milder vices like greed and envy for these destructive passions, through the
creation of individual rights of commercial societies and contractual relations.
They sought to break down obligations of blood, soil and faith, in favour of a
mercenaryexchangeofgoodofficesaccordingtoagreedvaluation,whichrelied
on a senseof utility, without any love or affectionor gratitude (Smith, 1759,
PartII,pp.124127).
It wasnot that those emotions were to be totally discounted or suppressed,
but rather that they were to be confined to the private sphere of piety,
domesticity and association, and not allowed to become the ruling principles of
publiclifeandpolitics.AdamSmithsTheoryofMoralSentiments(1759)soughtto
show that emotions such as sympathy and admiration for vast and operose
contrivancesallowedsocietytobeconstructedaroundfamilyandmarkets;they
were designed by the wisdom of the Deityin finding out the means for
bringing about those ends which goodness suggested (Smith, 1759, p. 35) and,
hencesupportedtheprogressofhumandevelopment.Love,respectandloyalty
underpinnedcommerceandgoodgovernment.
Butthisinstalledindividualutilityasthecriterionforpublicpolicyandled
toitsadoptionasthecentrepieceofpoliticaleconomy,despitethedenunciations
ofwriterssuchasCarlyle,RuskinandMarx.Itmeantthat,inallthebigdecisions
abouthumandevelopment,welfaregainstoindividuals(subjecttotheprovisos
of principles such as those of Pareto or Rawls) got priority over the goods
associatedwithmutuality,communityorloyalty.Thiseconomicversionofvalue
becametheuniversalmeasuringrod(Pigou,1920,p.11).
The question raised by the wellbeing data is whether analyses in terms of
individual utility fully capture the sources of human flourishing, and whether
what they discount or obscure is actually more important for quality of life. In
particular, the question arises whether relational and cultural factors in human
interactions provide both qualitatively important aspects of experience and
essentialrestraintsontheexcessesofindividualisticselfindulgence(Offer,2006).
If market individualism leads to forms of insecurity, anxiety and alienation
(Lane, 1991, 2000; Pusey, 2003) and to the breakdown of traditional standards
over eating, drinking, sex, public order and civility, then policies for increasing
individualwelfaremaybecounterproductiveintermsofSWB(Jordan,2008).
Any such claim would involve reversing the imperialistic advance of
economicanalysisintoallspheresofhumaninteraction,symbolisedbythework
of Gary Becker (1976, 1981, 1996).The latest conquest in this campaign involves
the concept of social capital, which is so central to both Third Way and post
Washington Consensus versions of liberal capitalism (Fine, 2001). Although
superficially concerned with acknowledging social and communal factors for
development programmes (Stiglitz, 2002), Beckers work reveals that social
capitaliseasilyabsorbedintotheeconomicmodel.Hisextendedutilityfunction,as
hedescribesit,
retains the assumption that individuals behave so as to maximise
utility while extending the definitions of individual preferences to
include personal habits and addictions, peer pressure, parental
influences on the tastes of children, advertising, love and sympathy,
and other neglected behaviour. The extension of the utility
maximizing approach to include endogenous preferences is
remarkably successful in unifying a wide class of behaviour,
including habitual, social, and political behaviourSocial
capitalincorporatestheinfluenceofpastactionsbypeersandothers
inanindividualssocialnetworkandcontrolsystem(Becker,1996,p.
4).
Theonlywaytocounterthiskindofeconomicimperialismintheanalysisof
human development issues is to substitute an approach which subsumes
economicutility(welfare)intoawidersystemofsocialvalue.Thisrecognisesthat
all forms of value are ultimately aspects of the processes through which people
DOI: 10.2202/1932-0183.1140
createandsustainmeaningsfortheirexperiencesideasandimagesformaking
sense of the world, communicating and acting together in it. It also
acknowledges that contract is just one of the ways in which interpersonal
behaviour is regulated a part of a cultural system, which relies on the
productionanddistributionofsocialvalue.
Insteadofprivileginganindividualisticculture ofutilitymaximisation,this
approach allows social relations in countries at all stages of economic
development to be analysed within the same framework. By drawing on
anthropologicalandsocialtheory,wecanrecognisethateconomicexchangescan
only be properly understood as features of social relationships, whether we are
dealing with huntergatherer tribes or Wall Street financial traders: A material
transaction is usually a momentary episode in continuous social relations. The
socialrelationassertsgovernance:theflowofgoodsisconstrainedby,ispartof,
astatusetiquette(Sahlins,1974,p.186).
It is the social categories and standards which enable members of cultural
communitiestointerpreteachothersactions;materialtransactionsareoftenthe
meansbywhichcommunicationsareachieved.AsMaryDouglasputsit,
Whenever consumption goods change hands, someone is
communicating with someone else. Commodities define social
categorieswe define inclusive and exclusive categories by rules
about degrees of sharing and giving of commodities. No amount of
welfaregrantscalculatedonbasicneedswillcancelmeaningswhich
the language of commodities declares. Poverty is not lack of goods
but exclusion from esteem and power. This will never change that
meaning(Douglas,1973,p.181).
In other words, welfare is always constructed by the relationships through
which it is produced and distributed, and social value ultimately determines
both economic value and wellbeing, because the latter requires emotional
support, respect and the sense of belonging, communicated through
interpersonaltransactions,foritsfoundations(Jordan,2008).Bypayingattention
to the processes by which social value is produced and distributed, better
accountcanbetakenofhowdevelopmentaffectslevelsofSWB.
IntodaysaffluentAnglophonecountries,littleawarenessofthesefactorsis
tobefoundinpublicpolicy,orindeedineverydaylife,whichnowfollowsmany
of the precepts of economic theory. The dominant culture is one of permeable
social boundaries, where groups are provisional and temporary, and status is
negotiable.Individualsinthisculturearesupposedtoconstructandreconstruct
themselves, through their choices in markets and public services: This ethic of
thefreeautonomousselfseemstotraceoutsomethingquitefundamentalinthe
ways in which modern men and women have come to understand, experience
andevaluatethemselves,theiractions,andtheirlives(Rose,1996,p.1).
In the work of Durkheim (1898, 1912), sacred social value attaches to social
categories and classifications, such as gender, age, group and tribe; but
individualism is itself a culture, in which only the individual (and his or her
chosen actions) is sacred (Jordan, 2004): Each commodity is imbued with
personalmeaning,aglowcastbackuponthosewhopurchaseit,illuminating
thekindofpersontheyare,orwanttocometobe(Rose,1996,p.162).
This implies that choice, mobility and propertyownership, which give the
sacred self the autonomy for personal selfdevelopment, are also given the
highestvaluewithinthisculture.AsDouglasputsit,oneabstractprincipleis
sacredstill,thatistheholinessofcontractitself(Douglas,1978,p.192).
The evidence of stalled wellbeing in the affluent Anglophone countries casts
doubt on whether the road to basic income should lie through these forms of
individualism, contract and markets. Research by Lane (1991, 2000), Pusey
(2003), Kelsey (1995) and Offer (2006) suggests that those features of social
relations both generate stresses, insecurities and anxieties, and fail to supply
restraintsandstandards,thussubvertingqualityoflifeexperience.Societiessuch
asChinaandIndia,whichintheirdifferentwayshavepreservedaspectsoftheir
cultures, and the value of tradition, craft, commune and collective to be
sustained,mayhavemuchtorecommendthem.
More recently, a number of surveys and comparative studies suggest that
individualismisbeingwidelyidentifiedasthemajorfactorintherelativelylow
position of the UK and USA in league tables of SWB and, conversely, of their
high position in the incidence of social problems. For example, an online
consultation of more than 3,500 people by the Joseph Rowntree Foundation,
backedupbyfocusgroupsandworkshopswithspecificdisadvantagedgroups,
found that concerns about individualism and greed, and anxieties that
individualprefermenthasbecomevaluedovercommongood,weretobefound
across the respondents (Unwin, 2009, p. 4). An inquiry by the Childrens
Society, sparked partly by the finding that the UK came 21
st
, out of 25 EU
member states, in children and young peoples wellbeing (Bradshaw et al.,
2007),andatthebottomofatableof21richOECDcountries,justbelowtheUSA
(Innocenti, 2007), concluded that excessive individualism was the biggest
element in this poor performance, and that the pursuit of personal success
relative to others cannot create a happy society, since one persons success
necessarilyinvolvesanothersfailure(LayardandDunn,2009,p.6).
DOI: 10.2202/1932-0183.1140
This seems to imply that arguments for basic income should beware of
relying solely on its reallibertarian potential, and they should take more
seriously the idea that value which arises through social interactions should be
promoted through its implementation. Without the moral and cultural
underpinnings from such interactions, it is doubtful whether a basic income
societywouldbesustainable.
3.ContractorCulture?
It is no coincidence that the least convincing part of Van Parijss justification of
basic income capitalism is the final section, where he tries to suggest ways in
which an integrated world economy might not result in arace to thebottom, in
whichwelfarestatesweredismantledandpovertyreliefmademeanerandmore
conditional,underpressureofcompetitionforcapitalandskilledlabour.Herehe
argues that the media and international NGOs should provide emotional
cohesion (Van Parijs, 1995, p. 228) while nations design new global
redistributive institutions. Within those countries with welfare state traditions,
netcontributorstosuchschemesmightbemotivatedbysolidaristicpatriotism
prideinthecollectiveprojectofstrongprotectionagainsttheerosionofnational
systemsforredistributionthroughcompetitionbetweennationstates.
One can hardly expect the required dispositions to flourish as a
spontaneousexpressionofuniversalhumannature.Theywillhaveto
be nurtured, preserved, encouraged, engineered into existence by
specific social conditions, specific ways of organising social life. But
these conditions may not be that different from the conditions that
are required anyway for the lasting feasibility of high levels of
solidarity(VanParijs,1995,p.231).
HereVanParijswritesofanimprobable(toAnglophonereaders)empathy
enabling role of the media to provide the emotional basis for solidarity; and
herealsoherecommendsthatpeopleofallsocialgroups:
would have no option but to grow up (if not at home) in the same
crchesandthesameschoolsortobebornanddie(ifnotathome)in
the same hospitals. Perhaps one should even introduce compulsory
public service whose explicit purpose may be, say, to look after the
environment(VanParijs,1995,p.231).
He acknowledges that the engineering of a sufficient level of social cohesion
wouldbeantiindividualisticandmorecommunitarianthanleftlibertarian.
One concern with this is not that Van Parijs here violates all the principles
andmethodologicalstandardsstipulatedatthestartofhisbook,butthathedoes
soinsuchanimplausibleway.Forinstance,itispreciselybecausepeopleinthe
UK and USA do not go to the same crches, schools and hospitals, but are
encouraged to compete for places in the most advantageous ones, that
solidaritiesaredifficulttocreate.
Surely the point is that the political basis for institutional innovation and
design can be derived in only a very limited sense from rational argument and
analysis, as Pareto (1916, pp. 244245), among others, acknowledged. The
emotional basis for solidarity is just that a set of images, feelings and
interpretations of social rights and obligations, derived from the culture which
shapesandregulatesthecollectivelifeofasociety.Itreflectsthesystemofsocial
value which prevails within those social relations. The irony is that Van Parijss
economistic individualism is far more in tune with the dominant culture of
affluent countries (especially the Anglophone ones) than with his solidaristic
patriotism.
The main innovations of the postWashington Consensus which allow a
greater role for government intervention, regulation, public services and social
capital than does its predecessor, neoliberal ideology, are not concerns with
solidarity and equality. They rely on an extension of the economics of
informationandcontractintoallcornersofsocieties.TheWorldBanksmodified
model for human development relies on the financial capital of the affluent
world to drive through global integration and, hence, increased welfare in the
developingcountries.
[F]inancial institutionsare critical in determining the behaviour of
theeconomy,andthecentralfeaturesofbanksandbankbehaviour
can be understood in terms of (or derived from) an analysis of
informationimperfections(StiglitzandGreenwald,2003,pp.34).
Thus the role of governments and central banks is to act as insurers for the
wholeeconomy,writingcontractstotrytoregulatethebehaviour,firstofbanks,
andthroughthemofallotheragents,inlinewiththetheoryofcontract(Bolton
and Dewatripont, 2005). [T]he regulator (the principal) tries to control or affect
the behaviour of the bank (the agent) to make the bank act more in accord with
socialobjectives(StiglitzandGreenwald,2003,p.204),andthisomnipotentrole
spreadsouttothewholeeconomy.
Households are often not perfectly rational. Households and
firmscertainly dont have perfection informationModels based
DOI: 10.2202/1932-0183.1140
on more realistic assumptionsprovide an additional rationale for
government to intervene in the economy and additional tools for
governmentandcentralbankstostabilisetheeconomy(Stiglitzetal.,
2006,p.47).
The economic crash of 20082009 has revealed the shortcomings of this
approach, and the tighter regulation now canvassed by leaders of the G20 will
only partly remedy the problems it exposed. Although a series of books about
thecrashhaveshownthattherootcauseofthebankingcrisislayinthecultureof
invulnerabilityamongbankers(Tett,2009;Lonergan,2009),governmentbailouts
of the banks have postponed the pressure for these cultural factors to be
addressed.
Culture offers a feasible longterm alternative to contractual regulation, but
itrequirespainstakingconstruction(justasitcanbealmostinstantlydestroyed).
Especially in the UK, the term culture is still used to denote aspects of
behaviour which are disapproved of as in dependency culture, gang
culture,gun culture and bullying culture rather than denoting forms of
restraint and mutuality. Culture, as a way of coordinating and regulating
behaviour,involvesinterpersonalinteractionsinwhichclaimsofrecognitionand
respect, using the ideas and images of members repertoires of sensemaking
resources, are negotiated. Goffman (1967) called these claims and their
acknowledgment face: The term face may be defined as the positive social
value a person effectively claims for himself by the line others assume he has
takenduringaparticularcontract(Goffman,1967,p.5).
The facework done in such interactions is largely cooperative a
collaborative production of social value, which is then distributed among the
participants.
The combined effect of the rule of selfrespect and the rule of
considerateness is that the person tends to conduct himself in an
encounter so as to maintain both his own face and the face of the
other participantsThemutual acceptance of lines has an important
conservativeeffectonencounters(Goffman,1967,pp.1112).
So certain habitual and standardised practices with a logically coherent
framework (Goffman, 1967, p. 13) are built up through interactions, and this
makes the value constructed by individuals and negotiated between them, part
of the culture of a community, sustained within its institutions. Like Douglas,
Goffmanseesthistypeofvalue,eveninaffluentsocieties,assacred,becauseit
concernsjudgementsofsocialworthinritualrelationships.
I use the term ritual because I am dealing with acts through whose
symboliccomponenttheactorshowshowworthyheisofrespecton
howhefeelsothersareofitOnesface,then,isasacredthing,and
the expressive order required to sustain it is therefore a ritual one
(Goffman,1967,p19).
The logic and dynamic of cultural regulation involving social value could
scarcely be more different from the contractual regulation favoured by Third
Way governments and the World Bank. If basic incomes feasibility ultimately
rests on solidarity and social cohesion, it is to analyses of this kind that its
advocates must turn. Even if the starting point of social relations is an
individualistic one, it is cultures alone that can provide the respect and concern
whicharenecessaryforitsredistributiveprinciples.Thisimpliesthatthelogicof
economic development cannot afford to ignore the cultural resources by which
these relations are sustained, and that basic incomes justification should also
addressthem.
4.Conclusions
My argument is that the case for basic income, and especially the case for a
worldwide redistributive scheme to include the populations of developing
countries in massive redistributive transfers, is weakened by the implication (or
direct claim) that this can best be achieved through economic integration and
individualisation. The subversion of social relations for producing and
distributing social value which these processes of commercialisation and
contractingwouldentailwouldbedamagingforSWBandmightunderminethe
solidarities on which basic income schemes would depend. The basic income
proposal must be made consistent with the protection of social value in the
developmentprocess.
Thisimpliesthat,inallpublicpolicydecisions,themaximisationofwelfare
accordingtotheParetoorleximinprinciplesmustbeaccountabletothestandard
of the maximisation of wellbeing, seen as the product of cultural processes,
sustainedbysocialandpoliticalinstitutions.So,forexample,thegoalshouldnot
betomakealllabourmarketsasflexibleaspossible,byexposingindividualsto
globalcompetitiveforces,buttofindinstitutionswhichallowpeopletodevelop
themselves in work over time, as in the regulated labour markets of the
Scandinaviancountries(Haagh,2008).
Conversely,ofcourse,socialarrangementsmustbeaccountabletoeconomic
standards of efficiency and welfare maximisation. But politics should be about
DOI: 10.2202/1932-0183.1140
balancing these principles, not managing the creative destruction of globalising
forces. The longterm prospects for basic income will be better served if social
value is nurtured in the development process especially through those
institutions which encourage sharing and concern within collective units of
manykinds.
Whatthedebateaboutstalledwellbeingintheaffluentcountriescanreveal
isthattheindividualisationofsocialrelations,andthesubstitutionofcontractfor
otherformsofregulation,havehadmanyunintendedconsequences.Notleastof
these is the increased authoritarianism and surveillance of governments in the
Anglophone countries; ironically, the idea that individual citizens will make
themselves through their projects of selfrealisation and selfimprovement
(Rose, 1996) has led to more and more interventions to try to shape them into
beingssuitableforthesetasks.
In the UK, the New Contract for Welfare, which spells out duties of self
responsibilityinmarkets(DSS,1998,p.80)isnowunderpinnedbyawholeseries
of new contracts and penalties (parenting contracts, acceptable behaviour
contracts, jobsearch contracts, etc.) for those who fail to attain these standards.
In addition,the evidence of debt, obesity, drug and alcohol abuse, disorder and
family breakdown bears witness to the failures of markets and contractual
relationstoachieveselfregulationandselffulfilment(Offer,2006).
As a result, the most potent arguments for basic income in these countries
are now derived from the unintended consequences of contract and
individualisation the burgeoning of complex and costly schemes for targeting
socially undesirable behaviour by poor people, and the setting of more detailed
conditionsandbenefits,noneofwhichreducetheproblemsendemicindeprived
communities.Theintegrationoftaxbenefitsystemsandthesimplicityofabasic
income scheme would overcome many of the perversities of these systems. In
September, 2009, a think tank founded by a former leader of the UK
Conservative Party put forward a scheme for integrating the taxbenefit system
which would improve incentives for those working a few hours a week, get rid
ofmuchofthecomplexityaroundmeanstestedbenefits,anddispensewithmost
of the paraphernalia of welfaretowork measures (Centre for Social Justice,
2009). The main aim of this would be to improve social justice by ending the
exclusive effects of the current benefits system on the poorest members of
society.
For basic income advocates to embrace the notions of social value and
cultural regulation would involve abandoning some of the elegant abstractions
of its philosophical justifications or modifying them in line with the claims of
messy social realities. It would mean accepting that there may be no overall
rationale for the basic income principle which applies to all countries at every
stageofdevelopment.
For instance, some of the most promising innovations in basic income
schemes are currently happening in poor countries with great mineral wealth.
Here the moral impetus for the projects comes from enormous inequalities of
incomes among citizens. In Namibia, a consortium of NGOs has organised for
1,000residentsofadistricttoreceiveagrantofN$100permonthfortwoyears.
In an economy witha36 percent unemployment rate, andwhere 44 percent are
under 16 years of age, this has led to dramatic falls in poverty levels and child
malnutrition, while school attendance and utilisation of the local clinic have
increased; economic activity has improved, while crime levels have fallen. All
these indicate that the quality of life in this community has risen (Basic Income
EarthNetwork,2009).
At the same time, the Mongolian government has pledged to set up a
sovereign wealth fund using mining royalties from new gold and copper
mines,whichareexpectedtogeneratelargetaxrevenuesinthenextthreetofive
years.Thefundisplannedtodistributepartofitsrevenueasanannualincome
to every Mongolian, on the model of the Alaskan Permanent Fund (Bloomberg
News,2009).
The adoption of the basic income principle in these piecemeal ways, as
responses to a variety of circumstances, should provide evidence of its
adaptability and capacity to reconcile a number of policy goals. Enhancing
economic development and the effectiveness of taxbenefit regimes will be
among these. But increasing concern about wellbeing in affluent countries,
manifested both in levels of stress and anxiety among mainstream populations
and levels of disorder and deviance among poor ones, is demanding a
reassessment of the whole approach to welfare policies (Jordan, 2008). Basic
incomeanalysiscannotisolateitselffromthesedebates.
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Approach.Oxford:OxfordUniversityPress.
Wright,E.O.(2000)BasicIncome,StakeholderGrantsandClassAnalysis,Politicsand
Society32(1),pp.7988.
BillJordan
SchoolofSocialScienceandSocialWork
UniversityofPlymouth
DrakeCircus,Plymouth,PL48AA
UnitedKingdom
Email:bill.jordan@plymouth.ac.uk
IR AL NDICE
An International Journal of Basic Income Research

Vol. 5, Issue 1 RESEARCH ARTICLE April 2010
Near-Universal Basic Income
*

Nir Eyal
Harvard University
Abstract Under what I call Near-Universal Basic Income, or NUBI, everyone
receives a high level of basic income, except for the rich. NUBI is therefore only near-
universal and it requires means-testing. It is an economic hybrid: a cross between
Universal Basic Income (UBI) and conservative social relief. My thesis is that if
standard considerations that are often advanced to support UBI against social relief
are successful, then these combined considerations probably lend NUBI even greater
support. Thus, UBI supporters should consider becoming NUBI supporters. The
considerations I examine focus on (1) sufficiency; (2) cost cuts; (3) equality; (4)
freedom; (5) the social bases of self-respect; and (6) political resilience.
Keywords equality, freedom, maximin, resilience, respect, self-respect, social relief,
stigma, sufficiency, Universal Basic Income
Political ideologies and political theorists are fond of pure political-economic
systems, archetypes that enact a single elegant principle: the free market,
communism, monarchy. But the best systems are often hybrids. They combine
several principles, eclectically. Moreover, the considerations that ideologists and
theorists advance in favour of pure systems often better support nearby hybrids.
This is the case, I argue, for considerations often given in favour of universal

*
I would like to thank Alex Voorhoeve for detailed written comments and a long conversation over a beer
(which he bought), and Jurgen De Wispelaere for detailed written comments and a long conversation. I would
also like to thank Michael Lewis, Leah Price, Matthias Risse, Shlomi Segall, Nicolaus Tideman, Mischa Van Den
Brandhof, Karl Widerquist, and Dan Wikler, as well as anonymous referees for the journal and participants of
the 2009 US BIG conference, for many helpful suggestions.
basic income (UBI). On closer inspection, these considerations lend stronger
support to a hybrid that I call Near-Universal Basic Income (NUBI).
Under NUBI, everyone receives a high level of basic income, sufficient both
for a dignified existence and for effective political participation, except for the
rich, inasmuch as their earnings far exceed both economic sufficiency and
median income. In the United States, the example on which this article focuses,
let us assume (rather arbitrarily) that NUBI is phased out around the one or two
uppermost income deciles.
The only difference between NUBI and UBI is, then, that NUBI is not for
everyone: the rich do not receive it. NUBI is only near universal and it requires
means-testing. NUBI is an economic hybrid: a cross between UBI and
conservative social relief. In other respects, such as how the income is generated
(from natural resources, progressive tax, regressive tax), and how it is distributed
to recipients (in monthly instalments, in a single instalment), NUBI resembles
UBI, or your favourite version thereof.
It may seem as though the classical considerations supporting UBI must
count against NUBI: that if these considerations succeed against social relief, they
must also show that everyone, including the rich, should receive basic income.
For example, it might seem as though such pragmatic considerations as the high
financial cost of means-testing defeat both social relief and NUBI, which require
means-testing, and support UBI, which does not. It may also seem that more
principled considerations, such as the need to treat everyone with equal concern
and respect, defeat social relief and NUBI, neither of which provides equal basic
income to everyone, and support UBI.
My thesis is that if the considerations most often advanced to support UBI
against social relief are successful, then these combined considerations lend NUBI
even greater support. As far as we can tell, and other things being equal, some of
these considerations prefer NUBI to UBI, while the others are neutral between
the two systems. On balance, therefore, NUBI wins. At least for the time being,
UBI supporters should consider becoming NUBI supporters.
My argument does not commit me to the success or to the failure of any of
these considerations against social relief. I argue only that collectively, and for all
we know, these considerations count for NUBI a little more than they count for
UBI. As an illustration, if UBI supporters are right in expecting UBI to be cheaper
than conservative social relief, then NUBI is probably even cheaper or no more
expensive. If they are wrong, and social relief is cheaper, then both UBI and
NUBI are in trouble, and the trouble for NUBI is probably lesser or no greater.
DOI: 10.2202/1932-0183.1149
Let us examine how UBI and NUBI score on (1) sufficiency; (2) cost cuts; (3)
equality; (4) freedom; (5) the social bases of self-respect; and (6) political
resilience.
1. Sufficiency
One advantage of a generous UBI over meagre social relief, over providing only
jobs, and over participation income is that UBI unconditionally secures a
sufficient level of income for all sufficient both for a dignified existence and for
adequate political participation. That security protects everyones welfare and
shows them the states unconditional concern and respect. Al Sheahen seems to
express this idea:
Why Not Guarantee Everyone a Job [instead of an unconditional
basic income? Because to guarantee only a job] assumes the basic
conditions of human life have to be earnedThere is a moral
obligation to provide every man, woman and child with a decent
living. A persons right to be the right to simple existence is not
something for others to grant or withhold as an economic carrot, or to
give as a gift. It should be a universal right (Sheahen, 2006, p. 4).
However, an equally generous NUBI accomplishes the same effect. It, too,
ensures that everyone have a sufficient level of income. The only difference is in
how that income level is assured based entirely on money transfers, or on a
combination of transfers for some and market earnings for others. NUBI secures
everyones dignified existence and political access by giving a subsidy to all
except the rich, whose subsistence and political access are secure anyhow. The
rich do not need basic income transfers in order to enjoy dignity and a political
voice. NUBI thereby shows concern and respect both to transfer recipients,
whose dignity and power it actively protects, and to the rich, who know that
they are safe and that if they need transfers, they too will receive them. The
relevant difference between UBI and NUBI is only in the means used to fulfil a
shared goal the goal of guaranteeing everyones access to a dignified existence
and a political voice, thereby treating all with concern and respect.
2. Cost Cuts
UBI may cost less than social relief (e.g., Van Parijs, 2004, p. 20). But NUBI would
probably cost even less. The main driver of cost cuts is that NUBI is not for
3 Eyal: Near-Universal Basic Income
everyone. NUBI wastes no money on the rich, and it thereby saves a lot of money
compared to UBI. When the highest income decile or two do not receive NUBI,
the state saves approximately
1
1020% of all expenditure on transfers a hefty
sum. Sheahen estimates that in 2004 a generous UBI would have cost $1,895.6
billion in the United States. By saving 1020% of that cost, NUBI would have
saved approximately $190380 billion annually (Sheahen, 2006, p. 7). Sheahen
also mentions that in 2004, total revenue from individual income tax in the
United States was $809 billion. So NUBI would have saved between 2247% of all
individual income tax revenues.
A UBI defendant may point out that UBI cuts costs in other ways.
Specifically, by eliminating means-testing, it slashes the administrative expenses
of means-testing and prevents poverty and unemployment traps. UBI, she may
insist, could thus be cheaper overall. But let us examine whether NUBI is likely
to generate either steep administrative costs, or poverty and unemployment
traps.
Beginning with administrative costs, just like UBI (Sheahen, 2006, p. 7),
NUBI could replace and eliminate many tax loopholes and redundant welfare
programs, as well as the long-term costs of poverty. Admittedly, in other
respects UBI may initially seem much cheaper. An oft-cited economic advantage
of UBI over social relief systems is that UBI does not require expensive and
intrusive scrutiny of citizens incomes, and inspections against abuse. NUBI on
the other hand involves means-testing, and it might seem to require expensive
and intrusive measures.
My response is that we can track whether citizens fall in the uppermost
income deciles without special expensive and intrusive measures. Income tax
returns already give that information, and the authorities inspect them for tax
evasion anyhow. To enable NUBI, all that the authorities must add is a
calculation, based on tax returns, of who falls in the uppermost income deciles.
2

Expensive and intrusive additional means-testing or expensive and intrusive
additional inspections are not required.
This reliance on tax forms might seem to implicate NUBI in a different
problem, namely, administrative time lags. Philippe Van Parijs writes that UBI is
superior to negative income tax in offering poor beneficiaries money when they
need it, rather than after the tax year is over (Van Parijs, 2000). Since NUBI also
means-tests on the basis of tax returns, it might be thought to impose a similar

1
My calculation is rough in assigning to the highest income households the general populations average
number of dependents per household.
2
It may make sense to calculate NUBIs cut-off range not simply according to household income, but also
considering family size, which is information that is also readily available to the authorities.
DOI: 10.2202/1932-0183.1149
administrative time lag. However, Fred Block suggested a host of ways to avert
time lags in negative income tax, and they may work in a NUBI as well (Block,
2001, p. 87). For example, citizens could borrow money in advance against their
potential annual income transfers, receiving a check shortly after making the
request. Those who turn out to lack NUBI entitlement would have to repay the
loan.
3
In any case, some types of UBI also rely on the declaration of income on tax
returns, for example, the UBI proposed in HR 5257 (Sheahen, 2008).
Let us now turn to poverty traps. Here, UBI has an advantage over
conservative social relief systems. When everyone receives benefits, not just the
poor, then there is no need to remain poor in order to keep ones benefits. They
are guaranteed anyhow. Thus, UBI averts creating the poverty traps that social
relief does.
Nonetheless, NUBI prevents poverty traps as much as UBI does. The poor
have perfectly good incentives to seek income because they will continue to
receive the basic income supplement even if they become middle class. Only the
rich are denied that income supplement, and becoming rich is unrealistic for the
poor.
Other traps that UBI prevents include the unemployment trap and the
disability trap.
4
If you receive benefits only if you are unemployed or sick, you
might deliberately get yourself fired or put your own health at risk, precisely in
order not to lose that benefit. However, UBI and NUBI battle such traps
similarly, by eliminating poverty and by replacing (some) special unemployment
and disability benefits.
Still, there may seem to be one major trap that NUBI creates and UBI
doesnt. Let us call it the upper-middle-class trap. Under NUBI, members of the
upper-middle class might invest less or not at all, or work very little, so as to
avoid becoming so rich as to lose their entitlements to basic income.
Nevertheless, arguably, that effect would remain small: basic income, which
helps the poor greatly, is far less important for those members of the upper-
middle class who are on the brink of entering the uppermost income deciles.
Most of them can earn much more money by vigorously pursuing their highly
profitable business than by preserving their shares of universal benefits.
This point is not obvious. In 2008, United States households entered the
uppermost two income deciles at $100,240, and the uppermost decile, at $138,300

3
Negative income tax differs from NUBI in several respects: NUBI is given to the majority of participants not
just to the poor; NUBI is far more generous than negative income tax is usually imagined to be; the size of the
NUBI transfer is equal for all its recipients (except those in the phaseout range); and NUBI is given to
individuals, not to households.
4
On a disability trap for South Africas poor AIDS patients, see Nattrass (2006).
(U.S. Census Bureau, 2009, p. 38).
5
The prospect of losing their basic income in
Sheahens somewhat optimistically generous proposal, $10,000 for each parent
and $2,000 for each child would remain substantial for them.
Now, any upper-middle-class income trap is smaller per household when
income transfers are phased out only gradually, centring around the cut-off point,
say, linearly over the household income percentiles ranging from 7090%
(instead of abruptly stopping at 80% of households). Imagine, for example, a
household where two breadwinners together earn an annual gross of $100,000.
One breadwinner considers whether to accept a job with higher pay and greater
responsibility, such that their household would earn a gross of $138,000. That
would move the household from the 80
th
U.S. income percentile to the 90
th
one
(U.S. Census Bureau, 2009, p. 38). Let us also assume that, together, the couple
provides for one child. If there were no NUBI, and assuming an income tax of
30%, the salary raise would move the households after-tax income from $70,000
to $96,000 (that is, from 70% of $100,000 to 70% of $138,000). In other words, they
would have to consider whether the net gain of $26,000 compensates them
enough for the lost leisure for one of them. Now assume that a NUBI exists and
that, like Sheahens proposed UBI, it pays $10,000 per adult and $2,000 per child
(again, based on 2008 figures, incomes for the relevant U.S. income percentiles
have changed very little). Assume also that the NUBI is phased out in linear
fashion over the income percentiles ranging from 70
90%. Thus,
counterbalancing the after-tax gain, the household loses half the NUBI, that is,
(10,000+10,000+2,000)/2 = $11,000. Overall, the household moves from a net of
$81,000 to a net of $96,600. Instead of considering a $26,000 compensation for lost
leisure, the NUBI forces the couple to consider only a $15,500 compensation for
it. A worry arises about a large upper-middle-class trap. The worry is that, the
phase out notwithstanding, too many upper-middle-class couples would invest
less or work much less than they would otherwise, causing enough economic
damage to offset any gains from denying the rich a basic income.
6

Let me make several points to address this understandable worry. First, the
worry clearly does not apply to what may be the upper-middle classs most
socially urgent decisions, namely, decisions on high-yield economic enterprise.
Losing much economic enterprise would have been a high social cost indeed.
However, entrepreneurial decisions are hardly affected by NUBI because the

5
There were very similar numbers for 2004, when Sheahen made his proposal.
6
Thanks to Nicolaus Tideman for prevailing on me to include a phaseout despite my earlier reluctance, and to
Karl Widerquist for showing me that it could actually work.
DOI: 10.2202/1932-0183.1149
economic prospects and risks for the typical entrepreneur dwarf any basic
income transfers.
A second point touches on more relevant, but economically less momentous,
upper-middle-class decisions on whether and how much to work. Even here, the
impact of NUBI is likely to remain small. Empirically, the relation between these
decisions and the affected income for upper-middle-class households is more
complex than the worry assumes. For example, while, among the poor, income
differentials often affect womens decisions whether and how much to work,
among the middle class, both mens and womens decisions are, within a broad
income range, inelastic to income prospects (Atkinson and Stiglitz, 1988, pp. 48
57, 5859). In fact, in the United States, both members of middle-class couples
tend to work, although that often exposes their households to quite severe
economic risk (Warren and Tyagi, 2004, e.g., pp. 7). Likewise, unemployment
benefits (and disability grants) rarely appeal to United States middle-income
households enough to generate widespread unemployment (and disability)
traps.
These are some indications of relative inelasticity to pay differentials in the
United States, in middle-class decisions on whether and how much to work.
Several explanations for this seeming reality come to mind. First, the inescapable
costs of employment and enterprise, crucial for many unemployed poor, are for
the middle class a sunk cost: they cannot lose Medicaid benefits, food stamps,
and means-tested rent assistance by putting in an extra day of work. To be sure,
these inescapable costs are high, and probably account for much of any observed
poverty trap effects. One estimate has it that in the United States,
A family who moves from joblessness to income faces at least 48%
marginal cost of doing so: Resident share of rent equals 30% of
income. Income taxes equal to at least 10%. Withholding takes
another 7.5%. Plus, in individual circumstances, workers lose
Medicaid, to say nothing of the marginal costs of working: day care,
transportation, and so on (Affordable Housing Institute, 2005, p. 3).
Typically, nothing of the sort applies to upper-middle-class workers. They
do not stand to lose Medicaid or rent assistance. In addition, as Jurgen De
Wispelaere suggested to me, to the extent that poor people who work less than
before risk losing mainly part-time jobs that do not pay benefits and that middle-
class people who work less than before stand to lose significant benefits, the
poverty trap involves much more money than any upper-middle-class trap.
Second, the value of money, including money from market earnings, basic
income transfers, and the avoidance of some incremental costs of employment,
decreases at the margin. The marginal value of money is thus lower for the
upper-middle class than for the poor, who have less money (the main reason to
give basic income to the middle class is not the dire needs of that class). The
marginal value of working, on the other hand, far from decreasing for the upper-
middle class, is usually higher for them: in their case, a decision on whether to
work more can be a decision on whether to accept a high-status managerial
responsibility; it is seldom a decision on whether to work weekends as a Wal-
Mart cashier.
How income transfers affect upper-middle-class decisions on whether and
how much to work is ultimately an empirical question. An opponent might seek
to establish the reality of upper-middle-class traps, for example, by looking at
President Obamas tax policy impact. So far the Obama administration has
increased taxes more on the rich than on the poor and the middle class
(Associated Press, 2010; Montgomery, 2009; Vaughan, 2010). If upper-middle-
class America responds to these progressive tax reforms by investing and
working far less than before, then perhaps we should expect NUBI to have a
similar effect. If, as I suspect, the impact on investment and work cultures is not
dramatic, then the conclusion may be that there is a way, which does not
generate a significant upper-middle-class trap, to give financial benefits only to
the poor and the middle class and not to the rich. Admittedly, the
administrations current cut-off point for the bulk of increased tax ($250,000
household income) is far higher than the one I mentioned, and multiple
confounding factors may explain little impact. I offer the example mainly to
illustrate how the opponent would have to proceed in order to meet the burden
of proof for postulating major upper-middle-class traps.
Unlike speculation about long-term loss from an alleged upper-middle-class
trap, NUBIs 1020% savings would take place both immediately and definitely.
For the time being, these savings would seem to constitute a more dramatic
prospect.
To summarize, NUBI has an advantage over UBI in potentially cutting costs.
Under NUBI, no money is wasted on the rich. Since NUBI probably introduces
neither high administrative cost nor dramatic traps, the bulk of this saving is
probably retained. For any given size of income transfer per recipient, NUBI is
probably far cheaper.
7

7
I did not consider the complicated macroeconomic effects of either scheme. For example, a small UBI may
have increased growth in Alaska (Goldsmith, 2009). It is difficult to tell whether NUBI would increase or
decrease growth.
DOI: 10.2202/1932-0183.1149
3. Equality
In denying income transfers to the rich, NUBI enhances economic equality
between the rich and the rest of us a little more than UBI does. That treats the
poor more fairly than would giving the rich added privilege, and it thus seems to
show equal concern for everyone, at least as much as NUBI does.
Let me elaborate on this point in connection to several conceptions of
equality that have been used in arguments for UBI. Consider first equality of
outcomes. When some have already appropriated more than equal shares, as the
rich have, to hand them more diverges even more from equal outcomes. And,
inasmuch as money creates real opportunities (see the discussion of real freedom
below), handing more to the rich also tends to diverge more from equality of real
opportunity.
Put differently, Them thats got shall get
8
tends to be unfair; unfortunately,
this is precisely what UBI accomplishes. Under UBI, the rich keep their after-tax
earnings, which tend to be undeservedly high even when tax is somewhat
progressive, and they receive basic income. Why should the rich take home all
that money? Other things being equal, it is fairer to deny the overprivileged
added privilege; unlike UBI, NUBI denies them that.
Now UBI advocates like to point out that it is better for the poor to give to
the rich (Van Parijs, 2004, p. 13). By that they mean that, for multiple reasons, it
is cheaper to pay the rich than to have a social relief system. This may be true.
But we have just observed that it is probably even cheaper to pay everyone
except the rich. Denying transfers to the rich saves a lot of money, and it adds
only little through means-testing, poverty traps, and the like.
An opponent may allege that UBI and NUBI facilitate economic equalization
to the same extent, because any dollar transferred to the rich under UBI can be
taxed away. My response is that for any dollar amount that it is politically
feasible to tax the rich to fund either UBI or NUBI, NUBI distributes that dollar
amount in more egalitarian fashion. Since under NUBI, a lower portion returns
to the rich, the volume of egalitarian redistribution under it tends in one way to
be higher. So while both UBI and NUBI are, in principle, compatible with any
level of equalization, NUBI makes that level easier to reach.
The opponent may now respond that it would still make no difference
whether one introduces NUBI plus ordinary tax, or UBI plus especially progressive

8
From God Bless the Child (with lyrics by Steve Miller).
tax.
9
It strikes me that the considerations noted below, surrounding political
resilience and the social bases of self-respect, would suggest otherwise. In any
event, the opponents new response is neither here nor there for my thesis. NUBI
remains superior to UBI, other things being equal when these two basic income
policies are funded through equally progressive taxation. While in reality, the
scale-out of a UBI or, alternatively, a NUBI, may affect tax policy differentially,
we do not know how it would affect it. And for the time being we should
abstract from that potentially differentiating impact in deciding between NUBI
and UBI. Currently, at least, introducing NUBI remains the more egalitarian
choice. Certainly when basic income is not based on tax revenues but on land or
oil revenues, the complication that the opponent raises does not occur, and NUBI
is clearly the more economically egalitarian option. Then, there is clearly nothing
to offset the more equalizing impact of NUBI. Finally, in response to the
opponent, for either pragmatic (e.g., Van Parijs, 2004, p. 20) or more principled
reasons, UBI supporters tend to oppose exclusive benefits to the poor across the
board: even when these benefits team up with highly progressive taxation that
makes the short-term impact on earnings identical to that of tax-funded UBI.
Evidently, these UBI supporters accept that offsetting through progressive
taxation does not guarantee full moral equivalence between social relief and
UBI and, by implication, between NUBI and UBI.
Some left-libertarians and Georgists consider UBI to be egalitarian in a quite
different way. For them, UBI respects peoples equal claims on natural resources.
Nicolaus Tideman puts this classical argument eloquently:
From a left-libertarian perspective, the basic income guarantee that
justice requires has its source in the axiom that all persons have equal
claims on the gifts of nature. The simple version of the resulting basic
income guarantee is that everyone who has exclusive access to a
natural opportunity land, minerals, water rights, fishing rights,
spectrum rights, etc. should pay the value of that exclusive access
into a fund from which a uniform basic income guarantee is paid to
all persons (Tideman, 2007, p. 2).
Let me begin by registering my doubt about the so-called axiom of this
classical left-libertarian argument. Why assume that claims over the worlds
natural resources are distributed equally, and not, say, on the basis of personal
need? If my severe congenital disability makes me require more natural

9
I am grateful to Jurgen De Wispelaere and Michael Lewis for mentioning this point to me. Compare also Van
Parijs (2004, pp. 1213).
DOI: 10.2202/1932-0183.1149
resources in order to flourish as much as you do, do we really have equal claims
to natural resources or do I have a claim to more? If natural resources were
divided impartially, behind a veil of ignorance, surely either of us would accept
increased portions for whomever winds up needier through no fault of her own.
However, we can set aside this doubt. For our purposes, it is enough to
show that the equal claims on nature axiom does not prefer UBI to NUBI. It
does not. First, if all persons have equal claims on the gifts of nature, it is actually
quite impossible for many people to legitimately acquire exclusive access to a
natural opportunity, for which they owe others only rent. If these others have
literal claims on the gifts of nature, what seems to follow is that anyone
interested in exclusive access to material opportunity must secure permission
from each and every other person. The latter is admittedly a taxing process that
would impede nearly all exclusive access, but that just shows how absurd it was
to assume that exclusive access to material opportunity can become legitimate in
such a system. Of course, if exclusive access is rarely if ever legitimate, it cannot
legitimate any related UBI.
Furthermore, even if exclusive access is often granted in return for rent, why
assume that the income from rent is then divided among claimants equally, and
not maximin or according to need, which can save fairness? Arguably, owners
motivated by fairness not greed would use the opportunity to address unfairly
unequal endowments. They would distribute rent income unequally, favouring
the needy and the poor over the privileged. The resulting distribution would
probably tend toward equal outcomes or equal real opportunity, that is, more
towards NUBI than toward UBI.
Nonideal circumstances in the actual world make the equal claims on nature
axiom prefer NUBI to UBI even more. In the actual world, the rich clearly collect
far more than any equal rent which they might in principle be owed; their
outsized shares reflect much more than greater natural endowments. They often
reflect a history of fencing, undeserved inheritance, discrimination, and so forth.
Since, additionally, in the actual world taxing the rich enough to offset this clear
injustice completely is not a realistic option, why transfer further income to the
rich, as UBI does, instead of dividing that potential further income among other
people, including the poor, as NUBI does? In other words, since in reality, the
rich are unfairly overpaid, fairness and equality would seem to support a basic
income that counterbalances and corrects some of that unfairness. This favours
income transfers that are not even partly wasted on those whom the market has
made unfairly privileged. It favours NUBI.
Finally, when some UBI supporters call for equality, they really mean,
maximin (or leximin: see below). However, NUBI fares better than UBI on that
front as well. Recall our earlier discussion of cost. Being cheaper for any given
size of income transfer per recipient, NUBI allows the state to increase the
transfer size for each recipient, including societys economically least-well-off
members, who are among the recipients. For these members, that small increase
is often dramatic. A little more can mean a lot for people with little money.
Economic maximin thus strongly prefers NUBI to UBI.
In sum, NUBI seems to do equally well as or far better than UBI on several
conceptions of equality that were said to support UBI. Earlier we noted that
NUBI shows concern for all no less than UBI does. We can now add that NUBI
shows equal concern a little more fully than UBI does. In that way, arguably,
NUBI scores a little better than UBI.
4. Freedom
For Philippe Van Parijs, The main argument for UBI is founded on a view of
justice. Social justice, I believe, requires that our institutions be designed to best
secure real freedom to all As he explains, a basic income wouldpromote real
freedom for all by providing the material resources that people need to pursue
their aims (Van Parijs, 2000); also Van Parijs, 1995, pp. 3538). More specifically,
A free society requires that opportunities access to the means for
doing what one might want to do are distributed in maximin
fashionIn other words, institutions must be designed so as to offer
the greatest possible real opportunities to those with least
opportunities, subject to everyones formal freedom being respected
(Van Parijs, 1995, pp. 45).
For example, Van Parijs notes that purchasing power affects real
opportunities and real freedom.
10
He concludes that UBI, which offers the worst-
off higher purchasing power than meagre social relief does, is superior to meagre
social relief.
However, as we just saw, NUBI promotes economic maximin even more
than UBI does. It distributes purchasing power, a central means to real freedom,

10
Van Parijs (1995, p. 4): real freedom can berestricted by any limit to what a person is permitted or enabled
to do. Both a persons purchasing power and a persons genetic set-up, for example, are directly relevant to a
persons real freedom.
DOI: 10.2202/1932-0183.1149
in the exact pattern that Van Parijs favours the most. NUBI thus seems to secure
Van Parijss real freedom for all better than UBI does.
Let me make four additional points. First, Van Parijs further specifies that
the best principle for allocating real freedom is leximin (Van Parijs, 1995, pp. 4
5). However, since maximin prefers NUBI to UBI, leximin cannot prefer UBI to
NUBI. Second, inasmuch as equality of real freedom is also important, NUBI still
fares better than UBI. As we saw earlier, NUBI equalizes purchasing power more
than UBI does. Third, inasmuch as money, more than in-kind benefits, maintains
neutrality between conceptions of the good life while expanding opportunity,
NUBI maintains neutrality no less than UBI does. Either policy provides money,
not in-kind benefits. Finally, there are additional means to real freedom, apart
from money, such as the availability of meaningful jobs, and the social bases of
self-respect. We discuss some of them below.
What about republican freedom freedom from domination? According to
Philip Pettit,
We canargue for a right to a basic income, so long as the possession
of [basic] liberties is taken to requirethe absence of
dominationpromoting the resilient, republican possession of basic
liberties argues for establishing a legal right to a basic income. Such a
right would mean that people had adequate income for functioning
properly in society. And that income would mean that people would
not have to beg the favour of the powerful, or even of the counter-
clerk (Pettit, 2007, pp. 45).
11

Indeed, both Pettit and David Casassas (2007) may be right in saying that
republican freedom requires the material independence (as Casassas puts it)
that comes with having enough money to afford to say No to otherwise
coercive offers (Widerquist, 2008).
However, despite the ideas put forth by these authors, enough money and
material independence can be secured without transfers to all citizens: the rich
already have much more money than is necessary for material independence
and, certainly, for their fair shares of material independence. A NUBI
arrangement secures economic sufficiency for all, including ample economic
access to political participation enough for material independence. NUBI

11
Pettit (2007, p. 5) explains that when we are unable to command a decent wagethat will enable us to
function properly in society we would be defenseless against our employers petty abuse or their power to
arbitrarily dismiss usthe most effective of all protections, and one that should complement other measures
available, would be ones ability to leave employment and fall back on a basic wage available unconditionally
from the state.
secures materials independence just as much as UBI does, or even more given
that NUBI gives the worst off more money, both absolutely and relative to the
rich. NUBI then ensures, equally or more fully, that everyone can enjoy
republican freedom.
12

Likewise for the typical benefits from having enough power. Consider job
quality. As Van Parijs (2000) points out, by giving the least well endowed
greater power to turn down jobs that they do not find sufficiently fulfilling, [UBI
is] creating incentives to design and offer less alienated employment.
13

However, NUBI ensures just as much, or more, that job seekers have some
income to fall back on, and it introduces similar incentives to offer good jobs.
Eric Olin Wright commends UBI for Strengthening the power of labor
relative to capital, not only on the individual level that Pettit and Van Parijs
explore, but also on a collective level:
A generous basic income has the potential to contribute, in the long
run, to strengthening the power of labor viz-a-viz capital for three
reasons. First, to the extent that labor markets become tighter in a
capitalist economy with a basic income, the bargaining position of
individual workers will increase. Second, generally speaking labor is
collectively in a better bargaining position when labor markets are
tight. And third, basic income is a kind of unconditional and
inexhaustible strike fund, which also would contribute to
strengthening the labor movement (Wright, 2005, p. 201).
Again, I would argue, NUBI also achieves these protections for most
workers. The exception is very rich employees, like most CEOs and investment
bankers but, arguably, they lack a just claim to increased protection. Moreover,
NUBI alone may increase the power of most workers, and of the poor, in a fourth
way: NUBI may potentially foster a political alliance between the poor and the
middle class, which reconfigures political power dynamics. How? Under NUBI,
both classes have an interest in both maintaining and increasing basic income,
and they usually suspect the rich, who under NUBI do not receive basic income,
of trying to decrease transfers. The joint fight for NUBI may consolidate a

12
Casassas (2007, pp. 5-6) does raise the question whether schemes other than UBI may potentially secure
material independence more efficiently than UBI does. But he considers only several close variations on UBI,
not a generous safety net or NUBI.
13
See Van Parijs (2000), where Van Parijs adds, with a UBI, workers will only take a job if they find it
suitably attractive, while employer subsidies make unattractive, low-productivity jobs more economically
viable. If the motive in combating unemployment is not some sort of work fetishism an obsession with
keeping everyone busy but rather a concern to give every person the possibility of taking up gainful
employment in which she can find recognition and accomplishment, then the UBI is to be preferred.
DOI: 10.2202/1932-0183.1149
coalition between the poor and the politically vocal and savvy middle class,
breeding future cooperation on additional platforms. Such a process, if it were to
materialize, would lend additional voice, power and protection to the poor and
their causes. In the absence of such alliances, the poor are all too often politically
disenfranchised. In fact, such a coalition would naturally lobby for, among other
things, workplace regulations that protect poor and middle-income workers,
further enhancing job quality.
Pettit might consider such political alliance precarious or humiliating for the
poor and the middle class. In explaining why give the basic income right to all,
not to only those in need? Pettit answers, among other things,
A universal right would mean that those who rely on the basic
income distinct from the independently wealthy will not have to
assert their right on the grounds of being a class apart: people who
depend on others goodwill and are easier targets of control and
domination (Pettit, 2007, pp. 56).
It is true that, under NUBI, the poor and the middle class may have to
acknowledge that they are in some sense, jointly, a class apart from the wealthy.
14

However, in my view, this would usually be a good development. It is more
often than not good that potential targets of control and domination notice that
potential, and take action to thwart it. The political alliance that NUBI may
prompt would increase the power of the poor to take such action effectively, so
that, in line with Pettits own advice, they do not have to rely on the good will of
the rich.
Because NUBI does not in any way give less power to the powerless than
UBI does, and because in one way it may give them more power, NUBI holds
somewhat greater potential with respect to republican freedom.
But there is a complication. As Van Parijs reminds us,
it is not only against the tyranny of bosses that a UBI supplies some
protection, but also against the tyranny of husbandsIt provides a
modest but secure basis on which the more vulnerable can stand, as
marriages collapse (Van Parijs, 2000).
To ensure that NUBI protects nonbreadwinners, it is best to grant NUBI to
nonbreadwinners spouses or directly to individual recipients, not to
breadwinners. Admittedly, this leaves some potential for domination inside rich

14
As Jurgen De Wispelaere pointed out to me, neither the poor nor the middle class constitute a single class
apart, so neither is excluded.
households, the members of which are not entitled to NUBI. As Yannick
Vanderborght put this point to me, What if I marry rich Scarlet Johansson, and
she refuses to give me any money unless I do what she says? The best
protection against this tragic prospect may be to formalize child- and spouse-
support enforcement, legislating that rich households must regularly transfer a
certain income into each household members bank account.
15
In any event, the
connection between UBI and promoting interhousehold justice is now in
question (see contributions to Basic Income Studies, 3 (3)).
Understood either as real opportunity or as nondomination, freedom
probably recommends NUBI no less than it recommends UBI. In fact, since we
saw earlier that NUBI encapsulates equal concern no less than UBI, and since
what equal respect requires may simply be topping up equal concern with equal
freedom, we may now add that NUBI embodies equal respect no less than UBI
does.
5. The Social Bases of Self-Respect
UBI is often touted as a way to prevent the stigma and humiliation for which
conservative social-relief systems are notorious. This point is often made against
selective and means-tested benefit systems (Anderson, 1999; Spicker, 1984;
Titmuss, 1994, pp. 113123; Wolff, 1998; Wolff, 2008). Van Parijs uses this
consideration to cajole Rawlsians into supporting UBI:
Rawls mentions the social bases of self-respect, and there islittle
doubt that a transfer system that is not targeted at those who have
shown themselves inadequate and involves less administrative
control over its beneficiaries is far less likely to stigmatize them,
humiliate them, make them ashamed of themselves, or undermine
their self-respect. In this light, Rawlss positionappear[s] to
recommendthat one should introduce aself-respect preserving
unconditional basic income (Van Parijs, 1995, p. 95; see also Van
Parijs, 2004, p. 13).
NUBI might be accused of generating the stigma and humiliation associated
with social relief. Unlike UBI, NUBI is means-tested: the rich do not receive it.

15
This policy might seem too intrusive, but the law in many countries already demands that breadwinners
provide adequate livelihood to children and spouses, both after and before a divorce. Note also an existing
Dutch policy for funding BA studies: most high school graduates receive generous subsidies that partly cover
both fees and living allowances during their BA studies, and rich households are expected to fund their
childrens fees and living allowances (correspondence with Alex Voorhoeve and Mischa Van Den Brandhof)
DOI: 10.2202/1932-0183.1149
Nevertheless, I now argue that NUBI probably does not significantly
stigmatize anyone. First, NUBIs method of means-testing involves none of the
humiliations, intrusions, suspicions, and shameful exposures that Wolff and
others identify in highly selective benefit systems. As noted above, income tax
forms could provide all the information needed for NUBI, and inspections to
prevent tax evasion could provide all the inspection required, leaving no scope
for the humiliating measures that Wolff and others describe.
It might be thought that NUBIs means tests stigmatize, regardless of the
specific test method. In that view, it is inherent in means tests to stigmatize
recipients. They always suggest that some of us, perhaps benefit recipients or
candidate recipients, are needy, pitiful, lazy or inadequate.
That view is just wrong. Means tests that separate the rich from the rest do
not suggest that, because there is nothing severely stigmatizing about not being
very rich. Taking an ordinary plane to fly abroad is not a humiliation, although
some rich people use only private jets. Presumably, part of the reason that it is
not humiliating is that (unlike public buses in many places in the United States,
which serve mainly the poor and clearly incur some stigma),
16
ordinary planes
serve the middle class as well. NUBI also serves the middle class, and not the
poor alone.
Consider the analogy of food stamps, traditionally a highly stigmatizing
program that has recently seen a renaissance in the United States. There are
currently 38 million Americans eating with government aid (DeParle and
Gebeloff, 2010), about twice as many as a decade ago. Other programs, like cash
welfare and supplemental security income, have not witnessed a similar boost in
uptake. Supplemental nutrition recipients are now more highly educated, more
often working, and more rarely recipients of other government benefits than in
the early and mid-1990s. Reportedly, stigma has simultaneously declined
(DeParle and Gebeloff, 2010). A partial explanation for its decline is that
nutritional aid recipients now come from a wider population, encompassing
sectors with relatively robust social status, although the rich are not among them.
Consider the further analogy of public housing. Housing complexes open
only to the poor tend to incur stigma. Mixed-income complexes, open to poor
and middle-class citizens, tend to incur little if any stigma (Glover, 2005;
Schubert and Thresher, 1996). Social justice does not urgently demand that

16
Perhaps as a reflection, in the 2005 movie Crash (directed by Paul Haggis), a young African-American in Los
Angeles tells a friend, You actually expect me to get on a bus?You have no idea why they put those great big
windows on the sides of buses, do you?One reason only: to humiliate the people of color who are reduced to
riding on it. This conspiracy theory is false, but it does attest to the shame that some minority members (are
thought to) feel about using American public transportation.
mixed-income complexes serve everyone, including Bill Gates and his likes. So
long as a complex serves nearly everyone, including many members of social
groups with robust status, stigma rarely arises. By analogy, transfers that nearly
everyone, including many perfectly successful members of the middle class,
enjoys could potentially involve no serious stigma.
Is the exclusion of the uppermost deciles stigmatizing or humiliating for
them? But there is no stigma in being excluded and exposed as too rich and
successful to require assistance. Mixed-income complexes do not humiliate
residents of the suburbs. In any case, the rich tend to enjoy robust social standing
and multiple other privileges. As I argue elsewhere, protecting the rich from
stigma is far less urgent than protecting other citizens from stigma (Eyal, 2003).
17

A UBI supporter might make a different argument concerning self-respect.
Apart from generating less negative stigma, UBI is often said to constitute a
positive basis for self-respect and a way to symbolize our equal dignity. In
explaining why give the basic income right to all, not to only those in need?,
Pettit also broaches what UBI symbolizes:
a universal right symbolizes the fundamental equality of all in
relation to the collective provisions of government; only some will
depend on the basic income that all receive, but all can see that the
income is there to depend on, should they themselves fall on hard
times (Pettit, 2007, p. 6).
UBI grants all citizens basic income. NUBI does not. In that way, UBI might
initially be taken to be a truer expression of equal dignity, and equal concern and
respect for all. NUBI, on the other hand, might initially be thought to miss this
positive opportunity to recognize the equal fundamental worth of all participants
and to bolster their sense of self-respect. Furthermore, UBI might be thought to
recognize or to constitute a special dignity of citizens, nationals, or residents
(it is harder to argue that it is an indispensable sign of respect for persons or
humans, as some supporters hope it does, inasmuch as foreigners who live
abroad do not receive it). NUBI, on the other hand, cannot credibly claim to

17
Incidentally, even if means-tested benefits inevitably generated severe stigma and humiliation, UBI may
remain unnecessary. We may instead adopt a certain form of income guarantee that lies midway between UBI
and NUBI and prevents stigma and humiliation even better. In that income guarantee system, a basic income
reaches everyone (as in UBI), but that income is taxable (by contrast, UBI supporters usually prefer systems in
which All income other than [ones basic income] is taxed (Sheahen, 2006, p. 7). Under what we may call
taxable UBI, the poor, who do not pay income tax, retain their full basic-income transfers even after tax, but
many other citizens see increasing loss from progressive tax, as they become richer and richer. Crucially in the
present context, little or no stigma attaches to receiving and collecting basic income; everyone, including the
rich, receives and collects that income.
DOI: 10.2202/1932-0183.1149
respect citizens, nationals or residents as such, given that some of them, the rich,
are denied it.
My response is that we already established that NUBI expresses equal
concern and respect for all citizens and other residents, perhaps even more truly
than UBI does (see Sections 1, 3 and 4 above). It is true that, under NUBI, money
transfers do not go to everyone. But all have a right to transfers should they ever
not need transfers because they are rich; as Pettit (2007, p. 6) says in praise of
UBI, all can see that the income is there to depend on, should they themselves
fall on hard times. Certainly the motivation and the grounds for NUBI can be
concern and respect for all citizens, nationals or residents, the rich included. This
may seem like a contradiction, but it is not. By analogy, the so-called universal
human right to basic healthcare belongs to the sick and to the healthy alike
although the healthy do not receive healthcare, because it entitles all to
healthcare should they ever become sick.
It is true that UBI alone involves equal treatment: everyone is treated to a
basic income. But it is crass to demand equal treatment as an expression of equal
concern and respect. As Ronald Dworkin (1978, pp. 272278) classically pointed
out, equal concern does not require equal treatment. Under NUBI, Bill Gates gets
to keep his riches, and he would definitely be entitled to basic income if he ever
lost his riches. The notion that he is nevertheless shown serious lack of concern
because the state fails to go through the motion of granting him a check for
several thousand dollars turns a mere tool into a fetish. In the context of taxes,
denying only billionaires a tax cut does not violate their dignity; in the context of
healthcare, denying healthy people domestic support because the disabled need
it more does not violate the dignity of the healthy. In the context of basic income,
therefore, denying the rich transfers that they do not need is perfectly compatible
with their dignity.
Admittedly, unequal treatment sometimes appears to express unequal
concern. If you bring a present to a friends child who is hospitalized, her young
brother might feel neglected and unloved unless you treat him to a present as
well. But not bringing a present every time someone else receives one, does not
inherently and invariably show disrespect or lack of concern. Since there is no
general duty of respect to bring all children equal presents, there is no general
duty of respect to give all citizens equal transfers. And yet, an opponent might
point out a related instrumental reason for equal treatment, including equal
income transfers, namely, the typical psychological impact of equal treatment. In
the childrens example, we actually do have some reason to bring the young
brother a present as well. To do so is likelier to prevent offense and to keep him
happy. If you will, unequal treatment often appears disrespectful. Likewise, the
argument goes, on a psychological reading of the social bases of self-respect
(Eyal, 2006) there is some reason, perhaps not the strongest one, to offer everyone
a basic income transfer. UBI wears equal concern on its sleeve, in highly
perspicuous fashion. Such strong, unmistakable manifestation of equal respect
and concern for all can promote citizens sense of self-worth.
Nevertheless, even on this psychological reading, NUBI holds somewhat
greater promise of bolstering vulnerable citizens sense of self-respect precisely
because it is conditional and unequal. NUBIs exclusionary, selective nature, may
well make it more psychologically effective as a social basis of self-respect.
Relatively concrete and exclusionary identities, such as a determinate clan or
nuclear family, have a well-known tendency to command our appeal and
attention; far greater attention than do abstract categories like the human
commonwealth or personhood, in which Kantian philosophers often take
interest. We do not congratulate ourselves, or indeed pay attention, to the fact
that we are people not turtles, and that we move faster than turtles and enjoy
rights and privileges that they do not. As Hegelian philosophers and social
psychologists often point out, abstract human dignity rarely animates us and fills
our hearts with pride not nearly as much as concrete identities do.
For not altogether different reasons, I suggest, NUBI could garner greater
attention and more influence on recipients sense of self-respect than UBI. I am
particularly hopeful that NUBI could enjoy higher salience, higher impact on
self-esteem, and higher credibility.
Let me elaborate. Because NUBI is not automatically granted to everyone,
there is a way in which its presence is more perspicuous than UBIs. NUBI
transfers stand out. They run a lower risk than UBI transfers of passing
unnoticed and having little if any effect on our self-image. Consider the way our
perception works. We notice the odd item that stands out more than we do items
that look or move or are allocated as others are. We also notice benefits for which
we must strive and establish eligibility: benefits that, unlike the air we breathe
and our parents love, are not granted so automatically as to pass unnoticed.
Basic income that, like NUBI, is both unequal and conditional, would
presumably command higher attention than an equal, no questions asked
income la UBI. Being more salient, NUBIs potential impact on recipients self-
image is likely to be higher. This increase in salience would have been a problem
if government payments, or relying on them exclusively, were socially
stigmatizing, as government transfers in kind or in cash certainly can be (Zelizer,
1997, e.g. p. 149). By analogy, workfare is clearly salient to workers, but, when it
DOI: 10.2202/1932-0183.1149
incurs stigma, salience makes it worse for self-esteem. However, earlier we
pointed out that, under either UBI or NUBI, basic income is likely to form a
positive basis for self-respect, far more than being a source of shame and stigma.
Therefore, making basic income salient would generally tend to boost self-
respect. In short, NUBI tends to constitute a firmer psychological basis for self-
respect than universal, automatically granted UBI.
Philosophers who support promoting and protecting self-respect should
probably also support promoting and protecting self-esteem, as a fairly effective
means to the same end. While the notions of self-respect and self-esteem are
conceptually distinct, their instantiations tend to be causally associated (Eyal,
2003). Psychologically, boosting self-esteem often boosts self-respect and vice
versa. Herein lies another advantage of NUBI over UBI. Precisely because NUBI
is unequal, it stands a higher chance of increasing self-esteem than does equal
UBI. Why? Because, as Robert Nozick observed, self-esteem responds to
difference:
People generally judge themselves by how they fall along the most
important dimensions in which they differ from othersWhen
everyone, or almost everyone, has some thing or attribute, it does not
function as a basis for self-esteem. Self-esteem is based on
differentiating characteristics (Nozick, 1986, p. 243).
Exclusive payments to some citizens alone may become sources of pride and
elevated self-esteem for recipients and thus, potentially, sources of elevated self-
respect in that group, in a way that universal transfers would not.
18

Finally, NUBI may have an advantage over UBI in terms of its credibility.
NUBI is probably a more convincing and thus powerful sign of concern and
respect than UBI is. For imagine that everyone, millionaires included, received
income transfers. That would make it hard to sell these transfers to the public
as signs of concern and respect for everyone: millionaires clearly do not need
these transfers to maintain a high quality of life, material independence, and the
means to political participation. Can we really convince citizens that giving Gates
several thousand dollars in basic income shows concern that otherwise Gates
might lack sufficient access to political influence? And if the policy is
unconvincing as a sign of concern and respect for Gates, how can it be
convincing as a sign of concern and respect for everyone?

18
Would they undermine self-esteem in nonrecipients? But perhaps, as noted earlier, the rich enjoy more than
their fair shares of social bases for self-respect and self-esteem.
UBI transfers to Gates might be thought to show concern and respect
differently, by embodying how much he is worth qua citizen, not necessarily by
providing his needs qua citizen. These transfers show everyone respect and
concern by capturing our basic worth as citizens. But surely assessing that worth
at several thousand dollars is crude, contrary to our allegedly priceless dignity,
and unconvincing for that reason. So UBI supporters should not argue in this
way in the first place.
I submit, therefore, that NUBI does not impose significant stigmas that UBI
does not, and that NUBI is probably a stronger positive basis for self-respect than
UBI.
6. Political Resilience
Some UBI supporters speculate that UBI has better prospects for withstanding
conservative pressures for budget cuts than relatively generous social relief does.
Philip Pettit writes,
A universal right [to basic income] would resist electoral pressure for
change better than would a needs-tested right, since it would benefit
everyone in common (Pettit, 2007, p. 5).
Lyndon Johnson may have expressed a similar idea:
It is better to have the sharp elbows of the middle class on the inside
of the system pressing it outwards, than the other way around
(quoted in Segall, 2004, p. 5n15).
Indeed, it is probably no coincidence that, in the United States, Medicare,
which is a federal health insurance program primarily for all seniors 65 years of
age and above, consistently resists the austerity measures that chronically affect
Medicaid, which is a state-administered federal health insurance program
primarily for the poor and the disabled. The relative resilience of the former and
of other fairly universal schemes, like the social security system, even against the
backdrop of the United Statess highly conservative economic environment, rests,
among other things, on the cooperation of strong voter populations, who also
benefit from these universal benefits. By analogy, precisely because under NUBI
the rich do not enjoy benefits, the worry may arise that rich political actors
would fight to slash NUBI more strongly than they would to slash UBI.
19

19
I am grateful to Shlomi Segall for this suggestion. See Segall (2004, pp. 17).
DOI: 10.2202/1932-0183.1149
However, there is reason to expect this difference in resilience between
NUBI and UBI to remain small. The rich have a lot of money. For them, state
transfers of basic income are insubstantial. For the poor and for the middle class,
on the other hand, the same transfers remain substantial. The sharp-elbowed
middle class may fight hard to protect NUBI, and that may suffice to keep NUBI
in place. The relative resilience of Medicare may rest primarily on middle-class
voter support, and less on that of the rich. Many rich Americans hardly rely on
Medicare because they have the money to purchase private services.
20
The
surprising resilience of the British welfare state against Thatchers reformative
efforts has been linked to the benefits of determinate welfare services for Britains
middle classes (Le Grand and Winter, 1987).
Again, the analogy of mixed-income housing complexes is instructive. It is a
sad reality that in many countries, public projects serving minorities and the
poor alone are chronically neglected by the authorities. Not so, in many cases, for
mixed-income complexes. Some of their tenants are middle-class and fully
enfranchised, and they tend to command the attention of public authorities
(regarding the United States, see Schubert and Thresher, 1996).
21
NUBI could
command similar attention; it serves a similar mixed-income population.

Admittedly, in one way, NUBI is less politically resilient than UBI. It is more
liable than UBI to degenerate into a highly selective social relief system. NUBI
introduces the idea that transfers do not have to be universal to be legitimate,
possibly opening the door to greater and greater cuts. Conservative governments
may gradually deprive more and more income deciles of transfers, eventually
transforming what used to be a NUBI into a far more residual system. UBI is
somewhat resistant to this development because, being a pure archetypical
system, it makes for a simple and potentially effective political battle cry.
22

In a different way, however, NUBI seems far more resilient than UBI. NUBI
is more politically saleable. It preempts a demagogical and often effective protest
against state benefits that go to the rich. Tabloids cannot complain that the

20
Leah Price reminds me that poor and middle-class Americans are notoriously optimistic about their personal
chances of winding up rich. Therefore, they might fight NUBI, as they have done with other policies that
appear to work against the rich (e.g., Frank, 2005). Prices worry may apply exclusively to the United States;
and even there, programs like Medicare, which appeal to the middle class, enjoy relative resilience. Moreover,
Price offered me a further example regarding the United States: that of state university funding, which is
surprisingly high in the mid-Western states, possibly owing to their relative lack of good private universities
that might otherwise accommodate the local middle class the local rich can afford to send their children to out-
of-state private institutions.
21
See, however, Schwartz and Tajbakhsh (1997).
22
On the other hand, NUBI may also have a certain tendency to lead nations on the path to socialism. NUBI
may keep alive the idea that capitalism is unjust. For people will ask why discriminate against the rich, as
NUBI does, and the answer will often have to be that the rich already have more than their fair share.
overprivileged enjoy income transfers that all of us fund, because under NUBI
the overprivileged do not receive transfers. Such demagogy, which Fred Block
(2001, p. 86) expects will erode public support in any UBI system, is simply
irrelevant for NUBI. In that respect, and on balance, NUBI may prove to be more
politically resilient than UBI. To settle whether this is so, we would need to try
out both. For now, political resilience considerations cannot decide between
NUBI and UBI.

7. Conclusion
As far as we can tell, NUBI is as good as UBI in some ways and superior in
others. It holds equal or greater promise as a safeguard for basic survival and
political needs, as a cost cutter, as an economic equalizer, as a source of freedom
both real and republican, as a social basis of self-respect, and as a politically
resilient policy. Therefore, NUBI seems preferable to UBI. In the real world,
progressive reformers who seek to introduce a UBI often manage to introduce
only a NUBI. This is usually taken as being disappointing. But it may also show
that every cloud has a silver lining.
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Nir Eyal
Harvard University Program in Ethics and Health
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641 Huntington Ave, 2
nd
floor
Boston, MA 02115
United States
Email: nir_eyal@hms.harvard.edu
DOI: 10.2202/1932-0183.1149
IR AL NDICE


Vol. 4, Issue 2 RESEARCH NOTE December 2009
Debate: The Green Case for Basic Income
Guest editor: Simon Birnbaum, Stockholm University
Introduction: Basic Income, Sustainability
and Post-Productivism
*

Simon Birnbaum
Stockholm University
One category of political parties and groups consistently tends to be more
favourably inclined towards basic income (BI) than others, namely those
identifying with the green movement and post-growth ideals. A possible
explanation for that connection is that the basic income proposal seems to fit
particularly well into a post-productivist ideological space. The defining feature
of a post-productivist welfare regime, which sets it apart from the familiar
productivist cluster of liberal, corporatist and social-democratic models, is that
its defence of universal social rights holds personal autonomy and disposable
time rather than employment and high levels of economic growth as its core
objectives (Goodin, 2001; Offe, 1992; Van der Veen and Groot, 2006).
The last decade has seen a growing sense of urgency about climate change
and the massive global pressure on scarce natural resources. This has
increasingly made green values and priorities part of mainstream political
rhetoric. Interestingly, the claim that there is a firm link between BI and green
concerns would thereby suggest that the perceived relevance of this policy

*
I am very grateful to Jurgen De Wispelaere for his excellent support and feedback. I also wish to thank an
anonymous referee for valuable comments on this debate and all the contributors for their stimulating articles.

option should be growing. Should those who accept the need for green priorities
also embrace BI-type transfers as an indispensable part of their political
platform? What is the relationship between environmental sustainability and the
post-productivist aims of autonomy? Is there a solid, green case for BI? The
objective of this special issue of Basic Income Studies is to help shed light on these
issues.
The first step of such an analysis is to identify the central criteria
distinguishing green ideals from rival conceptions. One obvious contender starts
out from the priority ascribed by greens to environmental protection and, more
specifically, to the factual claim that growth-based, business-as-usual solutions
are radically insufficient to meet our present environmental challenges. Unless
modernisation and technological change are combined with a fundamental
change of lifestyle and culture, depending on lower levels of material
consumption, any robust form of sustainability is out of reach. If this view
provides the constitutive foundation of green politics, our present challenge
would essentially consist in examining the potential of BI to facilitate and
stabilize an ecologically sustainable way of organising our societies.
The contributions by Jan Otto Andersson and Paul-Marie Boulanger in this
issue of Basic Income Studies are both devoted to this task (Andersson, 2009;
Boulanger, 2009). Many arguments are suggested for assuming a close link
between BI and a post-growth economy. The availability of a universal, work-
independent source of basic security and the creating of new forms of
meaningful activity and integration beyond the employment contract may
remove one of the most important driving forces behind environmentally
destructive forms of growth. When we do not need a full-time job to survive and
gain social recognition, we no longer need to embrace unsustainable engines of
growth in order to achieve full employment at any cost.
A BI would greatly improve the opportunities for people to engage in local
and service-intensive activities that rely much less on transports or material
consumption. More broadly, many of the non-market activities that would
become more accessible and affordable through the BI could help release a
process towards cultural dematerialization (Boulanger). A BI linked to (and
supportive of) the expansion of community-based provision, volunteer work,
cultural and sports activities, etc., could help offer more direct, resource-efficient
and, thus, ecologically sustainable paths to well being.
However, it is by no means obvious that the distinctiveness of a green
perspective on welfare reform is sensibly captured, or exhausted, by such ideas
about the shortcomings of growth-based solutions. Indeed, there is a powerful
DOI: 10.2202/1932-0183.1178

tradition of arguing, following in the footsteps of Milner (1920), that one of the
key arguments in favour of BI is that it would be a powerful instrument to
stimulate economic growth. If correct, this claim would suggest that green
supporters of BI must either soften their commitment to such a policy or temper
their resistance to growth and spell out the foundations for green social policy
differently (e.g., Van Parijs, 1992: pp. 2628). The latter option is allowed by a
second way of specifying the green political ideal, defended by Philippe Van
Parijs in the early 1990s. In this account, its central distinguishing feature is not
so much a limits to growth analysis of sustainability as a broader concern for
autonomy, with particular emphasis on the priority of peoples access to free time.
In his contribution in this issue of Basic Income Studies, Van Parijs revisits and
reassesses this view on green ideals and their connection with BI. According to
this argument, worked out in dialogue with Andr Gorz, the most central
dividing line between political ecology and other ideals consists in the
importance and value ascribed by the former to the so-called autonomous sphere
of society. This sphere is defined negatively to comprise all the productive
activities whose products are neither sold on the market nor commissioned by a
public authority (Van Parijs, 2009a, p. 2). Robert Goodins characterisation of a
post-productivist welfare model provides another important orientation point in
this context. Like the autonomous sphere argument, it makes a close connection
between autonomy and the requirements of securing universal access to an
adequate income without thereby interfering with how to use it (minimal
conditionality) or peoples access to discretionary time (temporal adequacy)
(Goodin, 2001). In their respective contributions, Gideon Calder and Tony
Fitzpatrick both assess, in different ways, the link between such autonomy-based
concerns and BI. Fitzpatrick, taking Goodins argument as his point of departure,
develops his own version of the post-productivist case for BI. Calder focuses on
the problem of transport disadvantage and some of the broader conditions of
autonomy that a plausible, green justification of BI must satisfy.
In the remainder of this article I introduce certain key issues of the five
contributions and explore some of the connections and tensions between them. A
central and complex task for the green justification of BI is to identify when and
how conflicts between sustainability- and autonomy-guided arguments for BI are
likely to occur and how they should be dealt with. More broadly, with a
distinction used by Calder, we may ask whether the post-productivist argument
for BI can simultaneously satisfy two important requirements: the requirements
of justice with respect to citizens and their environments, including the status of
the ecosystem considered independently of citizens interests (environmental
3 Birnbaum: Basic Income, Sustainability and Post-Productivism

justice), and the requirements of justice with respect to the relations between
citizens (social justice) (Calder, 2009).
As illustrated by Anderssons remarks on the Alaska Permanent Fund, one
can easily support the expansion of the BI and, thereby, the autonomous sphere
through ways of funding that would be difficult to accept from the viewpoint of
ecological economics (Andersson, 2009). At the same time, it should be clear that
economic growth could really help (many would say it is necessary) to reach a
level of BI that would cover peoples basic needs or more. To confront such a
possible trade-off, there are two main routes for green supporters of BI to take.
The first, represented by Anderssons article, holds that the possible autonomy
gains from a growth-based approach to BI in the rich countries of the world
would come at the unacceptable cost of sacrificing necessary requirements of
global, long-term sustainability. Andersson argues, however, that BI can and
should be defended, in both rich and poor countries, with arguments and
proposals solidly anchored in a global framework of steady state economics.
The second path is to try dissolving the conflict by defending criteria of
sustainability, and green arguments for BI, that are untied from the rejection of
economic growth. Would not ecological sustainability, no less than the aim of a
full BI, require a high volume of remunerated work and savings in support of
technological investment and innovation? One of the central points in Van
Parijss works on this theme is that we cannot presume that the activities of the
autonomous sphere are generally more sustainable than those of the market or
the state. Hence, the relative expansion of that sphere cannot be consistently
promoted by greens for that reason. Interestingly, Van Parijss new contribution
concedes, however, that the connection between the autonomous sphere and
sustainable development is more profound than he had previously claimed
(Van Parijs, 2009a, pp. 4-5).
So, do we have compelling environmental grounds for strengthening the
autonomous sphere through the implementation of BI? Boulangers article
responds to this in the affirmative and seeks to identify a set of mechanisms to
support this link. By examining the role of so-called rebound effects, he defends
the insufficiency of eco-efficiency strategies for reducing the total ecological
footprint of rich economies. In particular, Boulanger defends the importance of
mobilising two additional, more radical, strategies for achieving sustainable
consumption patterns: supporting non-consumerist lifestyles (sufficiency) and
minimizing the share of commodities in consumption (decommodification). It
is argued that a BI, conceived as a payment for non-market activities, has a key
role to play in both of these strategies.
DOI: 10.2202/1932-0183.1178

Even if this points to a convergence between the objectives of sustainability
and autonomy, however, this line of argument triggers further challenges. If so
much of the outcome of BI for green aims depends on how people would
actually use their payments and on what types of activities the BI would
stimulate, one may question whether Goodins minimal conditionality is really
the best option. More fundamentally, if BI appears attractive only to the extent
that it may stimulate specific activities and attitudes that many greens find
desirable, would such a position not seem objectionably illiberal? Considering
that people disagree profoundly about the nature of a good life, would it not
depend far too much on a controversial account of the sources of well being, with
which many would reasonably disagree? The unconditionality of BI does, after
all, provide great freedom to pursue very different conceptions of the good life. It
appears attractive to many liberals, and difficult to reconcile with perfectionist
objectives, for that very reason.
Fitzpatricks contribution addresses both of these important questions. He
sets out to provide an account of post-productivism, based on an ethic of
reproductive value, which remains compatible with liberalism and a broadly
neutralist viewpoint. BI is defended as necessary but not sufficient for the
realization of post-productivist aims. It would, among other things, support
autonomy objectives such as exit rights, free time and freedom from debilitating
dependencies. However, he argues that such a green BI must also be combined
with other measures, specifically aimed to encourage and reward the activities
and associations in which reproductive care is likely to flourish.
1

An important objection to BI, relating to the liberal concern for respecting
diverse ways of life, is that the taxation of market activities needed to finance this
scheme may seem unfair to those who pursue an employment intensive lifestyle.
A powerful response to this charge of exploitation was formulated by Van Parijs
in his Real Freedom for All, which famously argued that inherited resources, job
rents (constituting a considerable slice of peoples wages) and similar gifts
(broadly conceived) belong to a category of assets to which all are equally
entitled (Van Parijs, 1995). For Van Parijs it would seem illiberal not to allow
people to decide freely for which purposes (market based or not) to use their fair
share of such gifts. In this issue, Van Parijs discusses the role of this liberal-

1
It should be clear that the postproductivist analysis of reproductive value, unpaid work and personal
autonomy has important implications for the analysis of exploitation and gender equality (Pateman, 2005). For
a useful overview of the feminism and basic income debate, see the Should Feminists Endorse Basic Income?
debate guest edited by Ingrid Robeyns in Basic Income Studies 3 (3), 2008. An important task for future research
on BI proposals is to examine more systematically the interaction between their impact on feminist and green
objectives.

egalitarian account of justice, depending on the stylised image of our economy as
a gift distribution machine, in the broader project of political ecology (see also
Van Parijs, 2009b).
Now, if placing ecological boundaries at the centre of such a gift-equalising
approach to justice, one could argue that energy taxation, arrangements for
personal carbon trading and perhaps even transferable birth licenses belong to
the set of measures needed to prevent some from monopolizing scarce
environmental assets to which all may be equally entitled. Anderssons article
discusses several of these options. He observes that the distributive implications
of ecological taxes may often be particularly painful to the poor. As he puts it: In
a very unequal world ecological taxes will absolve the rich from their
extravagant life styleswhereas poor people may not be able to afford even the
necessities of life (Andersson, 2009, p.4). Hence, while green taxes are necessary
for sustainability, Andersson concludes that they seem socially justified only if
combined with a BI.
If he is right, then, a close alliance between green taxes and BI may provide a
path for social and environmental justice to move in tandem. Yet this
relationship is not without friction. Boulanger and Calder both suggest that
connecting these two reforms too tightly would introduce a clear tension
between sustainability and a high BI. After all, the revenue from green taxes
would be directly proportionate to the amount of polluting activity (Calder,
2009). The success of green taxes to achieve their environmental objectives may,
thus, undermine the necessary tax base for the BI to survive (Boulanger, 2009).
Another important aspect of this debate concerns the broader policy context
for a green justification of BI. Even if we accept a broadly non-perfectionist
framework for the post-productivist project, we must not jump to the conclusion
that any deviation from individual cash payments as the distribution method
should be rejected as objectionably illiberal. The key claim of Calders article is
that the question of mobility deserves a much more central role in current
debates over disadvantage, social exclusion and BI. Addressing our challenge of
establishing a green path for reconciling autonomy and sustainability, Calder
argues that the policy of zero-fare public transport could fruitfully supplement,
and greatly enhance, the value of BI. Drawing on republican arguments for BI, he
suggests that such a reform may add one of the most crucial conditions for
peoples socioeconomic independence while at the same time contributing
greatly to the reduction of emissions and pollution.
DOI: 10.2202/1932-0183.1178

References
Andersson, Jan Otto (2009) Basic Income from an Ecological Perspective, Basic Income
Studies 4 (2), pp. 18.
Boulanger, Paul-Marie (2009) Basic Income and Sustainable Consumption Strategies,
Basic Income Studies 4 (2), pp. 111.
Calder, Gideon (2009) Mobility, Inclusion and the Green Case for Basic Income, Basic
Income Studies 4 (2), pp. 110.
Fitzpatrick, Tony (2009) Basic Income, Post-Productivism and Liberalism, Basic Income
Studies 4 (2), pp. 111.
Goodin, Robert (2001) Work and Welfare: Towards a Post-Productivist Welfare
Regime, British Journal of Political Science 31(1) pp. 1339.
Milner, Dennis (1920) Higher Production by a Bonus on National Output: a Proposal for a
Minimum Income for All Varying with National Productivity. London: George Allen and
Unwin.
Offe, Claus (1992) A Non-Productivist Design for Social Policies, in P. Van Parijs (ed.),
Arguing for Basic Income. London: Verso.
Pateman, Carole (2005) Another Way Forward: Welfare, Social Reproduction and a
Basic Income in Lawrence Mead and Christopher Beem (eds.) Welfare Reform and
Political Theory. New York: Russell Sage Foundation.
Van Parijs, Philippe (1992) Competing Justifications of Basic Income in Philippe Van
Parijs (ed.) Arguing for Basic Income. London: Verso.
Van Parijs, Philippe (1995) Real Freedom for All. What (If Anything) Can Justify Capitalism.
Oxford: Oxford University Press.
Van Parijs, Philippe, (2009a) Political Ecology: From Autonomous Sphere to Basic
Income, Basic Income Studies 4 (2), pp. 19.
Van Parijs, Philippe (2009b) Egalitarian Justice, Left Libertarianism and the Market, in
S. de Wijze, M. Kramer and I. Carter (eds.) Hillel Steiner and the Anatomy of Justice:
Themes and Challenges. New York: Routledge.
Van der Veen, Robert and Loek Groot (2006) Post-Productivism and Welfare States: A
Comparative Analysis, British Journal of Political Science 36 (4), pp. 593618.
Simon Birnbaum
Department of Political Science
SE-106 91 Stockholm
Sweden
Email: simon.birnbaum@statsvet.su.se
IR AL NDICE

Basic Income or Caretaker Benefits?
Amy L. Wax
University of Pennsylvania Law School
Abstract Feminists have long taken the position that society should commit itself to
the support of individuals who care for others. In this view, governments should
subsidize caretaking units, consisting of adults supporting dependents in need of
care and assistance. This article undertakes to assess a proposal for the public
support of caretaking units, as set forth by Anne Alstott in her book No Exit, and to
compare that proposal to the alternative of a guaranteed basic income for all. By
using an illustrative example, the article concludes that the caretaker benefit is less
desirable than a basic income program. Caretaker benefits reward people who
engage in premature and irresponsible childbearing at the expense of those who take
costly steps to prepare themselves to be good parents and to achieve self-support
before having children. By flouting basic principles of fairness, the resulting perverse
priorities become a serious shortcoming of Alstotts proposed caretaker benefit
program. In contrast, a guaranteed income offers subsidies to parents and
nonparents alike, and thus achieves greater neutrality among reproductive choices.
Keywords caretaker benefits, fairness, feminism, guaranteed basic income,
reproductive choice.
Feminists have long taken the position that society should commit itself to the
support of individuals who care for others. In this view, governments should
subsidize caretaking units, consisting of an adult (or adults) living with
dependents in need of care and assistance. One caretaking unit has traditionally
been dominant: the nuclear family, consisting of two biological, married parents
and their children. Recently, however, fewer people are getting married and the
number of single mothers with children has increased rapidly (McLanahan, 2005;
Wax, 2007). Greater longevity and medical advances have also generated a
pressing need for care for the dependent elderly. All in all, more persons now
require and receive care outside the context of the conventional nuclear family.
Changing demographics and the economic fragility of fatherless families
have fueled a call for more generous public support for caretakers and their
dependents. In light of present trends and a commitment to family diversity,
proponents of caretaker subsidies recommend that eligibility for such assistance
be extended to a broad array of arrangements, encompassing many combinations
of caretakers and dependents.
These supporters marshal a number of arguments for their position.
Feminists and their allies wish to free women and children from economic
dependency on men, who are claimed to benefit unfairly from the undue power
of patriarchal arrangements. Some proponents point up the apparent
inconsistency in societys treatment of market and nonmarket work. The
argument is that caring for others is no less socially useful, and no less
demanding of effort, than many forms of market work performed for monetary
compensation. Also, market-based rewards are often unrelated to desert, and the
amounts workers are paid for many jobs are disproportionate to effort and social
usefulness. It follows that restricting rewards to market work is arbitrary and
that caretakers are just as deserving, or at least no less deserving, of monetary
rewards than market workers. Therefore, caretakers should be compensated for
their efforts. Other advocates point to the onerous parental obligations society
conventionally imposes on parents. Yet another argument proceeds from
societys pressing interest in ensuring that children are well and consistently
cared for. Proponents identify collective benefits or positive externalities that
flow from uncompensated parental investments in childrearing and caretaking.
According to well-established economic principles, such uncompensated
externalities can be expected to lead to an undersupply of care for others (Wax,
1999). The goal of this paper is not to assess or review these assertions, which
have received extensive discussion elsewhere (Wax, 2003a).
1
Rather, the point is
to contrast proposals for the public support of caretakers and their dependents
with the alternative of a guaranteed basic income for all. In examining these
different policies, the article concludes that basic income proposals are preferable
to the selective provision of benefits to caretakers on both practical and fairness
grounds.

1
See also Wax (1999; 2003), Alstott (2004) and Pateman (2002).
DOI: 10.2202/1932-0183.1118
In assessing the alternatives, it is fruitful to consider one recent proposal for
caretaker support. Anne Alstott (2004) has recently suggested that the
government earmark special benefits for individuals who care for dependents,
most commonly minor children. Recipients freedom to spend these benefits
would be subject to designated restrictions. Section 1 of this article describes
Alstotts proposal for establishing a system of resource accounts for caretakers.
Section 2 then reviews the history of welfare programs in the United States,
focusing on a longstanding poor relief program, Aid to Families with Dependent
Children (AFDC), which has now been repealed. One shortcoming of AFDC was
that it produced perverse inequities. By its terms, AFDC provided most financial
assistance to persons who flouted traditional moral strictures and expectations
(and who thereby increased their risk of dependency), and refused aid to many
who lived up to those expectations (and thereby minimized their risk of
dependency). Section 3 concludes that caretaker benefits programs are more
perverse overall than guaranteed income programs, because benefits for
caretakers end up selectively rewarding imprudent behaviors that undermine
economic self-sufficiency. Sections 4 and 5 discuss this conclusion in light of the
desirability of structuring government programs to achieve neutrality towards
individual reproductive choices and diverse family structures. It concludes that
this goal is elusive. Because such neutrality is not really attainable, programs
designed to help caretakers and families should, to the greatest extent possible,
avoid helping the feckless at the expense of the prudent. This counsels favoring
guaranteed income over caretaker benefits.
1. Alstott on Caretaker Resource Accounts
In her book No Exit, Anne Alstott (2004) recommends the creation of caretaker
resource accounts. These accounts would be available to caretaker adults, defined
as those who actively care for children during their period of greatest
dependency. Under this program, the government would give the caretaker
parent of every minor child an annual grant of $5,000. The use of that money
would be restricted to three options: paying for child care; paying for the
caretakers education; or saving for the caretakers retirement. Each caretaker
recipient would yearly decide how to divide the funds among these three
alternatives.
The principal rationale behind Alstotts program is to compensate parents
for caring for their children. In justifying this allocation, she points to societys
expectation that parents will provide continuous and uninterrupted care for each
3 Wax: Basic Income or Caretaker Benefits?
child during the years of that childs dependency. She designates this the no exit
obligation the understanding that, in the ordinary course and absent truly
extraordinary circumstances, parents will remain with and support their children
until they reach maturity. Although recognizing that societys weighty interest in
having parents provide such care is only imperfectly enforced, Alstott points out
that societys expectation has strong normative force. Alstotts proposal
acknowledges that living up to this expectation imposes an extraordinary burden
on parents that often puts them at a disadvantage relative to others. The proper
response, she argues, is a program directed at compensating for the specific
sacrifices parents and especially mothers make in fulfilling their protracted
and onerous no exit obligations. Nonetheless, Alstott does not advocate a simple
cash grant. Rather, she argues that the specific restrictions she proposes on the
beneficiarys use of caretaker benefits are in keeping with the programs rationale
and purpose. The goal is not to enhance caretakers present consumption, but
rather to compensate for the specific sacrifices that parents of dependent children
routinely make. These include forgone education, fewer resources available for
retirement, and the costs (including opportunity costs) of providing childcare.
Consider how this program would work for a new mother. After the birth of
each child, the mother would receive $5,000 yearly until the child reached the age
of majority. She could spend her yearly allotment on child care, or save or use it
for an approved educational program, or deposit the money into a retirement
account in her own name. She could split her $5,000 among the three options as
she chose. If she spent less than $5,000 in any given year, the remaining funds
would accumulate with interest to be used in the future. The program would not
permit her to withdraw cash from her account for day-to-day expenses, either for
herself or for her family. Once again, these rules are designed to vindicate the
aim of the program, which is to improve parents opportunities, not to fund
higher levels of general consumption.
What considerations bear on the choice between Anne Alstotts caretaker
benefit proposal and a more general basic income guarantee? The conditions
attached to Alstotts proposal obviously make it more administratively
complicated, and many questions arise about precise details, including who is
eligible to receive the benefits and which types of families are to be included in
the program. In particular, the question arises of how the caretaker benefit is to
be allotted to parents in conventional two-parent families, where family
responsibilities are often divided, albeit unevenly, between the parents.
Although Alstott tries to nail down some of these issues in her book, they can be
expected to generate unforeseen complications that will sometimes require
DOI: 10.2202/1932-0183.1118
difficult judgment calls. Proponents of administrative simplicity will thus find
Alstotts program unattractive. In addition, opponents of paternalism will balk at
the detailed restrictions on the use of caretaker benefit funds. The assumption
implicit in the designation of specific uses that government actors are a better
judge of the needs and desires of caretakers than the recipients themselves will
sit uneasily with those who question the wisdom of such substituted judgment.
The focus of this paper is not primarily on these administrative issues.
Rather it is on other aspects of caretaker accounts and how they compare to basic
income type programs. Two distinct, but interrelated, questions are at issue: how
fair are these programs? And what incentives do they create for behavior in the
realm of reproduction, sexuality, family formation, and marriage?
One feature of Alstotts caretaker benefit program is that public subsidies are
earmarked for eligible parents regardless of age, marital status, employment, or
level of education. The program embodies no judgment as to family structure,
sexual behavior, or reproductive choice. Single and married parents are eligible.
Mothers who have borne children by more than one father are not thereby
disqualified, and caretaker fathers may receive benefits for the children directly
under their care, regardless of how many (other) children they have fathered,
under what circumstances, and by whom. There is no apparent age limit for
receiving funds through this program, with teen mothers not disqualified.
Likewise and not surprisingly the program establishes no educational
threshold. High school dropouts are as eligible as high school graduates or
parents with advanced levels of education.
Alstott commends this feature as exemplifying a virtue frequently touted for
unconditional basic income: she claims her program is neutral as between
different lifestyle choices. Does the caretaker benefit, as proposed by Alstott,
maintain a desirable neutrality, as she suggests? I submit that this virtue is
overstated. Examination of a specific example reveals that Alstotts caretaker
benefit is less evenhanded in practice than is at first apparent. To be sure, a basic
income guarantee is not free from normative problems. The blindness to
individual circumstance that basic income claims as a virtue can also be faulted
for that very feature. Basic income can be criticized for failing to reward more
responsible, prudent behavior over conduct that is less so. On the other hand,
basic income does not exemplify one structural element of some social policies
designed to help the disadvantaged, which is perversity.
2
That is, basic income
does not give irresponsible behavior more favorable treatment than prudent
conduct.

2
On perverse features of welfare programs, see Wax (forthcoming [a]) and Hirschman (1991).
2. Family Policy in the USA
Consider the example of AFDC, a poor relief program created during the New
Deal, which was repealed in 1996 and replaced by the federal Temporary
Assistance for Needy Families (TANF) program as part of a comprehensive
welfare reform package enacted during the Clinton administration. As part of a
sweeping series of New Deal reforms that included both social insurance and
direct subsidies, Congress established the Aid to Dependent Children Program,
which eventually became Aid to Families with Dependent Children (AFDC). The
program, which was administered by the states within the broad framework of
federal legislation, was by its terms designed to support families with children
left destitute by the death or abandonment of a parent (usually the father). Under
the terms of the federal statute governing these benefits, states were to make cash
aid available to families with an absent parent, with no express exclusion for
single unmarried mothers. The stated goal was to relieve mothers in those
families from the need to work, thus leaving them free to care for their children.
Although AFDC was initially a small and uncontroversial program, its
popularity declined as the number of recipients grew and the beneficiary
population changed. At first, recipients were mostly widows and divorcees, but
were replaced after 1960 by a burgeoning population of never-married single
mothers and their out-of-wedlock children. During that period, single mothers
could easily obtain welfare benefits and many remained on welfare for
prolonged periods.
This shift in the demographics of AFDC triggered concerns that the
program was encouraging dependency and undermining traditional families,
and dissatisfaction with a growing, idle welfare population became a salient
political issue. In deference to the dominant norms of the time, many states
were reluctant to pay benefits to unmarried single mothers cohabiting with
men who took no responsibility for them or their children. The unconditional
payment of cash benefits to single mothers was viewed as perverse, in that it
selectively rewarded (and thus encouraged) undesirable behavior while failing
to support those who avoided that behavior. Mothers who qualified for AFDC
benefits were almost all unmarried, and had been abandoned by the men who
impregnated them. Not only were the eligible mothers (and their male
consorts) often considered undeserving, but eligibility for single-parent
families under these circumstances was viewed as unfair and corrosive of
public morals. Specifically, concern was directed to the potential horizontal
inequity between conventional married couple families, who were ineligible for
DOI: 10.2202/1932-0183.1118
benefits under the terms of the program regardless of their economic
circumstances, and single mothers who received aid.
Some states responded by using their administrative discretion under the
AFDC program to introduce conduct restrictions on the receipt of benefits. Those
states imposed man in the house or substitute father rules, which forbid
single mothers cohabiting with a man from receiving benefits. Under the rule in
Alabama, for example, any man engaged in a relationship with an eligible
mother was deemed a substitute father under the statute, thus defeating the
statutory requirement of an absent parent (Bell, 1965)
.
. What seemed to
exercise the architects of the substitute father and man in the house rules
was the prospect of single mothers on welfare enjoying no-strings-attached
sexual relationships with men who bore no responsibility for their children and
were heedless of the fate of any children who might thus be produced. In each
case, public officials were loathe to offer financial support which could be
viewed as a form of public subsidy for behavior that ran afoul of customary
expectations. Meanwhile, living right next door to individuals engaging in that
behavior were hard-working married couples with no greater advantages or
skills who, nonetheless, were not receiving aid. The decision of those neighbors
to marry, and the steps the men in those families took to support their wives and
children, rendered their families ineligible for welfare benefits under the terms of
AFDC, which was designed to assist children with absent parents. In
formulating the restrictions at issue, the states were clearly looking over their
shoulder at these deserving neighbors of the welfare population, and seeking to
mute or eliminate the perversity of denying government benefits to those
families while providing them to people who disregarded conventional moral
expectations and strictures. In this view, programs to help the poor were to be
structured to ensure that welfare recipients are no better off than other low-
income persons who manage, by dint of their own effort and restraint, to avoid
dependency. Individuals who were working, getting married, and paying taxes
to support those on the public dole deserved more favorable treatment.
The states efforts to impose sexual conduct restrictions on entitlement to
AFDC benefits were rejected by the Supreme Court in King v. Smith,
3
and Lewis v.
Martin.
4
In invalidating these state rules, the Court cited the harm to poor
dependent children. Relying on a series of contemporaneous decisions
repudiating longstanding state rules that put illegitimate children at a

3
392 U.S. 309 (1968)
4
397 U.S. 552 (1970)
disadvantage relative to children born in wedlock,
5
the Court stressed that the
sins of the parents should not be visited on the children. Applying this principal
in the Courts decisions on welfare, however, had the effect of entrenching a
programmatic indifference to conventions of responsible conduct and
undermining the states efforts to preserve equity in the treatment of welfare
recipients and working families. These developments had important political
consequences. The growing unpopularity of the AFDC program worked to the
advantage of the Republican party and contributed to the success of Republican
Presidential candidates Richard Nixon and Ronald Reagan, who made taming
the excesses of the welfare system a priority. The backlash was heard in Bill
Clintons promise to end welfare as we know it, which helped get him elected
and produced the reforms enacted during his administration.
3. The Problem of Perversity Examined
AFDC has now been replaced by TANF, which seeks to address the perversity of
needs-based welfare programs for single-parent families by imposing stringent
work requirements and time limits. In light of this history, it is instructive to ask
whether caretaker benefit programs like the one Anne Alstott proposes share the
defect of perversity, and how such programs compare to a basic income
guarantee in this regard. That is, does a caretaker benefit, or a guaranteed
income, give irresponsible behavior more favorable treatment than prudent
conduct? As already suggested, basic income comes off well on this score, at least
with respect to reproductive choices, marital status, and family structure. Basic
income proposals generally do not elevate single parents over married couple
families, because they provide both types of family units with a cash benefit. To
be sure, the amount provided depends on whether the income is to be allotted to
individuals or families, and whether the benefit amount is tied to family size. But
the design can easily be tailored to eliminate any penalty for the decision to form
a conventional family. On the assumption that the goal of avoiding perversity is
to ensure fair treatment to traditional family forms and eliminate favorable
treatment for unconventional ones, basic income is more compatible with
achieving that objective.
The same cannot be said of caretaker benefits. As the example below
demonstrates, the potential for perversity is a serious shortcoming of Alstotts

5
See, e.g., Levy v. Louisiana, 391 U.S. 68 (1968). In the welfare context, see New Jersey Welfare Rights Organization
v. Cahill, 411 U.S. 619 (1973).
DOI: 10.2202/1932-0183.1118
proposed caretaker benefit program. To illustrate this point, consider two
individuals, Jan and Kate.
Jan, age 17, is an indifferent high school student from a broken
working-class family. She gets pregnant by her boyfriend, who
quickly drops her and takes up with another woman. She nonetheless
decides to go ahead and have the baby. She continues to live with her
parents and enrolls in a cosmetology course paid for by her $5,000
caretaker benefit. Erratic child care prompts her to quit before
completing her training. She stays home for two years with her
daughter and puts her yearly $5,000 benefit into a retirement account.
After a short-lived relationship with a man she meets at a bar, she has
another baby. She tries various part-time jobs and finally buckles
down to junior college, using her $10,000 yearly caretaker allotment
for tuition and childcare. After six years, she earns an associate's
degree. After that, she goes to work as an executive secretary. Her
sister, who lives nearby, watches her children after school. During
this period, she once again starts socking away her benefit for
retirement. By the age of 36, she has more than $80,000 in savings.
At age 17, Kate is an indifferent high school student from a broken
working-class family. She is fanatical about birth control because she
dreams of marriage and doesn't want to raise a child alone. She does
not have the money or grades for college, so she joins the army. After
returning from serving two tours of duty in Iraq, she moves back in
with her parents and works at various low-wage jobs. The years go
by, and she finally moves into her own tiny apartment. She dates a
series of men, but all disappoint her or balk at marriage. Meanwhile,
many of her friends have had babies (mostly out of wedlock), and
have started drawing their yearly caretaker benefit. She is envious
and longs for a child. She finds a job as a bank teller. She works hard
and is promoted to head teller (She is turned down for a managerial
position because she lacks a college degree.) At the age of 32, she
starts dating a recently divorced salesman. For three years the couple
lives frugally and saves steadily with the dream of eventually getting
married, starting a family, and buying a home. When Kate turns 35,
they marry, but Kate has trouble getting pregnant. Following
infertility treatments, she finally has a baby. She starts receiving a
caretaker benefit at that time, and manages to save about $10,000
while her child is small. She never succeeds in having another child.
One problem with Anne Alstott's proposal lies in the story of Jan and Kate.
At age 36, Jan is a single mother with two children. She has a college degree and
a tidy nest egg financed at taxpayer expense. Kate is married, but has no college
degree, has accumulated far less in savings, and despite her desire for a bigger
family has only one child. This picture would strike many as unfair. Indeed, it
carries the hallmarks of a perverse outcome (Hirschman, 1991): the person who
exercises restraint and diligence, behaves prudently, and makes considerable
sacrifices is left worse off than someone whose choices are relatively lacking in
those virtues. That is not the way society should be structured. This is not how
things should be. Indeed, this outcome turns things upside down. Social
programs should be designed to reward behavior that reduces the need for
governmental support and public subsidy. Public policies should foster self-
reliance, not penalize it.
Observations like these have defined the politics of public welfare for
decades. Although the popular outcry against topsy turvy features of public
benefits programs is fundamentally motivated by concerns about basic fairness,
the academic commentary has virtually ignored this problem. Rather, the debate
among legal scholars and social scientists has focused almost exclusively on
incentives. The question is whether programs like Alstotts generate moral
hazard. Will potential beneficiaries be encouraged to make bad choices or
induced to fall into dependency? In this vein, it was often claimed that the AFDC
program encouraged women to become single parents or to take that step
prematurely, discouraged men from marrying the mothers of their children, and
caused men to slight their parental responsibilities. Social scientists have been
arguing for decades about whether AFDC generated these incentives and
whether and to what extent people in fact responded to them (Murray, 1984;
Wax, 2005).
The focus on moral hazard misses an important point. Regardless of
whether behavioral effects can be demonstrated, programs like AFDC or
Alstotts caretaker benefit are open to the claim that they are simply unfair. The
assertion here is a normative one: our society should avoid doling out perverse
rewards. How to counter this objection? One way is to disparage the concern that
programs like Alstotts leave the Jans of this world better off than the Kates. In
this view, notions of fairness are a cover for a pernicious distinction between
the deserving and undeserving poor that has no place in the formulation of
public policy. Critics of this divide question the judgment that Kate is really
DOI: 10.2202/1932-0183.1118
more responsible and prudent than Jan by depicting Jan as a victim of bad luck
and untoward circumstances. Or they reject the notion that individuals or
families have an independent obligation to strive for self-support or deny that
they have the meaningful power to do so.
These ideas are nonetheless widely accepted and enjoy broad political
support. I have considered the arguments in favor of these views elsewhere (Wax
2003a). In light of the publics concerns with family fragmentation, Anne Alstott's
plan rests, I believe, on two questionable assumptions. The first is that the
government can remain neutral on matters of reproductive choice and family
formation while subsidizing caretaking. The second is that the government
should remain neutral on these matters.
As the story of Jan and Kate demonstrates, Alstotts caretaker benefit is not
in fact evenhanded as between different life strategies and reproductive choices.
Those who have children earlier and too early to prepare adequately for the
responsibilities of parenthood will contribute less, on average, to the sum total
of public resources. Yet they will draw more in benefits than those who have
children only after they are better able to support them. The latter will include
many who delay childbearing until after they acquire an education, marry, and
take other steps to reduce the risk of dependency. Although some people who
have children early or out of wedlock will manage to become self-supporting
and some who behave more prudently will fail the overall risks for those two
groups are very different. Caretaker subsidies, in effect, reward people who
engage in riskier behavior by becoming parents too soon or without adequate
preparation. Wholly apart from the question of whether the availability of such
benefits actually encourages people to engage in this behavior that is, whether
caretaker benefits in fact create an incentive structure that adversely influences
peoples choices those benefits can be viewed as perversely unfair in more
generously subsidizing less responsible or socially advantageous behavior at the
expense of conduct that imposes fewer costs on society.
That premature and extramarital childbearing contributes to poverty and
dependency is a fact well-established by social science (Wax, 2007; Galston,
1990). It is now widely accepted that children born and raised in single-parent
families do less well than those raised by a father and a mother, with children in
married, co-biological parent families doing best of all. A growing body of
research shows that children who grow up with single or unmarried parents are
less well off on many measures. This is partly because single-parent families
have fewer self-generated resources. Just as marriage brings financial benefits to
both parties, it also alleviates economic hardship for children. As a result,
poverty rates for children of never-married mothers are substantially higher than
for children from intact families (Hoynes, 2006).
Economic deprivation is not the only negative consequence of living with a
single parent or with unmarried cohabiting adults. The evidence indicates that
children growing up with two continuously married parents are statistically less
likely to experience a wide range of cognitive, emotional and social problems,
both during childhood and as adults. Although there is no definitive evidence
that family structure differences are the sole cause of these deficits, statistical
methods strongly suggest that structural disparities contribute significantly to
these patterns. And because many families now deviate from traditional
patterns, the number of children affected by these risk factors is large.
(McLanahan and Sandefur, 1994; Moore, 2002; Ellwood and Jencks, 2004; Wilcox,
2006; Brown, 2004; Sigle-Rushton and McLanahan, 2004; for a comprehensive
review see Amato, 2008). Many studies have found higher rates of social and
emotional problems among children with single parents using statistical
methods that adjust for income and resources as well as unmeasured variables
that, in principle, should include parents personality traits and personal genetic
characteristics and influences (Amato, 2008, p. 85; White and Rogers, 2000). This
data suggests that the observed problems are not solely due to selection effects
that is, to the traits intrinsic to people who choose unconventional lifestyles
but rather are traceable to family structure and behavioral choices.
Studies that find adverse effects from growing up in fragmented families
abound. In one reported data set, for example, adolescents living with single
parents consistently reported encountering more problems than those with
continuously married parents. Thirty percent of single-parent offspring reported
they had repeated a grade in school, as compared to 19 percent of children in
married families. In the same vein, 40 percent of children living with a single
parent report having been suspended from school, compared to 21 percent of
children with continuously married parents. Similar findings were observed for
delinquency, violence, seeking help from a therapist for emotional problems,
smoking, and thinking about suicide. Although not all the effects were large,
some were significant. Moreover, the cumulative impact is more dramatic
because so many children now grow up in fragmented or unconventional
families (Amato, 2008, p. 88).
Another consequence from childbearing outside of marriage is an increase in
the incidence of mothers cohabiting with or later marrying men who are
biologically unrelated to their children. Recent evidence has emerged suggesting
that children in step-families exhibit more problems than do children with
DOI: 10.2202/1932-0183.1118
continuously married parents and about the same number of problems as do
children with single parents (Amato, 2008, p. 80; see also Hofferth, 2006; Wax,
2007; White and Gilbreth, 2001).

Social scientists have speculated that such
blended arrangements are less stable and more stressful for children than
conventional two-parent families, resulting in untoward outcomes for children,
because the presence of an unrelated parent and especially an unrelated adult
male may generate divided loyalties, conflicting expectations, and tensions and
uncertainties surrounding the lines of adult authority over children. Yet such
family patterns are likely to be more common when childbearing takes place
outside of marriage.
The social fallout from unconventional family forms is especially adverse in
this country, where out-of-wedlock childbearing prevails among African-
Americans and the less educated, widening pre-existing disparities among
children by class and race (McLanahan, 2005; Wax, 2007, 2009b). Almost 70% of
black children are now born out of wedlock, and marriage rates among blacks
are lower than for other major American ethnic groups. Likewise, two-parent
families are significantly less common among adult high school dropouts and
those without a college degree, and the disparities with more educated segments
of the population are growing. The relative paucity of gold standard families
among minorities and the less privileged has important implications for the
future distribution of resources and well-being in our society. No known public
policy can alleviate the risks of a nontraditional upbringing, and income transfer
programs can only modestly alleviate them. Government programs cannot
replace the two-parent family. This fact counsels hesitation in subsidizing or
rewarding single-parent families, especially if conventional arrangements receive
worse treatment. Although the available social science fails definitively to
establish that public benefits sway peoples reproductive choices, monetary
benefits do make some life strategies easier. But even in the absence of firm proof
that subsidies tempt people into dependency, fairness concerns still loom large.
Those who contribute to the stability of families and the proper upbringing of
future generations patterns that are essential to the narrowing of group
inequalities should not receive smaller rewards than those who fail to do so.
4. The Impossibility of a Neutral Family Policy
Although proponents of caretaker benefits tout their ostensible neutrality, the
story of Jan and Kate shows that this appearance is illusory. The fact that the
subsidy is available to traditional two-parent families as well as single-parent or
blended, nonbiologically related families masks its distinctly uneven effects. As
the example shows, the seeming evenhandedness is only apparent. A program
like Alstotts that allocates benefits to all types of caretakers necessarily supports
and thus rewards becoming a parent, regardless of the setting in which this
occurs. Indeed, because it ends up providing more generous benefits to people
who bear children sooner rather than later, Alstotts program treats early or
unprepared reproducers better than those who delay having children until they
can best care for them. The argument is that we should try to avoid this result, if
only for equality's sake. At the very least, we should avoid embracing
government transfers that, in practice, have the perverse effect of encouraging
the formation of unconventional families over more traditional ones. In the
current climate, making a good match, getting married, and establishing a
successful, self-sustaining two parent marital home requires planning and
forbearance. Not only should the government not discourage this, but it should
embrace policies that shore up the two-parent family and acknowledge its
advantages. Public programs should reward, celebrate, and encourage this kind
of behavior.
Those who argue for subsidies for caretakers nonetheless stress the collective
advantages that flow from the production of children and effective childrearing.
But touting these contributions necessarily begs the question of whether every
reproductive decision is in the communitys best interest. Although society might
benefit overall from the birth of new citizens, this result masks considerable
heterogeneity. Not all children generate positive value, and some impose
weighty burdens. Society has a vital interest in producing children who are
diligent, law-abiding, sober, moral, conscientious, creative, well-educated, and
skilled. Not all families are equally likely to produce such offspring. Nor are they
equally equipped to do so.
In light of these observations, it is not surprising that those who stress
collective benefits from caretaking also generally embrace pluralism in family
law and policy. Pluralists celebrate family diversity and dismiss the suggestion
that some types of families are better than others, or offer a setting more
conducive to successful childrearing. Pluralists tend to ascribe the differences in
childrens outcomes that correlate with family structure to poverty or racial
discrimination rather than to family type. They stress the importance of the
quality of relationships and observe that successful parents operate in diverse
settings (Polikoff, 2008; Wax, 2009b). But this argument is blind to the growing
social science evidence that, even when factors like education and income are
matched, unconventional and single-parent families tend to fall short in stability,
DOI: 10.2202/1932-0183.1118
cohesion, and effective functioning. This data strongly suggests that family
structure does make a difference and that some types of families are less
conducive to good outcomes than others.
How should these insights affect redistributive programs? The social role of
caretaking encompasses two distinct functions: bearing children, and bringing
them up. The desire to lighten the burden of parents would seem to encompass
all parents regardless of circumstances, if only because society stands to benefit
from enhancing the quality of every childs upbringing. In addition, children
themselves are regarded as innocents, unable to respond to incentives and
immune from the broader fairness concerns that apply to adult behavior. Indeed,
much of public policy towards the poor is motivated by a desire to assuage the
harms inflicted on poor dependent children by their parents misguided choices
or questionable conduct. The goal is to refrain from visiting the sins of the
parents on the children. Providing more resources would appear to vindicate
these unqualified interests in promoting child well-being, holding children
harmless for circumstances out of their control, and minimizing deprivation. This
argues for programs that grant benefits to all caretaking parents alike, regardless
of family structure or type.
Ensuring that children are well brought up is only one element in the policy
equation, however. People must also decide whether and when to become a
parent in the first place. How policy bears on this choice warrants a distinct
analysis. Here the promise of a subsidy for parents might operate as an
inducement, and surely functions as a reward, for childbearing. This raises the
key question: Do we really want to confer valuable benefits on those who have
children without due consideration for the consequences? Do we want to reduce
peoples concern about falling into dependency? Because not all decisions to bear
children are equally wise nor all parents equally capable, public subsidies
triggered by the decision to reproduce should be approached with caution. To be
sure, the exercise of that caution is sometimes at odds with the goal of holding
poor children harmless for their parents untoward choices. But the latter cannot
be the paramount concern in the design of social policy, for two reasons. First, it
does children no good if the ultimate result of trying to help them is to produce
more deprivation. To be sure, this point assumes that incentives really do
influence behavior but, as noted, that common-sense intuition has not been
definitively refuted, especially regarding long-term trends. Second, the push to
structure policies to support poor children, regardless of how their deprivation
arises, assumes that public subsidies really do significantly improve their lot. A
growing body of data suggests that the harms from growing up in fragmented
families are resistant to correction through monetary transfers or other
programmatic interventions (Wax, 2007; Amato, 2008).
Caution toward caretaker benefits is not without foundation and is
grounded in commonplace judgments about how people make decisions in their
daily lives. Questions about what makes for good or bad parents, or about what
circumstances are more or less conducive to children's well-being, are central to
moral life. They are also central to the social scientific study of family structure
and child outcomes. To be sure, the exercise of moral judgment in these matters
fits most comfortably with the assumption that the choice of whether and when
to have children is a meaningful one for which people should be held
responsible. But the widespread availability of birth control and abortion
reinforces the idea that childbearing should be regarded as a deliberate decision
that is within a person's control. People routinely use contraception to limit the
size of their families, and many delay or forgo childbearing because of a lack of
resources, a reluctance to make trade-offs, or the desire to give their children the
right start in life. It is therefore not unreasonable to expect ordinary people to
exercise good judgment in deciding when and under what circumstances to bear
children.
On the other hand, our society has a strong commitment to noninterference
with reproductive choice. Everyone is free to be a parent and to decide whether
and when to have a child. Does it follow that we must regard Jan and Kate as
equals in all respects? Although there are compelling reasons for governments to
remain neutral towards reproductive choices to the greatest extent possible, such
a stance is not always feasible. The caretaker benefit is an instance in which it is
not. Our example shows that a benefit along the lines of Alstotts proposal cannot
really be evenhanded. Because entitlement to the caretaker benefit depends on a
self-qualifying condition, individuals have a built-in incentive to fulfill it. At the
very least, those who fulfill it receive something valuable that is unavailable to
those who do not. Persons who delay or refrain from having children lose out.
This regime enriches the Jans of this world and cheats the Kates.
5. Comparing Basic Income and Caretaker Benefits
Given sound social science evidence of the overall superiority of married, two-
parent families, one possibility would be to make the caretaker benefit available
only to those families. Such a policy would drop the pretense of neutrality and
straightforwardly seek to reward and encourage conventional arrangements.
Although such a proposal might appeal to some people, the political and legal
DOI: 10.2202/1932-0183.1118
obstacles to the selective subsidization of traditional families are nevertheless
formidable. Recent developments in common and constitutional law, including
cases striking down rules that disadvantage unmarried persons or illegitimate
children, render programs that selectively subsidize married couples problematic
(Wax, 1996, 2003a). In the wake of these decisions, the longstanding recognition
of reproduction as an individual right finds expression in myriad policies that
reject distinctions between married and unmarried parents, or that mandate
similar treatment for children born in and out of wedlock. There is also
considerable political resistance to measures that appear to penalize or actively
discourage childbearing. And although many people see parenthood as a choice
for which people should be held at least partly responsible, feminist ideas have
helped undermine this view. There is considerable ambivalence in some quarters
about whether having children really is a choice that women actively make, or
whether at least some childbearing derives from circumstances over which
individuals do not have full control. This uncertainty undermines the willingness
to impose too many burdens on the decision whether or not to bear a child.
Although the populace may resist selective subsidies narrowly directed at
traditional families, much depends on how such programs are framed. Concerns
about the detrimental effects of poor parenting and single parenthood can
undermine support for shunting public resources to single parent families in
ways that smack of active encouragement rather than tolerant noninterference.
People recognize the distinction between subsidizing bad choices versus simply
allowing people to make them. If unconditional aid for caretakers is viewed as
the former, it may not enjoy widespread support. Voters are not keen to give
money to those who flout dominant behavioral norms. Once again, notions of
fairness enter into the picture: those who sacrifice to achieve self-support
(because they delay parenthood or wait until conditions are auspicious for
starting a family) resent transfers to those who fall short of accepted standards of
prudence. Those who show restraint and foresight, often at great cost and with
effort, understandably resent paying for those who do not.
Do universal basic income programs represent an improvement over
caretaker subsidy proposals? Specifically, are they more neutral in their effects
on reproductive decisions and less perverse in their treatment of family types?
The picture is mixed. On the spectrum of supports, unconditional guaranteed
income programs sit somewhere between subsidies earmarked specifically for
traditional families and benefits provided to caretakers in general. The most
important aspect of guaranteed income, as compared to a caretaker benefit, is
that it lacks the peculiar drawback described above. With a basic income, persons
(such as Kate) who behave prudently by forgoing or delaying childbearing until
they are more able to handle its rigors receive the same amount as those (such as
Jan) who have had children before they can support them. In short, guaranteed
income mutes or eliminates the perversity of caretaker benefits. Those who work
hard and play by the rules dont do worse than those who fail to meet that
standard. To be sure, guaranteed income programs forgo some of the virtues of
selective subsidies for traditional families. They fail to provide a positive
incentive to form families of the most stable type, and they fail selectively to
reward such families. In addition, they may actually encourage the formation of
economically precarious families by providing a financial cushion that would not
otherwise be available. But the fact that the cushion is available to all, regardless
of circumstances, at least mutes the untoward incentive and eliminates the
unfairness of the effects.
The hierarchy of preferences asserted here for traditional family subsidies,
unconditional guaranteed income, and benefits earmarked for caretakers rests
on a number of critical assumptions. The most important is that family structure
matters to outcomes. The second is that public policies should avoid perversity:
they should not reward or elevate less desirable behavior over more laudable
choices. In addition, the argument at least entertains the possibility that
economic resources and subsidies do influence peoples decisions in the sphere
of reproduction, family formation, and sexual behavior, and that this effect can
be considered substantial enough to outweigh other considerations including
the deprivations that individuals or children might suffer without additional
support. By rewarding childbearing in less than optimal circumstances, a
caretaker benefit runs the risk of undermining the formation of two-parent
families. Commonsense intuition suggests that monetary support will encourage
risky behavior, or at least remove the deterrent to taking a riskier course. But this
argument ultimately rests on the assumption that the incentives that caretaker
benefits appear to generate will actually influence peoples choices or discourage
prudent planning. That is ultimately an empirical question and thus amenable to
testing, at least in theory. Unfortunately, demonstrating the effects of public
subsidies (or other public programs) on reproductive behavior is
methodologically difficult because dependent on natural experiments. Not
surprisingly, there is no consensus on this point, and the issue remains
controversial (Wax, 2005). The central point of this article, however, is that,
regardless of incentive effects, fairness concerns should independently enter into
the equation when the government decides how to structure policies for
economic redistribution.
DOI: 10.2202/1932-0183.1118
The relevance of these types of equity concerns about how resources are
distributed can be, and frequently is, questioned. As already noted, taxpayers
reluctance to support families who appear undeserving of government aid is
greeted with contempt by feminists and others who advocate greater
socialization of the burdens of child care. The accusation is that this reluctance
harms women and ignores the inevitable interdependencies that pervade private
life. On a deeper level, liberal theorists have launched a multipronged attack on
the distinctions behind popular attitudes between negative and positive rights,
tolerance and subsidy, and noninterference and affirmative support as based
on illusory baseline entitlements, incoherent notions of prepolitical ownership,
and outdated concepts of individual desert. However flawed in principle, these
categories maintain their currency in most people's minds and remain
entrenched in our laws, if only as a rough and ready way to reconcile public
respect for freedom with private moral judgment. Any government program that
fails to honor commonplace notions about responsible behavior threatens the
delicate balance between competing values. However messy and lacking in rigor,
these concerns are no less vital for their pragmatism.
In light of these objections, it is important to realize that the goal of
enhancing overall welfare is conceptually distinct from achieving equity. Those
goals will not always perfectly coincide. Despite many practical, efficiency-based
arguments in its favor, guaranteed basic income is open to the objection that it
licenses free riding and exploits the diligent (Wax, 2003a). These objections
threaten to trigger resentments that undermine support for sweeping basic
income subsidies. But caretaker benefits have the potential to intensify these
reactions by generating a particularly irksome form of free riding. Caretaker
benefits exemplify the vice of perverse rewards. In helping the feckless at the
expense of the prudent, caretaker benefits are, on this count, a less desirable
arrangement than a basic income program.
6. Conclusion
This article compares basic income benefits with caretaker benefits programs
such as the one proposed by Anne Alstott in No Exit. It considers these proposals
in light of the goal of avoiding perverse inequities between those who avoid
dependency through prudent behavior and those who flout traditional
expectations. It concludes that caretaker benefits programs are more perverse
overall than guaranteed income programs because they selectively subsidize
behaviors that tend to increase the risk of dependency. The article also argues
that, even if the government should try to maintain neutrality toward different
reproductive choices and diverse family forms, achieving that goal is virtually
impossible. In light of this observation, programs designed to help caretakers
and families should strive to avoid subsidizing the feckless at the expense of the
prudent. This counsels favoring guaranteed income over caretaker benefits
proposals.
References
Alstott, Anne (2004) No Exit: What Parents Owe Their Children and What Society Owes
Parents. Oxford: Oxford University Press.
Amato, Paul R. (2005) The Impact of Family Formation Change on the Cognitive, Social,
and Emotional Well-Being of the Next Generation, The Future of Children 15 (2), pp.
7596.
Bell, Winifred (1965) Aid for Dependent Children. New York, NY: Columbia University
Press.
Brown, Susan (2004) Family Structure and Child Well-Being: The Significance of
Parental Cohabitation, Journal of Marriage and the Family 66 (2), pp. 351367.
Ellwood, David T. and Christopher Jencks (2004) The Spread of Single Parent Families
in the United States Since 1960, in Daniel P. Moynihan, Timothy M. Smeeding and
Lee Rainwater (eds.) The Future of the Family. New York, NY: Russell Sage
Foundation.
Galston, William (1990) A Liberal Democratic Case for the Two-Parent Family,
Responsive Community 1 (1), pp. 1426.
Hirschman, Albert O. (1991) The Rhetoric of Reaction: Perversity, Futility, Jeopardy.
Cambridge, MA: The Belknap Press of Harvard University.
Hofferth, Sandra (2006) Residential Father Family Type and Child Well-Being:
Investment Versus Selection, Demography 43 (1), pp. 5377.
Hoynes, Hilary, Marianne E. Page and Ann Huff Stevens (2006) Poverty in America:
Trends and Explanations, Journal of Economic Perspectives 20 (1), pp. 4769.
McLanahan, Sara (2004) Diverging Destinies, Demography 41 (4), pp. 607627.
McLanahan, Sara and Gary Sandefur (1994) Growing Up with a Single Parent: What Helps,
What Hurts. Cambridge, MA: Harvard University Press.
Moore, Kristin Anderson, Susan M. Jekielek and Carol Emig (2002) Marriage From a
Childs Perspective: How Does Family Structure Affect Children and What Can We
Do About It?, Child Trends Research Brief (June).
Murray, Charles (1984) Losing Ground: American Social Policy, 1950-1980. New York, NY:
Basic Books.
Pateman, Carole (2000) The Patriarchal Welfare State, in Kate Nash (ed.) Readings in
Contemporary Political Sociology. Malden, MA: Blackwell.
DOI: 10.2202/1932-0183.1118
Polikoff, Nancy (2008) Beyond (Straight and Gay) Marriage: Valuing All Families Under the
Law. Boston, MA: Beacon Press.
Sigle-Rushton, Wendy and Sara McLanahan (2004) Father Absence and Child Well-
Being: A Critical Review, in Daniel P. Moynihan, Timothy M. Smeeding and Lee
Rainwater (eds.) The Future of the Family. New York, NY: Russell Sage Foundation.
Wax, Amy L. (1996) The Two-Parent Family in the Liberal State: The Case for Selective
Subsidies, Michigan Journal of Race and Law 1 (2), pp. 491550.
Wax, Amy L. (1999) Caring Enough: Sex Roles, Work and Taxing Women, Villanova
Law Review 44 (3), pp. 495524.
Wax, Amy L. (2003a) Something for Nothing: Liberal Justice and Welfare Work
Requirements, Emory Law Journal 52 (1), pp. 170.
Wax, Amy L. (2003b) Social Welfare, Human Dignity, and the Puzzle of What We Owe
Each Other, Harvard Journal of Law and Public Policy 27 (3), pp. 121136.
Wax, Amy L. (2005) The Conservatives Dilemma: Traditional Institutions, Social
Change, and Same-Sex Marriage, San Diego Law Review 42 (3), pp. 10591104.
Wax, Amy L. (2007) Engines of Inequality: Race, Class, and Family Structure, Family
Law Quarterly 41 (3), pp. 567600.
Wax, Amy L. (2009a) Norm Change or Judicial Decree? The Courts, the Public, and
Welfare Reform, Harvard Journal of Law and Public Policy 32 (1), pp. 4564.
Wax, Amy L. (2009b) The Family Law Doctrine of Equivalence, Michigan Law Review
107 (6), pp. 9991017
White, Lynn and Joan G. Gilbreth (2001) When Children Have Two Fathers: Effects of
Relationships With Stepfathers and Noncustodial Fathers on Adolescent
Outcomes, Journal of Marriage and Family 63 (1), pp. 155167.
White, Lynn and Stacy J. Rogers (2000) Economic Circumstances and Family Outcomes:
A Review of the 1990s, Journal of Marriage and Family 62 (4), pp. 10351051.
Wilcox, Brad (2006) Marriage, the Poor, and the Commonweal, in R. George and J.
Elshtain (eds.) The Meaning of Marriage. Dallas, TX: Spence Publishing Company.
Amy L. Wax
University of Pennsylvania Law School
3400 Chestnut Street
Philadelphia, PA 19104
United States
Email: awax@law.upenn.edu
IR AL NDICE

Vol. 3, Issue 3 RESEARCH NOTE December 2008
Debate: Should Feminists Endorse Basic Income?
Guest editor: Ingrid Robeyns, Erasmus University Rotterdam
Basic Income Grants or the Welfare State:
Which Better Promotes Gender Equality?
Barbara Bergmann
American University Washington, D.C.
Abstract The implications for gender equality of three regimes are compared: a low
tax-low benefit regime, a regime of Basic Income Grants (BIG), and a welfare state
offering a generous menu of in-kind and cash benefits concentrated on people with
special needs, but not including lengthy paid parental leave. It is argued that the
special needs of women, particularly lone mothers, make the welfare state regime
superior in promoting gender equality to a regime with BIG benefits, which spreads
its cash benefits equally to all citizens. Further, the reductions in labor force
commitment that BIG fosters (and which lengthy paid parental leave also fosters)
would reverse the progress women have made in the labor market. That progress is
the main basis for womens improved status, and undermining it may even make a
BIG regime inferior to the low benefits regime in its effect on gender equality.
Keywords basic income, gender equality, parental leave, welfare state
In trying to understand the implications of Basic Income Grants (BIG) for gender
equality, it is useful to compare BIGs advantages and disadvantages with those
that might result from alternative regimes of public provision. BIG would use a
sizeable part of the national income, collected through a progressive income tax,
and would spread those funds evenly over the entire population.
For people on the Right, the obvious alternative is a regime of relatively little
redistribution, whether in the form of cash or of the public provision of goods
and services to the citizenry. That is currently the situation in the United States.
This Low Provision alternative allows for a relatively low level of taxation, and
leaves the money that BIG would cost to be spent or saved by those to whom the
marketplace (or a relatives bequest) has awarded it.
For those on the Left, the alternative to BIG is the welfare state which
requires the same or perhaps even higher taxes, and uses the funds for the
provision by government of goods and services, and for cash grants to those with
particular needs. Northern European welfare states provide medical and dental
care, high quality child care (including infant care, preschool, after-school care,
summer camp), housing subsidies, expenses for those attending college, and
well-funded social service agencies that help new mothers, the homeless, the
addicted, etc. Cash grants under these regimes include stipends to the
unemployed, pensions to the old and disabled, and child allowances to parents
or guardians. Some countries with generous welfare state regimes provide
lengthy paid leaves for new parents.
In this note I argue that in promoting gender equality a welfare state regime
with generous in-kind benefits but without lengthy parental leaves (which have
the potential to reduce womens labor market success) is far superior to BIG.
Further, BIG is even more damaging to gender equality than Low Provision,
making BIG the worst of the three alternatives. It would not be possible to add a
sizeable BIG to the benefits granted under a generous welfare state, given current
levels of per capita income. This can be seen by looking at the fiscal situation of a
country like Sweden. Swedens provision of benefits requires a rate of taxation
equal to about 60 percent of its national income, so adding a BIG would push the
rate of taxation on those holding paid jobs to unsustainable levels.
1
This is true
even if some of the Swedish cash payments for those in special circumstances,
such as pensions and unemployment insurance, were considered redundant to
BIG and were discontinued or reduced, and paid parental leave was
considerably shortened.

1
For data on the relation between the Swedish government budget and Swedish Gross Domestic Product, see
Bergmann (2004).
DOI: 10.2202/1932-0183.1128
1. Construing Gender Equality
Before discussing which of these three regimes would best further gender
equality, I briefly discuss what meaning to attach to the term gender equality.
Traditional gender arrangements generally enforce a separation of women from
leadership roles, in both the world of politics and the world of work. Under
traditional gender arrangements, women who do engage in paid work are more
or less rigorously segregated into different occupations from men, and tend to be
excluded from jobs with relatively high pay that have possibilities for promotion,
high prestige, less detailed supervision, and interesting work. Traditional gender
arrangements also assign to women and female children exclusive responsibility
for household cleaning, laundry services, food preparation, and child care. They
operate like a caste system we know how much housework a newly born baby
is destined for by looking at its genitals. In a social system characterized by
gender equality such arrangements would be absent.
The most obvious path toward gender equality, so defined, is the path most
developed economies have in fact been taking already. The differences in mens
and womens opportunities and activities have been progressively lessening, and
the purchasing of household services formerly performed by family members
has been increasing. Further moves in that direction would involve a more equal
sharing of leadership roles and a further decrease in occupational segregation.
Household operations and child care activities would be further commodified
either financed privately or paid for by the government. Whatever household
activities remained for family members to perform would be divided more
equitably between men and women.
Some would argue that a move toward gender equality should include
giving women a choice to maintain their traditional household activities, perhaps
with higher prestige, better pension arrangements, and even pay for housework.
In this view, making it easier to combine household activities with paid work,
and to move into the labor force after a spell at home, would also conduce to
greater gender equality. Without question, that would accommodate
arrangements that some women would prefer. However, measures that lead in
that direction would be likely to reduce opportunities for women in the
workplace, and would reinforce the cultural habits of assigning housework and
child care to women. Implementing such measures would most likely lead, not to
greater gender equality, but to its opposite.
3 Bergmann: Basic Income Grants or the Welfare State?
2. Equal Public Provision Ignores Womens Greater Needs
An important difference between BIG and a welfare state is that in a BIG regime
benefits are spread evenly over the population, while in the latter most benefits
are targeted toward those with special needs that are expensive to fill those
who have children requiring constant care, those whose income is insufficient for
decent housing, those whose children could profit from an expensive college
education, and so on. Obviously, a high proportion of those having such needs
are women, lone mothers in particular.
Benefits targeted toward those with particular needs can be universal in the
sense of being open to all who have such needs regardless of income, marital
status, or gender. But targeting allows awarding very expensive benefits to only
part of the population -- those in particular need of them -- without requiring
that huge sums be expended to deliver to everybody benefits of equal value.
A second difference is that BIG gives cash, while a welfare state gives a
significant proportion of benefits in the form of goods and services, or vouchers
that can only be spent on these. This insures that public money goes to fill
publicly agreed-upon needs and that taxpayers money is not spent on things of
lower public priority or that are wasteful, such as gambling or larger cars.
Another feature of in-kind benefits is that they deter labor force participation less
than cash benefits do. On the contrary, some in-kind benefits, such as child care,
encourage it.
The targeting and non-cash features of a welfare state reduce opposition to
the state provision of benefits. When expensive benefits in the form of goods and
services are given to those who obviously need them, the fact that they are not
given to those who do not need them is not a cause for resentment, or at any rate
less of a cause for resentment than the distribution of hugely unequal cash
benefits would be.
The superiority of a welfare state over BIG for the support of lone mothers is
obvious. If they hold jobs, and relatives are unavailable to care for their children,
the cost of decent-quality child care may amount to half their earnings or more.
A BIG might pay in whole or part for child care, but using it in this way puts
lone mothers at a disadvantage compared to those who can use the BIG grant to
raise their standard of living better food, clothing, housing. A welfare state, by
contrast, recognizes the particularly acute needs of lone mothers and addresses
them, and creates an equalizing effect not provided by BIG.
The vast majority of lone-mother families cannot have a mainstream
standard of living without earning a salary plus receiving government help with
health insurance, high quality child care, higher-education expenses, and
DOI: 10.2202/1932-0183.1128
housing. In the absence of such provision, even a BIG of $10,00020,000 going to
such a family would not suffice to put it on a par with other families, because the
lone-mother family would have to spend the BIG on child care or forego paid
work.
It is increasingly important that government programs be structured to
address the needs of lone mothers and their children. Lone mothers are not some
minor part of the population. The proportion of the population living with a
spouse dramatically declines year by year, as marriages are delayed to later ages
and the high divorce rate persists. At the same time, the proportion of children
born to unmarried women increases. The households of unmarried cohabitants,
into which an increasing proportion of children are being born, are even less
stable than the households of married people. Lone mothers are chronically short
of time, and the majority have low earnings. In 2006 in the United States, the
median two-earner family had income of $76,000, the one-earner couple had
$54,000, while the lone mother had $29,000. Clearly, the lone-mother family is
very far down on the totem pole.
Part of the public resents births to lone mothers as imposing taxpayer costs
that births to married couples avoid. Such resentments are minimized when lone
mothers are earners (i.e., they are not lazy), and the in-kind benefits they get
are also available to other parents.
3. Womens Labor Force Participation and Womens Status
Womens previous low status was surely due to their lack of independent
resources; to their specialization in a single, servant-like occupation; to their
exclusion from participation in activities that bring independence; and to their
lack of a chance for advancement and recognition. The dramatic advances in
womens status made in the latter half of the twentieth century, which constitute
a veritable revolution in human affairs, are due in large measure to increases in
the labor force participation of mothers. At least in countries without lengthy
paid parental leaves, many employers have come to see women as likely to be
continuous labor force participants not inevitably destined to leave the work
force, and therefore have come to see women as worth training, worth putting
into jobs that lead to promotion, and worth considering for promotion. Womens
greater labor force participation has gone along with their greater enrolment in
higher education, and in professional and business schools. This has in turn
enabled their greater participation in business management, in the medical and
legal professions, as well as in political leadership.
Which regime promotes the further progress of this revolution, and which
impedes it? Government provision or subsidization of child care in a welfare
state encourages paid work for mothers. Large cash grants, such as BIG,
encourage withdrawal from the paid labor force. So do lengthy paid parental
leaves, such as those offered by Sweden, which can amount to an entire year, and
can be extended to two years. These long leaves give employers a motive to deny
women jobs that have duties that are not merely routine, that require on-the-job
training, and that lead to promotions and careers. This provision is probably at
least partly responsible for the persistence of the high degree of occupational
segregation by sex that is characteristic of Swedens labor market.
One alleged advantage for women that is claimed for BIG is that it would
reduce their dependence on the labor market, a male-dominated arena, and thus
a major site of their oppression. In fact, proponents of BIG proclaim that one of
their aims is to allow parents to stay home with young children. Under current
cultural conditions, the vast majority of those who would do that would be
women with a high-waged male partner. A lone mother trying to live on BIG
exclusively would be condemned to a standard of living far below the
mainstream.
For this reason, the full-blown implementation of BIG schemes in the near
future should not appeal to those for whom gender equality is an important goal
(Robeyns, 2001). Perhaps in the future, participation in housekeeping and
parenting activities will have become less differentiated by gender. Then BIG
would affect the behavior of both sexes more equally, and would have lost its
anti-equality effect. In the meantime, it is not hard to believe that BIG would be
more destructive of gender equality than Low Provision would.
4. Conclusion
A welfare state with generous child care provision but without lengthy parental
leaves would promote progress for women in the labor market, and would
deliver goods, services, and cash grants to those with special needs, of which
women presently form a major part. A BIG regime, by reducing womens
presence and success in the labor market, would reverse the gains in womens
status and opportunities. It would also fail to respond to the sizeable needs of the
increasing cohorts of lone mothers. For those reasons, it would be even worse
than the Low Provision regime of the United States. In terms of its effect on
gender equality, it would be the worst of the three alternatives.
DOI: 10.2202/1932-0183.1128
References
Bergmann, Barbara R. (2004) A Swedish-Style Welfare State or Basic Income: Which
Should Have Priority? Politics and Society 32 (1), pp. 107118.
Robeyns, Ingrid (2001) Will a Basic Income Do Justice to Women? Analyse und Kritik 23
(1), pp. 88105.
Barbara Bergmann
Professor Emerita, Department of Economics
American University
5430 41
st
Place NW, Washington, D.C.
United States
Email: bberg@american.edu
IR AL NDICE


Vol. 3, Issue 2 RESEARCH ARTICLE August 2008
Economically Forced to Work: A Critical
Reconsideration of the Lottery Question
*

Roland Paulsen
University of Uppsala
Abstract The lottery question asks whether you would stop working, continue
working in the same job or continue working in a different job if you won a sum of
money large enough to allow you to live on it comfortably for the rest of your life
without working. This literature review reports the results of 22 surveys carried out
between 1955 and 2005 where this issue was raised in connection with basic income,
and devotes specific attention to how the results have hitherto been analyzed. Used
as a measure of employability, other dimensions of the lottery question, such as
occupational discontent and satisfaction beyond economic necessity, have been
largely overshadowed despite their prominence in the statistical material. The
prevalence of non-financial employment commitment (NEC) has also been
overestimated because of an analytical dichotomy between those who would
continue working and those who would stop working completely if finances
permitted. Suggestions for further studies include a clear distinction between non-
financial commitment to current employment and to employment as such.
Keywords basic income, lottery question, non-financial employment commitment,
occupational satisfaction, workfare

*
I would like to thank Anna Lindqvist for all her support and helpful comments on earlier drafts of this article.
Also, I owe gratitude to the reviewers of Basic Income Studies and to Jurgen De Wispelaere for his extensive
editing help.

Without work, all life goes rotten. But when work is soulless, life
stifles and dies.
Albert Camus
1. Introduction
In addition to the complex of economic troubles that introducing Basic Income
(BI) is supposed to generate, BI is accused of being an antihumanist project that
replaces full-employment policy with financial-distribution policy. People want
jobs, the argument goes, and are the employed not better off than the
unemployed when it comes to statistics of both physical and mental health?
Indeed, depriving mankind of its essence (work) as some Marxists would argue,
seems like a petty bourgeois idea. Would it not be better to support the
unemployed with meaningful activity and income in one, i.e., employment,
rather than making the humiliation of a financial allowance universal?
This sort of criticism can be heard from both the Right and the Left on the
rare occasions BI is publicly articulated (see Janson, 2003 for a summary). Of
course, the relevance of such criticism is limited to the most radical notions of BI.
The idea that BI should be introduced in order to facilitate more flexible labor
market behavior (Brittan, 1995; Friedman, 1962) cannot really be interpreted as
an assault on workfare society; nor can the more social democratic notions of BI
where BI is more or less viewed as a complement to the capitalist labor market
and as a compensation for its inherent deficiencies (Beck, 2000; Parijs, 1995;
Rifkin, 1995). The goal of full employment does not inherently contradict the idea
of a BI.
Yet some BI proponents criticise the symbolic and economic centrality of
work in post-industrial capitalism (Bauman, 2004; Gorz, 1999; Offe,
Mckenberger et al., 1996). The global rise of productivity, they claim, generated
by technological progress, has rendered it possible to satisfy our basic needs with
a minimum of human effort. Furthermore, the deskilling process that this
technological progress has brought forth makes wage labor less and less
satisfying (Braverman, 1974). The more rational that production becomes on a
global level, the more irrational and repressive it becomes for individuals
engaged in it on an operative level. Therefore, the heteronomous sphere of labor
should be further rationalized and maximally reduced, not to eliminate work
from the repertoire of human activity but to free it from economic constraint. In
this process, BI is considered an important catalyst that would allow our
DOI: 10.2202/1932-0183.1104

attitudes to work to flourish beyond the realm of necessity (Gorz, 1988; Marcuse,
1955).
Underlying this line of argument is the assumption that most of us are only
enduring our jobs because we are forced to. This is not a particularly new idea.
Marx (1971, p. 820) wrote, The realm of freedom actually begins only where
labor which is determined by necessity and mundane considerations ceases; thus
in the very nature of things it lies beyond the sphere of actual material
production. Probably agreeing with Marx on this point, Prince Kropotkin
compared the commonly claimed right to work to the right to be always a
wage-slave, a drudge, ruled over and exploited by the middle class of the future
(Kropotkin, 1927, p. 22). But is this old idea of freedom as absence of wage labor
that is implied here based on the actual experience of those who, unlike Marx
and Kropotkin, spend most of their waking hours as employees or is it only a
product of a metaphysics that lacks contact with reality? To answer this question,
the empirical study of non-financial employment commitment (NEC) is
necessary.
NEC refers to the part of our employment commitment that is not a product
of the income that employment typically generates. In this article, several studies
analyzing the presence of NEC are collected and analyzed. Research about NEC
can be found in quantitative survey studies where the discussion above is
generally not taken into account. The absence of such reference is not only
unfortunate but also hard to understand. As we shall see, putting the concept of
NEC into our context is a way of developing it and reevaluating its meaning. In
return, as the concept helps peel economic compulsion from the modern work
ethic and helps to assess the strength of what is left, this allows us to empirically
test some arguments prominent in the growing literature on the critique of work.
NEC can be measured in several ways, for instance by simply asking
whether respondents are primarily working for earnings or not, or how they
think they would react to unemployment.
1
The most reoccurrent item, and often
the only item measuring NEC, is the so-called lottery question. In fact, the concept
of NEC was first presented in a single item study by Warr (1982) where the
lottery question is used in the context of the UK. It reads as follows: Imagine
that you won a lottery or inherited a large sum of money and could live
comfortably for the rest of your life without working; what would you do about
work? Three options are then offered: 1. I would stop working; 2. I would
continue to work in the same job; 3. I would continue paid employment in a
different job or I would continue to work, but under different conditions.

1
Warr et al. (1979) present the Work Involvement Scale.
3 Paulsen: Economically Forced to Work

Most of the studies using the lottery question report high levels of NEC. This
suggests that even beyond the force of necessity people imagine wage labor to be
a central source of meaning and joy. In all these studies, however, the second and
third alternatives have been merged into one in the data analysis, which makes
only two alternatives, to continue work or not to continue work, relevant. This
article critically examines the consequences of this widely accepted analysis. As
we shall see, another dimension of the lottery question appears as soon as we
analyze the existing data more extensively than has been previously done.
This review includes the most cited lottery question studies from 1955
onwards.
2
The results from the studies are analyzed in two steps: first, I present
the results as they have generally been analyzed, i.e., as if only two alternatives
were given to the respondents: to continue or not to continue work. Second, I
disentangle the distribution between all three alternatives in the studies as far as
possible; then I assess the results with reference to the discussion above. This
disposition facilitates a clear distinction between two types of NEC: one that
measures the non-financial commitment to employment as such, and one that
takes only the commitment to the job the respondent currently has into account.
In the next section, this distinction will be further explained.
2. What the Lottery Question Measures
The lottery question, which is hypothetically formulated as a scenario that can be
hard to even imagine, insufficiently predicts the behavior of real lottery winners
(Warr, 1982). An interesting branch of the BI research that elaborates
experimental studies of possible work related consequences of BI has recently
begun paying attention to post-award work behavior of lottery winners (Peeters
and Marx, 2004). From this and other research of lottery winners (Arvey, Harpaz
et al., 2004; Falk and Menp, 1999) we see that most people continue working
in one way or another after hitting the jackpot. Still, the question of what kind of
work people imagine they would undertake after gaining economic freedom
remains insufficiently answered. The idea that most people want to work in
some way is of course trivial. Every study of work commitment must pay
attention to what kind of work the commitment is linked to. Before starting this
discussion, however, let us see wherein the main value of the lottery question
lies.
Even if early studies (Sheppard and Belitsky, 1966; Warr and Lovatt, 1977)
suggest that the lottery question predicts labor market behavior to some extent,

2
See the individual studies for details such as instruments, samplings, procedures, and so forth.
DOI: 10.2202/1932-0183.1104

this does not do enough justice to its scientific value. The lottery question
approaches, as Vecchio (1980, p. 361) puts it, fantasy fulfilment (i.e., many
people at coffee breaks, office parties, etc., often speak fondly of the prospect of
having enough money to quit work, retire at an early age, and enjoy life). In
doing so, it encourages the respondent to transcend what critical theorists have
called one-dimensional thinking (Marcuse, 1991), the cult of productivity
(Adorno, 1978), the economic reason (Gorz, 1988) and other ideological
concepts of necessity. Thus, the research using the lottery question does not deal
primarily with predicting individual actions, but with employment-related
dissatisfaction and notably with a yearning for something else. The political aspect
of this yearning is somewhat disguised by the individualist appeal of the lottery
question (which could be why none of the actual researchers has mentioned it),
yet the negative character of the lottery question imagine that you won
provides grounds for assessing the place of employment in the general
conception of the good life. This dimension becomes particularly salient when
respondents declare that they are satisfied with their jobs while in the same
survey stating that they would quit or switch to another one if only they had the
opportunity a phenomenon to which we shall return.
Whether we choose to include the third alternative (to continue working
under different conditions) in the analysis or not, complicates the picture
somewhat. Note that the lottery question deals only with the monetary
dimension of modern wage labor. The major reason for working at a particular
job may be monetary, even though the reasons for wanting to continue to work
are not, Morse and Weiss (1955, p. 196) observe. Other dimensions such as the
social life, the routine, and the status associated with a job aspects of
employment that envelop more classical notions of work, i.e., the activity of
producing goods and services may well influence how respondents answer the
lottery question. This means that the lottery question, strictly speaking, does not
measure work commitment or work ethic as some scholars propose (Rietman and
Schneer, 1996), but the non-financial employment commitment, meaning
commitment to all aspects of an employment including organization, leadership
and the other dimensions mentioned. However, if the analysis includes only two
alternatives (to continue or not to continue working), we are exclusively
measuring attitudes towards employment as such. If we include the third
alternative (that is sometimes formulated as continue working, but in a different
job and sometimes as continue working, but under different conditions), we
get an idea of the respondents satisfaction with their current employment.

Respondents choosing the third alternative may want to set out on new
careers; they may want to change profession but stay in their organization; they
may want to continue practicing their profession but in a different organization
or as self-employed; they may also want to continue their current employment
but as part-time employees. In any of these cases, the third alternative implies
that the respondents, if enjoying financial security, would like to have a word
with their employers.
Those choosing the first alternative (to stop working) are expressing an
extreme reluctance to any kind of salaried work. These are people who would
not like to become professional ballet dancers, psychologists, actors, race drivers
not even alternatives such as self-employed author, musician, golfer or
performance artist come spontaneously to the minds of these people. They are
not interested in anything that has to do with the labor market. As I have already
mentioned, nearly all research using the lottery question has focused exclusively
on this group of people rather than on the group choosing the other two
alternatives. Far from presenting any clear-cut results, the authors of these
studies tend to emphasize the strength of the NEC.
Here, I would like to introduce a distinction between general NEC on the one
hand, and specific NEC on the other. By general NEC I mean NEC that is not
tied to a certain employment but to employment as such. This is the form of NEC
that we are studying when separating those who would not want to work at all
from those who would like either to continue or to switch to another job.
Specific NEC refers to the non-financial commitment to a specific employment
and is measured by an affirmative answer to the lottery question: to continue
working with the present job. This distinction allows us to discover a new
dimension in some of the studies that earlier analysis ignored.
3. General Nonfinancial Employment Commitment
Morse and Weisss classic study, the first to use the lottery question, was carried
out in a discursive context quite different from the one now dominating Euro-US
culture. We are now going through a period of readjustment of our
institutions, they asserted, to the shortening of the work day and week and to
the early retirement of individuals from their jobs (1955, p. 198). How will this
affect us, they wonder? Like most of the lottery question studies, the Morse and
Weiss study stresses that even if [employees] had enough money to support
themselves, they would still want to work (1955, p. 191). Their study remains
unique in that it let the respondents who answered affirmatively explain why in
DOI: 10.2202/1932-0183.1104

their own words. These explanations were classified in two categories: positive
and negative reasons for continuing to work. Positive reasons included to keep
occupied (32.0%), keeps individually healthy (10.0%), enjoy the kind of
work (9.0%), justifies my existence (5.0%); whereas negative reasons were the
ones that opened with without work I would and continued: feel lost, go
crazy (14.0%), not know what to do with my time, cant be idle (10.0%), feel
bored (4.0%), etc. Morse and Weiss conclude that 36.0% of those 80.0% (Table 1)
who answered they would continue working gave negative reasons, which, they
argue, lends support to the consideration of work as an important positive
element in the emotional economy of many individuals because it serves to
anchor the individual into the society (Morse and Weiss, 1955, p. 192). In these
days of human-resources-talk, the prospering of hedonism and consumerism
rather than of the Protestant work ethic (Bauman, 2004), it seems reasonable to
question whether any reason except enjoy the kind of work can be judged as
positive in a less semantic sense. The tendency to view work as an important
positive element in the emotional economy irrespective of what empirical
results are presented is, however, well represented in the lottery question
literature.
Table 1. Results of lottery question studies
Year Country Study n
Stop
Working
Continue
Working
Sample
1955 US
Morse and
Weiss (1955)
401 20.0 80.0 Employed Males
1969 US Tausky (1969) 274 19.0 81.0
Employed Blue-
Collar Males
1969 US
Quinn and
Staines (1979)
1522 33.0 67.0 Employed Adults
1971 US
Campbell et al.
(1976)
443 41.0 59.0
Employed
Females
1971 US
Campbell et al.
(1976)
671 26.0 74.0 Employed Males
1973 US
Quinn and
Staines (1979)
(continued on next page)

Table 1. (continued)
Year Country Study n
Stop
Working
Continue
Working
Sample
1974 US
Kaplan and
Tausky (1974)
275 19.0 80.0
Hard-Core
Unemployed
1977 US
Quinn and
Staines (1979)
1974, 1976,
1977
US Vecchio (1980) 1099 27.8 72.2
Full-time
Employed Males
1981
Great
Britain
Warr (1982) 1290 28.0 69.0
Full-time
Employed Males
1981 Israel Harpaz (2002) 973 12.1 87.9 Adult population
1987 US MOW (1987) 1000 11.9 88.1 Adult population
1987 Germany MOW (1987) 1278 29.9 70.1 Adult population
1987 Israel MOW (1987) 973 12.6 87.4 Adult population
1987 Japan MOW (1987) 3226 6.6 93.4 Adult population
1987
Nether-
lands
MOW (1987) 996 13.7 86.3 Adult population
1987 Belgium MOW (1987) 450 15.8 84.2 Adult population
1987
Great
Britain
MOW (1987) 840 31.2 68.8 Adult population
19721993 US Weaver (1997) 1343 27.8 72.2 Adult population
1993 Israel Harpaz (2002) 942 10.2 89.7 Adult population
1994 US
Rietman and
Schneer (1996)
874 39.0 61.0 Employed MBAs
2002 Israel
Snir and
Harpaz (2002)
501 14.2 85.8 Adult population
2005 US Saad (2005) 1001 39.0 60.0 Adult population

DOI: 10.2202/1932-0183.1104

This also counts for the exclusion of the third alternative when applied to the
general analysis of NEC. The third alternative is in Morse and Weiss (1955),
included in the survey as a second item for those answering affirmatively. The
correlation between social class and wanting to change job is analyzed; not
very surprisingly, the tendency is that the lower class the stronger the inclination
to change job. No further analysis is presented concerning specific NEC. As we
shall see, even the early results presented by Morse and Weiss should imply a
radical reassessment of the now prevailing idea that people would want to work
even if they were not forced to by economic necessity. Before formulating such a
reassessment, I present some other results in the field.
Twenty-five years after the publication of the Morse and Weiss study,
Vecchio replicates the lottery question and concludes that the present findings
suggest that a leisure ethic may be replacing the traditional work ethic in the
United States. This point is in accordance with the general prognosis of cultural
change theorists (1980, p. 366). The percentage who would then choose to
continue to work had dropped to 72.2% (samples were taken from 1974, 1976 and
1977). In fact, the percentage of those choosing the first alternative (to stop
working) reached its peak in the US during the late 1960s. Up to then, the lottery
question studies report similar results to those reported by Morse and Weiss
(Kaplan and Tausky, 1974; Tausky, 1969). Quinn and Staines (1979) report from
surveys made in 1969, 1973 and 1977 that the percentages of those choosing to
continue working were as low as 67.0% among employed adults in both 1969 and
1973. In 1977 the ratio had increased to 71.5%. Campbell, Converse et al. (1976)
found that in 1971 74.0% of the employed male population replied affirmatively
to the lottery question, whereas only 59.0% of the employed women did so a
gender difference that eventually seems to have weakened radically (Harpaz and
Snir, 2002; MOW International Research Team, 1987; Rietman and Schneer, 1996).
From 1974 onwards, US lottery question studies report an NEC percentage
that fluctuates between 71.5% and 80.0%. An important exception is found in the
international comparative Meaning of Work (MOW) study in 1987. Here, as
Harpaz comments, the USA, which ranked second (88.1 percent) in the
proportion of its labour force that wished to continue working, seems to have
broken a trend that has predominated since the late 1960s (Harpaz, 1989,
p. 149). Both Weaver (1997) and Rietman and Schneer (1996) report, however,
that during the 1990s the NEC percentage dropped back to approximately 73.0%.
At the bottom of the worldwide NEC league in the MOW study lies Great Britain
where only 68.8% would continue working; a result supported by Warrs (1982)
meticulous study in 1981 to which we shall return. Israeli results have since 1981

pointed out a much stronger NEC in Israel than in other industrialized nations,
with the exception of Japan (Harpaz and Snir, 2002; MOW International Research
Team, 1987; Snir and Harpaz, 2002)
The US results especially, whose amplitude permits historical analysis,
suggest a weakening of NEC. In Morse and Weisss study, those who thought
they would stop working completely constituted 20.0% of the population. Fifty
years later, this percentage had nearly doubled to 39.0% (Rietman and Schneer,
1996) among middle-class managers who are known to be significantly more
prone to answer affirmatively to the lottery question than other professional
groups (Morse and Weiss, 1955; MOW International Research Team, 1987; Warr,
1982). In 2005 exactly the same ratio of general NEC was disclosed in a Gallup
survey (Saad, 2005) among the adult US population.
However, since the lottery question has been put differently over the years,
there are methodological problems in making these kinds of generalizations.
Some (Morse and Weiss, 1955; Warr, 1982) split the lottery question into two
stages where only two alternatives (to continue working or not to) are given at
the first stage while the second stage permits the respondents to specify whether
they would stay at their present jobs or look elsewhere. Vecchio on the other
hand, does not even offer a third alternative to the respondents, while Harpazs
surveys, the MOW study, and Rietman and Schneer seem to have offered three
alternatives from the beginning as described in the introduction. However
difficult it is to tell how a bias due to these different formulations might operate,
it is important to take this aspect into account when analyzing the various
results. Furthermore, whether or not respondents have been offered a dont
know alternative is not obvious; the reason for this remains a mystery. As Warr
comments, [t]he absence of dont know responses in a national survey is
surprising, and it is possible that they have been omitted before calculation of the
percentage figures (Warr, 1982, p. 310). From this methodological flaw in the
lottery question studies we now approach what must be described as a major
flaw, a flaw that has dominated the research within this field since it began.
4. Specific Nonfinancial Employment Commitment
In most of the lottery question studies, the authors emphasize the strength of the
general NEC while dismissing the idea that any cultural change of attitudes
towards work should have taken place. Despite various reports of change in
workers values and attitudes toward work in the industrialized world, Harpaz
(1989, p. 149) asserts, a major proportion of a representative sample of the labor
DOI: 10.2202/1932-0183.1104

force in seven industrialized societies apparently still chooses to hold a job when
it is no longer financially necessary. To refute cultural change theories seems to
be a major object in most of the lottery question studies notably the Israeli ones.
As for all quantitative research, the relation between NEC and a range of other
variables has also been thoroughly examined. For instance, stronger NEC shows
significant correlation with being younger (Morse and Weiss, 1955; Warr, 1982;
Vecchio, 1980), having high socioeconomic status (Morse and Weiss, 1955; MOW
International Research Team, 1987; Warr, 1982), being married (Warr, 1982),
having a meaningful job (Harpaz and Snir, 2002; Kaplan and Tausky, 1974; Snir
and Harpaz, 2002), enjoying occupational satisfaction (Harpaz, 2002; Kaplan and
Tausky, 1972; Morse and Weiss, 1955; Snir and Harpaz, 2002), and having low
pay-oriented work values (MOW International Research Team, 1987). The
relevance of these correlations is barely pronounced. It is as if they were
interesting in themselves or only waiting to be explained and put into context by
someone else rather often they seem to betray a blind interest in
employability and its relation to generous welfare systems (see Nordenmark,
1999). We deal with some of them later, but before doing so, let us return to the
general claim that the majority would continue working at their jobs even
without financial pressure.
As already mentioned, the NEC discussed in the research so far is a general
NEC, i.e., a non-financial commitment to employment as such. From 275
semistructured interviews where the lottery question was put, Kaplan and
Tausky (1974, p. 195) comment that [w]ork as an activity was viewed in a
positive light, but often with little commitment to the work normally engaged in
when employed. This is also reported, at an early point, by Morse and Weiss
who conclude that for many individuals, commitment to working is much
deeper than commitment to their particular job (1955, p. 193). The specific NEC,
i.e., the commitment to the job the respondent is currently holding, can only be
extracted if we construct a new dualism between those who would continue
working at their current jobs, on the one hand, and those who would quit, on the
other hand. Unfortunately, it is not always possible to discern this other dualism
in some of the studies since the presentation of the data often is too scarce. This
can also be said of quite recent studies (Harpaz, 1989; Snir and Harpaz, 2002;
Vecchio, 1980), despite some criticism from Warr concerning this neglect: [t]he
published accounts of the US research are typically lacking in detail, and
responses are described as falling into one of only two categories (would or
would not continue working) (Warr, 1982, p. 310). The results presented in
Table 2 are partly based on my own calculations of rather fragmentary reports

(Morse and Weiss, 1955; Warr, 1982), while in Harpaz and Snir (2002), MOW
(1987), Saad (2005) and Rietman and Schneer (1996) all frequencies are explicitly
reported.
Table 2. Lottery question results including all three alternatives
Study Country
Continue at
Current Job
Continue Working
Elsewhere/ Under Different
Conditions
Stop
Working
Morse and
Weiss (1955)*
US 45.0 35.0 20.0
Warr (1982) UK 31.4 34.2 25.7
MOW (1987) US 39.0 48.8 11.9
MOW (1987) Germany 30.8 39.0 29.8
MOW (1987) Israel 48.7 36.1 12.1
MOW (1987) Japan 65.6 27.0 6.5
MOW (1987) Netherlands 42.4 44.0 13.7
MOW (1987) Belgium 36.9 47.3 15.8
MOW (1987) Great Britain 12.9 41.8 24.6
Rietman and
Schneer (1996)
US 26.0 35.0 39.0
Harpaz and
Sneer (2002)
Israel 39.2 46.6 14.2
Saad (2005) US 36.0 24.0 39.0
Note: Based on a subsample of middle class, working class and farmers (n=326). Respondents were
here given the opportunity to choose whether or not they would continue in same type of work.
If viewing these results in terms of a new dichotomy between those who
would want to change jobs and those who would not, we see that even in the
DOI: 10.2202/1932-0183.1104

early study of Morse and Weiss, more than half the population of employed
males (55.0%) would want to leave their present jobs if finances permitted. The
difference between the US results presented in Rietman and Schneer (1996)
where 74.0% of the MBAs would quit their current jobs and the Japanese results
of the late 1980s (MOW International Research Team, 1987) where this
percentage was at 33.5%, suggests that cultural differences have great impact on
the specific NEC. Considering the US results, our dichotomy also reveals a
historical increase of those wanting to leave their jobs; from 55.0% in the Morse
and Weiss study to 59.7% in the MOW study and finally 74.0% in Rietman and
Schneer (1996) an increase that becomes invisible when focusing on the general
NEC (see Table 1).
What is even more striking is the all-pervading yearning of the majority (with
Japan and Israel 1987 as the only exceptions) for something else than the current
job situation. In most of the studies the share of discontented employees amount
to approximately 60.0%. Discontent, or at least a hazy yearning for something
else, seems to prevail inherently in what is usually referred to as employment.
Closer analysis reveals, however, how deeply misguiding the use of the term
employment (not to mention work) can be. Employment can allude to an
infinite number of disparate activities and situations. This should belong to
common knowledge; yet in most of the studies of NEC, employment stands
out as a homogeneous institution without any internal differentiation. In a small
number of exceptional lottery question studies, a more stratified concept of
employment is presented. Morse and Weiss (1955, p. 197), to begin with, found
that of the 86.0% of the middle-class professionals who answered they would
continue working, 68.0% said they would continue in the same type of work.
Among the unskilled working class the share was at 16.0%. Generally the
middle-class share of those who would continue within the same type of work
was at 61.0%, while the working class lay at a total percentage of 34.0% and
farmers topped at 69.0%. These occupational differences are also salient in the
MOW study where, for instance, 49.0% of the chemical engineers claimed they
would continue working with the same job whereas only 34.0% of the temporary
workers indicated they would do so. In Warr (1982) these occupational
differences were not as salient even if 42.0% of the women in managerial,
supervisory, administrative or professional occupations answered they would
stay in their present jobs which can be compared to 26.0% among skilled manual
workers, and clerical and retail staff. Still Warr (1982, p. 310) concludes: Another
aspect warranting careful examination in the future is the pattern in respect of
socio-economic status. For example, full-time male employees in the ABC1

category are significantly more likely than DE employees to exhibit non-financial
employment commitment: will that differential be retained in future years, or
will it become enlarged or reduced?
Unfortunately, ensuing lottery question studies do not provide enough
information to answer Warrs question. Yet our conclusion must be that the
specific NEC is largely dependent on what kind of work it involves.
Meaningfulness and status have been propounded as two important aspects of
work that influence the inclination to voluntarily continue with the same job. The
neglect of these aspects denotes how utterly uninformed quantitative empirical
research can be of the most basic philosophical concepts within a field. Arendts
(1958) distinction between labor and work, for instance, should by now have
disqualified every scientific use of terms such as work, the labor market,
employment, etc. as if these concepts referred to uniform entities. Voluntary
servitude seems to be a very marginal phenomenon. Monotonous labor with
low status that normally is instrumental both to the worker and to society is
rarely voluntary chosen beyond the realm of necessity. Callings or labors of
love on the other hand are valued as identity projects and transcend their
economic functions (Allvin, 1997; Leidner, 2006; Menger, 1999). Those enjoying
this type of work are of course more likely to answer affirmatively to the lottery
question. Even concerning this privileged group the results are, however, far
from unequivocal. What is often called intrinsic work orientation to value a
certain job for its being interesting, challenging, autonomous is known to
influence the general NEC (Harpaz, 2002, p. 180), and logically it should have an
even stronger effect on the specific NEC (although we do not know that due to
incomplete reporting). What is interesting, however, with studies where these
sorts of correlations are reported is that the relation is never absolute. The
parameter estimate of intrinsic orientation in Harpaz (2002, p. 191) lies,
according to his survey results from 1981, at -0.27, which means that the
probability of the respondents with such orientation to continue working at their
present jobs or elsewhere (general NEC) increases with 24.0%.
3
The interesting
thing here that goes unmentioned by Harpaz is not simply the existence of a
correlation, but the weakness of it.
This is even more striking when occupational satisfaction is studied. In
Harpaz (2002) there is no significant correlation between occupational
satisfaction and general NEC in 1981. In 1993 on the other hand, occupational
satisfaction increases the probability of general NEC with 17.0%. What does this
mean? If we take the Morse and Weiss study, for example, 84.0% of the working

3
Odds ratio (Exp(B)) = e
-0.27
= 0.76
DOI: 10.2202/1932-0183.1104

class said they were satisfied or very satisfied with their job situation; but as we
have already mentioned, only 34.0% said they would continue with their present
type of job in absence of economic pressure. The gap between these figures
means that a considerable part of those who allegedly are satisfied still would
want to leave their jobs if they had the chance. An even clearer example is given
in a recent Gallup survey (Saad, 2005) where respondents have been offered the
opportunity to tell whether they hate, dislike, like or love their jobs. Among the
fortunate 32.0% who claim they love their jobs, only 61.0% think they would stick
to it if they won on the lottery; among the fortunate 59.0% who like their jobs,
this percentage is as low as 26.0%. Again, the occupational satisfaction that is
necessary for specific NEC appears to be different from the standards we
normally put up when assessing our current satisfaction. Could it be that the
normal state of things is taken into account when we think of ourselves as
satisfied in a way that the lottery question upsets?
The weak correlation between specific NEC and work satisfaction could be a
consequence of what Elster (1983, p. 110) calls adaptive preference formation
the adjustment of desires to circumstances. As Ackroyd and Thompson put it:
Really satisfying work is difficult to find for the majority of people, and this is
widely understoodPeople at work are often willing to say that they are
satisfied with their work, but what they mean is that they are satisfied, given that
one cannot expect much satisfaction (1999, p. 42). In Elsters theory, the
formation of adaptive preferences is an unintentional psychological mechanism
(in contrast to the Buddhist practice of equanimity). If so, and given the intensity
of what Anthony (1984) has succinctly termed the ideology of work, simply
asking whether people are satisfied at work or not cannot be regarded as a
sufficient measure of work satisfaction. Provided that it is properly analyzed, the
lottery question obviously is a valuable complement.
5. Conclusion
I have made a distinction here between general NEC (non-financial commitment
to employment generally) and specific NEC (non-financial commitment to a
specific employment). General NEC excludes an extreme group of employment-
rejecting persons who would not want to work at all if finances permitted,
whereas specific NEC excludes both this group and those who think they would
want to change jobs if they could do so without taking any economic risks.
General NEC varies heavily geographically and historically from embracing
61.0% in the US, 1994 to 93.0% in Japan, 1987 (see Table 1). The studies focusing

on general NEC reveal a weakening of it that is far from linear but still
noticeable. That 39.0% of the US MBAs declare that they would rather not work
at all is certainly remarkable in itself, still it only constitutes half the truth
concerning commitment beyond necessity. In Rietman and Schneer (1996) those
falling outside the category of specific NEC constitute 74.0% of the population. In
nearly all of the national samples presented here (with Israel and Japan, 1987 as
the only exceptions) an overwhelming majority indirectly states that they only
work where they do for financial reasons. The type of job the respondents have
radically influences how they answer the lottery question those with
stimulating, high status jobs are more likely to exhibit specific NEC than the less
privileged ones. To consider your job satisfactory or intrinsically meaningful
does not warrant that your answer to the lottery question falls within the scope
of our measure of specific NEC. Even respondents who claim to be satisfied with
their job situation can be ready to leave it if the opportunity presents itself. This
could be interpreted as symptomatic of the inherent oppressiveness of all kinds
of wage labor including the more attractive ones. In either case, the low
prevalence of specific NEC reveals that underneath the work-glorifying rhetoric
of our dominant political parties, people accept their job situations primarily
because of economic compulsion. This is why the introduction of BI (at a level
sufficient to fulfil basic economic needs) must be regarded as a humanist project
that relieves people from life-long dependence upon specific employments that
most of us would rather try to avoid.
But is this not bad news for the BI proponents who claim that BI would not
produce a huge disincentive for labor market participation? If the foundation of
todays wage labor is economic compulsion, would the dissolution of this
compulsion not create enormous shortages on the labor market and render the
realization of BI impossible?
We should not exaggerate the scope of what the lottery question can
measure. The lottery question primarily measures vaguely formulated longings
beyond taken-for-granted notions of necessity, and as such it is a bad instrument
for ascertaining future consequences of introducing BI. Yet the study of real
lottery winners might have some relevance to the question of practical
implications of BI (Peeters and Marx, 2004), and concerning this research some
parallels should be drawn.
To refer to Falks and Menps (1999) qualitative study of actual lottery
winners, one result was that only a small minority of the interviewed winners
continued working at the jobs they had before winning. Similarly to Marx and
Peeters, they still conclude: After a sabbatical year or two, at the latest, all
DOI: 10.2202/1932-0183.1104

winners interviewed have continued or at least would have wished to continue
to work in some form or another (p. 115). Interestingly they add that the type of
work their winners were engaged in borders what might also be called a
hobby: One built a house, another renovated it, a third worked at the cottage
and a fourth went into voluntary work. Helping friends with their projects was
very common. To one, winning in the Lotto provided the opportunity to fulfil the
dream of living as a free artist (p. 108).
As far as the question of possible consequences of BI is concerned, it would
be a mistake to assume, based on observations like this, that people would
voluntarily sweat on the assembly line all day long. The inclination among
researchers in this field to assume that most people want to engage in productive
activity (of some kind, somehow, in one way or another, etc.) might at best
appear philanthropic, but as Gorz (1988, pp. 5356) cautions, it may just as well
produce an essentialist concept of human nature with devastating consequences
if accepted as a foundation on which to build emancipatory projects such as BI.
What might seem like bad news for the BI project also demonstrates the need for
it. Practical consequences and difficulties must simply be settled not neglected.
To sum up, I will discuss three concrete proposals for the study of NEC
both among those who can only imagine what a jackpot situation would be like
and among those happy few who actually experience it. First of all, social
scientists should make the effort to distinguish philosophical notions of work
from existing forms of employment an obvious difference for those engaged in
both activities. Second, it should be worthy of note whether potential and actual
lottery winners want to continue working at the same old job or go elsewhere.
Third, to be able to realistically assess the consequences of BI including possible
difficulties, attention should be paid to which types of employment we tend not
to commit to. This would give us the possibility to discuss what unattractive
labor we find necessary for our well-being and how this labor should be
performed in an alternative society.
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Roland Paulsen
Department of Sociology
University of Uppsala
Box 624, SE-751 26 Uppsala
Sweden
Email: roland.paulsen@soc.uu.se
DOI: 10.2202/1932-0183.1104
IR AL NDICE

Basic Income and the Labor Contract
*

Claus Offe
Hertie School of Governance, Berlin
Abstract The paper starts by exploring the negative contingencies that are
associated with the core institution of capitalist societies, the labor contract:
unemployment, poverty, and denial of autonomy. It argues that these are the three
conditions that basic income schemes can help prevent. Next, the three major
normative arguments are discussed that are raised in opposition to basic income
proposals: the idle should not be rewarded, the prosperous dont need it, and there
are so many things waiting to be done in the world. After demonstrating that
proponents of basic income stand in no way empty-handed when facing these
objections, a third part considers basic income in functional terms: would its
introduction help to resolve problems of social and economic order that are unlikely
to be resolved in more conventional ways?
Keywords autonomy, basic income, full employment, labor market, politicization
of income distribution, poverty.
In current German and European debates on long term changes in labor markets,
demographics and social policies, the project of a basic income and proposals for
economic rights of citizens (rather than rights of workers or rights of the poor) have
come to the fore. National as well as international networks (most prominently
BIEN
1
) provide the setting for vivid debates and policy proposals involving

*
The author has received helpful comments from Jurgen De Wispelaere, Stein Kuhnle, Gerd Grzinger and
Robert E. Goodin.
1
The acronym BIEN refers to the Basic Income Earth Network. For further information see
http://www.basicincome.org.
participants various backgrounds: public intellectuals, representatives of
political parties, academics, union activists, faith-based activists and officials of
international organizations.
Basic income is a radical political program aimed at implementing social
justice.
2
Transforming this programmatic idea into practical public policy of
social reform, however, depends largely upon addressing concerns about fiscal
preconditions and consequences involved in such a reform, as well as the (hard-
to determine yet arguably significant) consequences its realization would have
upon labor and capital markets.
3
Basic income has an important role to play in
that process in that it is expected to assist advanced (as well as less advanced)
capitalist societies in coming to terms with their conflicts, structural problems
and inequalities in a pronounced liberal (or even left-libertarian, i.e.,
committed to the principle of equal real freedom) manner and within the scope of a
novel system of economic rights of citizenship.
4
In all these debates, there is
ample space for disagreement and arrangements of gradualist approaches:
Should a basic income cover the needs of subsistence or be as high as feasible?
Should it apply to all citizens or at least initially be targeted to those most
threatened by poverty or those performing caring and parental activities? Should
it be permanent for all recipients from childhood to old age or should it start
with a time account of, say, ten years per life (Offe, 1997; White, 2003b)? Should it
be strictly liberated from any notion of exchanging some useful activity for
income or should it, again at least initially, be tied to some form of active
participation of recipients? Should the access to and level of income be tied to
currently prevailing labor market situations or should it be made independent of
those?
In this article I discuss issues that regularly take center stage in the basic
income debate, as well as in the larger debate that focuses on the justification and
effectiveness of German and European labor market reforms. Both the legislation
that followed from the Agenda 2010, announced by Chancellor Schrder in
March 2003, and the EUs Lisbon agenda of 2000 aim at the restoration of a
condition of full employment by the year 2010. These and similar policy
initiatives to be found in many OECD countries in the first decade of the century

2
Throughout this paper and as is common in the lively international discussion, basic income refers to a tax-
financed and individualized form of monetary aid that is not bound to any conditions (except permanent
residency status), and which is disbursed on a regular basis or capitalized and then made available as start
capital. This aid should correspond at least temporarily to a level that assures a secure subsistence that avoids
poverty.
3
See the debate in the journal Theory and Society centred around Van der Veen and Van Parijs (1986)
4
The left-libertarian case for basic income is outlined and defended in Van Parijs (1995).
DOI: 10.2202/1932-0183.1100
have in common that they focus on the supply side of the labor market by
stimulating skills and skill acquisition, of removing subjective as well as objective
barriers to labor market participation, and decreasing both wage costs and non-
wage costs of labor, such as social insurance contributions. The highly ambitious
full employment goal of the Lisbon agenda is largely dictated, among others, by
the consideration that it is only a fully employed economy that can generate the
fiscal resources needed for financing an acceptable level of old age income for the
growing proportion of elderly citizens. The two debates are linked by the
opposite positions the protagonists take on the issue of whether or not full
employment at politically acceptable levels of wages and social security benefits
is in fact within the reach of what public policies and macroeconomic steering
can accomplish or not. If the stated policy objective of full employment is in fact
realistic, policy makers are right (or at least consistent) in rejecting any proposal
that is designed to expand economic rights of citizenship, as job creation and
promoting labor market integration figures as the paramount priority a priority
which is to be pursued through lowering the cost of labor and increasing
incentives for all kinds of gainful activities. Note, however, that economic
growth is the only conceivable engine that can pull the train towards full
employment. Moreover, such growth must be assessed under a positive as well as
normative perspective: Is growth likely to occur, and if so in which sectors? Will it
be sufficient? And are the ecological, psychological, social, cultural, political costs
of employment-inducing growth worth bearing? If, on the other hand, the said
objective of full employment is deemed either entirely unrealistic, or realistic
only under normatively unacceptable conditions (such as forced labor, or a work
force largely consisting of working poor, or a further expansion of mindless
and irresponsible consumerism), or realistic only under institutional changes that
are themselves unrealistic (such as a radical path departure from Bismarckian
principles of contributory pay-as-you-go funding of social security), then the idea
of an approximation to fully de-conditionalized subsistence level transfers
based upon the principle of citizenship rights alone can well gain considerable
moral and political plausibility. Many things are obviously at issue here,
including the important procedural issue of who must carry the burden of proof
in this controversy.
There are three consecutive questions that I wish to address. First, what is
the guiding normative idea of a basic income? Second, which political and moral
counterarguments, institutional traditions and socioeconomic interests must
proponents of a basic income be ready to address and defeat? And third, what
3 Offe: Basic Income and the Labor Contract
functional contribution can introducing basic income achieve in overcoming
acute structural and governance problems of mature capitalist societies?
1. The Labor Contract and Its Negative Contingencies
If basic income is the answer, then what is the question? Every economic order is
maintained and reproduced by its ability to find a solution to two core problems
of social order and the social reproduction of such order. The first can be termed
the production problem that is resolved by institutionally regulating which
categories of persons are being assigned to which productive task or function.
The second is the distribution problem that addresses the reciprocal problem of
who is entitled to which part of the total social product after, as it were, the work
is done. Capitalist societies, at least according to their idealized self-description,
represent the only known type of economic order in which both problems are
solved uno actu, i.e., simultaneously and through the same social mechanism,
namely the market for labor and capital. Labor contracts determine, within the
legal framework of contractual freedom and organizational control of the labor
process, who is to undertake which task, while simultaneously determining the
remuneration employees are entitled to in return for performing the productive
task assigned to them.
Now, the level of remuneration and hence the solution of the distribution
problem seems to be constrained by two conditions: an upper limit beyond which
wages cannot rise and a lower limit below which they cannot sustainably be
allowed to fall. Starting with the latter, we might say that employees
remuneration must be sufficient to provide not only for the worker, but also, in a
synchronic perspective, for household members who are (for whatever reason)
currently not employed or self-employed. In addition and diachronically, it
must
5
also be sufficient regardless of the method of financing applied (e.g.,
private savings, social security, occupational welfare, fiscal extraction and
redistribution) to provide workers with a retirement income or pension that
will ensure their future financial security when they no longer can, want or are
permitted to work.
The significance of this minimum threshold below which wage income
cannot be allowed to fall is easy to see if we take into account the shrinking
portion of time spent on gainful activity in proportion to the total life time, with
the difference between these two measures of time having to be covered through

5
I wish to leave it open here whether this must is a moral ought or a functional economic imperative,
implying that both apply.
DOI: 10.2202/1932-0183.1100
some intertemporal redistribution of earned income. A rough estimate of this
difference yields something like the following results. Life expectancy is close to
80 years in the OECD world, with a still ongoing steep increase of about 3
months per year, or 6 hours per day. Eighty years makes about 700.00 hours. If
we deduct a third of this amount for sleep, we get 467.000 hours of active life
time. If the total time spent on gainful activity is (conservatively) estimated at 40
years per life and an average of 1000 hours per year per person (allowing for all
time contingents of non-employment, unemployment, early retirement,
vacations, illness, part time employment, education, training etc.), we get an
average work time/active life time ratio of 8.6 percent, which is presumably
much less than the aggregated breakfast plus lunch plus dinner share in total life
time. Even if we calculate gainful active hours as a proportion of the span of 50
years between age 15 and age 64, we still get a gainful activity time share of the
average working age person of as little as 13.7 percent. The important thing to
realize here is the fact that the entire non-gainful portion of ones life time and
the needs to be met during that time, i.e., 86.3 percent or, more appropriately, the
full 91.4 percent, must be covered by the income earned during the relatively tiny
fraction of economically active hours of life.
This, incidentally, appears to be the implicit reference problem that the EUs
Lisbon Agenda of 2000 tries to resolve by its bold (as well as evidently highly
unrealistic!) proposal that member state governments should achieve a 70/60/50
employment record by the year 2010: 70 percent of all working age individuals,
60 percent of all working age women, and 50 percent of all the elderly (age 55
and over) are projected to be in some kind of gainful activity. But even if that
goal were to be achieved, at most a fifth of the average adult active life time
would be filled with gainful economic activities; and the need for a vast
intertemporal redistribution of economic resources would clearly not decrease
significantly.
At any rate, and as far as the minimum threshold of wages is concerned,
wages must be sufficient to allow for an acceptable coverage of needs that must
be covered during the economically active segments of the life course as well as,
and more significantly in quantitative terms, during the inactive time
segments.
But, to be sure, there is also a functionally defined maximum threshold of
wage rates. That is to say, wages are too high if they induce employers to
reduce their demand for labor, be it through the use of labor saving technical and
organizational strategies, be it through relocating the place of production to less
labor-costly regions of the globe. As a consequence, the remuneration should not
be so high that total employment costs stifle the demand for labor within a given
context of exit options of employers. The parameters of this income range
between the minimum and the maximum threshold are not easily identified in
empirical terms. It is not even certain that such an intermediate range between
the minimum and the maximum limits actually exists, or that, in case it does, it
will be of a durable nature. For what cannot be axiomatically excluded is the
somewhat nightmarish condition where the minimum income required to meet
employees and the inactive populations needs may well lie above the maximum
level of employment costs that are harmless in terms of levels of employment.
To summarize, if actual employment costs exceed the labor cost maximum,
the consequence is either outsourcing (in an open economy) or increased use of
labor-saving technologies (in an innovation-intensive economy); if remuneration
falls below the minimum required to meet the needs of employees and their
dependents, the financing of social security systems is rendered precarious and
must increasingly be complemented by tax revenues. The ongoing labor market
and sociopolitical problems in a country like Germany seem to suggest that both
difficulties can appear simultaneously. Gross pay levels and costs of employing
labor are then too high because they induce further reductions of levels of
employment, given the rich institutionally guaranteed availability of exit and
innovation options that employers enjoy. But pay levels are, at the same time,
too low to cover employees household and social security costs under current
labor market and demographic conditions. Both problems interact in ways such
that the solution for one side of the problem will obviously diminish the chances
of a solution for the other. What in neo-classical economics textbooks is often
called a market-clearing equilibrium wage rate is insufficient to cover the
income needs of employees, their families and pensioners, i.e., of those who do
not yet work as well as those who no longer work.
6

Solving production and distribution problems simultaneously through labor
contracts has, to be sure, enormous evolutionary advantages. Contract-based
labor relations are not fixed as in the status order of traditional societies, but can
be terminated by at least one of the two parties involved (and usually by both)
according to the shifting demand for and supply of labor. Contracts provide for a
contingent
7
coupling of actors on the supply and demand side of the market, with
this contingency being the source of collectively beneficial productivity increases.
This contingency-based solution to the dual problems of production and

6
It may also be insufficient, incidentally, to maintain the level of effective demand that is required for the
prevention of a depressive downward spiral.
7
In philosophical terminology dating back to Aristotle, events are contingent if they are neither impossible
nor necessary.
DOI: 10.2202/1932-0183.1100
distribution is the great evolutionary accomplishment of capitalist market
societies. Yet it also has its disadvantages, including, most importantly, the
uneven distribution of the risks of poverty, unemployment and loss of
autonomy.
Poverty, which includes income poverty but also social marginalization and
the chronic disorganization of the conduct of life, affects those who, due to a lack
of a minimum level personal productivity (also known as employability), are
unable to find durable access to gainful employment or self-employed forms of
activity, which can be due to educational poverty. Note that to the extent the
labor market has properties of a buyers market, demand side actors gain
definitional power over what employability means in operational terms: the
more people are looking for jobs, the more demanding employers can be in
hiring. Poverty also affects the working poor who, due to insufficient individual
productivity, quantitative effects of excessive supply, or their lack of capacity
to organize collectively, are unable to attain salaries that can ensure a secure
subsistence. (Involuntary) unemployment especially affects those who, beyond
short periods of seasonal or search unemployment, are not in a position to find
and enter into contractual employment, in spite of the fact that the law defines
them as able-bodied according to age or physical and psychological
conditions. Unemployment often implies an inability to cover living expenses
through independent means and thus dependency upon various kinds of
unemployment benefits and welfare transfers.
Loss of autonomy that is, the curtailment of the freedom to choose ones
own way of life according to a life plan that corresponds to a sense of personal
identity and is articulated within the constraints of prevailing social and legal
norms is not only an immediate repercussion of poverty and unemployment. It
can also be the consequence of administrative measures and programs grounded
in the logic of workfare that are intended, through the threat of negative
sanctions, to activate the unemployed and integrate them into an employment
relationship (Hasenfeld et al., 2004; Handler, 2004; Handler and Hasenfeld, 2006).
One can speak of autonomy in a meaningful way only if actors do in fact have
options the use of which allows them to consider themselves masters of their own
fate and of meaningful choices and purposes, not simply as a ball in other agents
economic or administrative games.
8
Losses of autonomy are, to be sure, no
necessary consequences of administrative intervention into the conduct of the
unemployed, but they are often perceived and criticized as such. Such perceived

8
This argument is prominent in the so-called republican justification of basic income (Casassas, 2007; Pettit,
2007; Ravents, 2007).
violations of autonomy occur when the protection and recognition of vocational
skills, wages levels, jobs and place of residence and family ties is denied in the
name of flexibility and the long-term unemployed are coerced, under the
threat of severe cuts of benefits, to accept jobs of any nature, anywhere and at any
wage.
A central attribute of my autonomy is doubtlessly my right to stay in my
chosen place of residence and to perform a job that I can appreciate as suiting
me, my talents and tastes. The slogan freedom instead of full employment that
is used by some protagonists of basic income in Germany
9
focuses on the impact
of various administrative measures of economically coercive labor market
integration and the violation of standards of dignity and recognition of those
targeted by such measures. This impact will be the greater the more the labor
market agency is under pressure to succeed with its integration efforts. The
slogan of market-liberal party politics that any job is better than no job leaves
no doubt that the individual right to autonomous choice (such as the elementary
right to say no to a job offer) is subordinate to the objective of job creation and
maximization of employment. At any rate, what needs to be kept in mind in any
debate over labor market and social policy reforms is that such policies are not
just about (re)distributing monetary resources and thus meeting recognized
needs; they are as well about granting or denying autonomy, as they can affect
autonomy both through the process of administrative control (which can, e.g., be
stigmatizing) and through the deficiency of income (Standing, 2002).
It is well known that a job that an employee must perform under material
coercion of an administration can not only violate the employees sense of dignity,
but also the economic interests of the employer, not to mention the interests of
fellow workers and competitors for jobs who can lose their jobs because of the
unemployed being prompted by labor market agencies to take any job. Given
the negative motivational effect of administrative and material coercion, there is
little demand on the part of employers for workers who are coerced into
employment through the threat of strong negative sanctions. The refusal of
German asparagus farmers to hire German long-term unemployed workers,
instead of the reliable and motivated Polish temporary migrant workers
who have done this kind of hard physical work before, to harvest the annual
crop illustrates that administratively coerced workers tend to be
underproductive. Their low productivity is due to their unwillingness to perform
the job and the lack of identification with a given task. And neither can such
deficiencies be healed through increasing the supervision or making sanctions

9
See , for instance, Sascha Liebermann at www.FreiheitStattVollbeschaeftigung.de.
DOI: 10.2202/1932-0183.1100
more severe, which only leads to additional costs to be spent on supervisory staff
and further undermines the workers work effort. To be sure, one cannot
categorically deny that such administrative disciplining of an unemployed labor
force may lead to some form of activation, which in future retrospect might be
appreciated as a gain in peoples occupational and personal lives, in spite of the
fact that such gain has been brought about in paternalistic ways. However, in
view of the current quantitative and qualitative characteristics of the demand for
labor, this would be merely a happy coincidence and not the intended and
consistently achieved outcome of workfare programs.
Despite variations in their institutional structures, the history of OECD
welfare states reveals a common development in their institutional differentiation
of organizations and programs concerned with poverty, unemployment, and loss
of autonomy, respectively. Institutions financed through local government are
typically responsible for the problems related to poverty at the local level. Their
task is to sort the impoverished population according to social administrative
categories (the truly poor versus the pretending poor, the able-bodied versus
the disabled, the local versus the foreign poor, etc.), to continuously monitor
them and disburse the benefits and services to which they are legally entitled.
The unemployment problem is embedded in an entirely different set of
institutional structures: Public economic and employment policies are conducted
here by various agencies of the central and regional state(s) as well as local
agencies of the labor market administration. These organizations provide clients
who have become unemployed (after being previously employed for a relevant
length of time) with consulting services, job placement, the transfer of benefits,
job-creation schemes, vocational retraining, continuing education, wage and
employment subsidies, etc., with their clients reintegration into jobs as the main
objective. Finally, the issue of autonomy and dignity in the workplace is again
organized within a separate institutional domain. Here we find a long tradition
of employment-related legislative activities as well as specialized courts
implementing labor law reflected in, among other things, the legal standards
regulating the physical and social protection of employees and the creation of
employees rights of representation and co-determination (such as the
Betriebsverfassungsgesetz, or Works Council Act, in Germany).
In spite of all this differentiation of institutional sites in which these various
categories of clients are being processed, there are also similarities in the mode of
operation of these domains. First, they all operate with the authoritative
ascription of recognized needs, legal obligations and rights to statutorily
specified categories of persons. These ascriptions and standardizations of need
who counts as poor? what are acceptable working conditions? who is
eligible for benefits and in what amount and for what duration? etc. are in turn
highly sensitive to changing economic and political contexts and are under
constant pressure of legislative revisions and the threat of reversals. Second, all
of these social and labor market policies are implemented through costly
administrative apparatuses and the transaction costs caused by them in applying
and implementing relevant standards, procedures, and criteria. These agencies
typically combine principles of bureaucratic public administration with elements
of self-governance through corporatist bodies. And third, the system of collective
rights categorizes, cares for, manages, controls, treats, supervises, integrates,
takes care of, and thereby often stigmatizes clients through sanctions and reduces
them to the passive status of sheltered, paternalistically regulated objects. This
treatment is often euphemistically referred to as activation, while in the reality
of people on the receiving side of such activation it often contributes to the
experience of passivity and the authoritative denial of meaningful choice.
The transaction costs of the welfare state include both the direct costs of
regulatory and supervisory bodies and regulatory agencies as well as the indirect
and less easily measured costs of such transformation of people that are being
served into passive and dependent clients. It is both of these categories of costs
that would arguably be avoided to a large extent with the introduction of a
subsistence-level basic income. Countless bureaucratic agencies and procedures
would obviously become superfluous and pointless if every citizen were granted
a legal claim to a regular, unconditional, individualized and tax-financed basic
income.
10
It would also decrease the need for official inspection to determine
whether or not persons are really poor, employable, entitled to benefits
according to their family status and household composition, or if their autonomy
or dignity has been infringed upon.
At the same time, citizens would be increasingly activated (as opposed to
being clientelized) to make use of their rights to freedom of action and of
decision, and in this sense would be activated to discard the status of clients and
to take on, instead, the responsibility of being masters of their own life plans
and conduct of life. Each person would then have to decide which additional
financial needs should be covered by engaging in further employment, which
activities competing for his or her time should be given priority in which period
of life, and which job with its associated working conditions is deemed suitable
or acceptable, and which not. As a consequence, the quintessence of all freedoms

10
For that reason alone, liberal critics of welfare state bureaucracy and its wasteful administration of services
and transfers should readily be converted into advocates of basic income (Offe, 2005).
DOI: 10.2202/1932-0183.1100
the freedom to say no would be asserted on the labor market, even if,
importantly, material incentives are by no means abolished to earn an income
above the subsistence level through all kinds of gainful and intrinsically
acceptable activities. And with a sufficient demand for labor, satisfactory
working conditions and an adequate income, citizens would also have the
genuine autonomy to say yes.
A basic income as an economic fall-back position accorded by economic
rights of citizenship would not only eliminate the problems of poverty and
unemployment; it would also have a sweeping indirect effect on what used to be
called in the 1970s the humanization of work (Ondrack and Timperley, 1982).
Workers would be put in a position to reject jobs with poor wages and degrading
conditions. Such jobs could no longer be filled under basic income conditions. As
a consequence, every job an employer seeks to fill will have to be a reasonably
good job, which the worker can quit without the risk of poverty should this
not turn out to be the case. This effect of making work intrinsically more
attractive will arguably even increase labor supply rather than motivating
retreat into tax-financed idleness, as is often alleged by the critics (Mead, 1986;
1997).
2. Basic Income Arguments from Justice and Objections of Their Critics
Every normative theory of social and political justice and such a theory is
behind the idea of the basic income first needs a theory about itself: What are
the arguments by which, and the constituencies to whom, the normative theory
is likely to make sense? This second-order theory answers the question of which
social powers and cultural norms, which causes and interests support the
implementation of the normative project or, contrariwise, diminish its chances of
success. It is a matter of exploring the discourse landscape, the configuration of
interests, traditions, and arguments in which any proposed theory of justice and
reform is necessarily embedded. The second-order theory of basic income must
come to terms with the question why the proposal to introduce citizenship rights
to individual income is in fact so widely opposed.
Before we enter into a discussion of some of the pros and cons, let us briefly
consider economic citizenship rights. A moments reflection shows that even in
the most market-liberal political economy that we are able to imagine, the legal
order on which the proper operation of markets is known to be crucially
dependent (Williamson, 1985) is guaranteed and implemented by institutions
(such as the police and the court system) that absorb, together with public
transportation, communication, education and some other elements of physical
and organizational infrastructure, a substantial amount of state revenues. From
the presence of such non-market (and non-marketable) prerequisites of markets
it follows that individual citizens are under the duty to pay taxes on their
property, income or purchases, which are needed, in the absence of state-owned
and state-operated productive facilities, to fund those prerequisites.
11
Since any
duty (at least nominally) implies a right applying to those who fulfill the duty,
paying taxes implies economic rights and rightful claims on the part of citizens.
To be sure, in the case of taxes this is not a subjectively enforceable right, but a
right that is assured to the tax payer by the legal order in general and the rule-of-
law principle in specific. This principle guarantees that tax revenues are being
spent in ways that are procedurally correct and that can be challenged in courts
should such correctness come in doubt, with the ultimate legitimation of such
spending being that it serves some notion of the public interest. What is new and
controversial in basic income proposals is therefore not the idea of economic
rights as such after all, the taxpayer has a right to getting something (though
nothing in particular) in return, rather than seeing the taxes ending up in the
private pockets of rulers but the subsidiary idea that such rights are redeemed in
the form not just of collectively available in-kind goods (e.g., roads) and services
(e.g., courts), but partly also in the form of an individual receipt of cash that
(unlike, e.g., food stamps) can freely be spent on whatever recipients decide to
spend it on (Standing 2008).
There are three serious objections that proponents of basic income must be
able to deal with in persuasive ways. First, the objection that there is no reason
and justifiable claim to reward those who in contrast to job-holders, the self-
employed and unemployed job-seekers voluntarily refrain from participating
as suppliers in labor and other markets. Allegedly, they do not deserve the
transfer. Second, the reciprocal argument that large categories of wage earners
do not need the transfer, as their level of income allows them to cover their needs
through the market income they earn. Third, there is, from a systemic
perspective often found with the Old Left, the objection that a unconditional
basic income scheme would involve huge opportunity costs: As there are so
many obvious and urgent things to be done in the world, nobody should be
permitted to withdraw into tax-supported idleness, rather than contribute his or
her productive efforts in ways that will become available once (and as long as)
full employment policies succeed.

11
For a compelling argument along these lines, see Holmes and Sunstein (1999).
DOI: 10.2202/1932-0183.1100
The increasingly common first objection to the basic income proposal often
voiced in a resentful tone arises from a prevailing idea of distributive justice
that is equally anchored in Christian (primarily Protestant), market-liberal and
socialist traditions of the work ethic. At the core of this work ethic stands the idea
that working for the market should not just be driven by the useful consequences
of such work (i.e., increments of income and wealth); it should also be driven by
a moral cause or calling that would lead people to continue working even after
they are rich enough to cover all of their needs. From this principled
understanding of a moral duty to work for markets, it follows that any scheme
that would allow people to eat without working would amount to a moral
scandal, as such a scheme would function as a standing, seductive, and morally
disorienting invitation to forget upon and positively betray ones calling, as
Max Weber famously argued. Persistent material need (and, corresponding to it,
the imperative of economic growth) are thus seen as vehicles of moral rectitude.
It is easy to see how Protestant Christianity and working class militancy
converge on the productivist moralization of work.
According to this notion of justice, every individual is responsible for
providing for his or her own necessities of life through either gainful
employment or any other type of useful work.
12
Conversely, whoever does not
work (or is unwilling to work) should not eat, the positive version of which
would be the meritocratic maxim that a persons salary should be based upon the
amount and (market-determined) usefulness of the service rendered. Basic
income impinges not only upon the basic norms of this work ethic but also upon
both its derivatives. On the one hand, with a basic income in place, adults
capable of working would be released from the material necessity and, in the
absence of this vehicle, the alleged moral calling to work, as they would be
allowed to draw income at the cost of the taxpayer. Although modest, these
benefits are an unconditional income and would be paid without there being the
rendering of any services in return. On the other hand, the willingness of the
proverbially hard-working, tax-paying majority, who actually pays for this
unconditional income, to engage in productive efforts would decline, with grave
consequences for overall prosperity. Taken together, these two undesirable
effects might positively destroy the moral foundations of collective well-being.

12
This excludes only those who are exempted from employment due to one of the (only) six legitimate excuses
for non-participation in contractual labor and self-employment: retirement, physical or mental illness or
disability, having the legal status of a child or minor, being a parent of a young child, mandatory military
service, and being a prison inmate. A (decreasingly legitimate) further excuse is the status of a housewife or
homemaker, at least in the absence of a linkage to parenthood.
There are two empirical arguments that need to be considered in this
context. One is that solidarity (or the readiness of income earners to pay taxes in
favor of those who live on their basic income alone) is in fact strongly contingent
on reciprocity. Solidarity, in other words, depends upon the (able-bodied)
beneficiaries being perceived as people who (are willing to) do something useful
in return. If this perception is missing, solidarity becomes excessively
demanding in moral terms and politically precarious as a consequence. The other
empirical generalization is that surveys on happiness seem to suggest that the
absence of opportunities to make oneself useful correlates strongly with a strong
feeling of unhappiness. Fortunately enough, and as far as the moral economy of
the basic income is concerned, these arguments seem to cancel each other out as
objections against basic income. For if the net-contributing tax-payers are
sufficiently (made) aware of the unhappiness of the idle and their (presumable)
aversion to unhappiness, then the reciprocity condition is likely to be seen as
being satisfactorily fulfilled.
In their introductory text to the basic income debate Vanderborght and Van
Parijs (2005) have discussed to what extent this core of distributive standards in a
modern capitalist society is justified, and hence must be incorporated into a
corresponding version of basic income entitlements and its mode of financing,
and to what extent these standards can and must be repudiated on normative
grounds. Concerning arguments that can be mustered against the standards of
the work ethic, there are three important considerations. A pragmatic one is, in a
nutshell, that the undeserved gift of income enjoyed by idle lazybones can be
justified not only because it cuts administrative expenses and their specific kind
of loss of freedom that results from being ordered to accept some kind of work,
but also because the alleged scandal of a (strictly individualized and universal
allocation of) income without work is just the mirror image of the quite
commonplace scandal of work without income performed by those who supply
undeniably useful (though not market-valued) activities such as care work and
voluntary services of all sorts. Thus the positive injustice from which non-
working recipients would benefit is partly offset by an abolition of the negative
injustice from which many non-receiving workers suffer today.
13

More important is the principle anchored not only in the left-liberal
tradition of Thomas Paine and John Stuart Mill but also in less rigid versions of
Christian theology that the earth belongs to all its inhabitants and, as a

13
A campaign of British feminists in the 1980s used a slogan to undermine the mindless categorization of
mothers into working mothers and non-working mothers. The slogan was simply: All mothers are
working!
DOI: 10.2202/1932-0183.1100
consequence, people can claim a right to a fair share of that collective
endowment, irrespective of their income or job status. As originally argued by
Paine, there is a set of transfers to which one is entitled neither by virtue of
ones contributions nor ones neediness, but simply by virtue of ones
membership in the relevant community (Van Parijs, 2001b, p. 123). A
contemporary example is the transfer of payments out of the Alaska Permanent
Fund, which is financed mainly out of oil drilling revenues, that all citizens of the
US State of Alaska receive as their share in the collective endowment of that
region (and perhaps in compensation of their readiness to withstand its
inclement climate conditions). This arrangement suggests that taxes on soil and
natural resources are a plausible way to finance a basic income; in addition, that
is, to the massive economic and other costs that are to be saved by the abolition
of unemployment and poverty, for separate expenditures for these social
categories would no longer be called for in a society that has established
economic citizenship rights to an adequate basic income.
The antimeritocratic derivative of the argument from collective endowments
and a right to fair shares may well amount to a demolition of the economists
adage that there is no such thing as a free lunch. The counter-argument must
make reference to collectively favorable background conditions that allow
productive agents Leistungstrger, in a popular neo-liberal German manner of
speaking to earn an income through what only appears to be an effort of
individual labor and is actually obtained through no merit or accomplishment of
their own. As we know from John Lockes property theory (Locke, 1689 [1988]),
legitimate property rights result from the axiom of self-ownership plus the
process of mixing ones labor power with (originally unowned, we must
assume) matter. Yet the terms of such mixing, i.e., both the level of productivity
and the institutional framework in which production is embedded, are clearly
collectively inherited background conditions rather than individually earned.
These background conditions (of which some productive agents are able to make
successful, and some to make less successful, use that is yet undeserved in either
case) consist of, e.g., the infrastructure left to us by past generations, and to a
large extent also the knowledge, technological achievements or civilizing moral
and legal systems that the contemporary generation may claim as a free and
public good.
14
The same observation applies in relation to the synchronic (as
opposed to the just mentioned diachronic) case of the payoffs of cooperation. The

14
Herbert Simon (2001, p. 36) estimated that about 90 percent of income in wealthy societies like those of the
United States or northwestern Europe is due to background conditions owned jointly by members of the
whole society.
organized cooperation effect of agents through division of labor leads to
productivity gains that cannot be ascribed to any single individual much like a
repository of fossil fuels. This source of productivity, too, represents a set of
(non-natural) resources and as such, an undeserved gift subject to a universal
claim of distribution and compensation in much the same way as claims to
natural resources (among those the physical and intellectual endowments of
persons won in a natural lottery
15
); this claim requires the lucky ones to
compensate their less advantaged fellow citizens to a certain extent while clearly
leaving intact the market incentives that are needed to sustain productive efforts.
It is consequently a moral paradox that precisely those who benefit most from
these undeserved gifts take pleasure in asking others who do not to please
refrain from asking for a free lunch.
The normative grounding of an unconditional basic income becomes most
challenging when one attempts to address the question which (useful)
activities can or should be undertaken by those who, for lack of a suitable
employment opportunity, must - or decide to - live off their basic income or in
any case remain outside the sphere of employment or self-employment. The
libertarian answer is that it should be a freely chosen activity, with the
(supposedly) tiny minority of those who choose no useful activity at all should
the single-minded proverbial surfers on the beach
16
should be allowed to do
so for the sake of preventing the rise and associated costs of bureaucratic
surveillance. This answer obviously does not fully appreciate the issue in that it
fails to consider the restrictions imposed by modern societies on the range of
choices among which a freely chosen activity can be selected. We might say
that dominant institutions and values have decimated options of making oneself
useful and feeling appreciated other than through gainful kinds of activities.
Apart from work in terms of family care, voluntary work in the nonprofit sector
and various types of personal work (including the work of acquiring skills and
knowledge through training and education), there are no institutional patterns in
modern work centered societies that would allow people to both integrate
socially and to perform as independent and distinctive individuals to the same
extent as those who occupy the status of employed labor, at least its better and
more desirable forms. Arguably, modern societies are institutionally
impoverished as social esteem and material life chances are largely determined
through peoples job status. Hence, there is the need to combine the debate on

15
For a radical argument along these lines, see Steiner (1992).
16
John Rawls (1993) denounces the possibility of allowing surfers a free ride within the cooperative order of a
just society; but see Van Parijs (2003) for a robust argument why Rawls is incoherent in his treatment of the
surfer.
DOI: 10.2202/1932-0183.1100
implementing any version of the basic income model with a debate concerning
the creation or revival of institutional opportunities to participate in useful
activities that are not premised upon contractual labor or market-oriented self-
employment.
Compared to this thorny problem of widening the range of choice and
appropriate incentives for recognition-conferring activities outside the labor
market, another apparent inconsistency is less problematic. While all citizens are
supposed to be equally entitled to a basic income, the majority of them obviously
do not need it, as they already receive an income from employment that is
sufficient or at least well above the poverty level. Proponents of this objection ask
why we should endow people who do not need them with a claim to transfers.
One method to neutralize this effect would be to raise the taxes on medium and
high incomes so that those receiving the basic income would automatically pay it
back with their tax money a solution which in turn invites the objection of
churning, or senseless transfers between accounts. Michael Opielka (2005) has
proposed a more straightforward solution which, however, is at odds with the
strongly universalist impetus of an unconditional basic income and rather follows
the logic of a social insurance institution: Anyone is entitled at the beginning of
each fiscal year to a subsistence-level basic income transfer. She or he will apply
for this transfer if it is anticipated that market income will be insufficient to cover
needs. This transfer thus serves as a personal security net, or a floor below which
disposable income cannot fall. It is based upon the bet a person makes on his or
her earning prospects. If, however, it turns out at the end of a fiscal year that the
claimant has been overly pessimistic and his or her actual income has in fact
exceeded a defined threshold (of, say, three times the basic income), all or part of
the transfer claimed must be paid back with interest. Given such an incentive
structure, the basic income would be largely claimed by those who need it to
prevent unemployment or falling into poverty, while the incentives to accept
available employment would remain fully effective.
A final objection, as mentioned above, is an argument from opportunity
costs. Isnt it a waste of tax money to subsidize the (potential) idleness of people
who could well perform productive functions? Clearly, a human nature
argument that postulates a natural propensity of humans to be usefully active is
not quite good enough as a response to this objection. On the other hand, in
mature economies of the OECD world, the market for contractual labor is
evidently not capable of absorbing the total of labor supply in a durable fashion
if, that is, such absorption were to take place on the basis of acceptable wages
and conditions. Under these constraints, the demand for labor, be it in the private
or public sector, is simply not sufficient, whatever the need for it may be. These
are, no doubt, contested assumptions. On the meta level, they evoke the question
which side of the argument should carry the burden of theoretical and practical
proof, and by when. Yet alternatives to market labor are not easy to come by, if,
again, forced labor is to be excluded as an option on normative grounds.
There are basically four remaining institutional approaches that have been
suggested. The alternative that comes closest to market labor are solutions which
follow models of negative income tax (NIT) or earned income tax credit (EITC).
Next in line is the option of licensing parallel currencies (green dollars, time
dollars) for use in a voucher-driven barter economy (Offe and Heinze, 1992).

A
third alternative is the idea of a participation income as suggested by Anthony
Atkinson (1996); this solution is based upon a version of basic income with some
measure of conditionality (in the form of non-market useful activities) attached
to it.
17
In this family of proposals also falls the idea of a capitalized basic income
that is transferred to every person at the beginning of his or her adulthood as a
start capital at birth (Ackerman and Alstott, 1999; Grzinger et al., 2006).
18

Finally, there is the institutional option of creating mandatory, and at any rate
state-subsidized forms of civilian community services and similar project-
focused activities in the third (not-for-profit) sector in a more or less close
analogy to the military draft; these would mostly be designed to absorb labor
power of young people (Gorz, 1988; Dagger, 2002; White, 2003a). Many of the
cases that belong to this category are designed to combine useful activities with
the acquisition of valued work experience and skills. Needless to say, the
institutional viability, quantitative effect, and fiscal feasibility of any of these
para-market settings for the performance of useful activities remain uncertain
and should be further explored.
Among these reformist ideas, the proposal of a basic capital that is to be
granted to every member of a stakeholder society (Ackerman and Alstott,
1999) deserves special attention as it is more than just a capitalized version of
basic income. For it addresses a problem that is not, or not to an equal extent,
dealt with by the other proposals, including basic income. This problem relates
to the grossly unfulfilled justice norm of equality of opportunity. Equality of rights
remains a clearly deficient version of social justice given that peoples differential

17
Yet the criteria of eligible activities that count as participation will always be contested and, given the
transaction costs of enforcing them, will (and should) be expanded to virtually everything, i.e.,
unconditionality (Goodin, 2001; but see De Wispelaere and Stirton, 2007, for a contrary view).
18
As put into effect by the British Child Trust Fund that began to operate in 2005 (Nissan and Le Grand, 2000).
See Dowding et al. (2003) and Ackerman et al. (2004) for recent discussions of the comparative advantages of
basic income and basic capital schemes.
DOI: 10.2202/1932-0183.1100
endowment with material resources allows them to make differential use of
those rights. Also, gender or ethnic identities can stand in the way of equal access
to rights, rendering the latter merely nominal. The justice norm of equality of
rights stipulates not more than the negative duty of courts, lawmakers or
employers to refrain from engaging in discriminatory political or legal acts
(including private contracts). In contrast, equalization of opportunities calls for
the positive moral and political duty to intervene whenever the equal access to
equal rights is empirically distorted by morally irrelevant factors such as class,
family background, gender, or ethnicity (Roemer, 1998). This activist reading of
what the justice norm of equality of opportunity requires thus covers a middle
ground between the mere equality of rights requirements of non-discrimination
and the equality of outcomes demand that is hardly feasible (and, even if it were,
hardly desirable in light of the methods that would be required for its
implementation). Compared to the idea of basic capital, the proposal of a basic
income may well be criticized for being deficient in that it just widens choices
and enhances autonomy while failing to address the problem of creating equal
opportunities.
It would be wrong, however, to assume that the controversy concerning an
unconditional basic income is solely determined by conflicts about normative
ideas concerning political rights and social justice. One must also consider the
easily understood role of sociopolitical interests in the rejection of basic income
models. Thus, employers associations consider the unconditional basic income
as a dangerous concept. We do not want a decoupling of labor and income but
rather the opposite. We need to strengthen the link between income and
performance. Whoever does not accept just and reasonable work simply must be
content with less, as a spokesperson of the German employers association
declared (Stuttgarter Zeitung, July 5, 2005). Similarly and more interestingly, most
trade union officials and activists assess basic income negatively, in large part
because trade unions lose some of their responsibility for the autonomous
determination of employees income through collective bargaining (Vanderborght,
2006). As individual income is partly transformed from a reward for work into a
right of citizenship, trade unions are bound to lose parts of their competency,
jurisdiction, and probably constituency. Their organizational and corporate
interest in defending their domains is often glossed over with the warning that
introducing basic income would relieve employers from their (anyway entirely
fictitious) responsibility for job creation. Until now, there have only been a few
open-minded voices among Germanys political parties, especially since the
German Greens, in contrast to their French, Dutch and Austrian friends, seem to
have largely dropped the subject. The widely shared main objection of parties
and unions is based on the view that the proponents of basic income schemes are
overly pessimistic in that they assume (in ways that imply an embarrassment for
parties and trade unions) that the issues of unemployment and poverty can no
longer be resolved by the conventional productivist strategies of promoting
economic growth and by activating workers into the labor market. This
productivist optimism, however, is a perspective that is not easy to support in
view of a fair and unbiased evaluation of facts and prospects of labor market
developments in advanced economies.
3. Basic Income Arguments from a Functional Perspective
Any normative theory, in addition to responding to normative challenges, must
be able to demonstrate that it suits the functional contexts, structural problems
and challenges of the system for which its policy recommendations are intended.
It must not just be morally right; it must also be practically affordable and
demonstrably collectively beneficial in its consequences. Political innovations
need to be supplemented not only by arguments from fairness, but also need to
be compatible with given situations and current problems; they need to be not
only well-intended, but also sufficiently intelligent. Concerning its problem-
solving capacity the proposal of a basic income fares decidedly well in this
respect.
The problem of the German economy in the first decade of the 21st century
is clearly not a problem of production but one of distribution: as both individual
and social security incomes are institutionally linked to gainful employment,
unemployment a high and persistent excess supply of labor force in the labor
market leads to the question of how those persons unable to access jobs can be
supplied with an adequate income that, in turn, would enable them to perform
adequately as consumers on the demand side of markets for goods and services.
Proponents of the basic income have a clear answer to exactly that question: a
tax-financed, economic right of citizenship to a (we have to admit: at most)
subsistence-level income. Market-liberals have quite a different answer. They
expect a correct (i.e., investment-friendly) fiscal, monetary, and economic
policy (I), to entail more growth (G), the latter then leading to more employment
(E), and more employment to finally solve the problem of distribution (D), i.e.,
the fair sharing by the entire population in the social product.
The hegemony of the market-liberal theory is by no means a consequence of
being true or correct. Rather, it has become and remained a prevalent doctrine
DOI: 10.2202/1932-0183.1100
due to the fact that it successfully escaped the scrutiny of its truth. Against the
evidence of its falsehood, its proponents can always defend themselves
(provided political elites are sufficiently indoctrinated). The theory survives only
because politics spared it from having to undergo serious testing and deliver
proof. The deceptive argument here is as follows: If the essentially correct
theory (I) ==> (G) ==> (E) ==> (D) is not confirmed in practice, this must be so
because the independent variable (I) did not reach a sufficiently high value. The
practical consequence of this conclusion is a pathological learning process which
results in trying out an even more investment-friendly fiscal and monetary
policy with even more rigorous cutbacks in social and labor market policies.
This learning process must be called pathological because it involves a
systematic disregard of a number of well-known facts. Concerning the link
between economic growth and employment, a (in itself somewhat ambitious)
growth rate of about two percent is needed in order to keep the level of
registered unemployment from further increasing, and only beyond that
threshold will the demand for labor expand. The total fiscal costs of
unemployment alone loss of revenues plus statutory expenditures in
Germany add up to an annual amount of more than 80 billion according to the
current statistics of the IAB, the research institute of the German labor market
agency. Note that this total does not include costs for the accompanying
detrimental economic effects of unemployment, namely the loss of income for
the unemployed and the accompanying negative effects on overall levels of
demand in markets for goods and services; neither does it include the income
loss resulting from the corresponding growth of types of employment in which
paying social security contributions is (illegally) avoided and which, through this
competitive advantage, can outcompete regular employment escaping the
standard liability of social security contribution payments. This huge burden on
state budgets also operates as a brake on overall growth, as it hinders federal,
state, and local authorities to create jobs through investment in infrastructure.
Furthermore, in microeconomic terms, the growth of industrial and service sector
companies does not consistently lead to more employment. Rather, layoffs
achieved through technical, organizational and locational change are generously
rewarded by investors in the stock market. Rather than growth leading to
employment, increments of unemployment due to layoffs can well lead to
growth.
A typical response when the belief in (I) ==> (G) ==> (E) is irritated by the
facts is to turn the problem into an issue of morality: if actual outcomes deviate
from expected results, it must be due to some reproachable misconduct on the
part of the agents involved. In the moralizing spirit of a new critique of
capitalism, the entrepreneurs are criticized for their alleged lack of a sense of
social (or even national) responsibility when they fail to create domestic jobs.
Apart from the fact that policy makers who lament moral deficiencies of certain
categories of citizens make fools of themselves and their claim to exercise a
meaningful capacity for political control, it also calls upon employers and
investors to fulfill obligations that they never had any reason to recognize in the
first place. For it is undoubtedly neither an inherent organizational objective nor
a statutory duty of business enterprises to provide (more) employment; rather,
employment is a possible (yet by no means automatic) side effect of these
companies success in delivering on their quite different raison dtre, which is
the perfectly legitimate goal of maintaining and increasing their profitability.
Concerning the belief in (E) ==> (D), i.e., the possibility of continuously
solving the distribution problem through the labor market and earned income,
the question of the labor absorption potential of an economy such as that of
Germany must be addressed. The issues involved in estimating this absorption
capacity (under the constraints of acceptable real wages and benefits) are well-
known. Mature economies such as the German one have the following features:
they are highly capital-intensive, they have on average demanding human-
capital requirements, wage determination takes largely place through collective
bargaining, capital and other markets are liberalized, and labor-saving technical
change is extensively utilized (not least in the form of substituting waged labor
by unpaid self service and other forms of internet-facilitated client labor). Are
such economies at all in a position to create a (domestic) demand for labor in the
often-invoked service sector that would be required to offset the current losses in
employment in the primary and secondary sectors? Are international division of
labor and global terms of competition ready to foster the creation of a stable
balance between losses of domestic employment and export-driven employment
gains? Are the labor markets of such mature economies able to absorb a further
increasing supply of (female, migrant) labor force entrants in the medium term at
wage rates that enable the currently active generation to finance both the raising
of the next as well as the support of the retired generations? In a nutshell, the
question is whether a full-employment equilibrium in a society whose order is
built around the labor contract is still a credible option. And if it turns out to be a
feasible option, the next and even more serious, namely political and moral
question is whether it is worth paying the (e. g., environmental) price for making
use of it.
DOI: 10.2202/1932-0183.1100
Skeptical answers to these questions are not only permissible; they positively
suggest themselves. The German experience over roughly 30 years of a gradual
relative decrease of the demand for labor within normal employment relations
(i.e., full-time, skilled jobs, protected by collective agreements and social rights)
embedded in stable firms has caused a deficit of jobs that must be estimated at
up to 7 million, out of a labor market of 40 million which includes discouraged
workers, gray and black labor markets, and those in a variety of administrative
measures of training and activating prospective employees. Pointing out that
both Anglo-Saxon and Scandinavian economies do better in absorbing labor into
employment amounts not really to a valid counter-argument as there are
important limitations in terms of transplanting the basic institutional frameworks
and geographic and economic advantages. They can, that is, at best stimulate
some cross-national learning processes. From a prudential point of view it
therefore appears advisable to modify the institutions of production and
distribution in such a way that (1) a high deficit of employment opportunities is
turned into a tolerable (i.e., a non-marginalizing, non-exclusionary, non-
impoverishing, politically non-disruptive) condition without (2) violating at the
same time the right (and incentives) of citizens to seek and enter into gainful
activities, nor interfering with (3) a general interest in realizing continuous
productivity increases.
A basic income at the subsistence level fulfils, due to its incentive and
steering effects, all three of these requirements just postulated. To be sure, it does
not lead to full employment, although the willingness of persons to enter into
employment may in fact be enhanced by the availability of an economically
acceptable exit option that a basic income provides.
19
At any rate, a universalist
basic income makes unemployment individually and collectively tolerable and
thereby diminishes the productivist pressure that public policy makers otherwise
face to create jobs through investment-friendly fiscal, monetary, and
infrastructural policies. It uncouples problems of distribution from problems of
employment as they are caused by a persistent underutilization of the overall
societal labor potential. It also makes counterproductive practices of an
administrative activation (i.e., the coercive integration of labor into the market
by means of negative administrative and economic sanctions) largely

19
The argument here is that the provisions of exit options will stimulate - rather than diminish - entry decisions.
Similar functional arguments have been used by proponents of a liberalization of divorce law, of the Bologna
process of the EU (supposedly increasing participation in tertiary education by institutionalizing the BA degree
in Continental universities as an intermediate certificate, rather than exposing those who do not make it all the
way to a MA to the stigma of being drop outs and failures), or the liberalization of statutory rigidities of job
tenure.
superfluous and rather activates people in the sense of creating space for
doubtlessly useful(though not marketed) voluntary activities in the family, the
community, and civil society organizations. At the same time, incentives to enter
into labor contracts remain fully intact for either side of the labor market for
suppliers of labor, because of the higher income, relative to a basic income, that
can be earned through paid employment; and for employers on the demand-side
of the labor market because the wage and non-wage costs of labor are reduced by
the amount of the basic income that any worker would be entitled to as a citizen.
Moreover, labor productivity is likely to increase because of the substantially
voluntary, economically uncoerced nature of ones participation in contractual
employment, and also because moral and legal constraints against making the
fullest possible use of labor-saving technical and organizational change would be
largely rendered pointless.
If we consider, in conclusion, some of the ongoing reforms and innovations
in the field of labor market and social policy of the OECD world, many of them
can even be seen as (unacknowledged and half-hearted) steps towards an
unconditional basic income. Levels of disposable income of households are
increasingly, and arguably so as a secular trend, not just determined by the
quantitative and qualitative supply of labor, the demand for labor, and the
institutionally determined distribution of bargaining power of individual and
collective actors on either side of the labor market. They are increasingly
determined by political decisions which address households as households of
citizens and according to their market income, family, health, gender, and age
status. In the German economy, the share of wage income in the total income of
households has been continuously decreasing, while not only the share of
income from capital is increasing, but similarly also the share of income in the
form of net transfers (defined as benefits and transfers minus taxes and social
security contributions). State policies, in other words, are no longer confined to
providing for collective consumption (such as public education and public
transport); in addition, they do provide for growing shares of individual
disposable income, and evidently irreversibly so. When we calculate in
proportions of the population instead of proportions of household incomes, the
same trend emerges: In 1980, 69,6 percent of the German working age (1864)
population lived on gainful activities; this figure was down to 63.7 percent in
2006. Even more dramatically, 13.9 percent of the working age population lived
on social security and other transfers in 1980, a figure that rose to 25.7 percent in
DOI: 10.2202/1932-0183.1100
2006.
20
Current efforts and policy trends to uncouple pension and health
insurance benefits from earnings and instead finance (parts of) benefits through
tax revenues point in the same direction of solving distribution problems
through political discretion rather than leaving them to the dynamics of markets.
The target group of these and similar reform initiatives is evidently no longer
framed as the employed and their collective status rights as parties to a labor
contract, but as citizens with their legally defined rights and duties.
The statutory fiscal (as opposed to voluntary contractual) mode of
interpersonal and intertemporal distribution seems currently to be on its way to
eventually including not only non-wage costs, but part of wages themselves. A
case in point is the current revival of the idea of a negative income tax (NIT) as
well as increasingly popular demands for the introduction of minimum wages.
Here, the idea is that those parts of the labor force which suffer from low
productivity or supply-side-induced wage depression will be employed (if they
find employment at all) only at adequate wage rates. In the case of NIT,
disposable income is uncoupled from earned income, and the effective income
becomes a matter of an openly political decision. At any rate, the game of income
determination is now being played not just between the agents on the supply
and demand sides of the labor market but, in addition, legislative and budgetary
decision makers.
To be sure, all such political interventions into the labor market and wage
determination, including the complex arrangements of the Hartz IV and Agenda
2010 labor market reforms in Germany, differ widely from anything coming
close to an unconditional basic income. For rather than leaving it to citizens and
their responsible and autonomous decision whether or not they perform
contractual labor and, if so, in what portion of their time, these policies and
reforms are motivated by the conventional view that state-manipulated positive
and negative incentives are needed in order to generate a maximum of
employment. Towards that conventional view of social order, non-wage cost of
labor must be alleviated, the price of labor must be uncoupled from the workers
actual income, workers must be deprived of protective status rights in order to
make them respond in a more flexible and mobile manner to market
contingencies, and unemployment benefits must be redesigned, both concerning
their level and the duration of entitlements, so as to bring to bear strong negative
incentives on suppliers of labor. Whether and to what extent these state

20
Data compiled by Institut der deutschen Wirtschaft, a research institute sponsored by German employers'
associations:
http://www.iwkoeln.de/Informationen/AllgemeineInfodienste/iwd/Archiv/2008/1Quartal/Nr11/tabid/2211/Item
ID/21986/language/de-DE/language/de-DE/Default.aspx.
sponsored supply-side employment policies will yield an overall labor market
condition that could be termed full employment and that at the same time
meets acceptable standards of distributive justice and social integration is an
empirical question the answer to which well come to know in the near future as
the target year of both the Lisbon agenda and Gerhard Schrders Agenda 2010
comes closer. Should the answer be a negative one, the emergent logic of an
openly political determination of issues of distribution would be available for
more far-reaching solutions, such as the gradual de-conditionalization of
citizens entitlement to transfers of tax-financed income.
Any approximation to the normative ideal of a tax-financed, unconditional,
citizenship-based, and subsistence level basic income is highly unlikely to come
as a big bang (as some of the less realistic enthusiasts of basic income
sometimes imply), but in a gradualist manner that extrapolates currently
observable trends towards numerous legislative alterations of incomes earned in
markets. Five gradients of approximation can be envisaged on the output side
of basic income, i.e., the statutory allocation of claims, with the input side, i.e.,
the financial basis of basic income, offering an even greater variety of policy
choices, the simplest and most radical of which is a proposal to disburse every
US citizen $10,000 per year (with $3,000 thereof being earmarked for health
insurance) and to finance this redistribution out of a source summarily referred
to as Programs to be eliminated (Murray, 2006, pp. 130139).
As to the five gradients on the output, or entitlement-conferring side, these
are the ones I have in mind:
1. There is a generosity scale, which would be suitable for a gradual upward
movement: The grant would initially be fixed well below subsistence and
stepwise pushed upwards (Van Parijs, 1995; 2001a).
2. There is a conditionality scale, which first applies a quid pro quo logic that is
subsequently diluted (Goodin, 2001).
3. There is a targeting scale which begins with a narrow targeting of
entitlements to certain income, ethnic and family categories (such as income
grants awarded to poor minority parents in compensation for the
opportunity costs of their children attending school rather than contributing
to household income through waged work
21
), with a gradual approximation
to universalist standards of citizenship being a built-in dynamic driven by a
me too logic.

21
An example of such a policy would be the Bolsa Familia in Brazil (Suplicy, 2005; 2007).
DOI: 10.2202/1932-0183.1100
4. There is a time scale, which comes in a chronometrical and a chronological
dimension. As to the latter, we might think of an initial age limit (say, 30
years) which must be passed in order for a citizen to become eligible; such a
limit can be quite persuasively be argued for in terms of combating youth
marginalization and discouragement from labor market participation and
skill acquisition. As to the chronometrical dimension, the right to draw basic
income may initially be limited to a time account of, say, 10 years per life to
be drawn at any age in units of at least 6 months (Offe, 1997, pp. 81108;
White, 2003b).
5. Finally, there is a dimension of counter-cyclicality, meaning that as long as
the labor market is reasonably balanced, the level of basic income can and
should be very moderate, with the transfer per capita (automatically)
increasing whenever chances to find a job deteriorate at the macro level.
These dimensions of approximation can of course be mixed and combined in
several ways. While practical experience will lead to contested moves in one or
the other direction of the scales, a great deal of experimentation and revisions
will certainly be called for in the process.
4. Conclusion
Throughout this essay, I have argued with the German and, more generally, the
Continental European situation of labor market developments in mind, as well as
the political debates concerning these development. Given these conditions and
prospects, the case for introducing basic income along its many conceivable
gradualist pathways can be based not just on the justice arguments that I have
reviewed, but even more cogently on functional arguments concerning the issues
and pathologies that the introduction of a basic income can cope with more
effectively than currently adopted policies and public philosophies. In the final
analysis, basic income is pointless in functional terms (however valid its
normative underpinnings may still be held to be) if conventional policies of
pursuing the goals of full employment and equitable distribution can actually
deliver on their promises; but the converse is also true.
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Hertie School of Governance
Schlossplatz 1
10178 Berlin
Germany
Email: offe@hertie-school.org
DOI: 10.2202/1932-0183.1100
IR AL NDICE


Vol. 2, Issue 2 RESEARCH ARTICLE December 2007
Anthroposophical Reflections
on Basic Income

Johannes Hohlenberg

Edited with an introduction by
Simon Birnbaum
Erik Christensen
Aalborg University
Abstract In the 1930s Danish author and painter Johannes Hohlenberg (18811960)
published several essays in defense of an unconditional income for all. These original
writings, strongly influenced by Rudolf Steiners anthroposophy, are not widely
known. This article makes two of Hohlenbergs essays on this topic available in
English translation for the first time. The first part of this article introduces
Hohlenbergs ideas, followed in section two by English translations of the two
Hohlenberg essays: Samfundsarven (The Heritage of Society) (1934) and Dersom nogen
ikke vil arbejde, s skal han heller ikke have fden (He who Does not Work, Neither Shall
He Eat) (1937).
Keywords anthroposophy, history of basic income, Hohlenberg, inheritance

We are very grateful to Hans Mller for bringing our attention to Hohlenbergs writings on this topic and to
Peter Normann Waage and Terje Christensen for further information about Hohlenbergs articles. Also, we
thank Karsten Lieberkind for translating the material on short notice and the Danish cooperative bank
MERKUR for sponsoring the translation. Finally, we thank the editors of this journal for helpful suggestions.

1. Rediscovering the Writings of Johannes Hohlenberg
Johannes Hohlenberg (18811960) was a Danish writer and painter. Hohlenberg
is internationally recognised for his two books about the Danish philosopher
Sren Kierkegaard: Sren Kierkegaard (1940) and Den Ensommes vej (1948)
(Christensen, 1981).
1
It is less widely known that Hohlenberg also wrote, starting
in the early 1920s, several original essays on income, distribution and
unemployment. Through the 1930s he increasingly emphasised the idea of
providing everybody with an unconditional minimum income as one of the core
components of the strategy he defended in tackling unemployment.
This theme was developed in a particularly clear way in his essays
Samfundsarven (The Heritage of Society) (1934) and Dersom nogen ikke vil arbejde,
s skal han heller ikke have fden (He Who Does Not Work, Neither Shall He Eat)
(1937). This article makes both essays, originally published in Danish in the
anthroposophical journal Janus, available for the first time in English translation.
Hohlenbergs writings are still virtually absent from the basic income debate,
even in Scandinavia, and we are pleased to help fill this gap by introducing these
two essays to an international audience.
In this first section we offer a brief introduction to Hohlenberg and some
remarks on the broader structure and modern relevance of his ideas.
2
Section
Two comprises the English translations of the two essays mentioned above.
1.1 Hohlenberg, Steiner and the Idea of Social Threefolding
Johannes Hohlenberg had connections with the anthroposophical movement
after the First World War, and in 1920 he met the Austrian philosopher and
social thinker Rudolf Steiner, the founder of Anthroposophy and of Waldorf
education. Hohlenberg played a central role in spreading Steiners ideas in the
Scandinavian countries. He was General Secretary in the Danish
Anthroposophical Society from 1923 to 1931. He was also the editor of the Nordic
anthroposophical journal, Vidar (19261940) and an important contributor to the
Norwegian anthroposophical journal, Janus.

1
Sren Kierkegaard has been translated into Swedish (1943), German 1949), Dutch (1949), English (1954), French
(1956) and Japanese (1968). Den Ensommes vej was translated into French (1960).
2
As John Cunliffe, Guido Erreygers and Walter van Trier have argued, it is interesting to observe the continuity
in the arguments presented for and against basic income throughout the history of this idea irrespective of
their different contexts (Cunliffe, Erreygers et al., 2003, p. 15). Hohlenbergs case for basic income fits well into
this pattern of continuity, and many of his arguments are strikingly relevant to present debates on work and
welfare.
DOI: 10.2202/1932-0183.1092

In 1932 Hohlenberg published Mellem enevlde og diktatur. En samfundsstudie
(Between Absolute Monarchy and Dictatorship: A Study of Society), an original
interpretation of Rudolf Steiners economic and political ideas. In accordance
with Steiner (1985), Hohlenberg distinguished three realms of society: the
cultural, the political and the economic spheres, which he suggested would
balance each other and function together harmoniously only when each was
granted sufficient independence. This has become known as Steiners idea of
social threefolding. Steiner held that the ideas of the French Revolution
Liberty, Equality and Fraternity expressed the distinct needs of the three social
spheres: liberty is the ideal in the cultural life, equality the ideal in a democratic
political life, and fraternity the ideal in the economic life.
In the political sphere the state is sovereign and should act on the duty to
create equality, justice and order for all people. However, the state should not be
able to control culture or how people think and learn, and the role of the state
must also remain limited in the economic sphere. In Hohlenbergs view of social
threefolding, the state should neither own or run businesses, nor manage
economic life. Many of these functions should be delegated to the stakeholders in
new economic associations.
This emphasis on the independence of the economic sphere does not mean
that Hohlenberg was an economic liberal in the traditional sense. Hohlenberg
holds that money and property belong to the political sphere. Earth, labour and
capital cannot be normal commodities (Hohlenberg, 1932, pp. 3843).
3
Property
rights and the right of inheritance to earth and capital should be abolished and
replaced with a social right of use. To Hohlenberg it is the states duty to protect
all people from being exploited, which implies that it must secure for all
individuals the means of subsistence as an unconditional right.
1.2 Material Progress and the Freedom From Toil
Hohlenbergs way of arguing for (what we now call) basic income is similar to
that of contemporary postproductivists (Goodin, 2001). While it would, no
doubt, be possible to push every individual to work and to make them do so as
much as possible, one of the core points of Hohlenbergs argument is that it
would not be desirable to do so. We should use the enormous benefits of
technological progress to liberate humankind from slavery: to free workers from

3
During the Great Depression in the 1930s Hohlenberg supported (and wrote a book about) the farm
movement Jord, Arbejde, Kapital (Land, Labour, Capital) (JAK) in Denmark. Like social credit movements in
other countries the JAK movement established its own interest-free currency and banking system. The Danish
government prohibited the use of JAK currency in 1934 (Hohlenberg and Kristiansen, 1935).
3 Hohlenberg et al.: Anthroposophical Reflections on Basic Income

conditions under which they have no option but to be sold as commodities and
to be treated like machines in meaningless forms of mechanical work. The day
is approaching when we will no longer need to sow nor reap nor spin nor gather
in barns, because we will be letting the machines do it for us (He Who Does
Not Work, Neither Shall He Eat p. 10 of the present article). We should do what
we can to expand peoples opportunities to engage in free, spiritual and
intellectual work guided by their own initiative.
True to the logic of social threefolding, Hohlenberg holds that the state must
not try to activate, control and discipline people; and that many new forms of
human interaction, forms of production and cultural activities could flourish
only if cultural and economic spheres gained sufficient independence. The right
to work is helpful to those who rule, because it makes people passively comply
with existing arrangements. It reduces them to obedient tools for the powerful.
In arguing against the right to work, Hohlenberg holds that telling people what to
do and how to do it would block economic efficiency and prevent people from
developing their own creativity, initiative and self-discipline. The outcome of
this obedience, he argued, may often be disastrous. According to Hohlenberg the
fact that employment opportunities were largely boosted during the 1930s
because of military expansion and the weapons industry illustrated the absurdity
of the notion that employment is always preferable to nonemployment and of the
destructive, disciplinary results of the view that all must work.
1.3 Technological Inheritance, Work and Social Participation
What prevents us from providing all with an unconditional income is not
economic constraints, but the moral dogma that we must work in order to have
rightful resource claims. So, how could we respond to this moral idea? In
reconstructing and tracing the source of this view through St. Paul and Calvin,
and in developing his response to this objection against unconditional
distribution, Hohlenberg states a clear case for what has later been referred to as
the technological inheritance argument for basic income (Alperovitz, 1994;
Simon, 2001; Van Parijs, 1995, pp. 102106; White, 2003, pp. 161162).
Many theorists before Hohlenberg, such as Thomas Paine, Henry George
and Joseph Charlier, advanced differing versions of the view that there exists a
universal right to a share in natural resources. Hohlenbergs case for basic
income rests on the broader notion that the spiritual inheritance from previous
generations and their production techniques have massively increased the
output for a given amount of labour. People can have legitimate claims on social
resources whether or not they work because, as Hohlenberg writes,
DOI: 10.2202/1932-0183.1092

when the production methods are not created by the people who use
them and are not the product of one persons work but a heritage
that present-day humanity has taken over from an earlier generation,
meaning it does not belong to one person but to all, just like the
spiritual heritage from the great poets and thinkers it is only natural
that all receive their share of its fruits (The Heritage of Society p. 6
of the present article).
Those who defend workfare or other activation policies under present
conditions often argue that such measures are necessary in order to break down
destructive cultures of unemployment or to prevent people from accepting a
state of grey resignation to unemployment (Layard, 2005; Mead, 1987). Along
with Hohlenberg we may argue that a basic income might give people the
freedom to turn down jobs they dont like and would expand the set of
opportunities available to them in many ways. But do we not all need the
discipline and structure of paid work or work-like activity - in order to bring
meaning and participatory opportunities to our lives?
Hohlenbergs work brings attention to one of the problems of such views. If
work is accepted as an existential necessity a condition for realising the most
fundamental ethical objectives in life it is easy to lose track of the purpose of
the activities undertaken. We can only achieve an expansion of freedom from toil
and a better assessment of the moral status of work if we reject the idea that the
state must provide all with employment. How can we afford to criticise the jobs,
or the sector of the economy, on which our livelihood depends? If work, or the
means to support oneself through work, is what we need, how can we be asked
to question the purpose or negative side effects of this production? In the 1930s,
Hohlenberg emphasised the military industry. In our own time, similar
arguments have been applied to environmental pollution (Offe, 1992; Van Parijs,
2001).
On the other hand, the arguments from employment-based paternalism
regarding work, social cohesion and the good life present us with a challenge
that we cannot easily sweep away. In the words of John Rawls, we may worry
that people would sink into apathy and cynicism if their material need to
accept the structure of work is withdrawn (Rawls, 1971, p. 440). Like
contemporary postproductivists, Hohlenberg was concerned with exploring a
response to this type of objection and identifying a policy path under which
people could, and would, use their time in constructive ways. People would
increasingly need to activate themselves and give meaning to their lives in a
sense, become their own employers. According to Hohlenberg it is the artists,

who independently initiate and conduct the tasks they set out to do, who present
us with a model to follow. However, Hohlenberg did not imagine that this
would be an easy transition for everyone. It would require a broader political
change along the lines of social threefolding. Fundamentally, politicians would
need to withdraw from much of educational and cultural life, since Hohlenberg
believed that the state would not normally have an interest in the development
of free, independent and critically minded individuals.
Anyone who defends the idea of an unconditional basic income for all will
need to demonstrate how this would be supportive to both essential conditions
for nonexploitation and the good life. In addressing these issues Hohlenbergs
writings provide us with rich inspiration. With respect to the exploitation
objection against basic income, he argued for the universal right to a share of the
technological inheritance that previous generations have left us. With respect to
the relation between work and the good life, he embraced the desirability of
using technical progress to expand peoples freedom from toil and to promote
individual autonomy.
With these background considerations in place, we hope readers will
appreciate the strength and vision of Hohlenbergs anthroposophical reflections
on basic income, in the essays that follow.
2. Johannes Hohlenberg on Basic Income
The Heritage of Society
Translation by Karsten Lieberkind of Samfundsarven, originally published in Danish
in Janus (1934, Issue 6, pp. 431 436).
If one were to ask, what can we expect of the state, and what can we expect it to
give us? the answer is, in a way, already given in the expression that has
become a slogan for democracy, that the state is a medium for the peoples
will. The question, then, becomes how to understand this concept and how this
will should express itself. Since we do not have other methods than the
quantitative majoritys decision, our definition of the concept will, in practice,
cover only areas where this method seems natural. In other words, the will of the
people should be considered when there is a common interest in having certain
things done and done in the same way. For example, to protect our homes from
fire, it is in the collective interest to have a fire department that functions as
DOI: 10.2202/1932-0183.1092

effectively as possible. As to which methods are most effective to meet this end,
the peoples will can have no opinion. The methods employed require special
expertise. And so the state will not be involved here.
To have a certain minimum standard of living access to food, clothing and
housing is also equally in the interest of all citizens, and in the same way. The
fact that some will think one area more important than another is of no concern
to the will of the people, which therefore will not decide this matter; but there
can be no doubt that a secure basic standard of living is in the interest of all.
Consequently it is the responsibility of the state to realise this wherever possible.
With these last words we move from state responsibility to economic
questions: is it possible to provide all citizens, without exception, with such a
basic standard of living a survival minimum independent of any work that
the citizen might do? How, if possible, do we steadily raise the basic minimum;
and how do we raise the average shared economic level on which the entire
society is founded?
The first of these questions can, without doubt, be answered yes. Modern
production methods are so advanced that it is possible today to produce essential
goods with only a small percentage of the work that was needed earlier, but in
the area of production there is not room for everyone, due to the simple fact that
one person in any area of production can, with the help of modern machines,
produce much more than that one needs or is able to consume. It is an
unavoidable effect of modern production techniques that the worker no longer
works for oneself but for others, and many people come to enjoy the benefits
from work that they themselves have not contributed to. When the production
methods are not created by the people who use them and are not the product of
one persons work but a heritage that present-day humanity has taken over
from an earlier generation, meaning it does not belong to one person but to all,
just like the spiritual heritage from the great poets and thinkers it is only
natural that all receive their share of its fruits.
It is the obligation of the state, as an expression of the peoples will, to assure
that based on the capacity of production a certain share of the production is
always and at any time assigned as a part of societys heritage, and to make sure
that all individuals actually receive their part. On the other hand it is not
competent to decide how the necessary work should be done and who should
take an active part in the work as this requires an expertise that the peoples will
could never have. It does not have the resources to assess the individuals work
capacity and therefore can not form any opinion on how the collective
production-life should be organised. All arrangements in these areas that have

been organised by the state until now have been shown to be destructive and
paralysing, or at the most serving the private interests of one or another. All this
must be left to those who are active in production, as the state (the peoples will),
by simply awarding every person a certain minimum share of the profits, will
secure societys economic basis at any time.
When every person is supplied with a sufficient survival base, all other
forms of protection against economic exploitation are made redundant, because
it is up to each individual to decide not to participate in production. If one wants
to earn a living that is over the minimum, it will rest on ones own will and
applicability in other words, ones own capabilities to choose what place to
fill.
An arrangement like the one suggested here calls for a change in thinking
and for giving up many traditional ways of looking at things: first and foremost,
the still common claim that the productive sphere should activate people. All
state intervention in production is dictated by a wish to keep people occupied, in
the belief that all people have a right to work; its higher priority is to to abolish
unemployment. This, however, is not a question of rights. Unemployment results
from developments in production methods and cannot be abolished without
abolishing such developments. It is only because people in their thoughts and
actions have not been able to understand development, but believe, based on
conditions that no longer exist, that unemployment is an evil that must be
fought. We should rather be discussing peoples right to be free from work.
Unemployment is, on the contrary, immeasurably good, because it means
freedom and new possibilities.
If one could acknowledge these two truths that the individuals material
existence is no longer measured by ones current work activity but is based on
the spiritual heritage from earlier generations; and that one can no longer count
on the idea that the productive work life should activate people then the
problems we now think unsolvable will be shown to comprise completely
different issues. When one has understood that lifes necessities are one thing,
work something else, and ones occupation yet another thing independent of the
first two, and that each of those issues must be addressed in their own right, it
will be possible to see clearly in the social, political and economic chaos in which
we live.
As we have seen, it cannot be up to the state (the will of the people) to
decide how the productive work in a society should be organised and who
should be involved in that work, but only, to the extent possible, to set the
minimum amount that belongs to each individual. It cant be the task of either
DOI: 10.2202/1932-0183.1092

the state or of the productive life to provide people with an occupation. To be
active must be up to the will of the individual. What one wants to occupy oneself
with and choose as ones lifes engagement, and thereafter use time and energy
on, must be ones own decision.
This is clear enough. At the same time that technology has made a large
number of people redundant it has also taken away from work the biggest part
of what made it more than a mechanical time-filler. The old joy and pride of the
artisan will never come again. Work is, on the one hand, pulled away from the
business of producing necessities and, on the other hand, from the satisfaction it
gave, and people have to seek both things separately. The first is secured by the
state, but the second can only come from oneself. Faced with this necessity, it
does not help to argue that only a few are capable of it, and that only obligatory
work can give them a purpose in life. This is a demand against which it does not
help to say we cannot. What is required can be formulated: the incredible sum
of spiritual energy that has gone to produce modern technology and to develop
it to the point where it now stands must now be put into serving the spirit,
thereby giving every person the possibility and the time to develop ones own
personal spiritual content. Technologys role is not just to provide us with an
electric trolley car or a vacuum cleaner. If used correctly, it can mean freedom
from hundreds of years of slavery.
The democratic state has not understood this. It has, on the contrary, used all
its power to fight the realisation of this by taking away responsibility and
independence from the people and forcing them into organisations that tie them
to work instead of making them free; dictatorship, which on so many points is
the continuation and consummation of democracy, has also on this point brought
about what democracy cannot and dare not do.
From this point of view, one can perceive the modern dictatorships as a last
attempt at going against the development that must come. Therefore the huge
effort to force people into a dependency on the state, blocking all free movement,
and from outside to force on people a dictated outlook on life to make them
forget the right to have an independent, personal view of life. It is a
misunderstanding to believe that the best guarantee against that danger lies in
strengthening and expanding the democratic principle. It lies, on the contrary, in
confining this principle to areas where the will of the people actually has an
opinion. For those countries that have come such a long way towards this goal
that it will be impossible to turn back, economic ruin is the only hope. It will
possibly be the price that must be paid to return to those values that democracy
so utterly failed to preserve.

He Who Does Not Work, Neither Shall He Eat
Translation by Karsten Lieberkind of Dersom nogen ikke vil arbejde, s skal han heller
ikke have fden, originally published in Danish in Janus (1937, Issue 4, pp. 292 297).
Over the entire world there is currently a widespread belief that the so-called
good times are returning. Though one is also well aware that the reason for this
apparent improvement is, in general, that the whole world is producing war
materials, one is generally inclined to draw the conclusion that even this activity
may be beneficial.
What is it, then, that is described in this way as the good times and
therefore is regarded as something so good that even this huge accumulation of
war material, the danger of which one is not blind to, is seen as something to be
included as part of the deal and as a lesser evil? The good part consists in the fact
that people who could not find work can now find an occupation and get paid,
so that money begins to circulate in the system, the producers of goods can sell
their products, and people can come into possession of the things they need to
sustain their lives, things which they could not otherwise get for themselves.
Now it has to be pointed out that the reason a lot of these people could not
get the necessities of life was not that there was any shortage of those necessities.
The work that a lot of those formerly unemployed now have does not consist in
producing more of those. On the contrary there was such an abundance of
products that the producers could not get rid of them and on many occasions
had to destroy them, burn them or throw them into the sea. The desire to get a
job that lived on among those so-called unemployed, and the efforts that were
made to give them a job, were not motivated by the fact that this work was
necessary because the products being made were needed. There were already
plenty of those. It was all about finding these people some sort of job that would
keep them occupied and provide them with a pretext for paying them wages that
would enable them to buy necessities of life without increasing the total amount
of goods, of which there was already an abundance. This problem was
completely solved by the war industry. Its products are not marketed, they can
be produced in infinite quantities, and when the time comes that they are to be
brought to the consumers it does not happen through buying and selling
because it would leave no room for other products. Instead they are thrown at
the consumers for free, with the double advantage of getting rid of both the
products and the consumers, which in turn will lead to a further reduction in the
number of unemployed.
DOI: 10.2202/1932-0183.1092

In other words, one has found in the war industry the ideal means to keep
the current production system going: a way in which people can get employment
without producing anything, although in such a way that a pretext can be found
for paying them wages that will enable them to buy the products already there
that could not be sold because people didnt have enough money to pay for
them. Compared with this, other methods like work prohibition, work
monopolies and such things are only half measures, because they only take into
account who is doing the job that, from a general perspective, is irrelevant. What
is important is to find a job that will keep people occupied without leaving any
surplus, and this is carried out to perfection in the war industry.
If one were to picture the ideal that lingers in the minds of the politicians
who engage in these matters, it would be this: a team of workers are employed to
dig holes in the ground and afterwards fill them up again. They are to be paid for
both jobs. (In the picture the situation is even better than in real life, as it is more
useful to dig holes than to produce toxic gas. In the first case the profit is zero,
while it is negative in the second, and zero is always more than a minus). Why
not go one step further and say, What if we released them from their duty of
doing this useless job while still paying them? What difference would it make?
Apparently none at all. Everything would be as before, with the exception that
the workers would get their wages without having to work, but it is the same
outcome as in the first case, because the sum is zero. From an economic
viewpoint it is the same whether the workers do anything or not.
Accordingly it is not economic but moral wisdom that dictates our present-
day economic policy. Generally, it is held that it is not good for the workers to
get paid without doing anything, even though they produce nothing and do this
without any meaningful purpose. And it is not hard to see where this view
comes from. It is the well-known expression from the Second Letter to the
Thessalonians 3:10, He who does not work, neither shall he eat. This has gone
into the blood of mankind to such a degree that, without further testing, it is
claimed to be a dogma even by people who do not regard St. Paul as their
master.
These words, however, are not meant to be a universally accepted dogma,
but were uttered at a certain occasion about certain people who were living in
idleness and were mere busybodies, not doing any work. St. Paul elsewhere
openly claimed his right to be supported by the congregation (see, for instance,
the First Epistle to the Corinthians 9:1314). And no matter how this rule is
conceived, as an economic necessity or a moral maxim, it is nowadays totally
impractical. In earlier days mankind had to work to survive because the

individual was not able to produce much more than what would cover ones
own needs. But modern technology has long since ended this situation. A small
fraction of mankind can now produce what is needed for everybody. But instead
of saying, Finally we have come this far that we are liberated from the slavery of
material needs; finally we are released from the curse of the Old Testament that
by the sweat of your face you will eat bread; finally we have reached the point
where we can turn to the real tasks and begin to work for a cause that is worthy
of human beings! Instead of making those changes in the social and economic
structure, that are necessary to be able to enjoy the fruits of this progress, we
stick to dogmas and ideas that no longer have any relevance for the actual state
of affairs, thereby wasting not only the opportunities that a merciful fate has
given us, but also failing to fulfil the task that has been laid upon us by those
very opportunities.
What are those ideas that we cannot liberate ourselves from? They are the
ideas about the importance of work that were maintained by the Calvinistic
citizens who, with their social influence on Western Europe during the
seventeenth and eighteenth centuries, gradually replaced the feudal nobility and
its entirely different ideals. The bourgeois enterprising spirit was, to this mind-
set, linked to religion in some peculiar way, in the sense that wealth acquired
through hard work was interpreted as Gods blessings, while poverty or lack of
fortune was regarded as a sign of the absence of Gods grace. A new foundation
for morals was created, since the ability to earn money was made the yardstick
for measuring a human beings value.
It is this mindset that has created the view on labour that rules in
contemporary socialism, and that has created the contempt for the pure
intellectual work and for all so-called nonremunerative occupations, such as with
artists and others, which in its most extreme form has led to an outright denial of
the very existence of all spiritual life. We all, to some extent, live under the spell
of this view that has gradually cast a shadow of guilt over the concept of
idleness, which in earlier days before the bourgeois mindset was regarded as the
highest good and as the true foundation for a noble life in the highest sense.
It does not come as a surprise that this outlook adopted St. Pauls expression
about work and raised it to the level of one of the great commandments of the
law. Today, however, social progress has made this outlook absurd. It is no
longer possible to tell someone who does not work that he is not allowed to eat,
when there are no jobs. And as this situation is not fully realised, and because it
is still thought that the old mind-set can deal with the new situation, one is
confronted with insolvable contradictions. Instead of trying to escape from the
DOI: 10.2202/1932-0183.1092

toils of work, which would be the most natural thing for a human being, people
fight to get a job and attach all sort of privileges and monopolies to it. And the
individual who will not work is punished with contempt and starvation, instead
of rewarding him as the public benefactor he really is.
From this standpoint, it is often claimed that nothing comes from nothing
and, therefore, it is not possible to enjoy the fruits of labour without having first
contributed by working. In other words St. Pauls rule is transformed from a
moral to a scientific necessity, and it is no longer said that he who does not
work, neither shall he eat but rather he who does not work, neither can he eat.
A little reflection will show the futility of this argument.
Obviously, mankind in general cannot satisfy its needs without work.
Nature only rarely presents us with products that are ready-made for immediate
consumption. They first have to be prepared by labour to be of any use for us.
But individuals can very well satisfy their needs without labour. Thousands of
individuals have, not only now but also before, earned their living quite well
without having lifted a finger, whether directly or indirectly, in the production of
the products they are consuming. And the number of those who, in this way, live
off the fruits of other peoples labour is increasing; and during the last 2030
years particularly this number has risen dramatically.
Modern technology has had the effect that only a small fraction of humanity
needs to work to produce all the goods that we need, and more than that: it has
had the effect that the majority of those goods have to be consumed by others
than those who were involved in producing them. Otherwise the production
system would collapse. And this is also perfectly all right, because only a small
part of what is being produced by the relatively few who are directly
participating is the outcome of their own work. A substantial part of it is the fruit
of the intellectual power and ingenuity of earlier generations, a kind of common
heritage that has accumulated from generation to generation, and that rightfully
belongs to us all. When we say that a growing number of people live off other
peoples work, it is only a fraction of those who are still alive; so it is the work of
earlier generations, and here we dont mean physical labour but the intellectual
and spiritual effort of those people. What today is securing me one or the other
necessity is not the modest work of some worker who is attending the machine
producing it, and that perhaps is producing it every hour in numbers thousands
of times greater than I need. It is the inventor of the machine; and in most cases
this is not a single individual but a whole line of theoretical and practical persons
whose collective and accumulated work has led to the machine in its current
perfection.

Therefore it does not make sense to claim the validity of maxims like, He
who does not work, neither shall he eat, or, Everyone should enjoy the fruits of
his own labour, and no one should live off the work of others. In our times this
simply does not make sense, and the idea of founding a social system on such
principles, which lie more or less at the root of all modern striving for example,
demanding that everyone participate in material labour whether they call
themselves Communist or adorn themselves with other names, is just a
materialistic figment of the imagination and a result of not recognising the reality
of spiritual and intellectual work. And, therefore, is ignorance of the true
purpose of human existence. Nevertheless one pretends these principles are
valid and tries to adapt to them. Much closer to reality are the words of Christ
about the lilies of the field how they grow, and neither toil nor spin; and the
birds of the air they neither sow nor reap nor gather into barns. What nature
has bestowed upon the animals directly, through their organs, human beings
have created through technology, by their spiritual powers. The day is
approaching when we will no longer need to sow nor reap nor spin nor gather in
barns, because we will be letting the machines do it for us.
Still, no one even makes an attempt of understanding this context. In order
to gain good conscience about getting a share in the fruits of labour, people are
made to do work that has nothing whatsoever to do with those fruits and for
which there is no use just to find a moral pretext for paying them wages.
Herein lies one of the reasons for the immense growth in the number of public-
employee positions that, once created, are almost impossible to get rid of. A huge
number of public institutions that are not only superfluous but outright harmful
and a nuisance consider positions like customs authorities, passport authorities
and lots of other official positions right up to the ministries are maintained
because no one knows what to do with these people once they are employed and
earn their daily bread in those positions. They must live off something, it is
said. And one cannot bring oneself to simply pay their wages while releasing
them from work duties, even though the expenditure involved in this would be
more than made up for by their not being able to do more harm.
However, it is exactly here that we find the only possible solution to the
problem usually labelled unemployment. Two issues must be separated: how
human beings should have their needs satisfied, and how a person should be
occupied. Until now the problem of unemployment has been regarded as an
occupational problem, and the only questions asked were,How do we occupy
these people? How do we manage to get the whole population a job? But the
problem lies elsewhere. The states obligation must be to secure everybody,
DOI: 10.2202/1932-0183.1092

without exception, a fair share of the heritage previous generations have left for
us, and whose visible expression is to be found in the abundance of life
necessities that we, with the help of machines, are able to produce, only a small
part of which is due to the work efforts of human beings living today.
If one were to separate occupation from the acquiring of lifes necessities,
which to a large extent would be possible even now and much more so in the
future, and were to leave the choice of occupation for people to decide for
themselves, opportunities for intellectual and spiritual work would flourish and
surpass anything one could imagine. At the material level there is
unemployment, and there will be still more. If one continues like this, the
country will soon be filled up with superfluous roads and bridges that will
destroy what is left of the original beauty of the landscape. Or one will have to
use energy on sport events and other trivial matters. But soon even this will stop
amusing people. And what is left is only self-destruction out of boredom. A
major reason for the war enthusiasm that is so carefully nurtured in many
countries is due to the fact that people no longer find sufficient interest in
working with material things and are not capable of or are hindered in their
occupation with other things.
It is possible to view the current potential of liberation from material work
as a gift of fate. But there is also an obligation that people will be able to fulfill
only with the utmost exertion of all their abilities. It is therefore a completely
unfounded worry that, provided that such a possibility for freedom were given,
there would not be enough people to do the material work that would still be
necessary. The majority would not be able to cope with this freedom and would
suffer a mental breakdown because of it. There will always be more than enough
people willing to go back to the treadmill because, not being able to maintain
their personality in the empty space of freedom, they need a fixed and authorised
framework for their lives. But those capable of it should have a chance. The
future of mankind lies in their hands.
Things dont happen by themselves. The development of technology that
has created the current possibilities does not originate from itself, and neither can
it be explained by a purely physical cause and effect principle. It is only
intelligible when one looks at the other side: the claim for a spiritual work of
such intensity as has yet only been accessible for the very few. Herein lies the
reason for the development of technology. In other words, human beings have
known this claim with that part of their being that is linked to the cosmic life a
part, though not a part of their conscious being, in which the creative-world-will
works and, unknowingly, created the conditions for the liberation from the

necessity of material work; that is, for unlimited leisure, which is the precondition
for fulfilling this claim. This, however, is as far as human beings can get
unknowingly. The work ahead can only be carried out in full consciousness. This
is the beginning of freedom, but freedom always comes out of a choice.
There are two possible roads ahead of us. One leads to new tasks and a new
understanding of what work is. To this end, it is important that a great number of
people become conscious about what has happened unconsciously so far and
understand the purpose of the possibility of freedom that has been won. If this
does not happen, freedom will be transformed into a slavery even worse than
anything before. Then people become slaves of the technology they have created
and are devoured by the demons they have called for and taken into service.
Current events demonstrate this clearly enough already. If some way of giving
people their share of what they produce, other than by offering them occupation
within the war industry the only form of production that has no effect on
consumption and (though it will in all likelihood some day lead to the
destruction of Europe) is called the good times, is not found, we will come to
share the fate of old Faust who, believing it is his work that is being carried on,
rejoices in the sound of spades, while in reality it is the lemurs who, at the
command of Mephistopheles, are digging his grave.
References
Alperovitz, Gar (1994) Distributing our Technological Inheritance, Technology Review 97
(7), pp. 3036.
Christensen, Terje (1981) Johannes Hohlenberg en pioneer (Johannes Hohlenberg a
pioneer), LIBRA, Tidsskrift for antroposofi 9 (2), pp. 6271 and 9 (3), pp. 137143.
Cunliffe, John, Guido Erreygers and Walter Van Trier (2003) Basic Income: Pedigree and
Problems, in Andrew Reeve and Andrew Williams (eds.) Real Libertarianism
Assessed: Political Theory After Van Parijs. Basingstoke: Palgrave Macmillan.
Goodin, Robert (2001) Work and Welfare: Towards a Post-Productivist Welfare
Regime, British Journal of Political Science 31 (1), pp. 1339.
Hohlenberg, Johannes (1932) Mellem Enevlde og Diktatur: En samfundsstudie (Between
Absolute Monarchy and Dictatorship: A Study of Society). Povl Branner:
Kbenhavn.
Hohlenberg, Johannes (1934) Samfundsarven (The Heritage of Society), Janus (6), pp.
431436. Reprinted in Johannes Hohlenberg (1948) Den Trange Port (The Narrow
Gate). Oslo: Frlagt H. Aschehoug & Co.
Hohlenberg, Johannes (1937) Dersom nogen ikke vil arbejde, s skal han heller ikke
have fden (He Who Does Not Work, Neither Shall He Eat), Janus (4), pp. 292297.
DOI: 10.2202/1932-0183.1092

Reprinted in Johannes Hohlenberg (1948) Den Trange Port (The Narrow Gate). Oslo:
Frlagt H. Aschehoug & Co.
Hohlenberg, Johannes and K. Engelbrecht Kristiansen (1935) Bogen om J.A.K. (The Book
About J.A.K). Copenhagen: Samstyrelsen J.A.K. i kommission hos Povl Branner.
Layard, Richard (2005) Happiness: Lessons From a New Science. London: Penguin Books.
Mead, Lawrence (1987) Beyond Entitlement: The Social Obligations of Citizenship. New York:
Free Press.
Offe, Claus (1992) A Non-Productivist Design for Social Policies, in Philippe Van Parijs
(ed.) Arguing for Basic Income: Ethical Foundations for a Radical Reform. London: Verso.
Rawls, John (1971) A Theory of Justice. Oxford: Oxford University Press.
Simon, Herbert A. (2001) UBI and the Flat Tax, in Joshua Cohen and Joel Rogers (eds.)
Whats Wrong With a Free Lunch? Boston: Beacon Press.
Steiner, Rudolf (1985) The Renewal of the Social Organism: 24 Essays Written During 1919
and 1920. E. Bowen-Wedgewood and R. Marriott (trans.); F. Amrine (trans., rev. ed.).
New York: Anthroposophic Press.
Van Parijs, Philippe (1995) Real Freedom for All: What (If Anything) Can Justify Capitalism?
Oxford: Clarendon Press.
Van Parijs, Philippe (2001) A Basic Income for All, in Joshua Cohen and Joel Rogers
(eds.) Whats Wrong With a Free Lunch? Boston: Beacon Press.
White, Stuart (2003) The Civic Minimum. Oxford: Oxford University Press.
Simon Birnbaum
Department of Political Science
S-106 91 Stockholm
Sweden
Email: simon.birnbaum@statsvet.su.se
Erik Christensen
Department of Economics, Politics and Public Administration
Aalborg University
Fibigerstrde 1, 9220 Aalborg
Denmark
Email: erikchri@socsci.aau.dk
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DOI: 10.2202/1932-0183.1056
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againslIandlheirdefenceofaIlernaliveveIfaredesignsreIyonaninconsislenl
osilion I cIaim lhal lhe recirocily rinciIe coIIides vilh basic inluilions of
lhose in lhe Iefl vhich is vhy Iefl recirocily lheorisls frequenlIy make
inconsislenlchoicesvhenexamininglhefieIdofinslilulionaIdesignandveIfare
oIicy AIlhough lhe recirocily ob|eclion lo I has generaled a considerabIe
amounlofIileralureIillIeslresshasbeenIacedonlhemoslslrikingandvisibIe
fIav of Iefl recirocily lheories lheir favourile oIicy olions are nol consislenl
vilhlhenormaliverinciIelheyoenIyandroudIydefendTheslarlIingfacl
is lhal in lhe end Iefl recirocily lheorisls defend nonrecirocily oIicies and
re|ecllruerecirocilyoIicies
AIlhough nol considered here in delaiI some I defenders aIso symalhize
vilh some aIIegedIy recirocilysensilive oIicies such as II or some
combinalionofcondilionaIschemes
I encourageIsuorlersandlhosevho
IookalIvilhinlereslandsymalhybularenolcomIeleIysureofilsfairness
lo see lhal lhe recirocily rinciIe if consislenlIy aIied vouId harm a
considerabIe number of olher vaIues and rinciIes lhal are al lhe core of
egaIilarianandrogressivesociaIlhinkingIflhalissolhenarinciIeddefence
ofIagainsllherecirocilyob|eclionshouIdbeossibIeandIdefendersneed
nolbeashamedorreIuclanllosaylhallheob|eclionisvrongandlhalIislhe
besloIicyoliononrinciIedgrounds
Tvo sliuIalions are vorlh noling Iirsl I focus my argumenl on |cji and
nol rigniuing recirocily lheorisls I consider as righlving recirocily lheorisls
lhose vho favour a more slringenl vorkfare design for resenl sociaI veIfare
schemes see Mead IheIs in order lo fighl lhe cuIlure of
deendency lo enhance vork erformance and lo encourage lhe vork elhic
among lhe oor In conlrasl Iefl recirocily lheorisls agree lo demanding some
kind of roduclive conlribulion by sociaIbenefil reciienls bul add severaI
egaIilarianquaIificalionslhalmakelhisdemandmuchIessslringenlandsub|ecl
lo !cccncq in vork oorlunilies sociaI righls and income sufficiency Their
ralionaIeislosuorlequaIilysociaIcohesionandarlicialioninacooeralive
sociaI framevork ralher lhan lo suorl a moraI Iife or lhe vork elhic Righl
vingrecirocilylheorislsmaydefendunfairoIiciesandlheymaybeconsislenl
indoingsoHoveveraIeflrecirocilylheorycanhardIybeconsislenlIcIarify
lhisdislinclionandlheIeflrecirocilylheoriesbeIov

IorinslanceseeCouiIIardGoodinOffeandOieIka
ThisisIhiIieVanIari|ssolionfromlhebeginningasMcKinnonrighlIynoles
3 Noguera: Why Left Reciprocity Theories Are Inconsistent
SecondIlakeSluarlWhilesformuIalionsofIeflrecirocilylheorylobelhe
sian!ar! version Of course lhis is nol lo say lhal aII Iefl recirocily lheorisls
agree vilh every sle in Whiles argumenl or lhal lhere cannol be olher
aeaIing Iefl recirocily discourses Hovever sace Iimilalions and cIarily
require a narrov focus in lhis arlicIe so I Ieave for lhe fulure an exhauslive
anaIysisofIeflrecirocilysensibiIilies
ThcRcciprncityOb|cctinntnBI
Since lhe recirocily ob|eclion lo I has been videIy discussed eIsevhere I do
nolresenlilherealIenglhIlsbasicoinlissimIelheuncondilionaInalureof
I makes il ossibIe lo Iive off socielys coIIecliveIy roduced veaIlh vilhoul
ever making any reIevanl lhal is recirocaI conlribulion lo il The mosl
sohislicaledargumenllodaleinfavourofaIeflrecirocilylheoryisdeveIoed
by Sluarl While in his book Tnc Citic Mininun While adduces lhal
economic |uslice necessariIy embodies some fair recirocily rinciIe cilizens
have some degree of resonsibiIily for lhe common good vhich shouId be
refIecled in making usefuI conlribulions lo sociely Thus economic and sociaI
cilizenshireslonacivicminimumcomrisinglherighlloashareoflhesociaI
roducl as veII as lhe obIigalion lo conlribule lo generaling lhal roducl The
recirocily rinciIe advocaled by While reads as foIIovs each cilizen vho
viIIingIy shares in lhe sociaI roducl has an obIigalion lo make a reIevanlIy
roorlionaIroducliveconlribulionlolhecommunilyinrelurn
Whiles idea of fair recirocily slales lhal vhen slale inslilulions salisfy
olher basic rinciIes of |uslice granl civiI and oIilicaI righls and rovide
cilizens vilh a sufficienlIy high minimum share of lhe sociaI roducl lo avoid
overly and vuInerabiIily lhen lhose cilizens aIso have lhe duly lo make a
decenl roduclive conlribulion in relurn in lerms lhal are roorlionaI lo lheir
abiIilies Iveryone shouId conlribule according lo ones caabiIilies and
aliludes Irovided lhal lhe slale sels oIicies againsl rivalion markel
vuInerabiIilycIassinequaIilyandIackofseIfreaIizalionlheninrelurncilizens
musl erform a sociaIIy defined minimum of hours of aid vork lhroughoul
lheir Iives lhal is lo accomIish a basic vork execlalion This execlalion
While adds may aIso incIude olher kinds of unaid vork such as care
voIunleer or communily vork or even some cailaIgeneraling aclivilies This
suggesls lhal Iefl recirocily lheory embodies a broader concel of sociaI uliIily
lhan does lhe righlving concel since for lhe Ialler onIy aid vork seems lo
counlasanaccelabIeconlribulion
DOI: 10.2202/1932-0183.1056
While goes on lo suggesl some concrele oIicies lhal
couId inslanliale a nonideaI modeI of fair recirocily as for examIe lhe
foIIoving
A reubIican I as While caIIs il simiIar lo II civic vork or cilizens
servicerogramssuchaslhosedefendedbyAlkinsonoreck
seeseclionbeIov
AlargeledbenefillobedeIiveredloonIylhosecilizensmosldisadvanlaged
in lheir Iabour markel oorlunilies or in lheir chances for seIfreaIizalion
in vork ve may incIude refundabIe lax credils in lhis calegory as veII as
olhermeanslesledbenefils
A limeIimiled bul uncondilionaI benefil an income guaranlee lo be
en|oyed for onIy a cerlain eriod in a cilizens vorking Iife for examIe
sabbalicaIaccounls
A universaI basic cailaI
such as a sociaI inherilance Iinked lo cerlain

roducliveorhumancailaIenhancingaclivilies
These oIicy roosaIs have some kind of resembIance lo I according lo
WhileTogelhervilholheraIreadyexislingveIfarearrangemenlslheyformlhe
sel of oIicy schemes lyicaIIy defended by recirocily lheorisls CaII lhem lhe
Recirocily IoIicy Iack RII Discussion of lhe ideas and oIicy roosaIs
incIuded in lhe RII is videsread among lhe inleIIecluaI Iefl in severaI
induslriaIized counlries Hovever ve shaII see lhal lheir consislency vilh lhe
recirocilyrinciIeisbynomeansobvious
WhatRcciprncityThcnryRca!!yRcquircsinTcrmsnIWc!IarcPn!icyDcsign
The recirocily rinciIe slales lhal if one benefils from sociely one musl
conlribule lo il In Whiles nonideaI modeI lhe lyicaI benefil one gels from
socielyissomekindofincomeorveaIlhandlhelyicaIconlribuliononemakes
is some kind of aid vork aIlhough some forms of unaid vork are aIso
acceled as reIevanl conlribulions
Tvo condilions are required in order lo

SabbalicaIaccounlshavebeenroosedbyOffeasagenerousversionoflimeIimiledveIfarebenefils
lhey incIude lhe righl lo Iive on a generous benefil bul onIy for a cerlain eriod vhich may be Iinked lo lhe
numberofyearsoffuIIlimevorklhroughIife
UniversaI basic cailaIisan uncondilionaI benefil equaI loaI bul in onIy one aymenl for examIe vhen
individuaIsreachasecificageasanaduIl
Here I am concerned onIy vilh vhal recirocily lheorisls lhemseIves imIy recirocily requires as a decenl
conlribulionAnolherqueslionvhichdoesnolaffeclmyargumenlisvhelherlherecirocilyrinciIemaybe
fuIfiI recirocily Condilion everyone vho receives is conlribuling and
Condilion everyone vho conlribules receives in lhe defined lerms
Inconsislency belveen a given oIicy and lhe recirocily rinciIe may arise in
lvo vays Inconsislency someone is receiving income or veaIlh vilhoul
recirocaling or Inconsislency someone is conlribuling reIevanlIy vilhoul
receivingincomeorveaIlhInbolhcaseslherecirocilyrinciIeisvioIaledSo
by definilion if a given oIicy or oIicy sel
by virlue of ils ovn design

syslemalicaIIy aIIovs al Ieasl one of lhese lvo ossibiIilies lhen il vouId be
inconsislenlforarecirocilylheorislloreferlhaloIicyolionInTabIeonIy
case A is consislenl vilh lhe recirocily rinciIe cases C and D are
inconsislenlvilhil
Tab!cTypcsnIincnnsistcncywiththcrcciprncityprincip!c
Condilion
aIIconlribulingarereceiving
Ycs Nc
Ycs
A Condilion
aIIreceivingareconlribuling
Nc
C D
Tvo cIarificalions are necessary Iirsl for lhe inconsislency lo arise il is
imorlanl lhal lhe seIeclion of lhe oIicy or oIicy sel is made in inc nanc cj
rcciprcciiq lhal recirocily and nol anolher rinciIe is lhe raiicna|c for lhal
choice In lhe discussion lhal foIIovs I lake lhe Ialler for granled since aII lhe
oIicy choices I discuss are made on lhose grounds by Iefl recirocily lheorisls

underslood in a vay lhal does nol require a vork conlribulion and lhus is comalibIe vilh I and olher
uncondilionaIbenefilslhisargumenlvasdeveIoedbySegaII
ToavoidmisunderslandingsisconlribulingshouIdbereadashaslhedulyloconlribuleandreceives
ashaslherighlloreceiveIassumelhislhroughoullheresloflhisarlicIe
ThequeslionofvhelhervearedeaIingvilharlicuIaroIiciesorvilhoIicyacksorselsdoesnolaffeclmy
argumenl TyicaIIy lhe reIevanl unils are oIicy acks because deending on lhe arlicuIar combinalion of
oIiciesasocielychoosesCondilionandviIIorviIInolbesociaIIysalisfiedTheoinlislhalaconsislenl
recirocilylheorislshouIdfavouraoIicyackvhichscoresosiliveforbolhcondilions
DOI: 10.2202/1932-0183.1056
infaclmanyoflhemaremakinglhesechoicesonceconfronledvilhlheaIIeged
IackofrecirocilyaIIovedbyI
SecondreIaxinglherecirocilyrinciIeinorderloadmilcasesCandD
losomedegreevouIdamounllomodifyingdeeIyorgivingulherecirocily
ob|eclionloISlriclIyseakingifrecirocilylheorislsreIaxCondilionlhalaII
conlribulingarereceivinglheyarenolforcedlogiveulheirob|eclionloIbul
lhey musl modify lhe recirocily rinciIe aIlhough il is difficuIl lo see hov
lhey couId do lhal cogenlIy or find differenl foundalions for lheir crilicism If
aIlernaliveIy recirocily lheorisls reIax Condilion lhal aII receiving are
conlribuling lhen lhe recirocily ob|eclion lo I becomes unavaiIabIe for lhem
Recirocily lheorisls lhen by virlue of endorsing lhe recirocily rinciIe
commil lhemseIves lo seIecl a sel of oIicies lhal faII under case A Olhervise
lheyhavenoIegilimalereasonlore|eclIalIeaslonrecirocilygrounds
A!!Rccciving5hnu!dCnntributc
Occsinc|PPsaiisjqCcn!iiicn
Recirocily lheorisls lend lo assume lhal rovided one is nol receiving any
ubIic cash benefil lhere is no robIem for recirocily ul lhink of aII lhe
differenlvaysanindividuaImayfindinoursocielylooblainsomebenefilfrom
lhe coIIeclive efforls of olhers even if lhe olhers do nol vanl lhal individuaI lo
benefil and al lhe same lime in order lo Iive vilhoul making any roduclive
conlribulion orcorresondingefforl oneseIf be il aid ornoleven if one does
nol receive any cash benefil from lhe slale one may benefil from coIIeclive
ubIic goods or from inkind benefils vilh universaI coverage one may Iive
from renls nol roduced by oneseIf and vhose mainlenance resuIls from
coIIecliveIy acceled arrangemenls of lhe sociaI cooeralive scheme one may
have a |ob in lhe shadov economy or even a formaI one bul vhich does nol
conlribule lo anylhing reaIIy vaIuabIe
or has no roduclive funclion lhink of

manyciviIservanlsorouldaledvorkIaceslhalaremainlainedonIybecauseof
sociaI oIilicaI or union ressure SliII a Iol of eoIe vho receive ubIic
benefils do nol seem lo conlribule lhey may have relired earIy yel be erfeclIy
abIelovorkbullheyIivealIeaslarliaIIyinmoslcasesoffubIicfundslhey
may be disabIed onIy in lerms of doing cerlain kinds of vork yel receive

HereIamonIyassuminglhallhisvouIdnolbevaIuabIefromlheslandoinlofIeflrecirocilylheorybulI
amnolnecessariIycommillingmyseIfvilhasubslanlivelheoryofvhalisvaIuabIeforsocielyRalherIlhink
lhal lhe concels of sociaI uliIily or sociaI vaIue as lhey are frequenlIy used are unvorkabIe from a
normaliveandlheorelicaIoinlofvievullodeveIolhiscIaimvouIdrequireanolherarlicIe
benefils even if lhey do nol lhey may be unemIoyed bul vailing lo find an
adequale |ob offer lhal never comes lhey may be in rison and may refuse lo
vork hence lhey Iive off generaI laxalion elc
Can a consislenl recirocily

lheorislremainimassiveinfronlofaIIlhoseossibiIiliesMaybebulifsolhe
crilicismagainslIIosesmuchofilsforce
Do lhe oIicy measures or any combinalion of lhem favoured by While

ensure lhal Condilion viII be mel The ansver is no vhelher ve lake lhem
searaleIyoraIIlogelherformingaoIicyackIlisnoldifficuIlloseevhyII
sabbalicaI accounls cailaI granls and benefils largeled lo lhe Ieasl advanlaged
such as lax credils or meanslesled benefils even if combined sliII Ieave oen
lhe ossibiIily lhal some abIebodied cilizens benefil from socielys coIIecliveIy
roduced goods vilhoul conlribuling al aII lo generaling lhem None of lhese
schemes nor lhe vhoIe sel is enough lo ensure lhe salisfaclion of Condilion
Somelhing eIse is required if ve are reaIIy consislenl in lrying lo deIiver such
slaleofaffairs
AIlhough aII benefils in lhe RII are condilionaI in some vay lhis is quile
differenlfromensuringlhalCondilionisfuIfiIIedonerequiremenlisloensure
lhal no one gels a cash benefil from lhe slale vilhoul making a decenl
conlribulionandanolherisloensurelhalnoonelakesadvanlageofcoIIecliveIy
roduced goods vilhoul conlribuling lo lheir roduclion lo some exlenl The
kind of earmarked granls and condilionaI benefils in lhe RII faiI lo salisfy
recirocily in one imorlanl sense lhe conlribulion is voIunlary If you do nol
conlribuleaIIlhalhaensislhalyouarenolenlilIedlolhegranlbulyouare
freeloIiveonolhersourcesofincomeandveaIlhavaiIabIeloyouorlolrylogel
olherbenefilsfromlheslaleorlhecommunily
WhalvouIdberequiredloavoidlhoseossibiIiliesandensureCondilion
Asve savifve donolhingve faiIlo salisfy Condilion lherefore uc cannci
a||cu rcciprcciiq ic criiicizc B| uni|c !cjcn!ing ancincr pc|icq pack inai pcrniis
csscniia||q inc sanc ining inai nciitaics cur rcjcciicn cj B| nameIy lhal some
eoIe may Iive off sociaI resources vilhoul having lhe duly lo conlribule lo
lheirroduclion

NolelhalIexcIudefromlhisIislsilualionssuchasIivingoffolhersvoIunlaryheIgiflsorcharilyvhichof
courseneednolbearobIeminrecirocilylermsasveIIasoverlfraudinveIfarerogramsevenifilvouId
be easy lo commil il under some recirocily oIicies as II see De WiseIaere and Slirlon or Noguera
A queslion Iaced by CouIIiard is vhelher il is ossibIe nol lo conlribule lo sociaI cooeralion

vhiIe Iiving in sociely The ansver is affirmalive if ve define conlribulion according lo lhe inluilions lhal
underIie recirocily lheory lo conlribule is lo do somelhing lo heI roduce some benefil lhal olhers can
en|oylheconlribulionmuslbeacliveandmuslresuIlinuliIilyloolhersThesameideaisconsliluliveoflhe
definilionofvorkinVanIari|s
DOI: 10.2202/1932-0183.1056
|ciiring|cncjiisicincun!cscrtingpccr
ConsidersomeinslilulionaIconsequencesofaIIlhisIirslloavoidInconsislency
recirocilylheorislsshouIdincIudeinlheirreferredoIicyacksomekindof
!uiqicucrk ThismaybeundersloodinlvodifferenlvaysThefirslisacoercive
obIigalion lo vork aII abIebodied cilizens vouId be direclIy forced lo vork or
accel|obsOfcourselhisversionishighIylroubIesomebolhfornormaliveand
ragmalic reasons see Noguera and no Iefl or even righl recirocily
lheorislendorseslhissinceilvouIdvioIalebasicindividuaIfreedominaIiberaI
slaleandvouIdrelurnuslolheoorIavsorlhevorkcams
Hovever a second vay lo undersland vhal a duly lo vork enlaiIs one
lhal may be more comalibIe vilh resecl lo formaI freedom vouId be lo
enforce an indirecl bul no Iess coercive obIigalion lo vork by vhich cilizens
vouId be forced lo vork or lo accel |obs lhrough lhe ressure of income
derivalionObviousIylhissecondmeaningoflhedulylovorkvouIdbemuch
more aIalabIe lhan lhe firsl one in modern democralic socielies in facl one
couId say il aIready exisls for many eoIe ul il is vorlh nolicing lhal lo
becomeareaIrecirocilyoIicylheenforcemenloflhaldulyvouIdrequirelhe
reliremenl of income sources for aII abIebodied cilizens vho do nol vork Of
course lhis vouId enlaiI an exlremeIy slringenl form of vorkfare under vhich
in order lo be enlilIed lo any ubIic assislance or benefil abIebodied cilizens
vouIdhavelofinda|oborengageinsomedefinednonmarkelvork
ul some Iefl recirocily lheorisls |oin lhe defence of lhe recirocily
rinciIe vilh a nonslringenl condilionaIily for lhe unemIoyed and olher
veIfarereciienls
IfyoucoherenlIydefendlhefirsloneyoushouIdsooneror
Ialer be ready and unashamed lo relire lhose benefils in order lo jcrcc some
eoIelovorkHoveIsecanarecirocilycommilledslaledeaIvilhlhosevho
refuse lo accel any adequale |ob offers Sooner or Ialer il viII be necessary lo
forcesomeeoIeloaccel|obslheydonolvanlloenforceslringenlvorkfare
as done by righlving recirocily lheorisls Olhervise lhere vouId be no oinl
in re|ecling I The oinl is lhal Iefl recirocily lheorisls rareIy suorl lhal
olion or even lhe hardening of lhe eIigibiIily condilions for unemIoymenl or
sociaIassislancebenefilsforvorkingagecilizensabIelovork

SeeWhilesdefenceofagenerousandfIexibIeinlerrelalionoflhevorkleslinhisbook
Tnc Citic Mininun See aIso Anderson eseciaIIy While Ieaves oen lhe
ossibiIilyofinlroducingsomeformofMeadsveIfareconlracluaIismdeendingonlheoIilicaIconlexlbulI
arguelhalrecirocilylheoryhasnoreasonloIeavelhalqueslionundelerminedReIaledandusefuIdiscussions
canbefoundinGoodinandWoIff
Il is hard lo see vhy recirocily lheorisls shouId nol back lhose kinds of
measures If lheir crilicism of I is consislenl and honesl lhen lhey shouId be
concerned lhal in moslIuroeanveIfare syslems refusing a|ob offerdoesnol
reaIIy Iead lo Iosing lhebenefilUnemIoymenl benefilshave become a lvisled
iclure of I lhal givesbad incenlivesGrool and Van der Veen In
facl our ubIic emIoymenl services normaIIy oerale in a more fIexibIe vay
lhan vouId be demanded by any coherenl recirocily rinciIe because lhe
oIicyoflhoseserviceslovardslheunemIoyedoflenreIyonlhevagueconcel
of aroriale |ob offer in order lo decide vhelher or nol lhey deserve lo kee
lheir benefils Since delermining vhal counls as an aroriale |ob offer is
ambiguous in raclice a broad discrelionary margin aIIovs on lhe one hand
arbilrariness and coercion deending on lhe governmenl oIicy or lhe
adminislralionIeveIandevenonciviIservanlsmoodsandonlheolherhand
inlerrelalions so fIexibIe lhal lhe benefils vouId become aImosl uncondilionaI
ulifvehadloaIylherecirocilyrinciIeconsislenlIyvhyshouIdvenol
forcesomereciienlsofubIicbenefilsloaccelsome|oboffersunderlhelhreal
ofvilhdravinglheirbenefils
ThisoinlforcesIeflrecirocilylheorislslofaceadiIemmaIflherecirocily
rinciIeisconsislenlIyaIiedilviIIIeadusloraclicaIconsequenceslhalare
inluiliveIy unaccelabIe from a Ieflving oinl of viev If on lhe conlrary lhe
recirocilyrinciIeisaIiedveakIyandfIexibIyilviIIIeadusloa!cjacicI
orlosomelhingcIoseloilIcannolseeanyvayouloflhisdiIemmaifveaccel
lhehiIosohyofrecirocily
Prctcniingparasiicsjrcn|cncjiiingjrcnpu||icgcc!ssiartaiicncrcxi|c
ul vouId a slringenl vorkfare oIicy be enough lo avoid Inconsislency To
ansver lhis ve have lo ask exaclIy vhal lo benefil from sociely means Ior a
righlving recirocily lheorisl vho beIieves in lhe ideoIogy of seIfsufficienl
isoIaledindividuaIsonecouIdsaylhalsomeoneisbenefilingfromsocielyand
has lhe obIigalion lo recirocale onIy vhen lhal erson receives some kind of
ubIicassislanceorbenefilaidbylheslaleoulofgeneraIlaxalioninlhalcase
a slringenl vorkfare scheme vouId do and Inconsislency vouId nol arise
According lo lhis viev a erson vho is financiaIIy seIfsuorling has no duly

ThisoinlcouIdbelakenfurlheruchananhassuggesledlhalifarecirocilylheorislshouIdbeready
loderivenonconlribulorsofavaiIabIesubsislenceresourceslhenlhelheorislshouIdbereadyloaIsoderive
nonconlribulors of lheir civiI and oIilicaI righls and even lo convicl lhem The reasons lo re|ecl lhe second
ossibiIilyvouIdaIsocounlasgoodreasonslore|ecllhefirslCouiIIardshovslhallhesame
chargeofnonrecirocalionmaybeheIdbyrecirocilylheorislsagainslshirkingvorkersandhusbandsvhodo
nollakeonlheirshareofdomeslicvork
DOI: 10.2202/1932-0183.1056
lo conlribule lo sociely lhal erson asks nolhing lakes nolhing and oves
nolhinglosociely
Hovever as aIready suggesled lhere are reasons lo doubl lhal lhis can be
enough for a Iefl recirocily lheorisl The viev |usl menlioned vouId be
regarded as loo alomisl and Robinson CrusoeIike
A Ieflving sensibiIily sees

sociaIresourcesandoorluniliesasbeingcoIIecliveIyroducedandconsiders
lhe roduclion of ubIic goods vhich by definilion can be used by aII lo be
one of lhe main aims and ralionaIes of lhe slale Iveryone Iiving in sociely is
lherefore by definilion benefiling somehov from sociaI cooeralion even if
someonedoesnolconlribulelolheroduclionoflhosebenefilsoriflheolhers
donolvanllhalersonlobenefilfromlhemHenceilvouIdnolbeenoughlo
relire monelary and even inkind benefils lo idIers lo salisfy recirocily
CIearIy il vouId be necessary lo ensure lhal nc a||c|c!ic! rcsi!cni unc is nci
pcrjcrninganqkin!cjucrkaidornol|cncjiisaia||jrcnanqpu||icgcc! ulhov
islhislobeachieved
ThiscondilionmaybesalisfiedifeverylimeaarasilebenefilsfromaubIic
good ve imose a fineequaI lo lheeslimaled vaIue of lhe consumed orlion of
lhe good ul Ieaving aside lhe obvious robIems invoIved in caIcuIaling lhal
hov couIdveimosefines uon ersonsvho Iack any income orveaIlh This
vouId condemn lhem lo die in slarvalion or vouId vioIale lhe recirocily
rinciIe by aIIoving eoIe lo benefil from ubIic goods vilhoul conlribuling
lolhemAsecondossibiIilyonefrequenlIyimosedhisloricaIIyseeDeSvaan
vouId be cxi|c Deorling idIers and arasiles seems somelhing lhal lhe
referred oIicy ack of a recirocily lheory may veII incIude since lhal
measure vouId heI lo decisiveIy ensure Condilion
So vhy do Iefl
recirocilylheorislsnolevenconsidersuggeslinglheseolions
||ininaiinginci!|cricn
SliII more vouId be required lo salisfy Condilion lhe ensuring lhal no idIe
abIebodied cilizen receives income from lhe slale cr jrcn inc narkci vhich is a
sociaI coIIeclive arrangemenl vhere economic agenls benefil from cooeralion
and ubIic goods IaradoxicaIIy in order lo avoid Inconsislency a Iefl

SeeforinslanceAndersonandWhile
ThisvouIdbesimiIarlolhelrealmenlimmigranlsreceiveinsomedeveIoedcounlrieslheyaredeorledif
lheyfaiIlorovelheyhaveareguIarandIegaI|ob
Anderson vho crilicizes Is uncondilionaI nalure and defends lhe core of lhe recirocily rinciIe noles
lhal righlving recirocily lheorisls shouId nol be vorried aboul deorling idIers My oinl is
lhal anyone defending vhal Anderson caIIs lhe GeneraI Recirocily IrinciIe a Iefl recirocily rinciIe
viIIhavelofacesoonerorIalerlhesamechoice
recirocily lheory vouId have lo endorse a much more slringenl and coercive
oIicylhanrighlvingrecirocilylheorislsdemand
This aIies arlicuIarIy lo lhe case of lhe idIe rich or renliers lhose vho
receive incomefrom onIy lheir roerlyrighls or inheriledveaIlh andvho do
nolvorkorfoIIovanysociaIIyusefuIaclivily
SignificanlIysociaIislsandmosl
IeflIiberaIshaveaIvaysshoveddislrusllovardslhemandhaveoflenaccused
lhe idIe rich and renliers of being unroduclive arasiles They aIvays look for
granled lhal anegaIilarian sociely vouIdeIiminale lhissociaI osilion and lhal
ilvouIdbe|usllodoso
A ossibIeob|eclionvouIdbelhalrenliersareconlribulingbyayinglaxes
onlheirincomeandveaIlh
ulislhisob|eclionaccelabIelolheIeflIlvouId
be as much as acceling lhal someone can buy an exemlion from a cilizens
dulylolheslalesinceIhavemoneyloaylaxesoveragivenlhreshoIdlhenI
do nol have lo vork Think of aying lo avoid comuIsory miIilary service
vhere il exisls or lo avoid going lo rison once condemned or lo avoid |ury
dulyoravolingslalion
These are nonmarkel obIigalions for every cilizen vhy shouId a duly lo
vork be differenl According lo Ieflving and egaIilarian sensibiIily if cilizens
have lhe duly lo vork lhen il shouId nol maller vhelher lhey have money or
nolcilizenshavelhedulylovorkloconlribuleroducliveIylosocielyralher
lhan lhe duly of having enough money and en|oying il or of |usl being seIf
suorling and indeendenl Iike a Robinson Crusoe vhich is iIIusory in a
comIexmodernsociely
ThusaconsislenlrecirocilylheorislshouIdaIsore|eclimosing|uslafine
orunishmenlonrenliersandidIersasSegaIIsuggeslsToaccel
lhalvouId be as muchas acceling lhal acilizens duly can be markelabIe see
CouiIIard Il foIIovs lhal lhe onIy accelabIe olion from a Iefl

See Widerquisl for lhe argumenl lhal a consislenl recirocily lheory shouIdaIy lhe vork or slarve
rinciIeloeveryonenol|usllolhosevhoIacksignificanlamounlsofexlernaIassels
See While One ob|eclion may be lhal lo lhe exlenl lhal lhe idIe rich and renliers are
aIIoving olhers lo use roduclive resources lhey ovn lhey are making a conlribulion ul lhis vouId be
vuInerabIe lo lhe galekeeing ob|eclion made by Schveickarl and addressed by While lhey vouId be
consuming sociaI resources in relurn for lheir galekeeing an unnecessary roIe of roduclive resources To
simIifylheargumenlandloavoidWhilesreasonabIeexcelionsIassumeherelhallhe
incomeoflheserenliersdoesnolcomefromroducliveresources generaledorsavedbylhemIsuoselhal
lhey are Iiving off lhe renls of nonroduclive roerly inheriled veaIlh forlunale inveslmenls or say a
Iolleryrize
To vhal exlenl While lhinks so is nol cIear AIlhough he endorses lhe viev lhal sociely is lhe roducl of
cooeraliveefforlWhilesomelimesseemslosaylhallheimorlanllhingforrecirocilyisnolicccniri|uicbul
isicatci!|cinga|ur!cniccincrsThesearedissimiIarevenifrenliersmaynolbeaburdenvhich
isdebalabIelheydonolhinglobenefilanyoneAgainiflheydidnolexislsocielyvouIdIosenolhing
DOI: 10.2202/1932-0183.1056
recirocilyvievoinlvouIdbeloforcerenliersandidIerslovorklhroughlhe
ressure of income derivalion lo ccnjiscaic incir rcnis IncidenlaIIy SegaII
seems lo concur lhal lhe idIe rich couId be aIIoved lo recirocale vilh money
insleadofvorkandargueslhalvorkdulyvouIdbeineffeclivevilhregardlo
aduIls vhoare deendenl on lheirfamiIies I can agreevilh lhis
Ialler oinl aIlhough lhere is arguabIy a difference belveen receiving income
and ubIic goods from sociely or lhe markel and receiving lhem as a tc|uniarq
giji from areIalivecuicj a pcrscna| snarc bul I canlagree vilh lheformer oinl
lhallheidIerichdorecirocalebyayingmoneyMoreoverasAnderson
has seen lhe undeserving aIso ay indirecl laxes lhrough urchasing
basic consumlion goods so lhey shouId be exemled from lhe vork
conlribulionforlhesamereasonlheidIerichare
To counl Iiving off renls as a decenl roduclive conlribulion confIales nol
onIy vilh Ieflving sensibiIily bul aIso vilh lhe basic inluilion underIying
recirocilylheoryilerverlslheidealhaleoIehavelomakesomeminimum
cjjcri or aciitc conlribulion lo sociely in order lo receive somelhing in relurn
IaiIing lo eIiminale renliers enlaiIs a arlicuIar kind of discriminalion and
unequaIlrealmenlprccisc|qcnrcciprcciiqgrcun!s sincelheenlilIemenlcondilions
and Iabour obIigalions of lhe civic minimum are imosed uon onIy lhe oor
anddisadvanlagedvhiIesomeIuckycilizensmayIiveonunearnedincomeand
veaIlh vilhoul vorking Iven if ve adol a slringenl vorkfare scheme
addilionaImeasuresvouIdbenecessaryloeIiminalerenliersinorderloensure
lhaleveryoneinsocielyisdoinglheirbilSoaninslilulionaIconsequenceofa
consislenlIeflrecirocilylheoryshouIdbelheeIiminalionofrenliersAnqpc|icq
pack a ccnsisicni |cji rcciprcciiq inccrisi can suppcri nusi inc|u!c scnc ncasurc ic
c|ininaic rcniicrs such as forcing renliers lo vork or confiscaling lheir renls
Hovever eIiminaling renliers is nol lhe same as eIiminaling cailaI gains and
renlsassuchbulinsleadmeanseIiminalinglheinslilulionaIossibiIilyofIiving
offcn|qlhalkindofincomesourceuni|cnolvorking
While faces lhis robIem and concedes lhal for lhis reason in conlemorary
circumslancesvorkfarecanmakenocIaimlocIearmoraIsueriorilyoverbasicincomeSimiIarIyinTncCitic
Mininun he admilled lhal some forms of cailaIisl income are inconsislenl vilh lhe recirocilybased
demandandlhallhereforeilisun|uslloaIIovcilizenslouselheseincomesloreducelheirvorkefforland
lherebyescaelhebasicvorkexeclalionullhereaderisIeflaskingvhylhisconcIusionhas
no inslilulionaI consequence in lhe RII and vhy While does nol recommend simIy eIiminaling lhis sociaI
osilion
A|c|isningcrcuiiingcurrcnincnrcciprcciiq|cncjiis
AsvehaveseenIeflrecirocilylheorislsdonolusuaIIybackoIicyolionslhal
vouIdensuresalisfaclionofCondilionThereforeilisnolsurrisinglhallhey
do back or al Ieasl shov no vorry aboul some exisling veIfare schemes lhal
vioIale Condilion by aIIoving some abIebodied cilizens lo receive income or
goods vilhoul conlribuling lo socielys efforls Some of lhese schemes are
uncondilionaIsoilmayseemlhalilisnolunccn!iiicna|iiqassuchlhaldislurbs
IeflrecirocilylheorislsbulonIylheuncondilionaIilyassocialedvilhI
ConsiderlhefoIIovingexamIes
Nonconlribulory or universaI ensions exisl in many induslriaIized
counlries and lhey rovide benefils lo seniors indeendenlIy of lheir
reviousconlribulionsandlheirvorkrecord
ChiIdbenefilsvhelherlheyaremeanslesledornolarenolusuaIIyIinked
lo any asl resenl or fulure conlribulion from arenls or chiIdren vhen
chiIdren grov u lhey do nol have lo vork lo relurn a decenl conlribulion
losocielyinexchangeforlhosebenefils
Conlribulory schemes vouId seem lo be more in accordance vilh lhe

recirocily rinciIe bul afler a cIoser Iook ve can easiIy see lhal vhal
counls as conlribuling in lhese schemes isnl vorking or erforming any
roduclive aclivily bul ralher is paqing as such The more one ays lhe
more one viII receive even if having vorked Iess As ve sav above for a
Iefl recirocily lheory lo be consislenl il shouId be hard lo accel lhal one
maybuyonesrighlsoravoidonesduliesbyayingmorelhanolhersul
lheseschemesareneverchaIIengedbyIeflrecirocilylheorislsnordolhey
disule lhal lhe caacily lo ay money counls as a reIevanl conlribulion
even vhen as is lhe case in mosl conlribulory schemes lhe aymenls are
comuIsorynolvoIunlary
Recirocily lheorisls do nol aear vorried aboul some lyes of
uncondilionaI and universaI inkind benefils Iike ubIic heaIlh educalion
orsociaIservicesvhichexislinmanyWeslIuroeancounlriesandvhich
cIearIyvioIaleCondilion
IinaIIy recirocily lheorisls say nolhing aboul lhe huge and inlricale mess

SegaIIaIsonoleslhis
One mighl argue lhal lhis is because lhe ralionaIe of lhe benefils is lo make chiIdren capa||c of making
conlribulionsinlhefulurebulislhisnolanargumenllhalmayaIsobeheIdlodefendIforcilizenslomake
moraIIyreIevanlconlribulionssubsislenceandreaIfreedomshouIdbeguaranleeduncondilionaIIy
DOI: 10.2202/1932-0183.1056
ofdireclandindireclsubsidiesandlaxexemlionsincIudinglheIuroean
Unionagrariansubsidiesen|oyedbycailaIislfirmsandbysomeeconomic
seclors aIlhough mosl such subsidies are indeendenl of roduclivily
rofilabiIily and sociaI demand And lhey say nolhing aboul lax
exemlions for incomelax ayers lhal are en|oyed even if lhe decIared
incomedoesnolderivefromvork
So as far as Condilion is concerned il seems lhal for Iefl recirocily
lheorisls lhe recirocily rinciIe cn|q ccunis againsi B| bul nol againsl aIready
exisling oIicies lhal are conlribulion indeendenl nor againsl lheir referred
oIicies lhal aIso vioIale lhal rinciIe The indignanl ballIe cry vhal aboul
recirocilyissurrisingIyinsiredbyonIyIRecirocilyseemslobeofmuch
Iess imorlance vhen any olher recirocilyinconsislenl oIicy is al slake An
imarliaI observer may say lhal I is cIearIy a viclim of inleIIecluaI
discriminalion since olher oIicies are aIso vioIaling recirocily cn cxaci|q inc
sancgrcun!sinaiB|!ccs bullheydonolreceivelhesameoosilion
A!!Cnntributing5hnu!dRcccivc
Occsinc|PPsaiisjqCcn!iiicn
In order lo avoid Inconsislency lhe RII vouId have lo ensure lhal aII vho
conlribulereIevanlIyaIsoreceivesomeincomefromsocielyIslhallhecaseIdo
nol lhink so aIlhough in lhis case lhe inconsislency is Iess obvious Lel us see
vhy
One can easiIy see lhal schemes such as sabbalicaI accounls lax credils
earmarkedcailaIgranlsorolhercondilionaIbenefilseveniflheycouIdenlilIe
more conlribulors lhan resenl schemes do nov lo receive income or veaIlh
vouIdnolensurelhesalisfaclionofCondilionrecaIIlhalIvouIdensurelhal
condilion aulomalicaIIy There vouId sliII be lhousands of unaid domeslic
care and voIunlary vorkers vho vouId be conlribuling reIevanlIy lo sociely
erhasevenmorereIevanlIylhanlhousandsvhoareinaidvorkbulvouId
nolbeenlilIedlolhosebenefilsnorvouIdlheyreceiveincomefromlhemarkel
Then ve vouId be enhancing unfair differenliaI lrealmenls lhal are nol
consislenlvilhlherecirocilyrinciIe
Ior inslance vhy offer aid sabbalicaI years lo WaII Slreel brokers and lo
veaons or lobacco roducers vhiIe ve deny lhem lo NGO voIunleers and
famiIycaregiversInshorlifonIylhoseinformaIemIoymenlcouIdquaIifyfor
lhe sabbalicaI accounls lhen Condilion vouId nol be salisfied If on lhe
conlrary veexlend lherighl lo sabbalicaI accounls lo aII cilizens vevouId be
insliluling a limeIimiled bul universaI I ul some queslions arise vhen ve
carefuIIyconsidersuchaoIicyvhalvouIdasabbalicaIyearmeanforafamiIy
caregiverWouIdlheslalefundandorganizelheerformanceoflheirdomeslic
andcarevorkvhiIeayinglhemanincomeforlvoorlhreeyearssolhallhey
couId Ianl bonsais Il is quile difficuIl lo lhink so bul lhen lhe recirocily
rinciIe vouId be again unfuIfiIIed and unfair differenliaI lrealmenl vouId
arisebelveenlhosevhoareformaIIyemIoyedandlhosevhoarenol
LelusnovconsiderlhecaseoflaxcredilsforIovincomevorkersWemay
findoneoflheusuaIrobIemsaboulvhichrecirocilylheorislsshouIdbemosl
concerned of invork benefils lhe discriminalory lrealmenl of unaid vorkers
vhobecauselheyvorkforfreevouIdnolreceiveanylaxcredilThisraiseslhe
queslion of vhy one shouId receive invork benefils onIy vhen one is aid
Ieaving aside miIIions of eoIe vho are undoubledIy making a decenl
conlribulion lo sociely ul even if ve lake inlo accounl onIy aid vork if
recirocilyverereaIIylheralionaIeforlaxcredilslheyvouIdhavelobeaidlo
lhe enlire emIoyed ouIalion and nol |usl lo Iovincome vorkers Thal onIy
lheIallerquaIifyforlheselaxcredilsshovslhallheirralionaIemainIyhaslodo
vilhincomeredislribulionandIabourmarkelefficiency
OnIy one melhodvouId ensure Condilion vilh lhe RII ay lhe benefils
loeveryoneerformingsomesociaIIyusefuIandroducliveaclivilyThalvouId
lransform lhe benefils inlo a II Il may veII seem lhen lhal II is a consislenl
scheme for a Iefl recirocily lheory as far as Inconsislency is concerned
Hovever il remains lo be shovn hov lhal couId ossibIy be a reaIislic oIicy
olion As De WiseIaere and Slirlon have cogenlIy argued a II scheme
vouId mosl IikeIy face lhe foIIoving lriIemma Il is designed as a slringenl
vorkfarerogramsomelhinglhalIeflrecirocilylheorislsre|eclorIlvouId
vork as a !c jacic I vhich vouId once more derive recirocily lheorisls of
lheir ob|eclion lo I or If lhe required conlroIs and inseclions are reaIIy
enforced ils imIemenlalion vouId be so coslIy economicaIIy bul aIso
oIilicaIIybecauseofilsinlrusioninlocilizensrivaleIiveslhalilvouIdcease
lobeanavaiIabIeoIicyolion
McKinnonaIsolhinkssoNolelhaliflhisroosaIvereseriousIyimIemenledconlraryloI
il vouId suorl lhe subordinale roIe of many vomen because of lhe Iink belveen receiving lhe benefil and
erformingdomeslicvork
DOI: 10.2202/1932-0183.1056
Sncu|!unpai!ucrkcrsrcccitcinccnc
I have been assuming unliI nov lhal Condilion imIies nondiscriminalion
againsllheunaidIabourerformedbycaredomeslicorvoIunlaryvorkersA
consislenlrecirocilylheoryvouIdimIyaIongvilhsomekindofdulylovork
necessaryloavoidInconsislencyadulyforsocielylorecirocaleloeveryone
vho makes reIevanl conlribulions in lhe form of some aymenl ul lhere are
lhreevaysinvhicharecirocilylheorislmayreIylolhal
The reIevanl aymenl shouId nolnecessariIy be monelary and some sociaI
righls Iike educalion or heaIlh services oIilicaI righls Iike voling or
olherubIicgoodscouIdbeenough
Conlribulions lhal do nol generale income are nol necessariIy reIevanl so
lheRIIvouIdberighlindiscriminalingagainslunaidvorkers
IfahousehoIdhasanemIoyedmemberlhalersonsgainsareenoughlo
recirocaleforaIIlheunaidvorkdonebymembersoflhehousehoId
Nov argumenls and may be vrong ul ij lhey are lhey are nol
necessariIy vrong on recirocily grounds lhey are vrong onequily orequaIily
groundsbasedonrogressiveorIeflvingnormaliveideaIsThalisvhyarighl
vingrecirocilylheorymaybeconsislenlAndargumenlmaybeendorsedby
IeflrecirocilylheorislsvesavlhalforaIeflrecirocilylheorylobenefilfrom
ubIic goods shouId counl as benefiling from sociely This couId resuIl in
considering lhal unaid vorkers receive enough benefil from sociely |usl by
Iiving in il and benefiling from ubIic goods even if lhey do nol receive an
income or aymenl of lheir ovn As ve sav before a consislenl recirocily
lheoryshouIdnolaIIovsomeeoIelofreerideoncoIIecliveIyroducedubIic
goods vilhoul making any reIevanl conlribulion lo sociely olhervise
InconsislencyvouIdariseTheequalionvorkslhesamelheolhervayround
lhe en|oymenl of ubIic goods may be enough aymenl from sociely in
exchangeforsomeunaidvorkandlhalvouIdsalisfyCondilionvilhoulany
necessily for a II scheme Nole lhal lhis has lhe inslilulionaI consequence lhal
foraIeflrecirocilylheorislilmayberighlloforcesomemembersofsocielylo
dosomeunpai!vorkinaddilionlobeingemIoyedoraccelinga|oboffer
|s|asicucrkincansucr
A IeflrecirocilylheorymayconsislenlIysalisfyCondilion|uslbyconsidering
unaid vorkers lo be members of sociely ObviousIy hovever one of lhe
oIiciesinlheRIInameIyIIvouIdberequirediflheancuniofunaidvork
done by some cilizens is higher lhan a decenl minimum conlribulion In lhal
caseIIvouIdbelheonIyschemeinlheRIIlhalvouIdavoidInconsislency
bulilishardloseehovilcouIdbeconsislenlIyimIemenledTheninorderlo
avoid Inconsislency Iefl recirocily lheorisls shouId have lo eilher render lhe
RII as unnecessary or abandon il in favour of I and lhus give u lheir
ob|eclionagainsllheIaller
ul seclion suggesls anolher ossibIe inslilulionaI soIulion for Iefl
recirocily lheories vhal ve couId IausibIy caII a basic vork scheme
}ackson Noguera Under such a scheme aII abIebodied cilizens
vouId have lo erform some amounl of sociaIIy usefuI or necessary vork
lhroughoullheirIivessolhalsomeamounlofsociaIIynecessaryvorkvouIdbe
dislribuled equaIIy and comuIsoriIy among lhe ouIalion As ve have seen
lhisrequiredvorkmaybeaidorunaidulherearecirocilylheorislvouId
beinbiglroubIeagainifilisaidvhynolaylheresloflheunaidvorklhal
cilizens may erform oulside lhe rogramme Thal vouId be unequaI in lerms
of Condilion since lhe same aymenl vouId be made lo lhose vho do exlra
unaidvorkasismadelolhosevhodonlIfonlheconlrarybasicvorkisnol
aid ve vouId sliII face more serious imIemenlalion and oIilicaI robIems
lhanvilhIIforexamIebasicvorkvouIdrequireanunimaginabIedegreeof
aulhorilarianism and slale conlroI over lhe economy and lhe Iife choices of
cilizensAndlhisvouIdIeadusloaIannedeconomyeveninsuchfieIdsascare
anddomeslicvorkAbasicvorkschemevouIdbeincomalibIevilhIeflving
and rogressive ideaIs lo lhe exlenl lhal lhey vaIue basic Iiberlies Therefore
democralicIeflrecirocilylheoriesneverdefendlhebasicvorkschemeaIlhough
ilvouIdbeconsislenlvilhlherecirocilyrinciIesalisfyingbolhCondilions
and
The concIusion lo seclions and lhen is lhal virluaIIy aII oIicy designs
favouredbyIeflrecirocilylheorislsfaIIunderoneormoreoflheinconsislencies
shovninTabIeRecirocilylheorislsaccuseIoffaiIinglosalisfyCondilion
bul surrisingIy lhe RII aIso faiIs lo salisfy lhal condilion and seems badIy
rearedlosalisfyCondilionvhichvouIdbelolaIIysalisfiedbyITheRII
iscomalibIevilhlheexislenceofsurfersandallhesamelimedoesnolensure
lhalsocielyrecirocalesloaIIvhoaredoinglheirbilConverseIysomeoflhe
oIicydesignsneededforbringingaboulreaIrecirocilycaseAinTabIeare
oflen re|ecled by Iefl recirocily lheorisls lhe onIy oIicy acks lhal score
osilive in bolh Condilions and incIude some arrangemenl lhal Iefl
recirocilylheorislsdonolandseemingIycannolaccel
DOI: 10.2202/1932-0183.1056
Cnnc!usinn Why LcIt Rcciprncity Thcnrists and 5nmc BI 5uppnrtcrs
5hnu!dNntBcAshamcdnIDcIcndingBI
Why do Iefl recirocily lheorisls re|ecl oIicies lhal bring aboul case A and
salisfy bolh Condilions and UnfeasibiIily does nol seem lo be lhe reason
somefeasibIeoIicyacksmaysalisfylhosecondilionsThenlhereasonmuslbe
lhallheyerceivesomeunfairnessinlhoseoIicyolionsulvhydolheysee
lhose oIicies as unfair Il cannol be because lhey faiI lo salisfy lhe recirocily
rinciIe lhey do They do nol re|ecl lhose oIicies in lhe name of recirocily
bul ralher because lhey are |cji recirocily lheorisls So Iefl recirocily lheorisls
musladmilandlheyoflendolhallhereareolherrinciIesof|usliceguiding
lheiroIicychoices
IlisimorlanlloknovlhereasonsunderIyinglhissomevhalaradoxicaI
re|eclionoflherecirocilyrinciIebysomeoflhesocaIIedrecirocilylheorisls
so lhal ve mighl be abIe lo delermine lhe roer roIe of recirocily in a |usl
socielyandloseelhalildiffersfromlheroIerecirocilylheorislsgiveloileven
vhen lhey admil lhal lhere are olher rinciIes of |uslice ecause of sace
Iimilalions I cannol go deeIy inlo each reason bul lhese incIude such vaIues
and rinciIes as freedom from coercion free choice of occualion reIief from
overlyaIlruismseIfresecllherighllodecidevhelherornolloarlicialein
a cooeraliveframevorkandlheidealhalrighlsaresub|eclcenlreduchanan
Once aII lhose reasons vere fuIIy deveIoed and acknovIedged Iefl
recirocily lheorisls vouId have lo accel lhal lhe recirocily argumenl shouId
nol affeclminimum IeveIs of maleriaI subsislence andfreedom such as lhose I
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DOI: 10.2202/1932-0183.1056
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DOI: 10.2202/1932-0183.1056
IR AL NDICE

Vol. 1, Issue 2 RESEARCH ARTICLE December 2006
The Relative Cost of a Universal Basic
Income and a Negative Income Tax
Philip Harvey
Rutgers University
Abstract The cost of a negative income tax (NIT) designed to mimic the
redistributive effects of a universal basic income (UBI) and set at a level sufficient to
eliminate official poverty in the US is estimated using income distribution data for
2002. It is estimated that an NIT satisfying these conditions would have required an
$826 billion increase in government spending in 2002, compared to a $1.69 trillion
increase for an equivalent UBI. Despite this cost difference, the income and
substitution effects of a UBI and an equivalent NIT are shown to be the same; and
these effects are analyzed. Finally, the cost of providing a basic income guarantee
(BIG) by either of these means is compared to the cost of securing the right to work
and income security recognized in the Universal Declaration of Human Rights using
a program of direct job creation and conventional income transfers.
Keywords basic income, negative income tax, Universal Declaration of Human
Rights
1. Introduction
In two recent papers (Harvey, 2003; 2006b) I compared the cost of eliminating
official poverty in the US with a universal basic income (UBI) or, alternatively, a
program of direct job creation and targeted income transfers designed to secure
the right to work and income support recognized in the Universal Declaration of
Human Rights (the job guarantee strategy) (United Nations, 1948). In this
paper I extend this comparison to include a negative income tax (NIT).
An NIT is a system of refundable tax credits that guarantees eligible tax
filers a certain minimum income. Tax filers with no income from other sources
receive the full NIT benefit in cash, thereby providing them a basic income
guarantee (BIG). Persons with taxable income receive a cash benefit only to the
extent their NIT credit exceeds their tax liabilities. Thus, as a persons income
rises, the size of the cash NIT benefit they receive declines. At the breakeven-
income level a persons tax liabilities exactly equal their NIT credit, so they
neither pay taxes nor receive cash NIT benefits. Persons with incomes above the
breakeven level pay taxes, because their NIT credit is less than the taxes they
owe. It is widely recognized that a BIG can be provided by means of either a UBI
or an NIT, and that each of these two mechanisms are capable of achieving
exactly the same net transfer of income (Van Parijs, 2004, p. 14). In this paper I
refer to the net transfer of income achieved by either a UBI or an NIT, after all
benefits are paid and all taxes devoted to the programs support are collected, as
the programs redistributive effect.
In my earlier papers I concluded that a UBI capable of ending official
poverty in the US in 1999 or 2002 would have cost in excess of $1.5 trillion more
than a program of direct job creation and conventional income transfers designed
to achieve the same goal. I further argued that most of the other benefits
attributable to a UBI could be more fully secured at lower cost using the job
guarantee strategy.
In this paper I discuss the relationship between a UBI and an NIT and
estimate the cost of an NIT designed to achieve the same redistributive effect as
the UBI described in my earlier papers. I draw the following conclusions from
this analysis. First, the redistributive effect of a UBI or what some people refer to
as its net cost (Samson et al., 2002, p. 2; BIG Financing Reference Group, 2004,
pp. 3753) can be determined by estimating the cost of an equivalent NIT, that is,
one designed to achieve the same redistributive effect. Second, after taking into
account the reductions in conventional transfer payments a BIG would permit,
the increase in government expenditures required to fund the NIT modeled in
this paper would have been approximately $826 billion in 2002, compared to the
$1.69 trillion increase required to fund an equivalent UBI. The redistributive
effect of both programs would have been the same $826 billion after taking into
account reductions in other transfer payments. Third, despite its lower budgeted
cost, an NIT designed to mimic the redistributive effect of a UBI would impose
the same marginal tax rates on earned income as the UBI it mimicked. Fourth,
DOI: 10.2202/1932-0183.1032
although an NIT configured in this way would be far less costly than a UBI, it
still would require a much larger increase in government spending than the job
guarantee strategy about $775 billion more in 2002. Given this cost difference,
the challenge UBI advocates face, in my view, is not simply one of showing that
the benefits of a BIG would exceed its cost, but of identifying the additional
benefits over and above those achievable by means of the job guarantee
strategy that would justify its much greater cost.
2. Defining Cost
Under most UBI funding proposals, people would pay taxes to fund the program
at the same time they were receiving benefit checks from it. That being the case,
some UBI advocates have suggested that, for purposes of comparing different
antipoverty strategies, the relevant measure of the cost of a UBI is its net
redistributive effect rather than the budget allocations required to fund the
program. According to this view, individual UBI payments should be viewed as
the equivalent of tax refunds or as refundable tax credits in the case of persons
whose benefit payments would exceed the taxes they would pay to fund the
program.
Consistent with this view, Van Parijs has suggested that a UBI and an
equivalent NIT would cost the same except for differences in administrative
expenses (Van Parijs, 2004, p. 15). Similarly, UBI advocates in South Africa have
argued that the net cost of a UBI would equal the amount of income it would
redistribute to the poor and near poor after the benefit payments received by the
nonpoor have been recovered by the government (i.e., clawed back) through
the tax system (Samson et al., 2002, p. 2; BIG Financing Reference Group, 2004,
pp. 3753).
I am skeptical of suggestions that the net redistributive effect of a UBI (i.e.,
the net transfer of income it would achieve) is the appropriate measure of the
cost of such a program for purposes of policy assessment. We shall see that the
level of taxation required to fund a UBI in the US is approximately double the
level required to fund an equivalent NIT. It strikes me as tendentious to assume
that this difference should not concern policy makers simply because the
increased taxes required to fund a UBI (compared to an NIT) would be returned
to taxpayers in the form of UBI-benefit payments.
All government benefits can be regarded as providing cash or in-kind tax
refunds. Some taxpayers receive benefits that are worth more than the taxes they
pay. Others receive benefits that are worth less than the taxes they pay. A UBI
3 Harvey: The Relative Cost of UBI and NIT Systems
would be no different. Even the fact that a UBI would be paid in cash does not
distinguish it from other benefit programs. Many recipients of both means tested
and contributory cash transfers pay taxes that help support the programs from
which they receive benefits, yet I know of no one who maintains that the relative
cost of those programs should be measured by their redistributive effect rather
than the budget allocations required to fund them. The only way in which a UBI
would differ from these programs is in the scale of the offsetting benefit and tax
payment streams associated with it.
I readily grant the importance of noting that a UBI and an NIT can achieve
the same redistributive effect. Indeed, the purpose of this paper is to emphasize
that point. But it simply doesnt follow from this observation that a UBI and an
equivalent NIT would impose the same costs, in any meaningful sense, on
governments. UBI advocates who advance this claim need to explain why people
would view the UBI payments they would receive from government and the
taxes they would pay to fund the program any differently than they do the
benefits they receive and the taxes they pay to support other transfer programs
or, for that matter, other noncash benefits. In other words, they need to
substantiate their assumption that people would view UBI payments as the
equivalent of tax refunds and, accordingly, that policy makers should ignore
both the higher budgetary cost of a UBI compared to an equivalent NIT and the
correspondingly higher level of taxation required to fund the UBI alternative.
3. Modeling an NIT
Ignoring the possible effects that providing an unconditional income guarantee
might have on the level of national income or the rate of economic growth in a
society, the cost of an NIT depends on the following three variables that may be
defined the same for all population groups or differently for different population
groups:

1. the population unit whose income is measured for purposes of
determining the size of the benefit (e.g., individuals, individual adults and their
dependent children, households); 2. the maximum NIT benefit this population
unit can receive (i.e., the size of the BIG provided by the NIT mechanism); and 3.
the take-back rate at which the NIT benefit received by this population unit is
reduced as other income is received.
As indicated above, population groups can be made subject to differing
eligibility criteria, the maximum NIT benefit provided to eligible population
units can vary in size, and the take-back rate can vary for population units, based
on their ages or income levels, for example. Adapting Neubergs notation
DOI: 10.2202/1932-0183.1032
(Neuberg, 2003, Appendix One), an NIT can be modeled using the following
terms:
U = The total number of population units subject to the NIT
G = The maximum NIT benefit
Y = The taxable income received by a population unit within U
t = The NIT or take-back rate
P = The NIT payment, if any, received by a population unit within U
Using these terms, the following relationships can be defined:
G/t = The breakeven-level of Y (the level at which P reaches zero) (1)
P = G tY for Y < (G/t) (2)
P = 0 for Y > (G/t) (3) (3)
The cost (C) of an NIT (also its redistributive effect) can be expressed as the sum
of the NIT payments (P) received by all population units comprising U, as
follows.
C = Pi for i = 1 to U (4)
where
C = The aggregate cost of the NIT program
Pi = The NIT payment (P) received by the ith population unit within U.
Alternatively, the programs cost can be expressed as the sum of the tax
payments made by individuals with incomes greater than the breakeven level, as
follows:
C = tYX GX (5)
where
X = The number of population units in U for which Y > G/t
YX = The aggregate taxable income received by the population units
comprising X
In other words, if X equals the number of population units with incomes
above the breakeven level, and YX equals the aggregate taxable income received
by those population units, the aggregate cost of an NIT (C) can be estimated by
multiplying YX by the NIT rate (t) and subtracting from that figure the aggregate
value of the NIT credit (GX) that those population units would be permitted to
deduct from that tax liability.
Thus, the cost of an NIT can be estimated in either of two ways: by
estimating the total payments the system is likely to make to population units
with taxable incomes below the breakeven level (equation 4); or by estimating
the total tax payments the system is likely to receive from population units with
taxable incomes above the breakeven level (equation 5).
For an NIT to have the same redistributive effect as a UBI, all that is required
is that the maximum NIT benefit (G) equals the UBI benefit, and that the tax rate
and tax base used to fund the NIT and the UBI be the same. For a UBI funded
with a flat tax, this tax rate will equal the aggregate cost of the UBI (the sum of all
UBI benefit payments) divided by aggregate taxable income (Y).
For example, if a society with $160 billion in taxable income wanted to fund
a UBI that would provide UBI benefit payments totaling $40 billion, the flat-tax
rate required to fund the system would equal 25 percent ($40/160), but the same
redistributive effect could be achieved with an NIT that provided the same
maximum benefit in the form of a refundable tax credit made subject to a
25 percent take-back rate.
4. Clarks Proposed UBI
Clark has suggested two designs for a UBI in the US. The first would provide
two levels of benefit. All persons 18 years of age and older would receive a UBI
equal to the official poverty threshold for a single person living alone. All
persons under the age of 18 would receive a uniform UBI set below the
individual poverty threshold but high enough to guarantee that their family
income when combined with the UBI benefits received by their adult caretakers
will at least equal the poverty threshold for a family of requisite size (Clark,
2003, p. 150).
1
Clark estimates that such a program would have cost $1.98 trillion
in 1999 and would have approximately doubled federal government spending
from $1.70 trillion to $3.44 trillion (Clark, 2003, p. 150).
2

Clarks other proposed design for a UBI would be identical to the first except
that seniors (persons 65 years of age and older) would receive a means-tested
top-up benefit instead of a UBI. (Clark, 2005, p. 16). Clark does not explain

1
The poverty thresholds used by Clark are those published annually for households of different size by the
US Census Bureau.
2
The reason government spending would not have increased by an amount equal to the full cost of the
program is that Clark assumed the UBI would have been accompanied by a reduction in spending on other
income security programs totaling about $238 billion.
DOI: 10.2202/1932-0183.1032
how his proposed top-up benefit would be calculated, but he seems to envision a
program that would pay seniors a cash benefit equal to the difference between
their income from all other sources, including Social Security benefits, and the
official poverty threshold.
If this is what Clark had in mind, his overall proposal can be described as a
mixed system. It would combine a UBI for persons under the age of 65 with an
NIT for seniors. Persons under the age of 65 would receive a UBI while seniors
would receive an NIT that would provide approximately the same maximum
benefit but which would be subject to a 100 percent take-back rate.
Note that the UBI and NIT components of this proposed system are not
equivalent in the sense in which I have been using the term in this paper, since
they would tax other sources of income at very different rates. Whereas the take-
back rate applied to the NIT benefit offered to seniors would be set at 100
percent, the tax rate used to fund the overall system, including its UBI
component, would be only about 26 percent in Clarks example.
Clark estimates that such a program would have cost $1.97 trillion in 2002
and would have increased federal government spending from $2.01 trillion to
$3.72 trillion (Clark, 2005, p. 16). If seniors were offered the same UBI benefit
proposed in Clarks earlier paper (Clark, 2003, p. 150), it would have resulted in
an estimated program cost of $2.23 trillion in 2002 instead of $1.97 trillion, and
total federal government spending would have increased to $3.98 trillion instead
of $3.72 trillion (Harvey, 2006b, p. 24n72).
If I have accurately surmised Clarks intent, the top-up benefit he has
proposed for seniors is the least expensive type of antipoverty guarantee a
government can provide. The proposal limits transfer payments to the absolute
minimum necessary to raise the income of the target population to the poverty
threshold. This program design is susceptible to criticism, however, if one does
not want to discourage wage employment on the part of program participants
because a program that taxes earned income at such a high rate (100 percent in
the case of Clarks proposed top-up payment) creates strong work disincentives.
Clark believes this is acceptable for seniors because most of the elderly are
not in the labor force (and those who are in the labor force are there for economic
reasons and would like to leave, or are there because they enjoy what they are
doing) (Clark, 2005, p. 16n7). The problem with this argument is that it applies
with equal or greater force to many other groups indeed arguably to all
workers. An average of 4.5 million seniors were active labor-market participants
in the US at any one time during 2002, meaning that a larger number were
employed or sought employment at some point during the year. Presumably,
these seniors sought wage employment for the same combination of reasons
other people do, and while some would have ceased working if they had been
guaranteed a poverty level income, many others would have wanted to continue
working in order to maintain a standard of living above the poverty threshold.
Why should we be any less concerned about discouraging them from engaging
in wage employment than we would be if they were under age 65?
Clarks proposal would produce other anomalous (and likely unintended)
results. By using age to determine whether Social Security recipients would
receive a UBI in addition to their Social Security benefits, Clarks proposal would
treat seniors less favorably than millions of other Social Security recipients (who
would receive a UBI benefit in addition to their Social Security benefit), and it
would cause a precipitous drop in the income received by many such persons
when they reached age 65.
Approximately 5.5 million disabled workers under age 65 received Social
Security disability benefits in 2002, as did 745 thousand disabled children and 3.4
million children of deceased or disabled workers. Another 2.5 million persons,
ages 6264, received Social Security benefits that year because they elected to
begin collecting an actuarially reduced benefit before reaching age 65. Under
Clarks proposal, all of these persons would receive a UBI in addition to their
Social Security benefits,
3
despite the fact that most of them are far less likely to
seek wage employment than are seniors. Why should they, but not seniors,
receive a UBI in addition to their Social Security benefits? And why should Social
Security recipients who reach the age of 65 lose their UBI benefit, possibly cutting
their income by as much as 50 percent?
4

Clarks proposal also would result in seniors subsidizing the UBI benefits
received by younger persons. Under Clarks proposal seniors would have

3
Ironically, while leaving Social Security benefits intact for persons under the age of 65, Clark proposes the
elimination of equivalent benefits for veterans. His funding proposal assumes that all pension, disability, life
insurance and readjustment benefits currently paid to veterans and their families would be eliminated. The
bulk of these benefits consist of disability pensions for veterans with service-connected disabilities, and pension
benefits for the survivors of military personnel who die of service-connected causes. It is difficult to envision
any rationale for eliminating these benefits when comparable Social Security benefits would be left intact.
Clarks treatment of other social insurance benefits such as unemployment insurance evidences similar
inconsistencies, but the question of which social welfare benefits should be deemed replaceable by a UBI (or an
equivalent NIT) is beyond the scope of this paper. For a more extended discussion of this issue, see (Harvey,
2006b, pp. 36-41).
4
Anyone whose income from sources other than their UBI equaled the poverty threshold would suffer a 50
percent reduction in their income under Clarks proposal. Persons whose income from other sources was less
than the poverty threshold would have at least part of their UBI replaced with a top-up payment, while persons
whose income from other sources exceeded their UBI would suffer a loss of income equal to their lost grant, but
that loss would constitute less than 50 percent of their total income.
DOI: 10.2202/1932-0183.1032
contributed about $104 billion in flat-tax payments to support his proposed UBI
in 2002, but they would have received only about $34 billion in top-up payments
from the program. Any senior who received either wages or taxable pension
income would almost certainly suffer a reduction in their disposable income
under Clarks proposal unless they were poor enough to receive a top-up
payment compensating them for the additional taxes they would pay.
I do not believe Clark intended any of these anomalous results, but because
of them I have elected to base my estimate of the cost of an NIT on Clarks earlier
assumption that seniors would receive the same UBI benefit as everyone else.
The specifications for an NIT designed to mimic the effects of Clarks
original proposal for the design of a UBI one that treated seniors the same as
everyone else are set forth in Table 1 using 2002 data. An NIT with these
specifications would have exactly the same redistributive effect as Clarks
proposed UBI. It also would impose exactly the same marginal rate of taxation
on other income since, as explained above, the models take-back rate (t) has
been set at the same level that all income would be taxed under Clarks proposed
UBI.
5

Two features of this tax rate (25.6 percent) warrant special emphasis. First, it
does not include the taxes required to fund any other government functions.
Clark estimates that an overall flat-tax rate of 35.2 percent would have been
required to fund these functions along with his proposed UBI in 2002. Moreover,
this 35.2 percent figure does not include Social Security taxes and state and local
taxes, all of which would be left in place under Clarks proposal (Clark, 2005,
p. 17). Wage earners accordingly would have been subject to a total tax bite of
45.2 percent on their wage income (beginning with their first dollar earned) up to
the maximum level of wage income subject to full Social Security taxation
($84,900 in 2002).
The second feature worth noting about the 25.6 percent flat-tax rate assumed
in my model, is that it assumes everyone would fully report their income to the
tax authorities. We know this is not the case under existing tax systems, and with
the increased rates of taxation required to fund either a UBI or an equivalent
NIT, the incentives for tax evasion would grow substantially. The US Internal
Revenue Service (IRS) estimates that taxpayers underreport their actual income

5
To calculate this rate, I first had to recalculate what Clarks proposed UBI would have cost in 2002 using the
same population (U), benefit (G) and tax base (Y) figures used in my NIT specifications. The estimated cost of
Clarks system based on these figures would have been $1960.3 billion in 2002. Dividing this figure into the
systems assumed tax base of $7,562.9 produced the 25.6 percent value of t included in my NIT specifications.
Table 1. 2002 Design specifications for an NIT with the same redistri-
butive effect as Clarks proposed UBI
U = 285,933,410 (Total US population in 2002)
6

G = $ 3,500 (Persons under 18 years of age)
$ 9,359 (Persons aged 18 to 64)
$ 8,628 (Persons aged 65 and above)
$ 9,183 (Weighted avg. NIT benefit for persons 18)
7

Y = $ 7652.9 billion (Clarks proposed tax base)
8

t = 25.6 % (The NIT or take-back rate)
9

G/t = $ 13,672 (Breakeven income for persons under 18 years of age)
$ 36,559 (Breakeven income for persons aged 1864)
$ 33,703 (Breakeven income for persons aged 65 and older)

by over 15 percent (Internal Revenue Service, 2005). If Clark had assumed this
level of underreporting in his cost estimate, the flat-tax rate required to fund his
proposed UBI system (or an equivalent NIT) would have been 30.1 percent in
2002 instead of 25.6 percent, and the overall tax bite on wage earners would have
been 52.3 percent instead of 45.6 percent on earnings up to the $84,900 maximum
subject to full Social Security taxation. If the underreporting of income had
increased to 20 percent (and it would be reasonable to assume at least some
increase in tax evasion under Clarks proposed funding system) the flat-tax rate
required to fund either scheme would have been 32.0 percent in 2002, and the
overall tax bite on wage earners would have been 55.1 percent on earnings up to
$84,900.

6
This number is about 2 million smaller than the 287,984,799 population figure Clark used in estimating the
cost of his proposed universal program in 2002. I use the smaller figure because the income distribution data on
which my estimate is based uses it. I recalculate the cost of Clarks proposal using the same population figure
before comparing its cost to the NIT whose cost I am estimating.
7
This weighted figure equals the official poverty threshold for persons 18 and above before that threshold is
recalculated for persons between the ages of 18 and 64 and for seniors. I use this weighted average NIT benefit
in my estimation exercise to avoid having to calculate differing NIT benefits for working age adults and seniors.
The use of this figure for that purpose should have no effect on the results of my estimation exercise.
8
This figure equals total personal income minus current transfer receipts of individuals from governments,
as those terms are defined in the US Department of Commerces national income accounting methodology (US
Department of Commerce Bureau of Economic Analysis, 2006).
9
This is the proportion of each dollar of an individuals income that would be taxed away to pay for the NIT.
Up to the breakeven-income levels (G/t), this tax would be deducted from the individuals NIT credit, thereby
reducing its size, but once an individuals income exceeded the breakeven level their tax liability would exceed
their NIT credit and they would have to pay their tax liability in excess of their NIT credit.
DOI: 10.2202/1932-0183.1032
Also note that the breakeven income levels specified in this model are based
on only that portion of an individuals total tax liability that would be devoted to
funding the NIT. This does not mean that anyone with an income below these
breakeven levels would receive an NIT benefit. If the additional tax payments
required to support other government functions are taken into consideration, a
person between the ages of 18 and 64 would have to have earned less than
$20,706 instead of $36,559 before they would have received an NIT benefit check
from the government. If income underreporting totaled only 15 percent, and the
tax rates required to support the specified NIT were adjusted accordingly, a full-
time worker between the ages of 18 and 64 would have to have earned less than
$17,895 before they received a positive NIT benefit. Even at the higher breakeven
level of $20,706, fewer than one in four full-time workers would have received a
positive NIT payment under this scheme in 2002.
5. Estimating the Cost of an NIT
To estimate the cost of an NIT with the design specifications listed above I used
individual-income distribution data derived from the 2003 March Supplement
(the March Supplement) to the Current Population Survey (CPS) (US Bureau
of the Census, 2003). The March Supplement reports data obtained in a
supplemental survey conducted each March to collect annual income and other
information from the same sample of households that the US Bureau of the
Census surveys monthly, in cooperation with the US Bureau of Labor Statistics
(BLS), to produce the governments official labor force participation and
unemployment statistics. Among other things, the March Supplement includes
self-reported annual-income figures for each person aged 15 and older in the
sample households.
10

The principal problem with this data for estimating an NIT equivalent to
Clarks proposed UBI is that the total income reported by CPS participants is less
than Clarks proposed tax base. A small portion of this discrepancy is
attributable to the fact that the income of persons under age 15 is not recorded in
the survey,
11
but the principal reason is that survey participants underreport

10
The income reported by survey participants is for the preceding calendar year. That means the income
reported for persons who are 15 years old at the time of the survey (in March) consists mainly of income
received when they were 14 years old. The same lag is true for all other age groups as well.
11
Lacking income data for persons under the age of 15, I have assumed that all such persons received zero
income in 2002. While children obviously do receive some income, this assumption does not significantly affect
my estimate of the cost of an NIT because the amount of income children receive is very low in the aggregate.
For example, the average reported income for 15-year-olds in the survey (excluding government transfers) was
their nonwage income to CPS enumerators just as they do to the IRS. To correct
for this tendency, I have adjusted the average income figures reported by CPS
participants upwards to produce income figures for the entire US population
equal to the $7.7 trillion tax base on which Clark based his estimate of the cost of
a UBI in 2002 (the same period covered by the 2003 March Supplement).
I have used the resulting adjusted distribution of income to estimate the cost
of an NIT with the design specifications listed in Table 1. This estimation exercise
is detailed in three tables in this papers Appendix. Table A1 in the Appendix
shows the individual distribution of US income in 2002. Government transfers
are not included in the income figures reported in this table,
12
even though the
income cohorts shown in the first column of the table are based on all reported
income, including government transfers. In addition to tabulating self-reported
income figures from the 2003 March Supplement, Table A1 also includes a set of
adjusted income figures designed to estimate the actual average income received
by the members of each income cohort. The sum of these adjusted income figures
equals our hypothetical tax base.
Table A2 in the Appendix breaks down the Table A1 data by age. Separate
tabulations are provided for adults (persons 18 years of age and above) and
children (persons under the age of 18). This separation is required because
Clarks proposed UBI (and hence an equivalent NIT) would provide different
benefits for members of these two age groups.
Table A3 uses the adjusted income figures from Table A2 to estimate the cost
and redistributive effects of the NIT being modeled. Average NIT benefit or tax
payments are calculated for persons in different income cohorts based on the
adjusted average income figures tabulated in Table A2. Total NIT benefits
received or taxes paid by members of each income cohort also are calculated,
along with aggregate benefits received (which equals aggregate taxes paid) by
the entire population.
Based on these figures, I estimate that total cash benefits received by persons
aged 18 and above under the NIT I have modeled would have equaled $839.9

only $383 in 2002. Moreover, all but $122 of that was attributable to earnings from work, a source of income
unavailable to most younger children. This compares to $27,899 average nontransfer income reported for all
persons aged 18 and older.
12
The CPS database does not permit the removal of all government transfers from its reported income figures,
but the amounts that are not removable are very small in the aggregate. Income from all major transfer
programs is separately recorded in the database, and none of this income is included in Appendix 1. The
sources of income that are included consist of earnings from both wage and salary work, earnings from both
farm and nonfarm self-employment, dividends, interest, rent, private retirement benefits, private disability
benefits, private survivors benefits, and a small other income category that includes all other regularly
received income not included elsewhere.
DOI: 10.2202/1932-0183.1032
billion in 2002. NIT benefit payments to persons under the age of 18 would have
totaled another $253.3 billion, so the total cost of the program would have been
just over $1.09 trillion.
As explained above, the UBI that Clark modeled for 2002 would have
achieved exactly the same redistributive effect but with a budgeted cost
approximately double that of its NIT equivalent. Based on the figures set forth in
Table A3, the cost of a UBI system that included seniors on the same basis as
other persons would have totaled $1.96 trillion in 2002 compared to the $1.09
trillion budget of its NIT equivalent.
This does not take into account reductions in other transfer benefits made
possible by the implementation of a BIG in the form of either an NIT or a UBI.
Clark has estimated these savings at $267.3 billion in 2002. As suggested above, I
believe Clarks selection of proposed transfer-program cuts is problematic, but
his figures still can be used to estimate the approximate savings governments
would have enjoyed if his proposed UBI or an equivalent NIT had been in place
in 2002.
Subtracting these savings from the budgeted cost of Clarks proposed UBI
and the equivalent NIT I have modeled would have resulted in the same
reduction in the additional tax burden required to fund either one. The net
additional cost of Clarks proposed UBI after this adjustment would have been
$1.69 trillion (instead of $1.96 trillion). The additional cost of the NIT would have
been $826 billion (instead of $1.09 trillion).
These figures show that a UBI and an equivalent NIT both would be very
costly to implement, but the NIT strategy would be far less costly. On the other
hand, remember that the marginal rate at which other income received by
program participants would be exactly the same under both systems, so a
plausible claim can be made that the two systems would be perceived by
taxpayers as costing the same. As explained above, I am skeptical of this claim,
but it cannot be dismissed out of hand.
6. The Work Incentive Effects of a BIG and Why They Should Concern Us
As noted above, the cost estimates described in this paper assume that the
introduction of a BIG (in the form of either a UBI or an NIT) would have no effect
on the size of the tax base used to fund the program. One of the first questions
that needs to be addressed in relaxing this assumption is whether the
introduction of a BIG would affect labor force participation rates.
BIG advocates face a conundrum in addressing this question because their
hopes for the program pull in two opposing directions. On the one hand, when
discussing funding issues, BIG advocates tend to assume that the establishment
of an unconditional income guarantee by means of either a UBI or an equivalent
NIT would not cause aggregate income to decline. Both Clark and I, for example,
have adopted this assumption in our program cost estimates. On the other hand,
this assumption is at odds with another tendency among BIG advocates an
urge to celebrate the support a BIG would provide for nonmarket activities
(Standing, 2004).
These tendencies are at odds because any significant reduction in labor
market participation would be likely to cause a reduction in the tax base needed
to fund a BIG.
13
If people dont reduce their participation in the paid labor
market, it is hard to see how a BIG could result in an upsurge in nonmarket
activities. But if they did embrace nonmarket work in preference to wage
employment, it could undermine the tax base needed to support the BIG and
hence its sustainability.
I am not suggesting that BIG advocates are unaware of this problem. Van
Parijs, for example, has been careful to specify that the size of a BIG should be
limited by its sustainability (Van Parijs, 1995; 2006). But that raises another issue.
Does the provision of a BIG constitute the best use of a societys limited
redistributive capacity? Suppose the maximum BIG a society can sustain over
time is insufficient to eliminate poverty. The inadequacy of a BIG to fully achieve
its goals provides no reason in and of itself for rejecting the idea, but it is hard to
imagine this sustainability limit being reached without the redistributive
capacity of society being exhausted in the process. If that were the case, the BIG
itself could become a giant poverty trap, preventing a society from using its

13
This assumes that a reduction in labor force participation would not lead to compensating increases in real
wages. This assumption probably is reasonable. We know what happens when excess labor supplies evaporate
due to increased aggregate demand. Wages rise, but so does the rate of inflation, and both employers and the
government (usually through its central bank) react in ways that tend to slow down the economy, increase
unemployment rates, and relieve upward pressure on wage rates all in the name of fighting inflation. There is
no obvious reason to expect employers and governments to react any differently if the decline in excess labor
supplies (and consequent increase in average wage levels and the rate of inflation) were caused by a decline in
labor force participation rather than an increase in aggregate demand. This means the most likely effect of a
decline in labor force participation would not be a lasting increase in wages but a decline in national income,
and hence in the tax base available to fund a BIG. In the long run, of course, it is possible that a BIG would
produce effects that would enhance labor productivity and hence raise wage levels without inflationary effect,
but before counting on such gains, BIG advocates need to reconcile their hopes for a flowering of productivity-
enhancing nonmarket activities with the unattractive short-run consequences of a reduction in labor force
participation.

DOI: 10.2202/1932-0183.1032
sustainable redistributive capacity to fund less costly methods of eliminating
poverty such as that afforded by the job guarantee strategy (Harvey, 2003; 2005;
2006b).
In other words, the possible work-disincentive effects of a BIG are
important, not only for determining the maximum BIG a society can sustain over
time, but also because they underscore the fact that a societys ability to
redistribute income may have economic as well as political limits. Funding a
social welfare benefit as costly as a UBI (or an equivalent NIT) could impose
significant opportunity costs on society preventing it from funding other
equally or more important social welfare benefits.
14
If one accepts that a BIG
would not secure all of the economic and social human rights that governments
have an obligation to secure, the opportunity cost of providing a BIG must be
considered along with its sustainability in deciding what level of BIG, if any, it
would be desirable for a society to provide. This makes the possible work-
incentive effects of a BIG doubly important since they could affect not only the
sustainability of the BIG itself, but also a societys ability to meet other social
welfare needs.
Most commentary on the work-incentive effects of a BIG addresses another
issue whether a BIG would create the kind of poverty trap that existing
means-tested transfer programs have been blamed for creating. This type of
poverty trap results from the alleged tendency of such programs to diminish
work incentives among the poor because the withdrawal of benefits that occurs
as a recipients income rises has the effect of taxing wage income at an
exceptionally high marginal rate. It is claimed that this causes people to remain
in poverty when an increase in work effort would permit them to raise their
standard of living (see, e.g., Murray, 1984). We therefore need to add this concern
to our list of reasons to worry about the possible work-incentive effects of a BIG.
What would be the likely work-incentive effects of a UBI or an equivalent
NIT? The fact that both systems would have the same redistributive effect and
would tax earned income at the same marginal rate means that both the
income and the substitution effects of the systems should be the same. A
conventional economic analysis accordingly would predict that both systems
would produce the same incentive effects, but what would those incentive effects
be?

14
Van Parijs has suggested that a societys obligation to provide health and education benefits to its members
should have priority over the establishment of a BIG (Van Parijs, 2006, p. 22) but he offers no explanation of the
considerations on which that judgment is based and, consequently, no guidance in determining whether there
are other social welfare benefits that he views as commanding similar funding priority.
One reassuring conclusion is that neither a UBI nor an equivalent NIT would
create the kind of poverty trap that critics of existing public assistance programs
deplore, since the marginal rate of taxation on wage income would be the same
for wage workers at all income levels. However, our concern is not only that the
poor might be encouraged to work less, thereby trapping them in poverty, but
that labor force participation in general might decline and with it the tax base
available to fund a BIG.
Unfortunately, the tendencies of a BIG in this regard are unsettling. First, the
increase in taxes required to implement either a UBI or an equivalent NIT would
reduce net wage rates for all workers. This means the substitution effect of these
programs should tend to cause all labor-force participants (or potential labor-
force participants) to want to work less.
Moreover, this tendency would be enhanced for low-income workers by the
programs income effect. A UBI or an equivalent NIT would increase the real
income of persons with incomes below the breakeven level while reducing the
real income of persons with incomes above the breakeven level. A conventional
analysis would predict that net-income gainers would use at least part of their
additional income to purchase more leisure. In other words, they would work
less because of the income effect of the transfer benefit they received. On the
other hand, net-income losers should manifest the opposite tendency, reducing
their consumption of leisure by working more. In other words, the income
effect of a BIG should encourage higher-income workers to work more and
lower-income workers to work less.
This analysis can be summarized as follows: lower-income workers would
be subject to both an income and a substitution effect that would tend to make
them want to work less, while higher-income workers would be subject to
conflicting income and substitution effects that could cause them to want to work
more than they do now, less than they do now, or the same amount that they do
now. I am not predicting that these effects actually would occur. Recent
behavioral economic research has undermined confidence in the rational actor
assumptions on which conventional analysis of the income and substitution
effects is based. On the other hand, there is no reason to be sanguine concerning
these projected effects. If the changes in labor force participation predicted by
neoclassical theory materialized, it could mean that pretransfer income
inequality would grow under a BIG at the same time the tax base needed to
sustain the program was shrinking.
DOI: 10.2202/1932-0183.1032
7. Conclusion
We have seen that a UBI and an NIT designed to achieve the same redistributive
effect would impose the same marginal rates of taxation on other sources of
income, but that the overall tax burden required to fund an NIT would be much
smaller than for an equivalent UBI. Unless one is persuaded that the
redistributive effect of the two systems is the proper measure of their cost, the
NIT alternative plainly enjoys a substantial cost advantage over a UBI. A UBI
might have other advantages that would tend to compensate for its higher cost,
but those advantages would have to be very great to cancel out the cost
advantage of an NIT.
We also have seen that despite the lower cost of an NIT compared to a
comparable UBI, it still would constitute a very expensive way of eradicating
poverty. Indeed, the high cost of the NIT modeled in this paper combined with
the possibility that it would produce work disincentives undermining its own
sustainability call into question the viability of this type of BIG as a means of
eliminating poverty.
15
The distinct possibility exists that it could not be sustained
at a high enough level to achieve its antipoverty goals.
This would not matter, of course, if a UBI or equivalent NIT constituted the
only means of eliminating poverty. In that case it would be reasonable to
disregard any misgivings we might have concerning the ultimate effectiveness of
the strategy. We could proceed in good conscience to promote the most generous
BIG the economy could sustainably maintain. If the strategy fell short of its
ultimate goal, at least we would have done what we could.
But providing a UBI or its NIT equivalent is not the only way of eliminating
poverty. The reason a UBI or an equivalent NIT would be so expensive is
because most of its benefits would be provided to individuals who were not
living in poverty. The reason for this is obvious in the case of a UBI. A benefit
large enough to raise the income of the poorest members of society to the poverty
threshold would have to be paid to every member of society, the vast majority of
whom are not poor.
An NIT configured to achieve the same redistributive effect would cost less
because back-and-forth payments to individuals would be eliminated, but it
would not eliminate back-and-forth payments to family units. Since tax liabilities

15
I know that BIG advocates have devoted considerable energy to the task of identifying potential funding
sources other than the straightforward redistribution of income modeled in this paper. I leave to another day
the task of considering whether the analysis in this paper would apply to those funding strategies as well. I
also leave to another day an inquiry into less expensive design specifications for an NIT or a nonuniversal basic
income grant system.
and benefit eligibility would be determined for each family member individually
(consistent with the universality principle underlying the UBI idea), some family
members could be liable for substantial net-tax payments while others received
NIT benefit checks. Consequently, most of the budget of an NIT configured to
achieve the same redistributive effect as a UBI would be used to pay benefits to
nonworking members (both children and adults) of nonpoor families.
Other ways of providing a BIG are conceivable, of course, but it is beyond
the scope of this paper to explore those possibilities. The only comparison I will
make here is between the cost of the NIT I have modeled in this paper and the
cost of the job guarantee strategy (Harvey, 2003; 2006b). As noted at the
beginning of this paper, that strategy involves the use of direct job creation and
conventional transfer benefits to secure the right to work and income support
recognized in the Universal Declaration of Human Rights. In contrast to the $826
billion increase in taxes required to fund the NIT modeled in this paper, I have
estimated that the job guarantee strategy could be funded with an increase in
taxes of less than $100 billion a year.
This latter cost comparison raises the question of whether the benefits
produced by a UBI or an equivalent NIT would be great enough to justify the far
greater cost of this means of providing a BIG compared to the job guarantee
strategy. Answering that question in the negative, I have argued that the job
guarantee strategy would not only eliminate poverty more efficiently than a UBI,
but that it also could achieve most of the other goals of a BIG at less cost, while
simultaneously securing a range of economic and social human rights that a UBI
would not address (Harvey, 2003, 2005, 2006b). This same argument would
apply to the NIT modeled in this paper, although with less force given the cost
advantage of an NIT over a UBI.
Finally, even if the benefits of a UBI or an equivalent NIT would justify its
cost in theory, BIG advocates need to consider the possible opportunity cost of
pursuing the strategy in practice. In light of its high cost, is it realistic to imagine
that a UBI or an equivalent NIT could be sustained at a high enough level to
eliminate poverty? BIG advocates who argue that a society should provide its
members the largest sustainable BIG it can afford whether or not that guarantee
would be large enough to eliminate poverty are on shaky moral ground if the
opportunity cost of providing such a BIG would be the exhaustion of societys
redistributive capacity without eliminating poverty when other foregone social
welfare strategies could have been funded at far less cost that would have
succeeded in achieving that goal.
DOI: 10.2202/1932-0183.1032
Appendix
Table A1. Individual distribution of US pre-tax income, 2002
Income (1)
Number of
Persons
Avg. Reported
Income (2)
Avg. Actual
Income (3)
Total Income of Cohort (3)
(dollars) (1000s) (dollars) (dollars) (billions of dollars)
All Persons 285,933 20,787 26,765 7652.9
Under 2,500 (4) 99,156 55 71 7.1
2,500 - 4,999 8,884 2,181 2,809 25.0
5,000 - 7,499 13,289 2,694 3,469 46.1
7,500 - 9,999 11,417 3,804 4,898 55.9
10,000 - 12,499 13,397 6,658 8,573 114.9
12,500 - 14,999 9,734 8,130 10,467 101.9
15,000 - 17,499 11,304 11,859 15,269 172.6
17,500 - 19,999 8,377 14,352 18,478 154.8
20,000 - 22,499 10,868 18,087 23,288 253.1
22,500 - 24,999 6,923 19,782 25,470 176.3
25,000 - 27,499 9,182 23,655 30,457 279.7
27,500 - 29,999 5,709 25,325 32,607 186.1
30,000 - 32,499 9,472 28,859 37,158 352.0
32,500 - 34,999 4,311 30,261 38,962 168.0
35,000 - 37,499 6,945 34,061 43,855 304.6
37,500 - 39,999 4,036 35,565 45,792 184.8
40,000 - 42,499 6,710 39,429 50,767 340.6
42,500 - 44,999 2,741 40,639 52,324 143.4
45,000 - 47,499 4,167 43,947 56,583 235.8
47,500 - 49,999 2,512 45,726 58,874 147.9
50,000 - 52,499 4,868 49,324 63,507 309.1
52,500 - 54,999 1,917 50,782 65,384 125.4
55,000 - 57,499 2,683 54,010 69,540 186.5
57,500 - 59,999 1,389 55,576 71,557 99.4
60,000 - 62,499 3,025 58,957 75,909 229.6
62,500 - 64,999 1,259 60,601 78,026 98.2
65,000 - 67,499 1,873 63,926 82,307 154.1
67,500 - 69,999 969 65,732 84,633 82.0
70,000 - 72,499 1,934 69,435 89,401 172.9
72,500 - 74,999 849 70,877 91,257 77.5
75,000 - 77,499 1,753 74,473 95,887 168.1
77,500 - 79,999 707 75,654 97,408 68.8
80,000 - 82,499 1,428 78,774 101,425 144.9
82,500 - 84,999 576 81,330 104,715 60.3
85,000 - 87,499 828 84,406 108,676 90.0
87,500 - 89,999 396 84,665 109,010 43.2
90,000 - 92,499 822 89,212 114,864 94.5
92,500 - 94,999 351 90,468 116,482 40.9
95,000 - 97,499 581 94,312 121,431 70.6
Table A1. (continued)
Income (1)
Number of
Persons
Avg. Reported
Income (2)
Avg. Actual
Income (3)
Total Income of Cohort (3)
(dollars) (1000s) (dollars) (dollars) (billions of dollars)
All Persons 285,933 20,787 26,765 7652.9
97,500 - 99,999 343 93,697 120,639 41.4
100,000 + 8,247 173756.9 223,719 1845.0
Source: Author's calculations using data from US Census Bureau, DataFerrett, CPS,
March Supplement, 2003.
(1) Based on reported income including government transfers
(2) Excluding government transfers
(3) Estimated
(4) Assumes zero income for all persons under age 15
Table A2. Individual distribution of US pre-tax income by age, 2002
Persons Under 18 Persons 18 and Older
Income (1)

Number
Avg.
Reported
Income (2)
Avg.
Actual
Income (3)
Total
Income of
Cohort (3)
Number
Avg.
Reported
Income (2)
Avg.
Actual
Income (3)
Total
Income of
Cohort (3)
(dollars) (1000s) (dollars) (dollars) (billions) (1000s) (dollars) (dollars) (billions)
All Income Levels 73,312 161 207 15.197 212,622 27,899 35,920 7,637.4
Under 2,500 (4) 71,380 31 40 2.849 27,777 117 151 4.2
2,500 - 4,999 952.6 2,694 3,468 3.304 7,932 2,120 2,729 21.6
5,000 - 7,499 511.6 3,497 4,502 2.304 12,777 2,662 3,427 43.8
7,500 - 9,999 196.7 4,923 6,338 1.247 11,220 3,785 4,873 54.7
10,000 - 12,499 102.4 7,224 9,301 0.952 13,295 6,654 8,567 113.9
12,500 - 14,999 51.9 6,991 9,001 0.467 9,682 8,136 10,475 101.4
15,000 - 17,499 38.2 12,607 16,232 0.620 11,266 11,857 15,266 172.0
17,500 - 19,999 6.4 15,885 20,451 0.131 8,371 14,350 18,476 154.7
20,000 - 22,499 5.1 20,449 26,328 0.133 10,863 18,086 23,286 253.0
22,500 - 24,999 4.0 18,453 23,758 0.094 6,919 19,782 25,470 176.2
25,000 - 27,499 11.0 20,486 26,376 0.291 9,171 23,659 30,461 279.4
27,500 - 29,999 1.5 28,000 36,050 0.055 5,707 25,324 32,605 186.1
30,000 - 32,499 6.8 23,350 30,063 0.203 9,465 28,863 37,161 351.7
32,500 - 34,999 10.3 18,986 24,445 0.252 4,301 30,288 38,995 167.7
35,000 - 37,499 3.8 36,000 46,349 0.177 6,941 34,060 43,852 304.4
37,500 - 39,999 2.7 37,180 47,869 0.129 4,033 35,564 45,789 184.7
40,000 - 42,499 2.4 31,811 40,956 0.099 6,708 39,429 50,765 340.5
42,500 - 44,999 0.3 44,000 56,650 0.015 2,741 40,638 52,322 143.4
45,000 - 47,499 5.5 28,342 36,491 0.202 4,162 43,947 56,582 235.5
47,500 - 49,999 (5) (5) (5) (5) 2,512 45,726 58,872 147.9
50,000 - 52,499 7.2 29,158 37,541 0.269 4,860 49,340 63,525 308.8
52,500 - 54,999 1.4 54,503 70,173 0.097 1,916 50,779 65,378 125.3
55,000 - 57,499 3.1 55,143 70,996 0.223 2,679 54,009 69,536 186.3
DOI: 10.2202/1932-0183.1032
Persons Under 18 Persons 18 and Older
Income (1)

Number
Avg.
Reported
Income (2)
Avg.
Actual
Income (3)
Total
Income of
Cohort (3)
Number
Avg.
Reported
Income (2)
Avg.
Actual
Income (3)
Total
Income of
Cohort (3)
(dollars) (1000s) (dollars) (dollars) (billions) (1000s) (dollars) (dollars) (billions)
All Income Levels 73,312 161 207 15.197 212,622 27,899 35,920 7,637.4
57,500 - 59,999 0.2 58,721 75,603 0.012 1,389 55,576 71,554 99.4
60,000 - 62,499 1.7 60,846 78,339 0.133 3,023 58,990 75,949 229.6
62,500 - 64,999 (5) (5) (5) (5) 1,259 60,601 78,024 98.2
65,000 - 67,499 (5) (5) (5) (5) 1,873 63,926 82,304 154.1
67,500 - 69,999 (5) (5) (5) (5) 969 65,732 84,630 82.0
70,000 - 72,499 (5) (5) (5) (5) 1,934 69,435 89,398 172.9
72,500 - 74,999 (5) (5) (5) (5) 849 70,877 91,254 77.5
75,000 - 77,499 1.0 75,000 96,563 0.099 1,752 74,473 95,884 168.0
77,500 - 79,999 0.4 79,194 101,962 0.041 706 75,652 97,402 68.8
80,000 - 82,499 (5) (5) (5) (5) 1,428 78,774 101,422 144.8
82,500 - 84,999 (5) (5) (5) (5) 576 81,330 104,712 60.3
85,000 - 87,499 (5) (5) (5) (5) 828 84,406 108,672 90.0
87,500 - 89,999 (5) (5) (5) (5) 396 84,665 109,006 43.2
90,000 - 92,499 (5) (5) (5) (5) 822 89,212 114,860 94.5
92,500 - 94,999 (5) (5) (5) (5) 351 90,468 116,478 40.9
95,000 - 97,499 (5) (5) (5) (5) 581 94,312 121,427 70.6
97,500 - 99,999 1.9 98,416 126,711 0.236 341 93,671 120,602 41.2
100,000 + 2.2 157,797 203,163 0.447 8,245 173,761 223,717 1,844.5
Source: See Table A1
(3) Estimated
(5) Numbers too small to report
Table A3. Estimated benefits and taxes under hypothetical NIT, 2002
Persons Under 18 Persons 18 and older
Income
Cohorts (1)

Number
Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Number
Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Aggregate
NIT
Ben (+) or
Tax (-)
(dollars) (1000s) (dollars) (dollars) (billions) (1000s) (dollars) (dollars) (billions) (dollars)
All Income Levels 73,312 207 253.30 212,622 35,920 839.9 1,093.2
Under 2,500 (4) 71,380 40 3,490 249.10 27,777 151 9,144 254.0 503.1
2,500 - 4,999 953 3,468 2,612 2.49 7,932 2,729 8,484 67.3 69.8
5,000 - 7,499 512 4,502 2,347 1.20 12,777 3,427 8,306 106.1 107.3

Income
Cohorts (1)

Number

Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Number
Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Aggregate
NIT
Ben (+) or
Tax (-)
7,500 - 9,999 197 6,338 1,877 0.37 11,220 4,873 7,936 89.0 89.4
10,000 - 12,499 102 9,301 1,119 0.11 13,295 8,567 6,990 92.9 93.0
12,500 - 14,999 51.9 9,001 1,196 0.06 9,682 10,475 6,501 62.9 63.0
15,000 - 17,499 38.2 16,232 -655 -0.03 11,266 15,266 5,275 59.4 59.4
17,500 - 19,999 6.4 20,451 -1,736 -0.01 8,371 18,476 4,453 37.3 37.3
20,000 - 22,499 5.1 26,328 -3,240 -0.02 10,863 23,286 3,222 35.0 35.0
22,500 - 24,999 4.0 23,758 -2,582 -0.01 6,919 25,470 2,663 18.4 18.4
25,000 - 27,499 11.0 26,376 -3,252 -0.04 9,171 30,461 1,385 12.7 12.7
27,500 - 29,999 1.5 36,050 -5,729 -0.01 5,707 32,605 836 4.8 4.8
30,000 - 32,499 6.8 30,063 -4,196 -0.03 9,465 37,161 -330 -3.1 -3.2
32,500 - 34,999 10.3 24,445 -2,758 -0.03 4,301 38,995 -800 -3.4 -3.5
35,000 - 37,499 3.8 46,349 -8,365 -0.03 6,941 43,852 -2,043 -14.2 -14.2
37,500 - 39,999 2.7 47,869 -8,755 -0.02 4,033 45,789 -2,539 -10.2 -10.3
40,000 - 42,499 2.4 40,956 -6,985 -0.02 6,708 50,765 -3,813 -25.6 -25.6
42,500 - 44,999 0.3 56,650 -11,002 -0.003 2,741 52,322 -4,211 -11.5 -11.5
45,000 - 47,499 5.5 36,491 -5,842 -0.03 4,162 56,582 -5,302 -22.1 -22.1
47,500 - 49,999 (5) (5) (5) (5) 2,512 58,872 -5,888 -14.8 -19.8
50,000 - 52,499 7.2 37,541 -6,111 -0.04 4,860 63,525 -7,079 -34.4 -34.5
52,500 - 54,999 1.4 70,173 -14,464 -0.02 1,916 65,378 -7,554 -14.5 -14.5
55,000 - 57,499 3.1 70,996 -14,675 -0.05 2,679 69,536 -8,618 -23.1 -23.1
57,500 - 59,999 0.2 75,603 -15,854 -0.003 1,389 71,554 -9,135 -12.7 -12.7
60,000 - 62,499 1.7 78,339 -16,555 -0.03 3,023 75,949 -10,260 -31.0 -31.0
62,500 - 64,999 (5) (5) (5) (5) 1,259 78,024 -10,791 -13.6 -18.6
65,000 - 67,499 (5) (5) (5) (5) 1,873 82,304 -11,887 -22.3 -27.3
67,500 - 69,999 (5) (5) (5) (5) 969 84,630 -12,482 -12.1 -17.1
70,000 - 72,499 (5) (5) (5) (5) 1,934 89,398 -13,703 -26.5 -31.5
72,500 - 74,999 (5) (5) (5) (5) 849 91,254 -14,178 -12.0 -17.0
75,000 - 77,499 1.0 96,563 -21,220 -0.02 1,752 95,884 -15,363 -26.9 -26.9
77,500 - 79,999 0.4 101,962 -22,602 -0.01 706 97,402 -15,752 -11.1 -11.1
80,000 - 82,499 (5) (5) (5) (5) 1,428 101,422 -16,781 -24.0 -29.0
82,500 - 84,999 (5) (5) (5) (5) 576 104,712 -17,623 -10.1 -15.1
85,000 - 87,499 (5) (5) (5) (5) 828 108,672 -18,637 -15.4 -20.4
87,500 - 89,999 (5) (5) (5) (5) 396 109,006 -18,723 -7.4 -12.4
90,000 - 92,499 (5) (5) (5) (5) 822 114,860 -20,221 -16.6 -21.6
92,500 - 94,999 (5) (5) (5) (5) 351 116,478 -20,635 -7.2 -12.2
95,000 - 97,499 (5) (5) (5) (5) 581 121,427 -21,902 -12.7 -17.7

DOI: 10.2202/1932-0183.1032
Income
Cohorts (1)

Number
Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Number
Avg.
Actual
Income
(2)(3)
Avg. NIT
Ben (+)
or
Tax (-)
Total NIT
Ben (+)
or
Tax (-)
Aggregate
NIT
Ben (+) or
Tax (-)
97,500 - 99,999 1.9 126,711 -28,938 -0.05 341 120,602 -21,691 -7.4 -7.5
100,000 + 2.2 203,163 -48,510 -0.11 8,245 223,717 -48,089 -396.5 -396.6
Total Nit Benefits Received(+) Or Taxes Paid(-) +/- 253.3 +/- 839.9 +/- 1,093.3
Source: See Table A1
(3) Estimated
(5) Numbers too small to report
References
BIG Financing Reference Group (2004) Breaking the Poverty Trap: Financing a Basic
Income Grant in South Africa, Basic Income Coalition Group, Cape Town, South
Africa. http://www.sacc-ct.org.za/BIGfin.pdf [Accessed 21 November 2006].
Clark, Charles M.A. (2003) Promoting Economic Equity in a 21st Century Economy: The
Basic Income Solution, in Paul Dale Bush and Marc Tool (eds.) Institutional Analysis
of Economic Policy. Norwell, MA: Kluwer Academic Publishers.
Clark, Charles M.A. (2005) The Economics of Poverty in the United States of America,
Oikonomia 4 (3), pp. 619.
Harvey, Philip (2002) Human Rights and Economic Policy Discourse: Taking Economic
and Social Rights Seriously, Columbia Human Rights Law Review 33 (2), pp. 363471.
Harvey, Philip (2003) The Right to Work and Basic Income Guarantees: A Comparative
Assessment, USBIG Discussion Paper No. 57. http://www.usbig.net/papers/057-
Harvey-Right2Work.doc [Accessed 30 October 2006].
Harvey, Philip (2005) The Right to Work and Basic Income Guarantees: Competing or
Complimentary Goals, Rutgers Journal of Law and Public Policy 2 (1), pp. 859.
http://www.rutgerspolicyjournal.org/jlpp_issues_2_1.html [Accessed 30 October
2006].
Harvey, Philip (2006a) Funding a Job Guarantee, International Journal of the
Environment, Workplace and Employment 2 (1), pp. 114132.
Harvey, Philip (2006b) Income, Work and Freedom: Progressive Alternatives to
Conservative Welfare Reform, paper presented at the Eleventh Congress of the Basic
Income Earth Network, Cape Town, South Africa, Nov. 24, 2006.
http://www.philipharvey.info/particles.html [Accessed 30 October 2006].
Internal Revenue Service (2005) Understanding the Tax Gap, FS-2005-14, March 205.
http://www.irs.gov/newsroom/article/0,,id=137246,00.html [Accessed 30 October
2006].
Murray, Charles (1984) Losing Ground: American Social Policy, 19501980. New York, NY:
Basic Books.
Neuberg, Leland G. (2003) What Defeated a Negative Income Tax?: Constructing a
Causal Explanation of a Politically Controversial Historical Event, USBIG Dis-
cussion Paper No. 57. http://www.usbig.net/papers/066-Neuberg-FAP2.doc
[Accessed 30 October 2006].
Noguera, Jose A. (2005) Citizens or Workers? Basic Income vs. Welfare-to-Work
Policies, Rutgers Journal of Law and Public Policy 2 (1), pp. 103124.
http://www.rutgerspolicyjournal.org/jlpp_issues_2_1.html [Accessed 30 October
2006].
Samson, Michael, Kenneth MacQuene, Ingrid van Niekerk et al. (2002) The
Macroeconomic Implications of Poverty-Reducing Income Transfers Michael
Samson, paper presented at the 9
th
Congress of the Basic Income Europe Network,
Geneva, Switzerland, 1214 September 2002. http://www.etes.ucl.ac.be/bien/Files/
Papers/2002SamsonVanNiekerk.pdf [Accessed 21 November, 2006].
Standing, Guy (2004) About Time: Basic Income Security as a Right, in Guy Standing
(ed.) Promoting Income Security as a Right: Europe and North America. London: Verso.
United Nations (1948) Universal Declaration of Human Rights, G.A. res. 217A (III), UN
Doc. A/810 at 71.
US Bureau of the Census (2003) Current Population Survey, 2003 Annual Social and
Economics (ASEC) Supplement, March.
US Department of Commerce Bureau of Economic Analysis (2006) National Income and
Product Accounts, Tables SA04 (2002) and SA35 (2002). https://bea.gov/bea/
regional/spi/ [Accessed 30 October 2006].
Van Parijs, Philippe (1995) Real Freedom for All: What (If Anything) Can Justify Capitalism
London: Oxford University Press.
Van Parijs, Philippe (2005) Basic Income: A Simple and Powerful Idea for the 21st
Century, Politics and Society 32 (1), pp. 739.
Philip Harvey
Rutgers School of Law Camden
217 N. Fifth Street
Camden, NJ 08102-1203
United States
Email: pharvey@crab.rutgers.edu
DOI: 10.2202/1932-0183.1032
IR AL NDICE
BASlC lNCOML STUDlLS
An lnternutlonuI ]ournuI of Buslc lncome Reseurch

Vc| 1, |ssuc 1 RISIARCH ARTICLI junc 2006
Why Trade Unions Oose asic Income
Yannick Vanderborghl
Bc|gian |un! jcr Scicniijic |cscarcn (|N|S), an!
Hcctcr Cnair, Unitcrsiic Cainc|iquc !c Icutain
Abstract In mosl OICD counlries lrade unions remain key Iayers in lhe fieId of
veIfare slale reform. And yel, surrisingIy IillIe allenlion has been aid by
roonenls of a universaI basic income (I) lo lhe very osilion of vorkers unions on
lhe radicaI reform lhal lhey are advocaling. This aer lackIes lhis issue in lhree
comIemenlary vays. Iirsl, il offers a brief overviev of lhe (scarce) Iileralure on
basic income and lrade unions. Second, il focuses on IausibIe argumenls lhal couId
be used by lrade unions lo oose or, aIlernaliveIy, suorl a basic income. IinaIIy,
emiricaI informalion coIIecled in eIgium, Canada, and lhe NelherIands is used lo
lesl lhe robuslness of lhe lheorelicaI assumlions. These invesligalions demonslrale
lhal lrade unions are far from being naluraI aIIies of I advocales vilhin deveIoed
veIfare slales. As evidenced by lhe eIgian case, lhey can even conslilule a
significanl obslacIe lo lhe oIilicaI rogression of lhe idea.
Kcywnrds guaranleed income, income dislribulion, oIilicaI feasibiIily, lrade
unions, sociaI oIicy.
This aer is arlIy based on a resenlalion made al lhe Xlh Congress of lhe asic Income Iarlh Nelvork
(arceIona, 2004). I am gralefuI for commenls and suggeslions from arlicianls al lhis Congress, IhiIie Van
Iari|s, }urgen De WiseIaere, KarI Widerquisl and lvo anonymous referees.
Tnc inirc!uciicn cj sucn an unccn!iiicna| inccnc is ic |c ticuc! nci as inc
!isnani|ing |ui as inc cu|ninaiicn cj inc uc|jarc siaic.
IhiIie Van Iari|s (1992)
1. Intrnductinn
In mosl OICD counlries lrade unions remain key Iayers in lhe fieId of veIfare
slale reform. In eIgium and Scandinavia, vhere lhey sliII reresenl a Iarge
ma|orily of lhe vorkforce, lhey are lradilionaI and ivolaI arlners in lhe
oIicy-making rocess. In olher counlries, even lhose vilh Iov union densily
(such as Irance) lhey are oflen abIe lo mobiIize mass suorl in favor of lhe
slalus quo, somelimes lhrough huge demonslralions and araIyzing slrikes. ul
surrisingIy IillIe allenlion has been aid by universaI basic income (I)
roonenls lo lhe very osilion of vorkers' unions on lhe radicaI reform lhal
lhey are advocaling.
This aer, vhich dravs uon a sludy of lhe oIilicaI feasibiIily of an
uncondilionaI minimum income in induslriaIized counlries (Vanderborghl,
2004), lackIes lhis issue in lhree comIemenlary vays. Seclion 1 offers a brief
overviev of lhe (scarce) Iileralure on I and lrade unions. Seclion 2 focuses on
IausibIe argumenls lhal couId be used by lrade unions lo oose or,
aIlernaliveIy, lo suorl a I. In Seclion 3, I use emiricaI informalion coIIecled
in eIgium, Canada, and lhe NelherIands lo lesl lhe robuslness of lhe lheorelicaI
assumlions. The finaI goaI of lhis exIoralion is roseclive: are lrade unions
IikeIy lo faciIilale lhe graduaI imIemenlalion of a I in OICD counlries, or are
lhere reasons lo lhink lhal lhe reverse shaII be lrue` Are lrade unions sliII lhe
mosl imorlanl and efficienl oosilion lo neoIiberaI allacks on lhe veIfare slale
loo conservalive vhen considering lhe emancialory olenliaI of a I` As il
becomes cIear al lhe end of lhis invesligalion, lhere is no singIe ansver lo lhis
queslion, since secific inslilulionaI arrangemenls are of arlicuIar imorlance.
2. Tradc Uninns in thc Basic Incnmc Litcraturc: A 5hnrt Ovcrvicw
As menlioned above, in lhe I Iileralure IillIe allenlion has been aid (lo dale) lo
lhe imacl of lrade unions on lhe feasibiIily of lhis conlroversiaI idea. A fev
excelions are neverlheIess vorlh menlioning.
In his veII-knovn accounl of lhe oIilicaI debales on US Iresidenl Richard
Nixon's IamiIy Assislance IIan (IAI, 19691971), DanieI I. Moynihan (1973)
DOI: 10.2202/1932-0183.1002
briefIy focuses on lhe lrade unions' osilion.
1
Al lhe lime, he recaIIs, lhe
AIL-CIO (American Iederalion of LaborCongress of InduslriaI Organizalions)
did nol reaIIy oose lhe negalive income lax (NIT) Ian designed by lhe While
House. Quile lhe conlrary, Iabor did regard IAI and olher guaranleed income
roosaIs as ossibIe sles in lhe direclion of a more inlegraled safely nel. Yel,
foIIoving ils ovn agenda, lhe idea of inlroducing a higher minimum vage vas
given riorily in lhe idea of governmenl suIemenlalion of vages, lhrough a
veII-designed NIT scheduIe. Labor vas nol slirred by lhe idea of a guaranleed
minimum income, Moynihan vriles. SliII il did nol oose IAI, eilher in
ubIic or in lhe commillee rooms of lhe Congress, vhere ils over vas
unmalched (Moynihan, 1973, . 276). In sum, even if healed debales on IAI
look Iace in Washinglon, lhe mosl advanced eIemenls of lhe Iabor movemenl
shoved IillIe inleresl in il, bul did nol overlIy oose il (Moynihan, 1973,
. 277). Thirly years Ialer, a iIol sludy of UK lrade union alliludes lovards lax-
benefil reforms aIso came lo lhe concIusion lhal a guaranleed income scheme
vas nol al lhe core of Labour's asked aboul lheir osilion lovards a I, rilish
union Ieaders loId lhe researchers lhal since I vas a more remole rosecl
lhan ever, il vas nol vorlh considering seriousIy. In olher vords, lhe aulhors of
lhe sludy argue, lhe I/CI |cilizen's incomej case is a good examIe of lhe
reIalive negIecl of Iong-lerm sociaI oIicy issues by rilish lrade unions (ZiegIer
and }ordan, 2001, . 4).
And yel, in a fev induslriaIized counlries I has been endorsed by lrade
unions, somelimes in a very delermined vay. In lhis erseclive lhe emiricaI
research Ied by Dulch socioIogisl Rik van erkeI, vho sludied lhe osilion of
lrade unions vilh regard lo lhe imIemenlalion of a I in lhe NelherIands, is
undoubledIy one of lhe mosl slimuIaling (see van erkeI, 1994, van erkeI el aI.,
1993). His vork remains lhe mosl comrehensive sludy of lhe endorsemenl of I
by a Iabor union, and is discussed in more delaiI in lhe lhird seclion of lhis
aer. Il shovs lhal in lhe 1980s lhe Dulch Union of Iood Workers vas one of
lhe mosl efficienl roonenls of a I in lhe NelherIands and abroad. In a fev
olher sludies lhe osilive allilude of unions is briefIy discussed, bul nol
lhoroughIy anaIyzed. Ior inslance, in an unubIished mimeo Slefano Sacconi
(1992) resenls an oulIine of lhe I debale in IlaIy, and lackIes lhe lrade union
issue. Slrong and significanl signs of inleresl in lhe idea, he vriles, have been
shovn by IlaIy's Iargesl lrade union organizalion, lhe CGIL |Confederazione
GeneraIe IlaIiana deI Lavoroj. ul inside lhe organizalion, Sacconi argues, lhe
1
Ior furlher delaiIs on Nixon's IamiIy Assislance IIan, see Quadagno (1990).
3 Vanderborght: Why Trade Unions Oppose Basic Income
debale vas romoled by lhe nalionaI research cenler, and I never became an
officiaI oIicy.
Thus lhere is room for furlher comaralive emiricaI invesligalion regarding
lhe osilion of unions lovards I in induslriaIized counlries.
2
Irom lhis
erseclive schoIars couId drav insiralion in designing research queslions from
lhe abslracl modeIs lhal have been deveIoed by economisls since lhe earIy
1990s. Loek Grool, for examIe, has devised a sohislicaled anaIysis in vhich he
shovs lhal if unions exhibil a slrong viIIingness lo lradeoff nel vages and
emIoymenl, lhe I scheme of sociaI securily is suerior (eseciaIIy vilh regard
lo vage inequaIily and lhe IeveI of emIoymenl) lo lhe resenl arrangemenl of
condilionaI sociaI securily, even if lhere is a significanl faII in Iabor suIy under
lhe former (Grool, 1999, . 203). Again, al a more lheorelicaI IeveI, KIaus
ZuehIke-Robinel (1991) has focused on reasons vhy a seIf-inleresled lrade union
shouId suorl a I. Such a scheme, he argues, vouId be beneficiaI lo lhe Iabor
movemenl because il vouId affecl lhe mechanism of lhe induslriaI reserve army
(see Seclion 2 beIov). eIgian economisl runo Van der Linden (2004) is Iess
olimislic. The nel effecls of a ju|| basic income (higher lhan lhe re-exisling
unemIoymenl benefil) financed by income laxalion, he demonslrales, vouId
acluaIIy be harmfuI for mosl union members, since il vouId require a significanl
increase of lhe lax rales in order lo baIance lhe slale's budgel. This increase
vouId, of course, be absorbed enlireIy by vorkers. ul lhe imacl vouId be
differenl in lhe case of a pariia| basic income. Indeed, as is shovn by Van der
Linden's simuIalion resuIls, lhe Ialler couId be seen as a Iarelo imrovemenl in a
unionized economy: The arliaI basic income increases lhe rogressivily of lhe
lax scheduIe and il favours in-vork nel income (2004, . 115).
3
2
Inleresling lesl cases are found in Sain. Since lhe earIy 2000s, Izker SindikaIaren Konbergenlzia (ISK), a
lrade union in lhe asque region, has defended lhe idea of an uncondilionaI basic income. In CalaIonia, lhe
Comissions Obreres de CalaIunya (CCOO) look a simiIar osilion in 2001. In lhe same vein, delaiIed sludies
focusing on deveIoing counlries couId cerlainIy heI in underslanding lhe Iogic of union suorl for, or
oosilion lo, basic income. In lheir accounl of lhe Soulh African debale belveen 1996 and 2002, for inslance,
Heidi Malisonn and }eremy Seekings exIain lhal Soulh Africa's lrade unions (and union-Iinked inleIIecluaIs)
have Iayed lhe Ieading roIe in caIIs for a IG |asic Income Granlj (Malisonn el aI., 2003, . 65). The Congress
of Soulh African Trade Unions (COSATU) has officiaIIy recognised lhal lhe asic Income Granl viII have a
osilive imacl on |Soulh Africa'sj economic grovlh and deveIomenl, vilh osilive imIicalions for |ob
crealion (Vavi, 2003). One couId aIso menlion lhal lrade unions in CoIombia have shovn slrong inleresl for lhe
idea (GiraIdo, 2003).
3
See aIso Van der Linden (2002). Van Iari|s el aI. (2000) vere more scelicaI aboul lhe olenliaI of a arliaI
basic income (II) regarding lrade union suorl for lhe reform. Such a II mighl veII favor in-vork nel
income, as shovn by Van der Linden, bul Van Iari|s el aI. argue lhal organized vorkers insisl on rolecling
lheir nel vages, nol onIy lheir nel incomes (2000, . 76).
DOI: 10.2202/1932-0183.1002
IinaIIy, Guy Slanding, an economisl vilh lhe InlernalionaI Labour
Organisalion, has ubIished a aer lhal direclIy focuses on reasons vhy unions
shouId suorl a basic income (Slanding, 2004). ecause of lhe changing
characler of vork and Iabor in lhe conlexl of gIobaIizalion, Slanding argues,
unionisls shouId no doubl make a I a key arl of lheir agenda.
3. Thc Ambiguitics nI Basic Incnmc Frnm a Tradc Uninn Pcrspcctivc
Slarling from lhe shorl overviev in Seclion 1, il is difficuIl lo give a cIear iclure
of lrade unions' (olenliaI) osilion lovards a I. DelaiIed sludies are loo scarce
lo aIIov for robusl hyolheses. Hovever, lhey rovide a good slarling oinl lo
shov lhal, from a lrade-union erseclive, lhere are good reasons lo be ralher
susicious vilh regard lo lhe inlroduclion of such a scheme.
Lel us assume lhal a I scheme vouId reIace exisling means-lesled
minimum income schemes, lhe buIk of lax credils and exemlions, and be
inlegraled vilh famiIy aIIovances and, ossibIy, basic ension schemes. In lhe
fieId of sociaI insurance, I vouId reIace lhe bollom arl of lhe earnings-reIaled
unemIoymenl, ension, heaIlh and sickness benefils. The income fIoor il
rovides vouId remain suIemenled by earnings-reIaled benefils, designed lo
make u lhe difference belveen I and currenl benefil IeveIs. Ils IeveI vouId be
cIose lo 500C er monlh. Why shouId unions suorl, or oose, such a reform`
3.1 Cc||cciitc an! in!iti!ua| |argaining pcucr
If lhe IeveI of lhe I is sufficienl, il couId easiIy be used (as arl of or in lolaI) as a
source of funding for slrike uroses. Iirsl, members' I couId be laxed by lhe
union on a reguIar basis in order lo raise lhe IeveI of ils slrike fund, lhereby
increasing vorkers' reIalive over vilhin lhe firm or branch. Second, even in lhe
absence of such a mechanism, a I vouId make each singIe slrike Iess harmfuI
financiaIIy, since vorkers vouId kee lheir enlilIemenl lo a guaranleed income
fIoor oulside lhe Iabor markel. Wilh a I, slrikers vouId be abIe lo face
Iong-Iasling resislance from emIoyers, and lhe coIIeclive over of unions
vouId lherefore be enhanced.
ul I vouId nol onIy fosler vorkers' indeendence in lhe case of slrikes or
crises. Al a more micro-IeveI, il aIso rovides individuaI vorkers vilh a lrue,
reIiabIe, and uncondilionaI cxii cpiicn, hence foslering lheir ovn individuaI
bargaining over. Iven if lheir |obs remain lhe rimary source of income, lhe
exislence of an income fIoor oulside lhe Iabor markel, vilhoul means lesling or
vork requiremenls, couId Iead lhem lo negoliale for higher vages even in lhe
absence of a coIIeclive lhreal, such as a slrike.
The firsl and second reasons lo suorl a I are lhus bolh reIaled lo lhe
over resources il vouId confer on vorkers, bolh coIIecliveIy and individuaIIy.
4
The exislence of an individuaI exil olion and lhe erseclive of Iong-Iasling
confIicls vilh unions vouId force emIoyers lo revenliveIy increase vages and
imrove vorking condilions and make |obs as more allraclive as ossibIe. This
vouId, in arlicuIar, be lrue for mosl undesirabIe or sligmalizing |obs.
Prina jacic, lhere are lhus good reasons lo beIieve lhal, in a I scenario,
emIoyers vouId be graduaIIy obIiged lo make |obs more allraclive in lhe oorIy
aid end of lhe income dislribulion seclrum. ul one shouId nol loo quickIy
concIude lhal a generaI increase of saIaries is necessariIy lo be execled in lhe
aflermalh of lhe inlroduclion of such a scheme. On lhe conlrary, one couId even
assume lhal ils imIemenlalion mighl veII engage a dovnvard siraI:
emIoyers couId slarl Iovering aII vages, considering lhal a I is roviding lhe
comIemenl needed lo reach lhe IeveI of IegaI minimum vages. Under such a
vage-defIalionary scenario lhe Ialler vouId, inescaabIy, come under
discussion.
5
3.2 Tnc cn! cj uagc |a|cr?
Olher reasons, sliII reIaled lo lhe exil olion rovided by lhe inlroduclion of a I,
mighl |uslify lrade-union susicion lovards a I. Il is somelimes argued lhal lhis
exil olion vouId offer nev oorlunilies lo lhose vanling lo Iaunch lheir ovn
smaII business (Nooleboom, 1986). Il vouId, in olher vords, faciIilale
seIf-emIoymenl. As a consequence, ils imIemenlalion couId fosler a graduaI
decIine of vage Iabor as lhe core of cailaIisl economies. If lhis vere lrue, a I
vouId, for lhis very reason, erode lhe lradilionaI basis of lrade union infIuence
and aclion.
More generaIIy, lhe exil olion rovided by lhe uncondilionaI income fIoor
vouId negaliveIy affecl lhe cuIluraI cenlraIily of aid vork (and lhe vork elhic).
If currenl emIoymenl remains lhe main source of sociaI recognilion, vilh a
(sufficienlIy high), I nol onIy seIf-emIoymenl bul aII kinds of informaI and care
aclivilies vouId become financiaIIy viabIe olions (see, e.g., }ordan, 1989). Hence,
4
On lhe over resources aroach in comaralive sociaI oIicy, see for inslance O'Connor el aI. (1998).
5
This scenario comes cIose lo vhal }ames Meade advocaled in his Agalholoia (Meade, 1989). The lhreal lo lhe
minimum vage IegisIalion is reciseIy vhy Irench lrade unions oosed any move lovards lhe inlroduclion of
a lax credil largeled al Iov-aid vorkers in Iale 1990 (see, for inslance, lhe osilion of Marc IondeI, a Ieader of
Iorce Ouvriere, exressed in Nalhan (2001).
DOI: 10.2202/1932-0183.1002
lhey vouId receive roer sociaI consideralion, and vage Iabor vouId Iose ils
cenlraI roIe in sociely. IresumabIy, unions mighl see lhis deveIomenl as a lhreal
lo lheir ovn osilion, even if in recenl years lhe Iabor movemenl has been much
Iess reIuclanl lo recognize lhe imorlance of informaI aclivilies in generaI, and
care vork in arlicuIar.
3.3 jc| snaring an! j|cxi|i|iiq
Having heard lhe revious counlerargumenls, I roonenls couId reIy lhal
lhe exil olion is nol IikeIy lo rovoke a mass deserlion of lhe lradilionaI Iabor
markel. A I oIicy vouId, ralher, heI Iover lhe unemIoymenl rale, arlIy
because il is consislenl vilh voIunlary |ob-sharing an ob|eclive lhal has been
endorsed by ma|or lrade unions in Iuroe. I has somelimes been described as
lhe sofl slralegy lo achieve lhis goaI (Van Iari|s, 1996, . 65), in conlrasl vilh
comuIsory vork-lime reduclion rograms as lhey vere imIemenled in some
Iuroean counlries (nolabIy Irance). I makes il, indeed, easier for vorkers lo
lake arl-lime |obs, or even lo quil lheir |ob lemorariIy and go on sabbalicaI
Ieave, since lhe revenue Ioss is arlIy offsel by lhe guaranleed aymenl of an
uncondilionaI granl oulside lhe Iabor markel. Hence, a I vouId heI creale |obs
vilhoul vorsening insiders' osilions, and vilhoul lhrealening lhe cenlraIily of
vage Iabor.
This is no doubl a IausibIe inlerrelalion. ul if a I vouId faciIilale
arl-lime vork, does il reaIIy foIIov lhal il conslilules a desirabIe alh of reform
from a lrade-union erseclive` I advocales generaIIy focus on oorlunilies:
individuaI vorkers couId choose lo vork for Iess, rovided lhe guaranleed
income fIoor is high enough. ul in mosl cases, il mighl veII haen lhal
arl-lime vork and fIexibIe limelabIes viII be imosed by emIoyers, ralher lhan
being lhe resuIl of vorkers' increased individuaI aulonomy. I vouId lhen serve
as a coslIy slale-subsidized shock absorber, soflening lhe harmfuI effecls of an
increasingIy fIexibIe Iabor markel for lhe mosl vuInerabIe arl of lhe vorking
cIass lhrough a higher laxalion of gross vages of lhe middIe-cIass.
3.4 Tnc cn! cj cxp|ciiaiicn?
Al a more generaI IeveI, IhiIie Van Iari|s and Roberl van der Veen argue lhal
lhe imIemenlalion of a I vouId oen a cailaIisl road lo communism (Van
Iari|s and van der Veen, 1986).
6
In lheir viev (al lhe lime), cailaIisl socielies
have aIready reached lhe slage of veak abundance, and lhe graduaI
6
See aIso lhe Relroseclive A CailaIisl Road lo Communism Tvenly Years Afler, ubIished in lhis issue.
inlroduclion of a I couId aIIov vorkers lo ski lhe slage of sociaIism (ubIic
ovnershi of lhe means of roduclion) and go direclIy lo lhe eslabIishmenl of a
communisl sociely. Wilhin lhis framevork, raising lhe IeveI of lhe guaranleed
income lo a maximaI IeveI vouId meel lhe Marxian crilerion from each
according lo his abiIilies lo each according lo his needs. In such a scenario, of
course, exIoilalion vouId nol onIy be !ininisnc! lhrough lhe increase of
vorkers' coIIeclive and individuaI bargaining over, il vouId simIy be
a|c|isnc!. Il vouId be difficuIl for unions lo svee lhis erseclive aside.
ul erhas lhe mosl decisive reason lo oose a I from a lrade union
erseclive is lhal such a scheme vouId nol, conlrary lo vhal has been asserled
by Van Iari|s and van der Veen, a|c|isn exIoilalion, il vouId more robabIy
change ils very nalure. The argumenl vouId lhen go as foIIovs: in lhe case of a
sociely vilh a I, lhe idIe exIoil lhe induslrious by receiving an income
generaled (inler aIia) by lhe aclivily of lhose vho choose lo vork (Reeve, 2003,
. 11). Seen from lhis erseclive, lhe inlroduclion of a I videns lhe scoe of
exIoilalion: vhereas in cIassic cailaIism lrue exIoilalion remains lhe vice of
a smaII minorily, in I cailaIism exIoilers vouId conslilule a subslanliaI
fraclion of lhe ouIalion. IncidenlaIIy, lhis has been lhe mosl conlroversiaI issue
in hiIosohicaI debales aboul lhe roosaI (CouiIIard, 2002).
4. What Dn Wc Lcarn Frnm thc Empirica! Invcstigatinns?
The overviev resenled in Seclion 2 aims al briefIy cIarifying some argumenls.
ul il mainIy shovs lhal a delaiIed discussion of ros and cons of I mighl lhrov
union reresenlalives inlo confusion. ShouId lhe inlroduclion of a I be
considered a sle lovards lhe end of exIoilalion` WouId a I faciIilale vage
moderalion` In order lo furlher enIighlen lhe issues raised by lhe shorlIisl of
lheorelicaI argumenls, il is usefuI lo go inlo lhe fieId and comare nalionaI
debales. Keeing lhe lheorelicaI discussion in mind, vhal do ve Iearn from lhe
emiricaI evidence`
Draving uon a Iarger research on OICD counlries, lhis second seclion
focuses on lhree reIevanl nalionaI debales: eIgium, Canada, and lhe
NelherIands. Nole lhal I has never been a hol ilem on union agendas in OICD
counlries.
7
The exIanalion is quile obvious: in mosl counlries I has never been
high on lhe pc|iiica| agenda. Why bolher lhen, vilh lhe el idea of eccenlric
academics` As vas argued above in lhe case of rilish unions, in many counlries
7
Comare Vanderborghl and Van Iari|s (2005, . 7982) for a shorl overviev of lhe discussions vilhin unions
in lhe OICD and in deveIoing counlries.
DOI: 10.2202/1932-0183.1002
Iabor has oflen seen lhe roosaI as loo remole a ossibiIily lo be vorlh
considering seriousIy (ZiegIer and }ordan, 2001, . 3). In a fev cases, hovever,
I has been lhoroughIy discussed by vorkers' reresenlalives and, somelimes,
even officiaIIy endorsed.
4.1 Bc|giun. nc |asic inccnc!
Wilh a unionizalion rale of aroximaleIy 60 ercenl, eIgium has no doubl
some of lhe mosl reresenlalive lrade unions in Weslern Iuroe.
8
The lvo main
confederalions, CSC-ACV (Chrislian Unions Confederalion) and IGT-AVV
(SociaIisl Unions Iederalion), remain overfuI in mosl seclors of lhe economy,
and lhey are direclIy or indireclIy invoIved in each subslanliaI reform of lhe
veIfare slale. They are nol onIy abIe lo mobiIize vorkers on a Iarge scaIe, lhey
aIso benefil from riviIeged Iinks vilh oIilicaI aclors, incIuding MIs and
minislers. Iurlhermore, lhey lake arl in formaI inslilulions such as lhe NalionaI
Labor CounciI (CNT-NA), as veII as in lhe adminislralive managemenl of sociaI
insurance rograms, eseciaIIy unemIoymenl insurance.
9
eIgium has Iayed a cruciaI roIe in lhe I debale. The asic Income
Iuroean Nelvork's (IIN) founding congress (1986) and second inlernalionaI
conference (1988) vere heId in eIgium, under lhe aegis of hiIosoher IhiIie
Van Iari|s, aulhor of |ca| |rcc!cn jcr A||. IIN's archives are Iocaled al lhe
Universile CalhoIique de Louvain. Wilh sociaI scienlisl WaIler Van Trier and
olhers, Van Iari|s has advocaled I on many occasions in Irench- and
IIemish-seaking arls of eIgium. One shouId aIso kee in mind lhal eIgium
has lhe onIy Iuroean singIe-issue arly focused on I: Vivanl, founded in 1997
by businessman RoIand DuchleIel, has arlicialed in severaI eIeclions and
allracled ubIic allenlion lo lhe roosaI. eIgium, no doubl, mighl lhus
reresenl an inleresling lesl case regarding lhe oIilicaI rosecls of I.
To ul il crudeIy, il's imossibIe lo be recognised as a rohel in one's ovn
counlry. eIgiums' main lrade unions have nol shovn much inleresl in I, and
on lhe rare occasions vhen lhey did lhey exressed very hosliIe oinions. Irom
lhe very slarl of lhe discussion in lhe mid-1980s, lhe main confederalion
(CSC-ACV) allacked vhal il caIIed a siIIy and vorrying uloia (CSC, 1985).
Afler aImosl 20 years of debale, some union officiaIs are sliII among lhe mosl
uncomromising oonenls of a basic income. In }anuary, 2002, CSC ubIished a
8
According lo Ibbinghaus (2004, . 580), nel union densily in eIgium vas 62 ercenl in 2002.
9
Comare Kuiers (2004, . 7986) for a good overviev of lhe roIe Iayed by unions and emIoyers in eIgian
oIicy making.
rearalory reorl in anlicialion of ils nalionaI congress. Il incIudes a seclion
lilIed No basic income (CSC, 2002, . 42).
Whal do eIgian unionisls hoId againsl lhe roosaI` Al Ieasl four
grievances are vorlh menlioning.
10
Iirsl, unions in arlicuIar officiaIs of
SociaIisl Unions Iederalion fear lhal lhe inlroduclion of a I vouId make il
more difficuIl for lhem lo negoliale vage increases vilh emIoyers (odson,
2003, . 2). Since a I couId be seen as an indirecl vage subsidy, emIoyers
vouId urge union reresenlalives lo negoliale vilh ubIic aulhorilies and Iobby
lheir oIilicaI aIIies in order lo gel a generaI increase of lhe I IeveI. A I vouId,
in sum, negaliveIy affecl lhe reIalive over of vorkers al lhe firm, branch, or
federaI IeveI, eseciaIIy if il vere lo be accomanied by lhe aboIilion of lhe
minimum vage IegisIalion. In saying lhal a I vouId increase individuaI
vorkers' bargaining over, I roonenls seem lo beIieve lhal lhe cIass slruggIe
is asse, vhich is eIgian unionisls argue obviousIy faIse.
Second, eIgian union officiaIs aIso beIieve lhal lhe exislence of a guaranleed
income fIoor vouId |uslify furlher deveIomenls aIong lhe Iines of increasing
fIexibiIily of lhe Iabor markel. According lo a IGT-AVV reresenlalive, I
advocales seem lo accel lhal conlracls for unIimiled eriods shouId be
aboIished, and lhal in coming decades aII vork conlracls vouId have lo be
shorl-lerm and recarious (Wernerus, 2004, . 47).
Third, in mosl vrilings and inlervievs, union reresenlalives aIso exress
lheir commilmenl lo seIeclive and largeled schemes. They see lhese schemes as a
beller and more efficienl vay of using ubIic resources lhal are massiveIy
suslained by lhe laxalion of vages, be il lhrough sociaI conlribulions or lhe
income lax. To rovide a basic income equivaIenl lo lhe IeveI of lhe condilionaI
minimum income (aboul C600/monlh in 2006), lhey say, one shouId subslanliaIIy
raise lhe lax rales, an unaccelabIe erseclive for mosl vorkers. And if il vere
nol lhe case, lhe syslem vouId be absurdIy inefficienl: some vouId have lo vork
hard in order lo ay for a miserabIe granl. ObviousIy, eIgian unions do nol
beIieve lhal a I vouId aboIish exIoilalion.
Iourlh, eIgian unions are quile ambiguous on lhe queslion of vork
requiremenls. If bolh CSC-ACV and IGT-AVV have reealedIy oosed lhe
slrenglhening of lhese requiremenls and lhe lighlening of eIigibiIily ruIes in
unemIoymenl insurance, lhey are nol ready lo argue in favor of a fuIIy
10
This accounl is based on lvo main sources: socioIogisl Sabine Wernerus's masler's lhesis (Wernerus, 2004),
vhich vas based on fieIdvork and inlervievs vilh union reresenlalives, and arl of my ovn IhD research
(Vanderborghl, 2004). I aIso benefiled from discussions vilh union officiaIs during a seminar on Trade Unions
Againsl asic Income ` organized by lhe Hoover Chair, (Universile CalhoIique de Louvain, eIgium) on May
13, 2004.
DOI: 10.2202/1932-0183.1002
uncondilionaI benefil, even if il vere largeled al lhe oor aIong lhe Iines of a
negalive income lax scheduIe. Il seems lhal lhe queslion of lhe olimaI
equiIibrium belveen righls and dulies of beneficiaries remains oen. Il is
erfeclIy Iegilimale, CSC-ACV officiaIs argue, lo require lhal lhe abIe-bodied
conlribule lo lhe roduclion of coIIeclive veaIlh.
11

Il vouId be unfair, lhough, lo asserl lhal eIgian unions are lherefore onIy
defending lhe inleresls of insiders. Mosl officiaIs emhasize lhal lhe Ieasl
advanlaged shouId be heIed, bul slress lhal lhe oor need much more lhan lhe
aulomalic aymenl of a basic income fIoor. They see lhe inlroduclion of a I as a
cruciaI sle lhal Ieads lo a sIiery sIoe a massive disinveslmenl in sociaI
vork. They fear lhal ubIic aulhorilies vouId rogressiveIy slo aII rograms
aimed al socio-rofessionaI inlegralion, vhich vouId furlher viden lhe ga
belveen insiders and oulsiders (comare, for inslance, odson, 2003). And yel,
union officiaIs insisl, aid vork remains lhe cruciaI recondilion for sociaI
recognilion and seIf-esleem. eIgian unions lhus remain unconvinced by lhe
argumenls of I advocales. Il does nol mean, of course, lhal lheir reasons for
adoling such a osilion are IogicaIIy and universaIIy vaIid. ul il cerlainIy
means lhal in a counlry vilh such a high union densily, lhe oIilicaI feasibiIily of
I mighl veII be very Iov, lo say lhe Ieasl.
4.2 Cana!a. inc nixc! jcc|ings cj Quc|cccis unicns
In 2004 Canadian union densily amounled lo a smaII 25.1 ercenl average, vilh a
eak of more lhan 40 ercenl in lhe Irench-seaking rovince of Quebec a very
reseclabIe rale by Norlh American slandards.
12
Al lhe federaI IeveI, unions
benefil from lhe facl lhal lhe Canadian eIecloraI syslem, conlrary lo lhe US
syslem, aIIovs for lhe exislence of a lrue Iabor arly somevhere belveen IiberaI
and conservalive.
13
Hovever, lhe Nev Democralic Iarly (NDI) remains a smaII
Iayer on lhe oIilicaI scene. Iurlhermore, lhe IiberaI characler of lhe veIfare
syslem has aIvays kel Canadian unions al lhe margins of lhe sociaI oIicy
debales (anling, 1987).
I has been videIy debaled in Canada. Il had aIready been briefIy on lhe
agenda in lhe 1930s, lhanks lo lhe rise of lhe SociaI Credil Iarly, vhich came lo
11
Comare IaIslerman (2005) for a baIanced evaIualion by a CSC-ACV officiaI, of "aclive sociaI oIicies" in lhe
fieId of eIgian unemIoymenl insurance.
12
Canada: Human Resources DeveIomenl Canada, 2005, Union membershi as a ercenlage of civiIan Iabour
force, hll://vvv.hrsdc.gc.ca |Accessed 30 March 2006j, Labrosse (2005, . 2).
13
The descrilion oflen made of lhe Canadian syslem as a lhird arly syslem is nol enlireIy accurale. In facl,
vilh lhe assing of years, a fourlh arly, lhe nalionaIisl Ioc Quebecois, became a significanl oIilicaI force al
lhe federaI IeveI.
over in AIberla in 1935. ul lhe reaI discussion slarled in lhe 1960s, vilh a fev
sociaI scienlisls insired by lhe American debales on demogranls and lhe
negalive income lax (NIT). Irom lhe Iale 1960s unliI lhe earIy 1990s, lhe idea
came u quile reguIarIy in officiaI ubIicalions al federaI and rovinciaI IeveIs
(eseciaIIy in Quebec), and in lhe 1970s NIT exerimenls vere Iaunched in
Maniloba. Al lhe end of 2000, Irime Minisler }ean Chrelien even Iaunched a I
lriaI baIIoon via nevsaers such as lhe much resecled Oiiaua Ciiizcn. Under
calchy headIines, lhe ress reorled lhal lhe IederaI IM had decided lo sel u an
exerl grou lo sludy lhe feasibiIily of a guaranleed annuaI income (GAI) in lhe
Canadian conlexl.
14
ul faced vilh harsh crilicisms from lhe Conservalives,
Chrelien quickIy denied his arl in suggesling lhe idea.
15
Whal aboul lrade unions` According lo oIilicaI scienlisl Rodney
S. Haddov, lhe |Canadianj union movemenl has aIvays lrealed lhe GAI vilh
considerabIe caulion and vieved il as olenliaIIy anlilhelicaI lo ils sociaI oIicy
goaIs (1994, . 350). ul il did nol aIvays lake coherenl osilions on lhe loic,
Haddov argues: Organized Iabor's earIy resonse lo lhe GAI vas nuic! an!
ccnjusc!.il vas s|cu ic jcrn a ccncrcni asscssncni of lhe imIicalions of a negalive
income lax for ils rogram (1994, . 353). Hovever, lhe ubIicalion in 1985 of a
buIky and infIuenliaI reorl by lhe RoyaI Commission on lhe Iconomic Union
and DeveIomenl Irosecls for Canada (lhe so-caIIed MacdonaId
Commission), vhich incIuded a scenario for lhe inlroduclion of a arliaI basic
income, lriggered harsh reaclions. In 1986, lhe convenlion of lhe Canadian
Labour Congress (CLC), Canada's Iargesl union confederalion, exressed serious
doubls aboul lhe desirabiIily of such a reform and denounced ils neo-IiberaI
characler. A I, lhe CLC argued, vas going lo undermine lhe minimum vage
IegisIalion (Haddov, 1993). Al lhe same lime, eIgian unions vere using lhe
same sorl of argumenls lo dismiss lhe idea.
The slory is quile differenl, lhough, in lhe rovince of Quebec. MicheI
Charlrand, a coIorfuI and lremendousIy ouIar relired figure of lhe lrade
union movemenl, has been advocaling I for many years (ernard and
Charlrand, 1999).
16
In 1999, lhe CSN (NalionaI Unions Confederalion) Quebec's
main union in lerms of membershi ubIished a delaiIed and baIanced sludy
on I in order lo fosler a eacefuI discussion of lhe roosaI. Iven if olher unions
14
See Chrelien Wanls lo Leave Mark Wilh CradIe-lo-Grave Irogram of Guaranleed AnnuaI Income (Ollava
Cilizen, December 9, 2000). In Canada, lhe exression Guaranleed AnnuaI Income has mainIy been used lo
refer lo a negalive income lax and, on some occasions, lo a basic income.
15
Ior furlher delaiIs on lhe Canadian debale, see Vanderborghl (2004, . 160176).
16
Nov relired, Charlrand vas a Ieader of lhe CSN.
DOI: 10.2202/1932-0183.1002
(ITQ and CSQ) did nol underlake simiIar inilialives, lhey never exressed any
hosliIily lovards lhe idea of an uncondilionaI minimum income. Il does nol
mean, hovever, lhal lhey vouId suorl any move in lhal direclion. Recenl
inlervievs vilh Quebecois union officiaIs have shovn lhal lhey have mixed
feeIings aboul lhe ossibIe inlroduclion of a I in Canada or Quebec (Wernerus,
2004, . 3639). Mosl of lhem do acluaIIy endorse lhe roosaI on elhicaI
grounds, bul re|ecl il for ragmalic reasons.
In Quebec, union officiaIs recognize lhal roviding everyone vilh an
uncondilionaI income fIoor is a maller of fundamenlaI righls. Conlrary lo lheir
eIgian counlerarls lhey do nol ul lhe very idea of an income by righl inlo
queslion. They aIso admil lhal in lheory, al Ieasl such a scheme couId heI
soIve (arl of) lhe robIem of unemIoymenl lras vilhoul vorsening overly,
lhrough a significanl reduclion of marginaI lax rales al lhe bollom of lhe income
dislribulion. In lhis erseclive, lhey do nol even see I as anlilhelicaI lo lhe
cuIluraI vaIues of a sociely in vhich aid vork remains, as is lhe case in eIgium,
a cruciaI recondilion for sociaI recognilion.
And yel in sile of lhese osilions very fev union officiaIs oenIy argue for
a I. Ior, reresenlalives say, lhey Iack lhe over resources needed lo imose a
lruIy prcgrcssitc ackage of reform. Hence, in lhe conlexl of an increasingIy
comelilive economy, and al a lime vhen rovinciaI and federaI governmenls
are Ieading for a more aclive veIfare slale, lhe defense of such a radicaI
reform vouId amounl lo oIilicaI suicide. Al resenl, a discussion of lhe
inlroduclion of a I vouId necessariIy degenerale inlo a Iriedman-Iike scenario:
a dismanlIing of lhe veIfare slale, nol a cuIminalion. Ior a fev years lhese fears
have been vigorousIy suslained by lhe eIecloraI rheloric of a overfuI righl-ving
IiberaI arly, lhe Aclion democralique du Quebec (ADQ), vhich camaigns in
favor of an NIT.
17
Unions are on lhe defensive: ve shouId defend vhal ve
aIready have, a ITQ officiaI says (Wernerus, 2004, . 113). We shouId kee
fighling for higher vages and rogressiveIy imrove lhe currenl veIfare
syslem, a CSN reresenlalive argues (Wernerus, 2004, . 114). In olher vords,
for Quebecois unions I is elhicaIIy aeaIing bul loo much a risky sociaI oIicy
reform.
17
In Quebec a much more rogressive version of I vas defended, 20002001, by a marginaI Iefl-ving arly,
lhe RassembIemenl Iour L'aIlernalive Irogressisle (RAI). In 2002 il vas merged inlo lhe Union des Iorces
Irogressisles (UII), vhich aIso advocaled a universaI cilizen's income. UII became Quebec SoIidaire in
Iebruary 2006. Nole lhal in Oclober 2005, 12 academics and oIilicians, incIuding lhe former rime minisler of
Quebec, Lucien ouchard, ubIished a manifeslo caIIing for lhe inlroduclion of a guaranleed minimum
income in lhe Irovince.
4.3 Tnc Ncincr|an!s. a ira!c unicn in jatcr cj Basic |nccnc
Dulch lrade unions have never been as overfuI as lheir eIgian counlerarls in
lhe fieId of sociaI oIicy and induslriaI reIalions. In lhe earIy 2000s, nel union
densily had droed lo a Iov IeveI of 22 ercenl.
18
ul Dulch unions remain
direclIy invoIved in various counciIs and commillees al a nalionaI IeveI, and
lhrough lhese inslilulions lhey sliII have an imorlanl say in lhe maller of
veIfare reform. Throughoul lhe 1980s and 1990s, unions even became cenlraI
Iayers in lhe mechanisms of comelilive cororalism (Rhodes, 1998), vhich
Iies al lhe basis of lhe much discussed Dulch miracIe (Visser and Hemeri|ck,
1997). Through innovalive lyes of negolialion, lhe unions, emIoyers and lhe
slale vere abIe lo concIude agreemenls lhal resuIled in lhe combined
inlroduclion of nev righls for vorkers and more fIexibIe arrangemenls for lhe
Iabor markel, aIong vilh vage moderalion. Wim Kok, lhe former head of lhe
biggesl union confederalion, INV, vas Ieading lhe counlry as a rime minisler
from 1994 lo 2002.
In lhe 1980s and earIy 1990s, I vas reIaliveIy high on lhe ubIic agenda in
lhe NelherIands. Irom 1980 onvards, il vas debaled in severaI oIilicaI arlies
across lhe oIilicaI seclrum. In 1994, il vas oenIy advocaled in lhe ress by
lvo ruIing minislers. Iven if lheir inilialive vas shorl Iived, lhe rime minisler al
lhe lime, Wim Kok, decIared lhal a I shouId nol be dismissed as a Iong-lerm
erseclive for lhe reform of lhe Dulch veIfare slale.
19
InlereslingIy, during lhe
second haIf of lhe 1980s, lhe Voedingsbond INV (Union of Iood Workers) an
imorlanl grou of affiIialed vorkers vilhin lhe INV union confederalion vas
one of lhe mosl rominenl roonenls of a basisinkomen (basic income). In
many vays, lhis vas a unique osilion vilhin veslern democracies. The Union
of Iood Workers ubIished Ienly of IeafIels and documenls arguing in favor of
lhe roosaI, and organized reguIar vorkshos in order lo enIighlen ils ovn
members.
20

As vas slressed by Rik van erkeI, vho made an in-delh anaIysis of lhis
eisode of lhe Voedingsbond's hislory, vhen reading lhe amhIels one is
slruck by lhe uloian nalure of I aIIeged effecls.. In shorl, lhe Voedingsbond
resenled ils I as a anacea for lhe robIems of conlemorary sociely (van
erkeI, 1994, . 19). Since lhe very slarl of lhe discussion in lhe Iale 1970s,
Voedingsbond Ieaders had been queslioning lhe vork elhic and lhe cuIluraI
cenlraIily of vage Iabor, caIIing for a radicaI reform lhal vouId confer sociaI
18
According lo Ibbinghaus (2004, . 580), nel union densily in lhe NelherIands vas 22 ercenl in 2002.
19
Ior furlher delaiIs on lhe Dulch debale, see Vanderborghl (2005).
20
Comare, for inslance, Voedingsbond (1981) and, in IngIish, Voedingsbond (1989).
DOI: 10.2202/1932-0183.1002
recognilion lo lhose vho do unaid vork, have no income and no sociaI slalus
(Lubbi, 1991, . 15). UnforlunaleIy, as van erkeI and his coIIeagues discovered,
lhe erseclive of a I did nol reaIIy aeaI lo lhe union's members. Il vas more
a lo-dovn debale: lhe infIuence of veII-educaled slaff members vas decisive
in lhe choice of lhe I slralegy. As lhe Ieaders lhemseIves conceded aflervards,
il roved difficuIl lo mobiIise members on such an abslracl and Iong-lerm
ob|eclive as I. This abslracl erseclive, mainIy suorled by lhe execulive,
conlradicled lhe more concrele members' inleresls lhal lhey vere exeriencing
in lhe daiIy Iife (van erkeI el aI., 1993, . 2224). Iurlhermore, lhe INV
confederalion, lo vhich lhe Voedingsbond beIonged, did nol suorl lhe
inilialive. As a resuIl, lhe debale ran oul of sleam and sloed aIlogelher in lhe
earIy 1990s.
As lhe unemIoymenl rale droed lo 2.4 ercenl in 2002, lradilionaI
suorlers of basic income vho had aIvays advocaled lhe idea as an
aIlernalive lo fuII emIoymenl and lhe vork elhic vere ushed off lo lhe
margins of oIilicaI discussions. CIaimanls' organizalions, vhich had been
associaled vilh lhe Voedingsbond on lhe I issue, graduaIIy disaeared from
lhe oIilicaI Iandscae as lhe unemIoyed vere finding |obs. ul in lhe reaI
vorId of veIfare cailaIism, miracIes never Iasl. In 2003 and 2004, lhe Dulch
grovlh vas aImosl negalive, and lhe unemIoymenl rale vas rising again. This
is, undoubledIy, arl of lhe reason vhy Agnes }ongerius, (Ieader of lhe union
confederalion, INV) vho vas eIecled in May 2005, nov argues lhal vorkers'
reresenlalives shouId lhink again aboul lhe idea of a I for aII. }ongerius
mainlains lhal aII Dulch cilizens shouId receive a monlhIy check of 350 or 400
IUR: vilh such a Ian, ve couId gel rid of a Iol of adminislralive difficuIlies,
she decIared in an inlerviev.
21
Iven if she sliII beIieves lhal eoIe shouId make
lheir besl endeavor lo find a aid |ob, conlroIs shouId become sofler and be
incenlive based. Mosl imorlanlIy, }ongerius slaled lhal a veII-designed I
roosaI vouId aIIov lhe Iabor movemenl lo slo being loo conservalive and
defensive aboul veIfare slale reforms.
In sum, lhroughoul ils recenl hislory lhe Dulch lrade-union movemenl has
been Iess caulious aboul I lhan Canadian unions, and much Iess reIuclanl lhan
eIgian Iabor organizalions. As menlioned before, one shouId cerlainIy nol
undereslimale lhe roIe Iayed by lhe ecuIiar characler of lhe Voedingsbond
Ieadershi in lhe 1980s. ul one shouId neverlheIess kee in mind lhal, during
lhe same eriod, I vas aIso debaled vilhin mainslream oIilicaI arlies,
incIuding lhe Labor Iarly (IvdA) ilseIf. In olher vords, il vouId be misIeading
21
Hci |inancic|c Oag||a!, May 25, 2005.
lo mainlain lhal discussions aboul I vere lhe riviIege of a liny minorily,
vhelher vilhin lhe Iabor movemenl or across olher oIilicaI slreams.
Iurlhermore, il shouId be slressed lhal secific fealures of lhe Dulch veIfare
slale and of ils lransformalions mighl aIso rovide some keys lo lhe
underslanding of lhe Dulch excelion. The exislence of a basic ension scheme,
as veII as lhe exislence of non-means-lesled sludenl granls, has cerlainIy
consliluled a favorabIe background for lhe discussion of a basic cash guaranlee
for aII. The facl lhal a grealer roorlion of lhe Dulch unemIoyed are sociaI
assislance beneficiaries, hence receiving non-earnings-reIaled benefils, may aIso
have eroded lrade-union oosilion lo I. Above aII, since 1982 and lhe so-caIIed
Wassenaar agreemenl, Dulch lrade unions have been direclIy invoIved in a
rocess of vage moderalion and vork-lime reduclion. In relurn for a graduaI
slrenglhening of lhe sociaI righls of arl-lime vorkers, lhey have acceled lhe
erseclive of a massive crealion of fIexibIe and lemorary |obs. In Iighl of
Seclion 2 above, one couId lhus cauliousIy concIude lhal, loday, Dulch unions
have more reasons lo suorl lhe inlroduclion of I lhan lo oose il.
5. Cnnc!usinn
TheorelicaI and emiricaI invesligalions demonslrale lhal lrade unions are far
from being naluraI aIIies of I advocales vilhin deveIoed veIfare slales. As
evidenced by lhe eIgian case, lhey can even conslilule a significanl obslacIe lo
lhe oIilicaI rogression of lhe idea. Al lhe same lime, lhe Dulch case shovs lhal
lhe Iabor movemenl is nol bound lo be a ereluaI oonenl lo such a scheme.
Al Ieasl lvo generaI concIusions can be dravn from lhis comaralive
inquiry. Iirsl, il rovides a manifesl confirmalion of lhe idea lhal inslilulions
maller. riefIy, in counlries vhere lhe financing of lhe veIfare syslem is
massiveIy based on sociaI conlribulions, and nol on lhe income lax, each sle
lovards a I is seen as a radicaI reform. Through vorker conlribulions, unions
are invoIved in lhe financing and managemenl of sociaI securily. Whal vouId
haen, lhey IegilimaleIy ask, if lhe minisler of finance vere lo become lhe key
Iayer in sociaI oIicy`
22
In eIgium, furlhermore, lrade unions are ivolaI aclors
in a Ghenl syslem. In such syslems, unions run voIunlary (lhough heaviIy
subsidized by lhe slale) unemIoymenl insurance rograms, generaIIy lhrough
lhe oeralion of IocaI Iabor exchanges (Scruggs, 2002, . 286). Thus eIgian
unions, conlrary lo lhe Dulch and Canadian vorkers' organizalions, are
22
Comare lhe crilique of IGT Ieader Thierry odson (2003, . 3) on lhe end of sociaI cilizenshi.
DOI: 10.2202/1932-0183.1002
handIing individuaI cases of unemIoyed vorkers. Il mighl arlIy exIain vhy
lhey have aIvays Iooked more susiciousIy al lhe imIemenlalion of an
aulomalic aymenl syslem lhal vouId reIace earnings-reIaled aymenls.
The second concIusion is cIoseIy connecled lo lhe firsl one. Il seems lhal lhe
inlroduclion of a I has nol much lo offer lo lhe vasl ma|orily of union members.
In limes of relrenchmenl in core seclors of lhe veIfare syslem (ension and
heaIlh insurance), il is a difficuIl lask lo convince insider of aying for an
uncondilionaI granl lhal viII mainIy benefil oulsiders. Il is nol a surrise lhal, as
van erkeI oinled oul, vilhin lhe Dulch union Voedingsbond, I vas mainIy
suorled by unemIoyed members. I, van erkeI vriles, comes across as
redominanlIy a cIaimanls' issue. Mosl of ils suorlers (aImosl 75 ercenl) are
cIaimanls, vhereas mosl of ils oonenls (again aImosl 75 ercenl) are aid
vorkers (van erkeI, 1994, . 20). Invesligalions in Irance have aIso shovn lhal
I had been aImosl excIusiveIy advocaled by indeendenl cIaimanls'
organizalions, vhich had been crealed in lhe 1980s as a resuIl of vorkers' unions
incaacily lo lake lhe secific needs of unemIoyed eoIe inlo accounl. Iven if
lhey vere abIe lo Iaunch a ubIic discussion on I in lhe vinler of 19971998,
lhey did nol manage lo gel lhe roosaI on lhe oIilicaI agenda. In eIgium, due
lo lhe Ghenl syslem, cIaimanl's organizalions have aIvays been very veak, and
mosl unemIoyed are members of a lrade union.
CIaus Offe (1992, . 72) argues lhal gains for lhe veII-off middIe cIass
reresenl lhe necessary recondilion for making sociaI securily for lhe
undercIass (incIuding lhe Iess riviIeged segmenls of lhe vorking cIass)
oIilicaIIy feasibIe. Wilhoul lhe suorl of veII-eslabIished lrade unions, il
mighl rove very difficuIl for I advocales lo gel lheir roosaI on lhe agenda in
OICD counlries. Hence, lhey shouId cerlainIy slarl vorking more syslemalicaIIy
lovards converling union reresenlalives on elhicaI and ragmalic grounds.
They shouId no doubl lry lo boosl any emerging discussion of lhe issue vilhin
vorkers unions, since emiricaI research shovs lhal good argumenls in favor of
a I from a lrade union erseclive are unknovn lo mosl union reresenlalives.
Ior even if lhe Ialler are nol naluraI aIIies of I suorlers, lhey remain
inescaabIe Iayers as veII as irreIaceabIe arlners.
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Iicher HandIungsfaehigkeil, Zciiscnriji jucr Sczia|rcjcrn 37 (2), . 115130.
Yannick Vanderborghl
eIgian Iund for Scienlific Research (INRS)
and Chaire Hoover d'elhique economique el sociaIe
Universile CalhoIique de Louvain
IIace Monlesquieu, 3
-1348 Louvain-Ia-Neuve, eIgium
ImaiI: vanderborghl+eles.ucI.ac.be
DOI: 10.2202/1932-0183.1002
IR AL NDICE

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BASIC INCOME STUDIES

Vol.6,Issue1 RESEARCHARTICLE June2011

While this view represents prudence regarding management of temporary

Second, dividend programs do not preclude the benefits of pooled

1. On current projections, although Australia is better placed than many

These challenges are national in character. While individuals may be,

This is partly the result of a welldesigned fund with effective governance

Vol.5,Issue2 RESEARCHARTICLE December2010

Vc||ssuc RISIARCHARTICLI junc

A universaI basic cailaI

such as a sociaI inherilance Iinked lo cerlain

Tvo condilions are required in order lo

by virlue of ils ovn design

or has no roduclive funclion lhink of

Can a consislenl recirocily

Do lhe oIicy measures or any combinalion of lhem favoured by While

A queslion Iaced by CouIIiard is vhelher il is ossibIe nol lo conlribule lo sociaI cooeralion

A Ieflving sensibiIily sees

Conlribulory schemes vouId seem lo be more in accordance vilh lhe

Of course lhese argumenls

Goodin Roberl I Somelhing for Nolhing in IhiIie Van Iari|s ed Wnais

WoIff }onalhan Training Ierfeclionism and Iairness jcurna| cj App|ic!

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